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RIVISTA DI ISSN 1825-6678
DIRITTO ED ECONOMIA DELLO SPORT Vol. VII, Fasc. 2, 2011

THE ORGANIZATION AND ECONOMICS OF ITALIAN SERIE A:

A BRIEF OVERALL VIEW

by Alessandro Baroncelli* and Raul Caruso**

SUMMARY: Introduction – 1. The Institutions of Italian Football – 2. Ownership and

listing of Italian Serie A Teams – 3. Management of stadia – 4. Some Economics
of Italian Football League – 5. Costs out of control. Financial fragility of Italian
teams – Conclusions – References

JEL CODES : L83

Introduction

Italian football industry is at a crossroads. In fact, the football industry in Italy

reached the aggregate value of Euro 3.6 billion.1 This is in line with a growth
registered in Europe. The European football market grew by 4% to Euro 16.3
billion in 2009/10 whereas Italian Serie A’s revenues increased only by 3% to Euro
1,532m.2 In fact, football is the most popular sport in Italy, with 31 millions of fans
and 1.2 millions of active footballers. Moreover, 9 million of Italians regularly
watch matches at stadiums, and 20 million read about football in newspapers and
25 million who follow football on television or radio.3 It has been estimated that
____________________
*
Full Professor of Business Management at Catholic University of the Sacred Heart; Director of
MIB Master in International Business and of the Monitor on Football clubs’ Brand Management
– ICRIM; alessandro.baroncelli@unicatt.it
**
Senior Researcher at Catholic University of the Sacred Heart, Institute of Economic Policy,
Milan. raul.caruso@unicatt.it, an earlier version of this article is published as A. BARONCELLI, R.
CARUSO, The Organization and Economics of Italian Top Football, in Gammelsaeter H., Senaux B.,
(eds.), The Organisation and Governance of Top Football across Europe, Routledge, London,
2011.
1
Source: Report Calcio 2011
2
source: Football Money League 2011, Deloitte
3
Source: Lega Calcio.
68 Alessandro Baroncelli and Raul Caruso

football generates aggregate revenue amounting to Euro 6.272 billion.4 Football is

also the activity preferred by 53 percent of the firms that choose to communicate
through sport. Football receives 54 percent of the total investment in sporting
sponsorship. In the 2008-09 season, Italian TV networks broadcasted 3,115 hours
in total of programming dedicated to football (including pay-TV non-specialised
transmissions). The 25 most-watched television programs in the history of Auditel
(Italian TV audience rating agency) have all been football matches. The clubs
followed the economic development of the sport industry.5
Needless to say, it is clear that the organization of football in Italy is a
sensitive issue which very often attracts prolonged attention and debate. Moreover,
in Italy football is often interpreted as an element of national pride and identity.
The national team has won the World Cup four times (second only to Brazil) and
the Italian teams are second only to Spanish teams if considering the number of
European cups won, and first if considering only the UEFA Champions Leagues
after its inauguration in 1992.
In some cases, it could be also argued that this great popularity has been
used to motivate and justify some exceptions to ordinary rules. Football teams for
example have had a very favourable application of the fiscal regulation. The
popularity of the game lies behind possible slippage of the authorities’ toleration of
financial misconduct when it concerns football clubs rather than «ordinary» firms
operating in other fields and businesses. Moreover, the authorities seem to have a
different attitude towards football-related hooliganism in comparison to riots
occurring on other occasions which cause similar incidents.
This article is intended to analyse briefly the fundamentals of the
organization of Italian top football and its economic aspects. Furthermore, we
review the evolution of the financial situation in professional Italian football and
attempt to depict what we think are the main causes of evident under-performance,
which threatens to turn into a full-blown crisis. Moreover we will depict the evolution
of the management of the most important source of funding for Italian football,
namely the TV-rights.

1. The institutions of Italian football

The Italian Football Federation is the governing body of football in Italy. Founded
in 1898,6 it was originally called Federazione Italiana Football (FIF) since all terms
___________________
4
M. CAMPIOLI, Il contesto industriale, paper given at Business Club Italia www.businessclubitalia.org/
2010.htm (22 January 2010).
5
On the evaluation of sport economy please see W. ANDREFF, Globalization of the Sport Economy,
in Riv. Dir. Ec. Sport, vol. 4, n. 3, 2008, 13-31. For a comprehensive economic definition of sport
please see R. CARUSO, Crime and Sport Participation: Evidence from Italian Regions Over the
Period 1997-2003 , in J. of Soc. Ec., (in press), 2011; R. CARUSO, Il calcio tra mercato, relazioni e
coercizione, in Riv. Dir. Ec. Sport, vol. 4, n. 1, 2008, 71-88; P. DOWNWARD, A. DAWSON, T. DEJONGHE,
Economics of Sport: Theory, Evidence and Policy, Butterworth-Heinemann, Oxford, 2009.
6
It included originally just four clubs – Genoa (Genoa Cricket and Athletic Club- now Genoa Cricket
The organization and ecnomics of Italian Serie A: a brief overall view 69

