Written by Umberto Pelà (04.02.2024)
We’re moving into an age where football clubs are increasingly led in ways that resemble classic businesses rather than the special vehicles they represent as sports firms. In Europe’s top 5 leagues, circa 39% of clubs are now backed by “private equity, venture capital, or private debt firms”. While this article does not aim to scrutinize this form of management, it is important to recognize how it is revolutionizing the industry. Historic clubs like AC Milan, now under control of Elliott Management, are the perfect example as to how trends are changing. In particular, the way these firms manipulate expenditures and increase revenues to turn over as much revenue as possible – and a profit – will always be fascinating to me.
With this in mind, it is important to consider that football clubs principally survive off of three sources of revenues. Firstly, matchday revenues: these principally encompass ticket sales, but expand to revenue from sales of food, drink, and merchandise. Secondly, commercial revenues — revenues from advertising and partnerships with other brands. Finally, and most importantly for today, Broadcasting/Media revenues. These comprise all the revenues from TV Rights: the same money we, as spectators, pay to watch the top leagues on TV.
Broadcasting/Media revenues, for the majority of clubs around Europe’s top 5 leagues, are the most pivotal source of income. The characteristic that makes these so important is that they are not subject to fluctuations like the other categories may be. Each year, clubs have close-to-guaranteed estimates of how much money should be coming in from broadcasting revenues each year. A guaranteed influx of money is so essential for all clubs — regardless of their sizes. While the outliers in Europe’s top 5 leagues per earnings, namely Real Madrid, Manchester City and PSG, are able to diversify their streams of income significantly, the majority of European clubs rely on broadcasting revenues to provide up to 80% of their revenues. Historic but now up-and-rising clubs like West Ham and Newcastle, for example, have broadcasting revenues representing 65% and 61% of their total revenues respectively. Go one step lower, with clubs which are going through rough patches like Everton, broadcasting revenues are estimated to represent even more — 70% of revenues. Further, in less lucrative environments like Serie A, broadcasting revenues are even more important: newly promoted clubs often see their revenues doubled as a result of earning their piece of the Serie A broadcasting revenues pie.
Broadcasting revenues also have an international segment that must be taken into account. When a league has good exposure and foundations in other countries, there is so much potential to make money. And a lot of it.
What the Premier League does so Well
Take the Premier League, for instance. The league has a massive following in the USA (and the rest of the world), and it has capitalized on that by closing international deals for €1.4bn euros — almost as much as their domestic deal, which is worth €1.5bn. This remarkable feat is a result of a reinforcing positive loop where international fans attract more eyes on the league, the league earns more money to spread with all its teams, and its competitiveness is increased. On the flip side, Europe’s other leagues haven’t found it as easy to make their mark internationally. With the Premier League taking a bigger slice in global soccer supporters, other European clubs lose out on experiencing perks such as increases in commercial sales, boosts in social media numbers, and development of clubs’ global brands.
What allows this positive loop to take place in the Premier League, however, is the way broadcasting revenues are shared across all teams in the league. Data from three seasons ago suggests that broadcasting revenue and prize money are divided in a very equitable manner. Manchester City, league winners, earned approximately €200M from broadcasting revenues. Southampton, the lowest earner in terms of broadcasting revenues, earned roughly €140M.
Yes, Manchester City earned €60M more, equivalent to 40% more than Southampton, but let’s compare that to Serie A in specific. Last season, Inter Milan earned revenues from broadcasting rights of roughly €85M, while last-place Cremonese earned €30M.
What feels wrong with these numbers are two things. First of all, comparing Italy and England, it sounds surreal to say that one of Italy’s biggest and most historic clubs earns close to half of what Southampton earned from broadcasting revenues. This is a testimony to the levels within today’s game. Secondly, within the league, highest earners and lowest earners in Serie A have a difference of 190%. Serie A’s board splits revenue from TV rights in a very specific way — and this article by Calcio e Finanza breaks it down clearly.
In summary, here is how it works. 50% of the yearly pool is divided in equal parts. 20% of the yearly pool is divided upon the user pool — 8% based on teams with the greatest TV audience, and 12% based on the teams with the most physical spectators within stadiums. Finally, the last 30% of the yearly pool is allocated considering performance: 15% on results (domestic league placement and points), 10% on average placement from the past five seasons, and 5% based on the club’s historic results. Below are the rough estimates of TV revenues per each Serie A club for the past season.
