Roma rely on owner funding

2022/23 was Roma’s third season under the ownership of The Friedkin Group, who purchased the club from fellow American James Pallotta in August 2020.

The good news is that Roma’s pre-tax loss more than halved, narrowing from €219m to €99m, which is a significant improvement, but this was still a sizeable deficit. The greatly reduced loss was needed to comply with the settlement agreement signed with UEFA.

Roma are no strangers to losing money, as they have suffered losses 14 years in a row, adding up to nearly a billion Euros (specifically €992m). The last time that they posted a pre-tax profit was back in 2009 – and that was only €3m.

To place last season’s €99m loss into perspective, while it was much better than the past three years, it was still way higher than the losses before the pandemic struck. In the previous 10 years, the average loss was much lower at €29m.

Revenue rose €28m (14%) from €196m to €224m, while profit from player sales shot up from €5m to €47m, while costs were cut by €52m (13%) to €349m, though net interest payable increased by €5m (21%) from €23m to €28m.

Despite the improvement, Roma’s €99m pre-tax loss was the second highest in Serie A last season, only surpassed by Juventus €117m., though it was better than Inter €77m. In stark contrast, Napoli reported a €118m profit, which was an Italian record, while Milan also notched up a €14m surplus.

Roma’s revenue increase was driven by match day, which nearly doubled from €26m to €49m, while broadcasting rose €16m (18%) from €93m to €109m. Commercial fell €11m (15%) from €73m to €62m, though this was mainly due to high player insurance payouts in the previous year.

Roma are the only leading Italian club whose revenue has dropped since 2018. Every other club has managed to grow its revenue in this period, especially Milan €181m, Inter €106m and Napoli €94m. As a result, Roma’s revenue is now fifth highest in Italy in 2022/23, a fair way below the top four. Juventus’

The improvement in Roma’s bottom line was helped by profit from player sales, which increased by €42m from (restated) €5m to €47m, comprising €54m less a €7m valuation adjustment. Roma’s decent profit from player sales was much needed, as this had effectively dried up in the previous three years when they generated just €23m, which has had an obvious impact on Roma’s bottom line.

Roma’s achievement in reaching the Europa League final was worth €29m. This was not too shabby, but the difference with Italy’s clubs in the Champions League is immense, e.g. Inter were also finalists, but they trousered €100m. Even Juventus, who were eliminated at the group stage, received €64m. European participation is extremely important for Roma, but the drop-off in their revenue in the last four seasons, when they have failed to qualify for the Champions League, is notable. They averaged €71m income in 2018 and 2019, compared to just €22m since then, even though they have reached two finals in that period.

Roma’s average attendance of 62,038 was the third highest in Serie A, not too far below the two Milanese clubs: Inter 72,630 and Milan 71,880. In turn, Roma were a fair way ahead of Lazio 45,483 and Napoli 45,102. Even more impressively, Roma’s crowds featured among the top clubs in Europe with their average attendance being ninth highest.

Owner funding

Roma’s gross financial debt increased by €141m (40%) from €356m to €497m, which means that this has virtually doubled in just four years. However, the composition of the debt has greatly changed, so external debt has decreased from €271m to €180m, while debt provided by the Friedkins has increased from €85m to €318m. This has reduced the club’s exposure to third parties.

Roma have been very reliant on capital injections from their owners, including another €232.5m from the Friedkins in 2022/23. That took capital funding to more than three-quarters of a billion Euros since 2012. The Friedkins have put in over €600m into Roma, adding together capital and loans. If we add the €200m they paid Pallotta to acquire the club plus €25m to smaller shareholders, that add up to an investment to date of well over €800m.

It’s fair to say that the club’s bet on Mourinho only partially worked. On the plus side, he brought back the crowds, while also reaching two European finals. However, the Portuguese did not manage to qualify for the lucrative Champions League, which would have gone a long way to solving Roma’s financial issues. As a result, they continue to rely on significant financial support from the owners, which is likely to be necessary for the foreseeable future.

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The Political Economy of Football V2

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