and rules of the game were those of the English FA. The first league took place on
a single day, May 8, 1898 in Turin. This first federation was an «amateur» federation
respecting FIFA rules since it became a member in 1905.7 In 1909 FIF was renamed
Federazione Italiana Giuoco del Calcio (FIGC). FIGC is one of the 45 national
sports federations affiliated to the Italian National Olympic Committee (Comitato
Olimpico Nazionale Italiano, CONI),8 a public body responsible for the development
and management of sports activity in Italy. Its annual budget is funded by the
Italian government, private donations, and income from the various football betting
pools in Italy (Totocalcio, Totogol, Totoscommesse etc.).
At the end of World War 1, Italian football saw an impressive development
and several athletes were judged to be professional players and banned according
to the FIFA agreements. From 1922 to 1926 more severe rules were approved for
keeping the «amateur» status of players effective such as footballer’s residence
and transfers controls, but the best players were secretly paid and moved from
other provinces illegally. Foreigners had to live in the country in order to get a
residence visa and the player’s card. In 1926 the Board of the Italian FA resigned
following a severe referee’s strike, thus Lando Ferretti, the fascist president of
the Italian Olympic Committee appointed a Commission to reform all Leagues and
federal rules. The Commission produced a document called the «Carta di Viareggio»
where football players were recognized as «non-amateurs» and allowed to apply
for refunds to the football teams they had played for. They had to sign a declaration
stating they were not professional players so that FIFA rules were formally
respected, since for the Italian FA they were still appearing as «amateurs» receiving
just refunds. Despite this, it was the beginning of professional football in Italy.
The Italian FA organises the Italian national football teams for men and
women and the Italian women’s championship9 while the men’s top competitions
are organised by leagues. The Serie A was created in 1929. Since 2004, 20 teams
takes part into the championship which is organised in a round-robin format. Since
Italy is currently rated as one of the top three European countries in terms of club
football ratings, the top four teams in the Serie A qualify for the UEFA Champions
League. The top three teams qualify directly to the group phase, while the fourth-
placed team enters the competition at the third qualifying round and must win a
two-legged knockout tie in order to enter the group phase. Teams finishing 5th and
6th qualify for the UEFA Europa League. The three lowest placed teams are
relegated to Serie B, which is composed of 22 teams. Until 2010, two professional
___________________
& Football Club was the first Italian club), FC Torinese, Internazionale di Torino and the Società
Ginnastica di Torino. Other clubs existed, but decided not to join.
7
Later on it was also a founding member of UEFA.
8
Founded in 1914 (it was then reorganized as a legal body with the law 426/1942), and a member
of the International Olympic Committee (IOC).
9
The female competition was officially introduced by the Italian FA in 1986 as a non-professional
competition, although a championship has been played in Italy since 1968. The women’s Serie A
currently includes 12 teams. The winning team qualifies for the UEFA championship and the last
two teams are relegated in Serie B.
70 Alessandro Baroncelli and Raul Caruso

leagues co-existed: the Lega Calcio (founded in 1946) organising the top two
professional championships (Serie A and Serie B) and the Italian Cup,10 while the
Lega Pro (founded in 1978 when semi-professionalism was abandoned) organises
the First (two groups of 18 clubs) and Second Divisions (three groups of 18 clubs),
making a total of 132 professional teams. Following a row over TV rights, Serie A
clubs announced a split from Serie B in 2009; hence as of July 2010 there are
three professional leagues: the Lega SerieA (organising the Serie A championship
and the Italian Cup), the Lega SerieB (Serie B) and the Lega Pro. The interregional,
regional and provincial committees of the Amateur League organises the six
amateur levels. In addition to the clubs and the leagues, three important associations
are affiliated to the Italian FA: the National Association of Footballers (created in
1968 by a group of leading players), the National Association of Trainers, and the
National Association of Referees.
This helps to explain why even in the face of the enormous economic
interests, the regulatory framework into which football has entered in recent years
has been inspired by opaque principles and, notwithstanding the numerous scandals
that have occurred. For example, in 2006, the Calciopoli match-fixing scandal,
disclosed a complex system of coercion operated by managers of Juventus in
accordance with some referees, other mangers and some FA officials in order to
influence the results of matches and championship. The Italian FA was placed in
administration in May 2006. Juventus had been found guilty from the Sport judicial
system. Therefore it was denied the win of the 2004-2005 championship and
eventually it was relegated to serie B. Minor punishments were assigned also to
Lazio, Milan, and Fiorentina.
Politicians and football authorities, in particular, have demonstrated a clear
opportunistic behaviour by exploiting the popular impact of football, tolerating a
widespread illegality in the management of clubs, the practice of doping, and the
latent criminality in the sphere of supporters’ organisations,11 which often spills
over into grave acts of violence. In other cases, politicians have given the impression
of connivance, exploiting the world of football in order to win consensus, at the
local level and above all at the national level, where populist measures have been
adopted. This had been particularly true for right-wing post-fascist parties. For
example, in the last electoral tournament held in Lazio region, the right-wing
candidate for presidency showed up in the midst of Lazio fans who are traditionally
considered to be extreme right-wing activists. In fact, the football influence is so
pervasive that in the Italian Parliament in the latest years, the lawmakers have
mimicked the organised groups of football fans by creating fan clubs of several
Serie A teams.
___________________
10
This tournament was first introduced in 1922, but it has been regularly disputed since 1958.
11
The main role of most local fan clubs is to provide a meeting place for fans (tifosi) and friends and
organize away trips. However since the late 1960s many Italian fans rely on organized stadium
groups known as Ultras. Although they are not represented in any club board, they are commonly
expected to put a pressure on clubs owners and local communities. In some cases, some organized
groups are also considered to shape and inspire hooliganism.
The organization and ecnomics of Italian Serie A: a brief overall view 71

