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

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

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 ...
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more