| Team | TV Rights Amount (€M) |
| Inter | 87.1 |
| Napoli | 80.3 |
| Milan | 80 |
| Juventus | 78.6 |
| Lazio | 70.7 |
| Roma | 68.2 |
| Atalanta | 55.2 |
| Fiorentina | 55.2 |
| Torino | 49.1 |
| Bologna | 43.5 |
| Udinese | 40.7 |
| Sampdoria | 39 |
| Frosinone | 39 |
| Sassuolo | 38.7 |
| Lecce | 38.6 |
| AC Monza | 34.2 |
| Cagliari | 34.2 |
| Genoa | 34.1 |
| Empoli | 32.6 |
| Hellas Verona | 30.1 |
| Spezia | 30.1 |
| Salernitana | 29.4 |
| Cremonese | 29.4 |
With this in mind, it is inevitable that questions on the competitiveness of the league will arise. Executives are likely to argue that this system promotes fairness because Inter – by history and merit – deserves substantially greater funds compared to a newly promoted team; and to be fair, there’s some truth to that. In turn, Serie A also needs clubs to represent the league positively in international competitions, so it arguably feels the need to support them in some way. On top of this, Serie A’s board of directors would likely argue that €30M are more than enough for a newly promoted team to survive in Italy’s top flight. For instance, if we analyze Empoli’s income statements from 2021 and 2022 (year in which they were promoted to Serie A from Serie B) their TV Revenues increased from €2.7M to €30M — 11,1 times the amount. This helped the team double their yearly revenues from €29M to €70M in a year.
Well, where’s the problem? Isn’t this all enough to promote competitiveness?
It might be, but I still feel like this view is relatively shallow. How are we meant to expect an environment with the highest level of competition with a relatively unequal distribution of goods? Fans who are skeptical of Serie A’s level will always hold the league accountable for this: “Serie A doesn’t have the same element of competition and surprise as the Premier League does”, and to that, I say that they’re right. There’ll never be the same element of competition and surprise as long as broadcasting deals are divided in this way. Unfortunately however, the solution isn’t as simple as allocating money more evenly by dividing the total pool by the number of teams. Various hurdles stand in the way.
Institutional issues would undoubtedly arise: how would the league approach these historic clubs, pillars of Italian football, and tell them they’re getting upwards of 30% of their broadcasting revenues cut? Further, when would we start seeing the results of a more even division of funds? 5, 10, 20 years? Can we afford to wait that long? Plus, who guarantees that the smaller clubs would be able to deal with greater amounts of money — and spend them in the right way to increase the value of their club and league? For these reasons, this is why institutional change is very much unlikely in Serie A — like it is with anything in Italy, to be fair.
Steering the Ship in the Right Direction
Serie A aren’t exactly screwed, however. Two things are in its control and can help steer this sheep in the right direction. Firstly, how they manipulate and increase the value of the league, and secondly, how they negotiate their broadcasting deals. The first one, easier-said-than-done, refers to how the league performs on international fields, and how it implements successful global brand development strategies. In other words, it needs to expand its horizons, penetrate new markets, and attract new eyes. In fairness, both of these things have been done relatively efficiently over the past 12 months. Namely, Serie A has opened new offices in landmarks like New York following their American deal with CBS Sports and Paramount+ — signed in 2021 and worth 220M.
The second one, however, has raised the eyebrows of many this year as Serie A renewed their deal for the next 5 years (till the 2029 season) with the Dazn-Sky Sports duo. The deal is reportedly worth a base of €900M per year, and €4.5bn in total. I used the term base because the partnership includes a new revenue sharing model. This model foresees that Dazn and Sky Sports will share 50% of their extra revenue with the league after they make €750M back. Experts have estimated this sum to be an extra €60-€80M per year, which would result in an increase of €300-€4000M in 5 years. While 17/20 voters were in favor of this offer, neglecting a possibility where the league would have set up and owned their own broadcasting channel, some of Serie A’s presidents abstained from voting or were even against the proposal.
Most importantly, SSC Napoli’s president, Aurelio De Laurentiis, had some fiery words in regards to the league’s decision. De Laurentiis argued that a 5 year deal, with these terms, completely gave up the league’s freedom. He highlighted how the quality and shooting modes were shoddy in comparison with the Premier League, and how Dazn’s platform wasn’t up to par. In fairness to him, per Google Trends, within the associated queries to the term ‘Dazn’ in Italy, “Dazn problems today” comes up in the top 5. As a customer of Dazn, too, I’d have to say I’m not too impressed with their services either. They’ve recently removed double access (where two users can watch at the same time) to combat piracy and made it a special premium feature at a higher price range. For the bigger families, or simply for families which aren’t living under the same roof, this has been a huge disappointment and obstacle in watching and supporting their teams.
Most importantly, De Laurentiis also had something to say in regards to the package that TV deals include today. Specifically, the Parteneopei’s president can’t come to terms with how TV packages in Italy can include Champions League, Serie A games, TV series, and shows. All in one.
How can we create a valuation for Serie A’s individual value? How can we seriously promote our league’s TV rights if they have to be sold with other products?