2. Ownership of Italian Serie A Teams

The floatation of football clubs on the Stock Market Exchange is one of the main
factors that has turned Italian football, long considered as a sport activity with
economic interest concentrated in a few top actors (players, teams, etc.), into a
conventional business activity. Until 1981, professional football clubs were organised
as not-for-profit associations. According to the 91/1981 law, clubs employing
professional players had to organise joint-stock companies with the qualification
that any profit had to be reinvested in the sport activity. In 1996 the quotation of
football clubs was allowed by law 586/1996 and consequently the previous prohibition
for sport companies to pay dividends and settling surplus like an ordinary profit
company was cancelled (although it introduced the obligation for the clubs to
reinvest at least 10 percent of operating incomes in soccer academies). The
implementation of this law also meant that football companies were allowed to
diversify into related activities or activities instrumental to the sport business.
Previously sport companies had to deal with sport operations only. Thus, football
companies evolved from non-profit organizations to for-profit entertainment
companies dealing with any business that could generate incomes leveraged on
the football clubs’ visibility. This was expected to increase the financing opportunities
for football clubs as well as the synergies with companies operating in various
businesses and it made football clubs attractive to wealthy investors rather than to
fan tycoons only.
Consequently, since Tottenham in 1983 in United Kingdom, some teams in
Europe have been listed in the stock exchange. In Italy, the first club listed on the
Stock Exchange was S.S. Lazio in 1998, followed by Juventus in 2001 and AS
Roma in 2002. Unfortunately long-run returns of stocks seem not to payoff. On
3th July 2006 the stock price of A.S. Roma was 1.150 euros while on 1st july 2011
the closing price was at .699 (-39,2% in five years). In the same interval, the stock
price of Juventus F.C. decreased from 1.165 euros to .872 (-25,15% in five years).
In the same period only investors in S.S. Lazio got a positive return (+70.17%
from .295 to .502 euros). More in general the whole football sector in Europe did
not perform particularly well. The STOXX european football index on 3rd July
2006 was 120.5 while on 1st July 2011 it was 130.11 so recording an increase of
8.3%.12 In general, there is a growing awareness that only sporting performances
have a significant impact on the stock market valuation of football clubs. In particular,
This is especially true in those countries – like Italy – where teams are not able to
diversify the sources of income.
However even listed teams in Italian serie A are largely controlled by
holding groups or individuals. For example, Exor, an investment company controlled
by the Agnelli’ family, owns more than 60 percent of Juventus, Italpetroli, controlled
___________________
12
For a comprehensive account on listing of football teams please see A. CIARRAPICO, S. COSCI, P.
PINZUTI, Risultati sportivi e performance di Borsa nel calcio europeo in Riv. Dir. Ec. Sport, vol. 6,
n.2, 2010, 63-87.
72 Alessandro Baroncelli and Raul Caruso

by the Sensi family owns directly and indirectly around 67 percent of Roma while
over 67 percent of the S.S. Lazio stock is owned by Claudio Lotito. Indeed, most
clubs in the Serie A are owned by family groups or individuals controlling companies
operating in unrelated businesses. Given the current financial outlook in the Italian
football industry, it seems extremely unlikely for those owners to make any positive
return on the football investment. Thus, we may infer that these clubs’ owners,
beyond giving paternalistic support, are spending personal (groups’) funds in an
attempt to acquire high media exposure, social status, and possibly political influence
in order to facilitate other types of businesses. Table 1 below shows who are the
owners of each Italian football company that participated in Serie A 2009-2010 as
well as their main activities and most relevant trading brands.

Table 1: Ownership and main activity of football companies in Serie A, 2010-11

CLUB PRESIDENT/PATRON OWNERSHIP OWNERS’ OWNERS’
MAIN MOST
ACTIVITIES RELEVANT
TRADING
BRANDS
AS Bari Vincenzo Matarrese Family Construction Salvatore
Matarrese
Spa
Bologna FC Albano Guaraldi Individuals Miscellaneous Various
1909 and (referred to
corporations the holding
company
shareholders)
Brescia Luigi Corioni Individual Toilet seats and Saniplast
Calcio bathroom
accessories
Cagliari Massimo Cellino Individual Cereals Sem, Stipar,
Calcio processing and Simec, Ism,
trade Sice
Catania Antonio Pulvirenti Individual Airline, hotels Wind Jet,
Calcio Platinum
Resort
AC Cesena Igor Campedelli Individual Construction Opera
Chievo Luca Campedelli Individual Backing and Paluani
Verona confectionary
industry
ACF Andrea Della Valle Family Shoes, luxury Tod’s,
Fiorentina leather goods, Hogan, Fay
and casual wear
Genoa CFC Enrico Preziosi Individual Toys Giochi
manufacturing Preziosi,
and distribution Gig, Toys
Center
FC Massimo Moratti Family Oil refine Saras,
Internazionale industry Sarlux,
Sardeolica
The organization and ecnomics of Italian Serie A: a brief overall view 73

CLUB PRESIDENT/PATRON OWNERSHIP OWNERS’ OWNERS’

