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In the 1990s, Italy’s Premier League, Serie A, was the epicenter of European football with superstars such as Marco van Basten, Ruud Gullit, Roberto Baggio, Ronaldo and Paulo Maldini celebrating The Scudetto and lifting multiple UEFA trophies. But the new millennium brought fixed matches, debt and dwindling incomes.
Serie A is now seeing a recovery. On the pitch, traditional powers AC Milan and Inter clash in the first leg of today’s UEFA Champions League semi-finals, while Serie A side Roma play Bayern Leverkusen in Thursday’s UEFA Europa League semi-finals, while fellow Italian club Juventus take on Sevilla .
On the balance sheet, thanks in large part to a steady stream of interest from American owners, the picture is also improving, with Serie A revenues growing faster than those in rival European leagues.
Yet this is still Italian football, where scandal often seems like business as usual. Italian authorities are in the midst of two ongoing investigations into financial abuse by Serie A clubs, one of which has ensnared American-owned Roma.
This is not to downplay the good news. According to Deloitte Annual Review of Football Finances, Serie A clubs saw the biggest percentage growth in total revenue among Europe’s big five soccer leagues in 2020-21, rising 23% to $2.7 billion (€2.5 billion) in total. Serie A was also the only league to report more revenue than it accumulated in 2018-19. While the growth was mostly due to higher broadcast revenue, 14 of the 17 clubs reported increased commercial revenue totaling $124 million.
The league’s fiscal renaissance began when investors – mostly from North America – saw untapped value in Serie A teams that had struggled financially in the decade or more since the 2008 financial crisis.
Most recently, Gerry Cardinale’s RedBird Capital acquired 19-time Serie A champions AC Milan in a 2022 deal that valued the team at $1.3 billion. Cardinale bought the team from US-based Elliott Investment Management, which paid out after taking control of AC Milan from embattled owner Li Yonghong in 2018.
The Cardinale are part of a wave of ownership in North America that Serie A president Lorenzo Cazzini says has improved the health of the league. “American owners have not only increased the degree of professionalism, but also paid more attention to the market, long-term investment, merchandising and entertainment,” Cazzini said in an interview. “Diversity of properties is an added value of Series A.”
Still, Americans were not spared the recent accusations by Italian authorities of financial abuses known as capital gain (capital gains) scandal.
On April 5, prosecutors seized financial documents from three clubs, including Roma, related to transfer deals and the methods used to determine transfer prices. Roma didn’t answer of Sportico request for comment but denied wrongdoing in a statement and said the club was “cooperating with authorities”.
Prior to the Roma investigation, prosecutors in Turin had launched a separate investigation into Juventus for allegedly inflating player transfer valuations to make the club’s year-end accounts more favorable. The investigation prompted a sports court to strip 15 points from the club’s league table in January, jeopardizing its chances of a lucrative Champions League place next season. However, on 20 April, the higher court ruled that the punishment against Juve should be reviewed, restoring the points, at least temporarily.
Juventus did not respond Sportyrequest for comment.
Despite these problems, the league’s traditional powers Milan, Inter and Juventus are playing for UEFA trophies and there is also a competitive balance, as evidenced by Napoli’s Serie A title (after 33 years) and Juve’s hold on to second place. Off the pitch, Venezia and Roma shirts are selling out thanks to successful marketing campaigns and Kim Kardashian.
Cardinale says the rebound was fueled by the Yankees in the C-suites. “The Americans have been, as the business of sports goes, a little bit ahead of the Europeans in putting together revenue streams around rights holders and elevating the fan experience,” Cardinale said in a video call.
According to Milan’s latest financial results for the 2021-22 season, the 123-year-old club has reduced its pre-tax loss by more than 30% to $66 million (€60 million) and revenue has increased by 14% to $328 million (€ 297.7 million) compared to $287.5 million (€261.1 million) in the previous financial year. The gains were the result of increased revenue from matches and higher income from commercial activities, royalties and sponsorship agreements.
RedBird’s founder rebuilds AC Milan by navigating the transfer market and player development with a foundation in data analytics. “It is in everyone’s interest that Serie A is as competitive as possible because that will make it a more valuable league,” he said.
Recent changes in Italian law around the commercialization of broadcasting rights, gambling and infrastructure put Serie A into a new era. The league can negotiate longer media deals and plans to create a media company to boost its commercial activities.
“On the pitch, Serie A is a good product. But the league has to find ways to bridge the gap that’s opened up,” said Chris Mann, head of M&A consulting at Sportsology, a boutique sports consulting firm. Sporty.
Although the English Premier League is not a realistic point of comparison for Serie A, Mann said the league could catch up with Spain’s La Liga.
“Is Italy the lowest risk market for football investors in its current state?” Not at the moment, but the green shoots of a fascinating growth story are there to see if Serie A can overcome its off-field issues as capital gain scandal and a drive for greater transparency and commercial sophistication.”