To me, all of the points made are very fair — and undoubtedly require consideration for the next deal Serie A will put ink to. To try and understand how much Serie A is worth compared to other leagues, I investigated and compared the valuation of broadcasting deals for Europe’s top 5 leagues.
| League | Domestic Rights (per season) | International Rights (per season) | Total Value (per season) |
| Premier League | £1.5 billion | £1.4 billion | £2.9 billion |
| Bundesliga | €1.1 billion | €200 million | €1.30 billion |
| La Liga | €1.15 billion | €897 million | €2.05 billion |
| Serie A | €973 million | €370 million | €1.34 billion |
| Ligue 1 | €814 million | €80 million | €894 million |
As shown from the table above, Serie A is the league with the 3rd-most lucrative deal (domestic plus international) in Europe — and it doesn’t surpass the Bundesliga by much.
Expected? Perhaps yes. But should the difference between the Premier League and Serie A be that big? Or better, should the difference between LaLiga and Serie A be that big? Absolutely not. In fairness, LaLiga have set out a clear marketing strategy, targeting foreign media outlets like Italy’s greatest soccer news social media page, Cronache di Spogliatoio. They recently struck a partnership with them, and In fact, the Supercopa de Espana was broadcasted live on Cronache di Spogliatoio’s Youtube Channel. For free. Something unheard of in this industry, which paid off by bringing a huge amount of eyes to Spanish football.
Having said this, I still don’t believe that in terms of quality, LaLiga is a better league than Serie A — but that’s an article for another day. For now, call me as biased as you please.
What challenges does Serie A face in getting better TV deals?
To mitigate the original issue set out, negotiating deals, Serie A faces so many challenges that it is tough to be as harsh as one would want to be with them.
First of all, we must take into account market saturation. There is little wiggle room to increase prices of packages to improve revenues from already-paying subscribers. Plus, I’m not sure how well that would go down: football is a fans’ game, and the attempt at the Super League in 2021 showed us just that. Further, the amount of competition from other leagues and other sports makes it tough to sell a product individually unless there is extremely high demand for it. This is exactly why Serie A offers their viewership in a package with other products. In turn, this diminishes or simply makes unclear what the league’s TV rights are actually worth.
Secondly, new technologies and variating consumer behavior is another obstacle in the road. New broadcast tech has completely changed the scene. There isn’t as much cabling being done, and adapting requires investment and adaptability to make platforms user-friendly from broadcasters. Further, streaming piracy in Italy has reached concerning levels. Unofficial streamers are bigger than ever, causing estimated losses of €270M and losses of jobs in Italy. While Serie A continues to create campaigns to advertise their fight against piracy, this seems to be an ever-lasting battle. Moreover, we must also take into account how, as a result of economic downturns, consumer behavior might change drastically. Today, it is tougher to keep higher prices to maximize revenues if families are considering their allocation of money as carefully as ever.
Furthermore, in terms of new market penetration, we must consider the challenges that expanding internationally presents: it isn’t as easy and intuitive as one may think. Production teams need to think about how football fits into other cultures, translations, competition from other sports and other forms of content which may be bigger in other countries, and even time zones. All these considerations cost money, and if you’re not making money, you simply can’t afford to test the waters in other markets. Finally, in terms of how you market Serie A, so many questions personally arise. How do you create brand recognition? How do you find out and adapt to other cultures’ needs? Where is the ROI the highest? Which markets should you focus on? Answering these questions takes time, patience, and skill.
So is Serie A doomed for another 10 years of inferiority?
No, Serie A isn’t doomed. Luckily for all of Europe’s top 5 leagues, football remains perhaps the biggest sport in the world to this day. This recent article by SoccerHint shows you exactly why, in terms of viewership, the industry has nothing to worry about. What Serie A as a league has to focus on, is a clearly devised strategy to mitigate the aforementioned issues.
Most importantly, the league has to double down on their anti-piracy mechanisms in order to salvage crucial potential revenue. Secondly, specifically referring to Dazn, it has to improve the quality of broadcasting. Viewership and user experience should be put at the center of everything. If you want us, the fans, to buy the product, make sure you’re providing true, tangible value. Thirdly, the league has to expand its global horizons even further. Influencer partnerships and social media content, for example, would be two great ways to promote the league. This recent Serie All article by Matteo Ciaramella highlights how clubs, as individual entities, are latching on to this and making the most of their resources to improve their brand recognition on global levels.
In terms of packages, too, the league could propose market-specific packages such as derbies, key rivalries, or important games as separate deals to customers who don’t have yearly subscriptions. Finally, I also think the league could look to create content with old archives. Documentaries and series like ‘All or Nothing’ have been appreciated fondly by the football community and created huge levels of engagement. Further, Serie A could reinforce this idea by playing on the fact that the league had huge success in the 90s and 2000s — I’m sure many fans would love to revisit that content with a modern spin to it.
With all of this in mind, it is important to consider that Serie A isn’t in a horrific position. They’ve secured a relatively lucrative deal, and clubs have been performing well in Europe. Yet, that may not be the case in the upcoming years, so if it aims to be the most respected league in the world once again, it has a lot of work to do.
Works Cited:
https://www.repubblica.it/sport/calcio/2022/06/21/news/pirateria_calcio_danno_economico-354883058/