MAIN MOST
ACTIVITIES RELEVANT
TRADING
BRANDS
Juventus FC Exor (Agnelli family) Family Conglomerate Gruppo
(Motorcar, FIAT,
Banking, Intesa-
Miscellaneous SanPaolo,
etc.) Alpitour
SS Lazio Claudio Lotito Individual Cleaning, Snam LAzio
sanitization and Sud,
surveillance Coopservice
Scarl,
Roman
Junior
Security
US Lecce Pierandrea Semeraro Family Diversified None
Milan AC Silvio Berlusconi Family Conglomerate Mediaset,
(Communication Arnoldo
and Mondadori,
entertainement, Mediolanum,
banking and Medusa
insurance
financial
services, etc.)
SSC Napoli Aurelio De Laurentis Family Production and Filmauro
distribution
of films
US Città di Maurizio Zamparini Individual Large Chain Mandi
Palermo Stores
Parma FC Tommaso Ghirardi Individual Mechanics Leonessa
industry
A.S. Roma Thomas Di Benedetto NEEP Roma Sport Liverpool,
Holding Management Red Sox
S.p.A. (60%
DiBenedetto
AS Roma
LLC, 40%
Unicredit
S.p.A.)-
UC Riccardo Garrone Family Oil industry and Erg
Sampdoria Energy
Udinese Franco Soldati Family Tools for wood Casals
processing and Herramentas,
Fans’ Casals
manufacturing Ventilacion,
Freud
74 Alessandro Baroncelli and Raul Caruso

Since football is widely reported to be economically unhealthy or non-

profitable at the club level, we have tried to analyze the owners’ main business
activities to see if synergies emerged between their activities and the football
business itself. Apart from the entertainment (e.g. AC Milan and Napoli) and the
construction13 sectors it did not seem predictable that the football club ownership
we have identified among the Serie A clubs (please see Table 1) would facilitate
exploitation of synergies between the clubs’ owners main businesses of and football.
Thus, we may conclude that also in Italian football business a pure economic
rationale does not apply to the football industry. In many cases, clubs are dependent
on contradicting institutions such as the civil sector, the market, the state, and the
sport itself.14
Instead, entrepreneurs or corporations that have an interest in acquiring
English clubs rely heavily on a business rationale. The primary concern is related
to the availability of funding, either direct funding in the form of a takeover by a
«patron», or indirect, where the acquisition is funded by borrowing against the
club’s assets and future income streams and then loading that debt on to the football
club.15 That is, in simpler words, the acquisition of an English club seems to be a
pure commercial decision. As a consequence, several English clubs were bought
by foreign businessmen. A novelty of the Italian next season will be a similar deal
concerning the new ownership of AS Roma. Thomas Di Benedetto, a US private
equity investor, has become the first foreign owner of a top Italian football club.
An US consortium led by Mr Di Benedetto, who already has interests in the
Boston Red Sox and Liverpool Football Club, acquired a 60 per cent stake in a
new holding company (NEEP Roma Holding S.p.A.) for the club.

3. Management of stadia

In Italy, the sports facilities are typically owned by the municipalities and the clubs
have almost no formal power to decide how the sports facilities should be used,
particularly when grounds are shared by two clubs (e.g. in Milan or Rome). A few
years ago, major Italian football clubs and also some of the minor ones realized
that owning or renting a stadium for a long period is one of the main ways of
increasing revenue. In times of economic crisis, as in the present period, ownership
or long-term leasing (30-90 years) of a stadium is amongst the most highly debated
topics in the business. Besides the opportunity to diversify sources of revenue
___________________
13
In recent years, a few Italian construction groups have been attracted by the business opportunities
inherent in stadia construction (e.g. Bari, Bologna, Cesena and Siena, promoted to Serie A in the
2010-11 season), and accordingly they have decided to invest directly in clubs in order to be able to
control those prospective building projects more tightly.
14
H. GAMMELSÆTER, B. SENAUX, Perspectives on the Governance of Football Across Europe, in
Gammelsaeter H., Senaux B., (eds.), The Organisation and Governance of Top Football across
Europe, Routledge, London, 2011.
15
S. MORROW, History, Longevity, and Change: Football in England and Scotland, in Gammelsaeter
H., Senaux B., (eds.), The Organisation and Governance of Top Football across Europe, Routledge,
London, 2011.
The organization and ecnomics of Italian Serie A: a brief overall view 75

ownership or long-term leasing it also represents important tangible assets in contrast

to the volatile and hazardous intangible assets (such as players’ contracts) usually
found in clubs’ balance sheet. In particular, the management of stadium is expected
to be the core of new marketing mix of football teams.16 Most Italian clubs
participating in Serie A have announced plans to transform their stadia into highly
impressive venues or to build new stadia in locations that should be more convenient
for adding lucrative corporate hospitality. So far most Italian clubs’ aspirations to
build new stadia have remained on hold as clubs’ owners are waiting for the
appropriate time to obtain building permission from city authorities and to raise
finance for their project. To date, only Juventus embarked on the construction of
its own stadium which has been just completed and will be inaugurated at the
beginning of the new football season.

