Situation critical: Why the financial gap is widening between Serie A's best & their European rivals like Real Madrid and Manchester United

Accounting firm Deloitte’s annual report on European football revenue was released on Thursday, and for the big guns in Italy the gulf developing in front of them will come as a worrying statistic ahead of the early impact of the Financial Fair Play era.

While five Italian clubs feature in the ‘Football Money League’ Top 20 – AC Milan, Inter, Juventus, Roma and Napoli – the highest Serie A representatives, the Rossoneri, again sit just seventh, while the likes of Real Madrid, Barcelona and Manchester United continue to lead the way.

Deloitte breaks down the teams' revenues, which are ascertained with the absence of transfer fee and associated sales taxes, into three categories – Matchday, Broadcasting, and Commercial.

With spending set to be capped according to a team’s revenue over three years, Milan, Inter and Juventus will see the figures for 2010-11 as a warning of potential repercussions on the pitch in the future, with their continued slide away from Europe’s biggest of hitters providing plenty of food for thought.

And with one of the peninsula’s four Champions League slots having been sacrificed ahead of next season, the body blow which would be felt upon missing out on Uefa’s flagship competition has become an increasingly unthinkable – yet increasingly realistic – prospect for Italy’s trio of giants.

There are some particular points to note, though, from the latest figures, as while the commercial pull of Madrid, Barca and United cannot easily be matched, there is room for significant improvement elsewhere.

Matchday malaise an increasing issue

Italy’s main shortfall comes in the matchday category, with the continued problems of low crowds and a lack of room for manoeuvre in terms of hospitality packages making for a damning set of figures in the Serie A representatives’ accounts.

Of the top three Italian clubs, Milan raked in most on gate receipts, season tickets and memberships, yet their €35.6 million income is dwarfed by Real Madrid’s €123.6m, and is thrown into even greater context by the more favourable matchday takings of clubs such as Tottenham Hotspur (€47.9m), Hamburg (€41.8m) and Schalke (€37.2m).

The Rossoneri share a problem in this respect with neighbours Inter. The pair’s current home of the council-run San Siro is one of the most recognisable arenas in world sport, but gives no leeway for an increase in corporate sponsorship and hospitality.

Instead they have both lived largely off the income provided by commercial and broadcasting revenue in recent years, with an ever-present status in the Champions League a near-necessity to make them any kind of sustainable business model.

	2008-09	2009-10	2010-11
Real Madrid	€401.4m	€438.6m	€479.5m
Barcelona	€365.9m	€398.1m	€450.7m
Manchester United	€327.0m	€349.8m	€367.0m
Milan	€196.5m	€244.0m	€235.1m
Inter	€196.5m	€224.8m	€211.4m
Juventus	€203.2m	€205.0m	€153.9m

With their move to the new purpose-built Juventus Stadium in August, the Bianconeri have become the trendsetters for Italian football, with their matchday returns at the Stadio Olimpico in 2010-11 of a paltry €11.6m – the worst of any Top 20 club and only 9.39 per cent of Madrid’s figure – emphasising the drastic need for them to have taken action.

The inability to cater for increased matchday revenue in their old surroundings was a large factor behind their poor figures, but another was their failure to qualify for the Champions League. Their €22.6m cut of the Uefa distribution in 2009-10 dropped to just €1.8m last season due to their participation in the Europa League, and saw them register a €51.1m decline in total revenue.

This all means that this season’s Football Money League list could be as bad as it is likely to get for Juve, with next term’s expected to see a significant rise in matchday income, with their move and the resulting lack of outgoing rent more than cancelling out the loss of Europa League money. A further projected rise could well follow the following year given their current placing at the top of Serie A, which would see them reclaim a spot in the Champions League in 2012-13, resulting in another boost in prize funds.

Italian clubs actually account for three of the bottom four spots in the Top 20’s list of matchday revenue, with Napoli’s €22m and Roma’s €17.6m also reflecting poorly on the league’s ability to generate money through gate receipts. However, the two southern sides have seen an increase in broadcasting income in 2009-10.

Broadcasting change has levelled the playing field

While Milan, Inter and Juve have dropped further away from Europe’s big hitters, Serie A in itself has seen a narrowing of the wealth gap in large part due to the collective bargaining agreement which came into play in the summer of 2010.

The big three have seen their broadcasting revenue drop dramatically, with Juve suffering the biggest hit when added to the loss of Champions League TV income. In total, the credit in this category was down by €90.7m for the traditional giants, with the Old Lady’s €43.8m reduction to €88.7m representing the most significant slump.

However, Roma and Napoli’s accounts are indicative of the fair play feel to the new broadcasting arrangement in the peninsula, with the capital club’s €25.5m broadcast gains explaining their €20.8m total revenue increase, while the San Paolo outfit’s broadcast cut was inflated by €18.6m on 2009-10 to help chart a €23.3m overall rise.

In addition to its sentimental value, the new stadium is actually an investment that allows us to bring Juventus to the level of the top clubs in Europe Andrea Agnelli

This trend mirrors a widely held belief that Serie A is becoming a more competitive league – as shown by Champions League play-off representation for Fiorentina, Sampdoria and Udinese recently – but similarly reflects international opinion and Uefa co-efficients in terms of Italy’s standing on a continental scale.

Napoli’s overall and broadcasting revenues are likely to massively increase again in next year’s release due to their participation in this season’s Champions League. But with another qualification for the prestigious event unlikely, and Roma also struggling in the race for third place, there is one other way these clubs can look to boost revenue on a regular basis in order to compete for top European football regularly, and that is to follow Juventus’ lead and move home.

The hope for the future

As Italy’s ‘other’ entrants in the Top 20, Roma and Napoli are bridging the gap between the traditional powerhouses and the potential inductees. Another thing they share in common is a desire to change their living arrangements.

The Giallorossi have plans in place for a new purpose-built stadium to match Juventus’, with owner Thomas DiBenedetto, who took charge in April 2011, seeing it as a necessity to move up to the next level. Napoli president Aurelio De Laurentiis still hopes to trigger a redevelopment of the club’s San Paolo home despite the plan being shelved when Italy failed to secure the hosting rights to Euro 2016.

In essence, clubs are smartening up their act, slowly but surely. Juve’s new home was built out of the unsuitability of the old Stadio Delle Alpi for a club aspiring to compete at the top of European football. In truth, none of the stadiums in Italy were suitable. The only difference is that the rest remain in use.

The increased attendances due to the more pleasant surroundings, plus the added income from the greater flexibility for corporate attractions makes for a winning combination which would better reflect what is happening across much of the rest of western Europe.

"I am proud that Juventus finally has its own home," said the club’s president Andrea Agnelli at the stadium’s inauguration last summer. "For us it is an historic moment. In addition to its sentimental value, the new stadium is actually an investment that allows us to bring Juventus to the level of the top clubs in Europe.”

This time next year, we are likely to start seeing the numbers to support Agnelli’s claims, and it could well help to trigger the other heavyweights into action. In the meantime, they continue to gamble on Champions League qualification simply to hang on to the ever-thinning thread of the big boys’ coat-tails.

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