Tuesday Jun 27, 2017  
     
 
  20/03/2015: Team Revenues and its Impact on the Playing Field for S.S. Lazio (as of 20 March 2015)
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Financial health is a concern for most clubs in Serie A, we need to look no further than the current state of affairs Parma find themselves in. Let’s take some time to look deeper into the financial prosperity of SS Lazio and how it relates to the product on the field during this 2014-2015 campaign. We are all well aware of the poor financial position Lazio were in after the Sergio Cragnotti era, so let’s look at conducting this analysis with balance in mind in order to land at a firm conclusion. Balance here should be defined as the greatest possible success both financially in the front office as well as the greatest possible success through results on the field of play. This is most certainly not meant to be an annual report, it is simply a look from above at the financial status of SS Lazio over the past two years and how that financial position has transferred itself onto the final product on the field of play. It may also help to draw upon the comparison of the financial revenues of other Serie A clubs as this will help in providing context.

Last year, Lazio posted total revenues of €78.7M (year ending June 30th, 2014), this is down significantly from the year prior, where revenues of €99.8M were reported. The variance in revenue over the past two seasons is most likely due to results and fan protests. In 2013, Lazio of course won the Coppa Italia in their most important derby victory in the history of the club. This would of course have earned additional television revenues, stadium revenues and more than likely spawned incremental sales in gear for the club. The stadium boycotts of the Laziali certainly hurt the club as it would have adversely affected ticket sale revenues in the 2014 fiscal year. Lazio went deep in the Europa League in 2013, eventually being knocked out in the quarter finals to Fenerbace in April that year, 3-1 on aggregate. That late run in the Europa League in the 2012-2013 season earned Lazio €9.5M in club redistribution from UEFA out of a total pool of €209M. The following year, Lazio were also knocked out of the Europa League, this time earlier than expected at the hands of Ludogrets in the round of 32, but still picked up approximately €9.5M in club distribution from UEFA, once again out of the total pot of €209M. This of course does not include stadium revenues for these fixtures in either season.

Drawing comparison to European competition earnings in 2013 for Lazio’s Serie A compatriots, Juventus raked in a whopping €65.3M for their quarter final run in the Champions League, and AC Milan earned €51.3M for their round of 16 appearance. For their roles in the 2013 Europa League competition, Udinese earned €4M, Napoli €6.9M and Inter €6.6M. In 2014 AC Milan earned €37.6M for reaching the round of 16 in the Champions League once again. Juventus and Napoli were both eliminated at the group stage and moved down to the Europa League, they still earned €50.1M and €40.2M respectively for their efforts in both competitions, Fiorentina earned €8.2M for getting out of their group in the Europa league in 2014. You can see that there is a clear cut difference in club revenue distribution from UEFA for those who participate in Champions League football. Did Lazio do well by earning a spot in Europe for both the 2013 and 2014 seasons and bringing in €9.5M in UEFA distribution both years? Based on the data above that is readily available from UEFA, you have to believe the answer is yes. Is European football important for Lazio? Again, yes, it most certainly is.

With respect to domestic television revenues for Serie A teams, Lazio also reap their fair share of rewards. Juventus topped the charts earning €90M in TV revenues for the 2013-2014 campaign. Juventus was followed by both Inter and AC Milan who came in at €80.4m and €77.9M respectively. Roma earned the fourth highest amount of Serie A TV revenues with €61.4M, they were closely followed by Napoli at fifth, earning €59.8M. Last season, Lazio earned the sixth highest amount of television revenue at €49.8M. Total Serie A TV revenues last season were €846.1, Italy ranked second in Europe, a long way away from the English Premier League, which earned a monstrous €1.875B for their television rights. As you can see here, Lazio do earn their fair share of television revenues but there is a substantial difference between their earnings and some of their Serie A counterparts. Let’s use the difference in TV earnings between Lazio and AC Milan, who is in third as an example, which is €28.1M. This could equate the three quality players in the summer mercato for Lazio, I say three because €10M valued players appear to be the maximum amount Lazio are willing to pay for a player, look no further than the recent acquisitions of Biglia, Anderson and De Vrij who all came in around that mark once the transfers were all said and done, some more complicated than others. These are all notable players that are extremely impactful to the team on the field and were considered large purchases for Lazio. Again, the picture becomes clearer, given the resources at their disposal and the financial well-being of the club, that Lazio are a competitive side.