4. Some Economics of Italian Serie A

As noted above the Italian Serie A, in spite of the economic downturn, increased
the revenues by 3% in the season 2009/2010. However, the imbalance between
revenue and costs has worsened more than elsewhere among the main European
Football Leagues. In particular, the sources of funding for professional teams of
Serie A have severely changed their relative weight. This is clear while reading
the figures of the period 1998-2008. Table 1 reports the breakdown of total turnover
of Serie A from 1998-2008. The subtotal A summarizes the ‘traditional sources of
funding’ which are related to attendance of matches, namely the game tickets
and the season tickets sold. The subtotal B summarizes the sources which can be
defined as media-related, namely (i) TV-rights, (ii) sponsorships and (iii) advertising.
In spite of the evidence that advertising and sponsorships have always been a
source of funding for sport clubs, their relative weight clearly increased in the
presence of a larger audience due to TV broadcasting.
If we pay attention to the absolute figure, the total turnover of teams
increased by 140 percent from 1998 to 2008. Needless to say, such increase
depended mainly on the massive increase of TV related sources such as TV-
rights, sponsorships and advertising. The revenues from TV-rights increased from
a percentage quota of 37 percent in 1998 to a quota of 63 percent in 2008. This is
in line with the process of transformation of European football which started in the
early 1990s. In Italy, the introduction of pay-TV in 1993 and, subsequently, the
introduction of the «Pay-per-View» system in 1996 led to a major increase in
revenue from TV companies, and since then TV-rights have become the most
important income stream for football clubs. However, in spite of increasing
importance of TV-rights across Europe, we must consider also that such severe
imbalance between TV-rights and the other sources of revenues is an Italian
peculiarity.
___________________
16
Please, see on this point S. GIUDICE, Il Marketing nella gestione di uno stadio moderno, in Riv.
Dir. Ec. Sport, vol. 4, n. 2, 2008, 37-65.
 76 Alessandro Baroncelli and Raul Caruso

According to the Annual Review of football finance 2008 released by

Deloitte, the TV rights to turnover ratio is the highest in Italy’s Serie A (63 percent),
followed by the French (58 percent), the Spanish (42 percent), the English (39
percent), and the German premier leagues (35 percent). Moreover, data from the
Deloitte Football Money Leagues for the 2006-07, 2007-08 and 2008-09 seasons
shows that the four Italian teams Milan, Juventus, Internazionale, and Roma
generate a significantly lower percentage of their revenue from matchday receipts
compared to other big European teams. In particular, Juventus is the least able in
this respect because of the lowest average home match attendance among the top
European teams. Table 2 reports the breakdown of total revenues as computed by
Deloitte in its report Football Money Leagues. AC Milan, Juventus, Internazionale
and AS Roma are the teams which are included within this European group of
high-revenues teams. As it is clear from table 2, the Italian teams are the least
able to generate matchday revenues. In particular, Juventus is the least able in this
respect because of the lowest average home match attendance.

Table 1. Breakdown of Total revenues

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
(*) (*) (*) (*) (*) (*) (*) (**) (**) (**) (**)
Serie A 73,406 75,315 66,326 68,321 74,113 59,509 62,059 69,570 54,811 48,828 67,861
European
Cups 20,676 19,776 17,015 20,771 30,513 46,335 14,116 28,759 22,911 20,811 22,721

Coppa Italia
and Friendy
Matches 24,916 21,567 17,481 13,173 10,633 19,522 16,704 20,969 16,988 10,651 24,646
Season
Tickets 99,360 104,941 101,410 84,656 75,710 84,957 93,031 106,605 84,945 75,706 88,635
Subtotal A 218,358 221,599 202,232 186,921 190,969 210,323 185,910 225,903 179,655 155,996 203,863

Sponsorships 70,606 99,255 125,664 153,915 152,223 161,972 166,955 186,135 187,814 134,596 187,512
TV rights 241,303 248,371 595,543 618,609 602,266 646,141 631,801 765,559 872,875 731,693 984,932
Advertising 29,410 36,924 45,321 62,985 73,432 74,776 77,740 85,178 85,619 74,217 100,824
Other 90,155 107,588 90,141 128,246 107,228 68,781 90,311 72,918 73,364 66,463 84,488
Subtotal B 431,474 492,138 856,670 963,755 935,149 951,670 966,807 1,109,790 1,219,672 1,006,969 1,357,756

Total (A+B) 649,833 713,737 1,058,902 1,150,676 1,126,118 1,161,993 1,152,717 1,335,693 1,399,327 1,162,965 1,561,619

Source: Lega Serie A, * 18 teams, ** 20 teams; data are at 30 June every year
The organization and ecnomics of Italian Serie A: a brief overall view 77

Table 2 - Composition of total revenues

Total
Turnover Commercial Matchday Broadcasting
Rank (m euros) (%) (%) (%)
Real Madrid 2008/2009 1 401.4 35 25 40
2007/2008 1 365.8 35 28 37
2006/2007 1 351 39 23 38

Manchester United 2008/2009 3 327 25 39 36

2007/2008 2 324.8 25 39 36
2006/2007 2 315.2 27 44 29

Barcelona 2008/2009 2 365.9 31 26 43

2007/2008 3 308.8 33 29 38
2006/2007 3 290.1 32 31 37

Chelsea 2008/2009 6 242.3 26 36 38

2007/2008 5 268.9 29 35 36
2006/2007 4 283 30 39 31

Bayern Munich 2008/2009 4 289.5 55 21 24

2007/2008 4 295.3 60 23 17
2006/2007 7 223.3 48 25 27

AC Milan 2008/2009 10 196.5 33 17 50

2007/2008 8 209.5 29 13 58
2006/2007 6 227.2 20 13 67

AS Roma 2008/2009 12 146.4 28 13 59

2007/2008 9 175.4 27 13 60
2006/2007 11 157.6 19 15 66

Internazionale 2008/2009 9 196.5 27 14 59

2007/2008 10 172.9 21 17 62
2006/2007 9 195 19 15 66

Juventus 2008/2009 8 203.2 27 8 65

2007/2008 11 167.5 29 7 64
2006/2007 12 145.2 31 5 64
Source: Deloitte, Football Money League
78 Alessandro Baroncelli and Raul Caruso

