Napoli needs to sell players to balance the books

The authoritative Swiss Ramble reviews the 2019/20 accounts of Napoli.

The club swung from €48m pre-tax profit to €20m loss, a €68m deterioration, as revenue fell €38m (17%) from €217m to €179m and expenses rose €43m (17%) to €295m, partly offset by €13m increase in profit on player sales to €96m. After tax, €29m profit to €19m loss.

All revenue streams were lower with broadcasting being the largest reduction, down €22m (15%) to €121m, though there were also falls in commercial, down €5m (11%) to €42m, and match day, down €3m (17%) to €13m.

The post-tax €19m loss is not great, but it is much lower than huge 2019/20 losses at other Italian clubs, impacted by COVID, e.g. Roma €204m, Milan €195m, Inter €102m and Juventus €90m. The pandemic has reduced Napoli revenue by an estimated €32m.

Napoli have posted four losses in the last six years, though have accumulated an impressive €196m profits over the last decade, including two hefty profits in 2017 (€101m) and 2019 (€48m). Unless the COVID situation improves, club is likely to report a substantial loss in 2021.

Player sales are very important for Napoli, increasingly so, as they have averaged €65m a season in the last five years compared to only €24m in previous five. The club needs to periodically sell stars to balance the books. The €325m profit from player sales in last five years is only beaten by Juventus €563m and Roma €372m, but is €100m more than the next highest, Inter €226m.

Revenue growth highlights the importance of the Champions League, as 2020 revenue of €179m was greatly boosted by €67m from this tournament. It is imperative that they do well in Europe as Serie A television rights are relatively low. They have earned an impressive €246m from Europe in the last five seasons, only surpassed in Italy by Juventus €449m and Roma €255m, but ahead of Inter €117m, Lazio €76m, Atalanta €71m and Milan €29m.

Revenue is now third highest in Italy, though less than half of Juventus €407m and €132m below Inter. That said, they have overtaken both Milan €172m and Roma €149m.

Commercial income has hardly grown in the last decade, leading to a massive disparity with other leading European clubs. Even before last season’s decrease, their €46m in 2018/19 was miles below the likes of Barcelona €384m, PSG €363m, Bayern €357m.

Wages up €56m in the last 4 years, while revenue only rose €35m, increasing wages to turnover from 59% to 79%. In fact, since 2016 wages growth of €56m has only been outpaced by Inter €74m and Juventus €63m.

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The Political Economy of Football V2

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