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Prudent Napoli's strategy pays off

Not only did Napoli win the scudetto last season, but they achieved this in a lot of style, playing some brilliant football under head coach Luciano Spalletti to seal the deal with six rounds to spare. This was only the third title in their history, over 30 years after the Maradona inspired triumph in 1990.

Give Napoli’s financial disadvantages compared to the traditional “big” Italian clubs, this was a very impressive feat, especially as this came after they had sold (or released) some of the team’s bigger stars before the season started, replacing them with relative unknowns.

This was very much in line with the modus operandi established by owner, Aurelio De Laurentiis, who had bought the club in 2004 after Napoli went bankrupt and were relegated to the third tier. They soon bounced back with two promotions in three seasons, with the Italian film producer insisting that the club follows a sustainable strategy.

Napoli swung from a €66m pre-tax loss to an all-time Italian record profit of €118m, a massive improvement of €184m. Revenue rose €115m (69%) from €165m to a new club high of €280m, while profit from player sales shot up from just €4m to €80m.

However, Napoli’s operating expenses hardly increased at all, as they restricted growth to only 4% (€8m), which is unusual for clubs enjoying such a successful season.

Napoli’s largest revenue increase was broadcasting, which rose €71m (79%) from €90m to €161m, mainly thanks to participation in the Champions League. There was also significant growth in the other two revenue streams, as match day more than tripled from €12m to €38m, while commercial was up €24m (48%) from €52m to €76m. In contrast, player loans dropped €7m (61%) from €12m to €5m.

Napoli’s €118m pre-tax profit was in a class of its own in last season’s Serie A, miles more than the next highest surplus, namely Milan €14m. This was in stark contrast to the large losses posted by the likes of Juventus €117m, Roma €123m and Inter €77m.

Napoli’s superlative financial results were boosted by €80m profit from player sales, up from prior year’s €4m. This was mainly driven by the sales of Kalidou Koulibaly to Chelsea (€42m gain), Fabian Ruiz to PSG €22m and Andrea Petagna to Monza €9m.   In addition, they offloaded a few players on free transfers, which obviously generated no profit, but did reduce the wage bill.

European TV money

Napoli earned €77m for reaching the Champions League quarter-finals, which was logically less than finalists Inter €100m and semi-finalists Milan €85m, though more than Juventus €64m, after the bianconeri were eliminated at the group stage.  Europe TV money has been extremely important for Napoli, earning them an impressive €228m in the last five years. This is the third highest of Italian clubs, but still a lot lower than Juventus €404m and Inter €325m.   Napoli have already earned around €70m from this season’s Champions League with another €11m to come if they beat Barcelona (them again) to reach the quarter-finals.

Napoli have increased commercial income by €29m in the last four years, which is not too shabby, but this was more than matched by Juventus, up €32m, and less than half of Milan’s €70m growth. On the other hand, Inter dropped by more than a third (€59m), due to the disappearance of their Chinese sponsors.  Consequently, Napoli’s €76m commercial income is currently fifth highest in Serie A, albeit only around a third of Juve’s €219m and half of Milan’s €146m.

Wages

Napoli’s wages reduced by €19m (15%) from €130m to €111m, which was somewhat surprising, as success on the pitch normally leads to a higher wage bill, due to performance-related bonuses.   In fact, the €111m wages last season were the club’s lowest for six years, which seems incredible. This is perhaps the clearest evidence of Napoli’s prudent strategy in action.  This means that wages have fallen 28% (€44m) from the €155m peak two years ago, though that season was inflated, as it included two months that had been deferred from 2019/2 following pandemic delays.

To really underline the extent of Napoli’s achievement, their €111m wages are easily the lowest of any of the Serie A champions in the last decade. The wage bill for the other winners range from €328m for Juventus in 2018/19 to €170m for Milan in 2021/22.

Napoli are fundamentally a well-run club. After three years of losses, largely driven by the impact of the COVID pandemic, they have returned to profitability in some style, setting a new all-time record for Serie A.   Last season was truly exceptional, as they managed to punch well above their weight, overcoming their handicap against the traditional leading Italian clubs.

 

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