Napoli have to sell stars to balance the books

The authoritative Swiss Ramble reports that Napoli's 2017/18 accounts posted a €3m loss before tax, compared to €101m profit prior year, as profit on player sales dropped €74m to €30m and revenue fell €18m (9%) from €204m to €185m, mainly due to worse performance in Champions League. After tax, went from €67m profit to €6m loss.

The club's €3m pre-tax loss was by no means the worst in Serie A, as seven others reported higher deficits, including the four largest clubs: Inter €10m, Juventus €10m, Roma €18m and Milan’s horrific €121m. Most profitable: Fiorentina €55m, Torino €54m, Atalanta €40m and Lazio €40m.

Napoli's €185m revenue is the fifth highest in Italy, but still less than half of Juventus’ €411m. As Sarri said, 'Juve’s turnover is too high, they make another league.' Also more than €100m below Inter €290m and behind Roma €257m and Milan €220m, but well ahead of Lazio €129m.

Napoli benefited from €30m profit on player sales, mainly Zapata to Sampdoria €20m and Pavoletti to Cagliari €4m, though much lower than €104m in 2016/17 (Higuain to Juventus €86m & Gabbiadini to Southampton €14m). Only the 10th highest in Italy, way behind Juventus €94m.

Player sales are very important to Napoli, averaging €42m in last six seasons versus only €7m in the previous four. They need to periodically sell stars to balance the books. This season will include at least €60m of gains, mainly Jorginho to Chelsea, while Koulibaly could go for €100m.

The club have now made three losses in the last four years, though have accumulated €190m profits in the last decade. Owner Aurelio De Laurentiis has said that accounts in the red represent a 'stain' on his reputation and expects the club to return to the black in 2018/19.

Revenue growth highlights the importance of Europe, particularly the Champions League. The €204m record revenue in 2016/17 was greatly influenced by €73m from this tournament. In fact, excluding European money, revenue has only grown by €27m (24%) since 2011.

Napoli have earned a healthy €171m from Europe in the last 5 seasons, only surpassed in Italy by Juventus’ €406m and Roma €227m, but comfortably ahead of Lazio €56m, Milan €52m, Fiorentina €41m and Inter €15m. the €171m revenue from European competition in the last five years is the 13th highest of all clubs over that period, ahead of the likes of Borussia Dortmund €166m, Liverpool €153m, Sevilla €150m and Tottenham €140m.

Napoli had €77m TV money from Serie A, a long way below Juventus €117m. Distribution: 40% equal share; 30% performance (5% last season, 15% last 5 years, 10% historical); 30% profile (25% supporters, 5% population). New deal from 2018/19 increases the equal share to 50%.

Average attendance rose from 36,605 to 43,050, the third highest in Italy only behind Inter 57,529 and Milan 52,690. There is a project to redevelop Stadio San Paolo, described as 'an ever increasing toilet' by the colourful president De Laurentiis.

The wage bill increased by €17m (16%) from €102m to €118m. Most of the growth came from player salaries, up €13m to €92m, and bonuses, up €3m to €12m. Wages have more than doubled in 6 years from €58m in 2012, as wages to turnover ratio rose from 38% to 64%, but still below Uefa's recommended 70 per cent level.

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When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned. He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long. What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do

The Political Economy of Football V2

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