The relative importance of media-related revenues is a relatively new

phenomenon. In fact, media-related sources increased by 215 percent whereas
the traditional sources decreased by 7.2 percent from 1998 to 2008. Whilst this
could have been explained by a substitution effect between gates and TV
broadcasting, there is evidence that it is hooliganism and the perceived insecurity
and low standards in the grounds that actually determine the reduction in gate
attendances.17 More recently the trend seems to have turned.18 According to data
provided by the Serie A League (Lega Calcio), the average attendance (game
tickets and seasonal tickets) increased by 7 percent. This corresponds with the
decreased level of hooliganism. According to the figures released by the Ministry
of Internal Affairs, the number of injured people in stadium decreased by 78 percent
between 2003 and 2008,19 perhaps as a result of the measures approved in the
«Pisanu decree» in the summer of 2005 which strengthened the sanctions and
tightened enforcement against hooliganism. Among other measures, the decree
required football clubs to meet new safety standards in the grounds, something
which was elaborated in the law n.41/2007.
Given the heavy dependence on TV-rights of Italian teams their governance
and redistribution has been a highly disputed issue in recent years. In the period
1993-1999 the TV broadcasting rights were managed collectively by the League.
The revenues originating from TV rights increased from 180 billion of Lira (Euro
93 million) to 447 billion, an increase by 148 percent. However, under the pressure
of the most powerful clubs such as Juventus and Milan, supported by a regulation
introduced by the Italian Antitrust Authority,20 the TV-rights came to be managed
exclusively by the clubs. This meant that starting with the 1999-00 football season,
pay-TV and foreign television rights for the Serie A and Serie B had to be negotiated
directly and individually by the football clubs and no longer through the League.
Whilst the League continued to be entrusted with the task of negotiating rights for
public television, each team had to bargain with TV companies the rights for
broadcasting their home matches. This measure increased the amount of funding
allocated to the Serie A teams. The rights’ values for the Serie A and B
championships and the Italian Cup more than doubled with respect to the previous
period (from about Euro 231million to approx. Euro 511million). The positive trend
continued in the following season, during which pay-TV channels paid out more
than Euro 550million to obtain TV rights.
The drawback of the new measures was the huge gap between the top
___________________
17
R. PENN, Sport e sviluppo locale: l’esperienza del calcio inglese, in A. Baroncelli, U. Lago e S.
Szymanski,(eds.), Il Business del calcio. Milan, 2004 EGEA; M. DI DOMIZIO, Competitive Balance e
Audience Televisiva: una analisi Empirica della Serie A Italiana, in Riv. Dir. Ec. Sport vol. 6, n. 1,
2010, 27-57.
18
This assumption is supported also by the reduced hooliganism observed in Germany since the
renovation of stadiums that took place after the 2006 World Cup.
19
Figures retrieved from www.osservatoriosport.interno.it/primo_piano/2009/marzo/3_marzo.html.
20
Autorità Garante per la Concorrenza e il Mercato: Decrees N° 6869 dated 10 February 1999 and
N° 7340 dated 1 July 1999, Proc. N° 1362 - Sale of TV rights.
The organization and ecnomics of Italian Serie A: a brief overall view 79

teams and the rest of participants in the League that now increased. Because
pay-TV companies started to apply a strictly market-based system, the income of
the particular clubs was premised on subscriptions and other market indicators.
This resulted in a concentration of resources in the hands of a few big clubs and to
a controversy between the smaller clubs and the League which eventually caused
the start of the 2002-03 Serie A and Serie B championships to be delayed. The
small clubs pointed out the fact that the payments they were offered by the pay-
TV companies were about one tenth the amount offered to clubs such as Juventus
and Milan. It would not have enabled them to balance their accounts, and would
have forced them to dramatically reduce salaries in order to avoid bankruptcy. In
turn, this would have caused a weakening of their teams, making the championship
far less interesting.
The problem was temporarily solved, as the major clubs agreed to pay out
a small sum to level out the money offered by the pay-TV companies to the
smaller clubs. However, the problem reappeared one year later, following the
acquisition of Tele+ and Stream by Sky, which owns the TV rights for most clubs,
including the largest. A group of small clubs (Brescia, Perugia, Ancona etc.)
launched an alternative television platform called «Gioco Calcio», in which the
League purchased a capital share. However, the enterprise failed at the beginning
of March 2004 when all the Serie A clubs resolved to sell their TV rights to Sky.
The increasing gap in revenues between the top-teams and the rest made
it pertinent to reorganise the allocation system and in 2007, according to the law
106/2007, it was ruled that collective and centralized sales of broadcasting rights
should be introduced from the 2010-11 season. Therefore, the League now bargains
the sale of TV-rights to media companies. That is, the Italian professional football
league of Serie A sells different packages of service to media companies on behalf
of the professional teams. The total amount for 2010-11 season is around Euro
900 million, which will increase up to Euro 930 million in 2011-12.21 Infront Sports,
a Swiss sport marketing company has been appointed as exclusive media rights
partner to the League. However, a new struggle took shape to allocate the revenues.
In fact the expected allocation was based upon the law and was supposed to
allocate the revenues following three criteria: a) 40 percent of total revenues is
equally distributed among participant teams; b) 30 percent of total revenue is
allocated according to historical performance. In particular 5 percent will depend
on past season’s championship performance; 15 percent will depend on the latest
five seasons of performance; and the remaining 10 percent will depend upon «sport
tradition» and historical ranking; c) 30 percent of total revenues is allocated following
the potential demand proxied by number of fans (25 percent) and the population of
cities (5 percent). In particular, the number of fans will be calculated by means of
surveys. The «low weight» that population is given in the criteria can be defended
on the basis that the presence of large cities with two teams, such as Milan (Milan
and Internazionale), Rome (Roma and Lazio), Torino (Juventus and Torino,) and
___________________
21
Source: Lega Calcio, 2010.
80 Alessandro Baroncelli and Raul Caruso

