Skip to main content

Lazio have a sustainable business model

The authoritative Swiss Ramble reports on the latest set of accounts from Lazio. Their net financial debt rose €10m from €46m to €56m, as gross debt was up from €50m to €60m and cash was unchanged at €4m. Financial debt was just €10m in 2012.

Lazio have been steadily increasing their expenditure in the transfer market with average annual gross spend rising from €20m 2010-14 to €28m 2014-17 and €38m 2017-20. However, average sales have also grown to €46m in the last 3 years, leading to €8m net sales.

Although the €28m Lazio wages growth in the last two years is quite steep, it has still been outpaced by the “Big Three” in Italy (Juventus €66m, Inter €41m and Roma €39m), which means that the gap has further widened.

Revenue has grown by €24m (24%) in the last 2 years from €100m to €124m. The highest increase in this period came from commercial €13m, followed by broadcasting €8m and match day €3m.

Since 2016 Lazio have managed to grow revenue by a third. However, their €30m growth has been significantly outpaced by Inter €194m and Juventus €123m, and is also below Napoli €40m and Atalanta €37m. That said, they have closed the gap to Roma and Milan.

If Lazio do qualify for the Champions League, there will be a significant step-up in revenue. As an illustration, in 2018/19 the Italian clubs earned big money, as follows: Juventus €95m, Roma €58m, Napoli €50m and Inter €48m.

Even after the deterioration, Lazio's €4m pre-tax loss is actually one of the smallest in Italy. No fewer than nine clubs lost more than €15m, including Juventus €27m, Inter €40m and Milan €143m. Largest profits reported by Atalanta €35m, Sampdoria €19m and Sassuolo €13m.

The Swiss Ramble notes, 'Despite last year’s loss, by and large Lazio operate a sustainable business model, having reported profits in four of the last six years. Over that period, they have aggregated €54m of profits before tax, averaging €9m a season.'

However, it is clear that Lazio have become increasingly reliant on player sales. In the last three years, they averaged €40m a season from this activity, a significant increase over the €9m average of the preceding 7 seasons. 2019/20 will include sales of Neto & Jordao to Wolves.

Since 2016 Lazio have managed to grow revenue by a third. However, their €30m growth has been significantly outpaced by Inter €194m and Juventus €123m, and is also below Napoli €40m and Atalanta €37m. That said, they have closed the gap to Roma and Milan.

My comment, 'Increasing reliance on player sales is becoming a pattern across many clubs and its implications need further thought. It is a relatively volatile source of revenue and can be highly reliant on one or two sales. Players bought in the hope of generating a profit may get a serious injury.'

Labels:

Comments

Post a Comment

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion.  Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs.  An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...
Post a Comment
Read more

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more