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.

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.'

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

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