Genova (Genoa and Sampdoria) makes the calculation of team fan-base inaccurate.
These new rules would have significantly changed the allocation of TV
revenues. «Middle level» teams like Fiorentina and Sampdoria would have gained
considerably more from the new regulations and the top clubs would have faced
cuts in their broadcast revenues. Needless to say, the historical ranking criterion
clearly favours top team such as Juventus, Internazionale and Milan. However, as
noted above, «middle level» teams such as Roma, Napoli, Fiorentina and Sampdoria
will benefit more in relative terms because they have participated for many seasons
in the Serie A tournament and even have won championships. In fact, the historical
ranking has been calculated according the British rule which assigns points on the
basis of the final standings of a season in a descending order, (i.e. 20 points for the
winner, 19 points for the runner-up and so on). That is, this criterion awards also a
continuous participation into Serie A. However, the new criteria have not been
accepted quietly. IN particular, the measurement of fan base has been highly
debated. According to A.C. Nielsen which in 2007 computed the fan base of Serie
A teams, Juventus was around 10 millions followers followed by Internazionale
and Milan with about 6 millions each, Napoli with about 3 millions and Roma 2.5
millions.22 However, at the time the law 106/2007 passed, there was no official
measurement of the fan base. Therefore, in may 2011 the governing body of the
League assigned the contract to evaluate the fan base to a consulting firm. The
results of the survey fuelled a new conflict between top-teams and smaller teams.
In fact, the new evaluation of the fan base would have decreased significantly the
quote of TV rights accruing to the top-teams. For example the Juventus which
has been traditionally considered the most loved team in Italian football turned to
«weight» for only the 19% of Italian football fans (this would have decreased its
quota by 13 million of euros).23 Therefore, after a complex mediation, a new
agreement has been reached in July 2011. This novel agreement had halved the
quota of TV rights to be assigned following the fan base criterion. This had lowered
the loss which was to be experienced by top-teams.24 In brief, the novel agreement
also appears to be conservative. This is in particular, a confirmation of the peculiar
feature of Italian football. In spite of the economic benefits deriving from a closer
competition, Italian football seems to be designed to guarantee the long-term
dominance of top-teams. That is, in Italian Serie A the competitive balance has
always been in favour of few important top-clubs.25
___________________
22
Il Sole 24 ore, 2 November 2009.
23
Gazzetta dello sport, Inter, Juve Milan, Il conteggio dei tifosi dà meno incassi TV, 28 June 2011.
24
Gazzetta dello sport, C’è l’accordo sui diritti TV, La Lega di A si compatta, 8 July 2011.
25
On competitive balance in Italian football please see: M. DI DOMIZIO, Competitive Balance e
Audience Televisiva: una Analisi Empirica della Serie A Italiana, in Riv. Dir. Ec. Sport, vol. 6, n. 1,
2010, 27-57; P. DI BETTA, C. AMENTA, A Die-Hard Aristrocracy: Competitive Balance in Italian
Soccer, 1929-2009, in Riv. Dir. Ec. Sport, vol. 6, n. 2, 2010, 13-40; T. DEJONGHE, W. VAN OPSTAL,
Competitive Balance Between National Leagues in European Football after the Bosman Case, in
Riv. Dir. Ec. Sport, vol. 6, n. 2, 2010, 41-61; L. GROOT, De-commercializzare il Calcio Europeo e
Salvaguardarne l’Equilibrio Competitivo: una Proposta Welfarista, in Riv. Dir. Ec. Sport, vol. 1, n.
2, 2005, 63-91.
The organization and ecnomics of Italian Serie A: a brief overall view 81