Revenues from kit manufacturers are also a huge source of revenue for all European club football teams, Serie A included. As can be expected, there is once again a large gap in disparity between the larger clubs in Italy compared to those further down in brand and fan base popularity. Topping the charts in Serie A is AC Milan, who earn a reported €20M per season from Adidas. Inter are close behind at €18.2M. Juventus will end their current agreement that pays them €16.5M at the end of the 2014-2015, they will earn an increase to €23M from Adidas starting next season. Roma are also due for a new deal from Nike, which will reportedly also earn them a long term annual deal worth an estimated €20M per season. Napoli currently earn an estimated €7.5M from Macron, I am sure upon renewal they will be able to obtain more, either from Macron or one of the large two manufacturers. Lazio are also supplied kits from Macron and earn a reported €2.8M per season from this agreement. Sassuolo come in dead last in kit revenues in Serie A with a deal worth €400k from Sportika. Lazio are clearly substantially behind the large five Italian clubs in kit revenue, this is something that inevitable plays on how they club can approach the open market to purchase players, they need to adapt accordingly and appear to have done so.

In 2013, Football Italia reported that only six teams recorded a profit in Serie A. That year Udinese posted a profit of €32.3M and Napoli were also on the good side of the ledger to the amount of €8.1M. The only other clubs to run at a profit were Chievo at €1.5m, Pescara €1.3M, Fiorentina €1.2M and Catania €0.1M. As mentioned previously, Lazio posted a loss of €5.1M during this campaign, won the Coppa Italia and reached the round of 16 in the Europa League. Other notable losses for Serie A teams during the 2013 campaign include AC Milan at €6.9M, Juventus €15.9M, Roma €40.1M and Inter at an astounding €82.7M loss. Like Lazio, both Juventus and Roma are traded on the Italian Stock Exchange so their 2014 financial documents are obtainable; Juventus posted a loss of €6.7M and Roma €38.6M. Despite the difference in reported revenue for Lazio from 2013 to 2014, the club managed to turn a loss of €5.1M in 2013 into a gain of €7.1M in 2014. This is in large part due to a gain on sale of assets in 2014 of €22.9M. This is undoubtedly the proceeds from the sale of Hernanes to Inter Milan, if this had not taken place 2014 would have also posted a loss for Lazio. Even with that being the case, Lazio have managed to utilize an asset to post a financial gain, this is good business. The balance of the 2014 season did not finish well for Lazio as the club missed out on European qualification, the start of the 2014-2015 has marked a return to the thick of European qualification for Lazio, they have a solid chance and belief is in the air.

Based on the analysis within, it is accurate to come to the conclusion that Lazio are delivering acceptable results on the field of play, given the revenues they earn and are able to utilize at their disposal to build a competitive squad. The larger clubs in Serie A undoubtedly have greater financial resources at their disposal from such revenue pools as Champions League and Europa League football, television right as well as kit agreements. Even so, most continually post large financial annual losses, of various degrees of severity. Lazio are unquestionably a fiscally conservative organization, and we can understand why when delving deeper into the numbers. Comparatively speaking, with Juventus aside, Lazio are able to fight year after year for European football positions within the Serie A campaign, they are known for making deep runs in the Copa Italia and when involved in European football, manage to at the very least emerge from the group stage. Lazio currently sit in 38th position in UEFA’s club coefficient rankings, other notable Serie A teams rank as follows: Fiorentina 49th, Roma 45th, Inter 23rd, Napoli 22nd, AC Milan 21st and Juventus 17th. The Euro Club Index has Lazio ranked in 32nd, among Italian teams, only Roma, Fiorentina, Napoli and Juventus rank ahead of Lazio in this index, the absence of European football surely hurts Lazio’s rankings, but they are respectful rankings nonetheless. As faithful Laziali, we surely all wish and dream of more, but given the context, let’s be thankful for the results we are provided and continue to support our beloved team.

Author: Michael Petricca
 
 
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