5. Costs out of control. Financial fragility of Italian teams

Even though revenues have soared over the last five years thanks to the revenue
from TV-licences, costs have risen at an even higher rate. According to the data
spread in ReportCalcio2011 the aggregate s of Italian professional football raised
up to 2.7 billion of Euros. The main reason of such imbalance seems to be the
amount of salaries for players and coaches. In particular, players’ and coaches’
salaries and wages show a constant growth rate since the 1996-97 season.
According to the data of Lega Calcio, in 2006-07 wages and salaries accounted
on average for 62 percent of the total turnover, up from 57.5 percent in 1997. In
the meantime, in 2001-02, wage costs already accounted for almost 90 percent of
sales revenue.26
In the season 2009-2010, before the January market window the main
Italian sport newspaper Gazzetta dello Sport presented the data on the salaries for
500 Serie A players27 and revealed that 22 percent of the Serie A players were
paid more than Euro 1 million a year. In the 1994-1995 season 7.4 percent of 418
Serie A players had salaries at Euro 1 million or above. Most of these players play
for the top clubs; hence the gap has increased between them and the other teams.
Internazionale, the team at the top of the ranking in 2008-09, had a payroll amounting
to Euro 150 million and 24 out of 25 players earned more than Euro 1 million.
Milan, with a payroll of Euro 25.5 million, and Juventus, with Euro 115 million,
both paid 21 out of their 25 players more than Euro 1 million. The wage bill of
middle level teams, such as Fiorentina, Napoli, Genoa, Lazio, Palermo, Parma,
and Sampdoria, were in the range of Euro 24 and Euro 40 million, whereas Atalanta
and Chievo paid their players about Euro 13 millions. It was perhaps unsurprising
that Internazionale won the league in 2010. Neither is it surprising that low salary
teams finished at the bottom of the ranking. As a matter of fact Internazionale’s
payroll was more than ten times that of Atalanta’s which was relegated and nearly
four times that of Napoli which finished 6th in the ranking.
The previous figures highlight why Italian top football system suffered
such a pervasive financial crises at the beginning of the 2000s. In the 2002-03
financial year operating losses of the Serie A and Serie B clubs were estimated at
Euro 1.5 billion as compared to a turnover level of Euro 3 billion. Debts for the
clubs in Serie A alone were also estimated to be in the region of Euro 1.5 billion.
Virtually all Serie A clubs showed a net loss in their balance sheets and this loss
would in fact have been much larger if extraordinary items had not been taken
into consideration.28
___________________
26
for a deep analysis on this points, please see: M. NICOLIELLO, Reddito e Capitale nelle società di
calcio: la massima seria italiana 1998-2007, in Riv. Dir. Ec. Sport, vol. 4, n. 2, 2008, 67-94; V.
VENTURELLI, Costi e ricavi, Investimenti e Finanziamenti nelle società di calcio. in F. Bof, F. Montanari,
G. Silvestri, (eds.), Il Management del Calcio, Milano: Franco Angeli, 2008.
27
Source: La Gazzetta dello sport, retrieved from www.gazzetta.it/Calcio/03-09-2009/eto-o-re-
denari-campionato-501202803300.shtml (last access august 2011).
28
Not to mention the fact that it has been suspected that a part of these extraordinary items have
been faked.
82 Alessandro Baroncelli and Raul Caruso

Moreover, one should take into account that the Italian Government in
2003 issued an ad hoc decree, the «decreto salvacalcio» (popularly known as the
«Spread-the-Losses» Decree), which allowed clubs to amortize players’ transfer
fees over a ten-year period. No similar regulation would have been approved for
any other industrial sector. Despite this favourable regulation in 2009 the
accumulated debts of the Serie A teams were still estimated at Euro 2.2 billion,
with four of the biggest teams accounting for over half of it.29

Conclusions

Italian football is at a turning point. As noted above, the novel mechanism of

redistribution of TV-rights increasingly is expected to improve the competitive
balance within the League and to benefit Italian football in the long term, whereas
in the short term it is painful for the Italian top clubs.
What remains to be solved is the financial distress of the Serie A teams.
The economic sustainability of Italian football is related to issues that will increase
in importance with UEFA’s accentuated focus on greater cost control in clubs and
the implementation of UEFA financial fair play from the 2013-14 season.30 The
most critical issues for the change of Italian football business are perhaps stadia
development and income diversification. The revenues generated by the exploitation
of stadia accounts for as much as 35 percent in top European leagues, compared
to less than 15 percent in Italy. This is due to the fact that grounds do not belong to
clubs but to the municipalities and the revenues they can generate are therefore
restricted to matchday income. Moreover, almost no corporate hospitality revenues
are generated in Italy and average revenue per attendee are rather small considering
the lack of additional services available in the grounds. A new bill that is meant to
facilitate the construction of grounds by football clubs is currently being discussed
in the Italian Parliament and its approval may in the short run be vital for the
ambition of Italian clubs to remain among the European top clubs.
In addition, Italian clubs have not been very successful in developing
commercial activities. The commercial revenues they generate are the lowest
among European largest football leagues. A new attitude toward marketing
activities, the protection of brands, the ability to better exploit the fans fidelity, and
an improved customer service provided by both the Italian League and the clubs
are critical to diversify the source of incomes in Italian football. Another major
improvement area concerns the sale of TV-rights on international markets. The
___________________
29
Internazionale had a gross debt of around Euro 432 million, followed by Milan (Euro 365
million), Lazio (Euro 130 million) and Juventus (Euro 109 million). Please see Il Sole 24 ore, 19
settembre 2010 and 10 May 2009).
30
On the financial fair play see A. BERNOLDI, C. SOTTORIVA, La disciplina della redazione del bilancio
di esercizio delle società di calcio. Confronto con l’esperienza internazionale ed impatto del c.d.
financial fair play, Riv. Dir. Ec. Sport, vol.7, n.1, 2011, 147-191. see also R. CARUSO, Il Fair Play
finanziario è già finito KO, Fin. Merc. Sport, 21 June 2011.
The organization and ecnomics of Italian Serie A: a brief overall view 83

visibility of Italian football worldwide could be improved if the Italian League and
the clubs were able to create an international broadcasting format and develop
selling synergies.
84 Alessandro Baroncelli and Raul Caruso

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