Archive for August 6th, 2007

Club Economy: balance in the red for Juventus

Monday, August 6th, 2007

Club Economy: balance in the red for Juventus

Juve’s administration council has just confirmed the numbers, and as you would expect from a team relegated to Serie B, the Bianconeri have ended the 2006/07 campaign in the red, with a deficit of about 900 million Euros. Don’t be alarmed however, as this isn’t as bad as predicted, the numbers actually being defined “a positive result” by the men in charge.

In the press release published by Juventus.it, the council declared that the large losses were kept under control thanks in particular to the “cash obtained from player sales” as well as the “considerable reduction of player’s wages” of the past season.

To get an idea of the numbers at play here, here’s a comparison of revenues & costs for Juve’s past two seasons:

2006 2007
INCOME (millions €)
TV rights 127 92
Sponsors & Advertising 55 34
Ticket sales 17 7
Various income 27 53
Total income 226 186
Income change / -17%
.
COSTS (millions €)
Player’s wages 127 95
Various costs 79 52
TOTAL 206 147
Cost change / -28%

So at it turns out, the various sales of big earners such as Cannavaro, Emerson, Ibrahimovic, Thuram, Zambrotta, and Mutu managed to limit the damage for the Vecchia Signora. A big dent in the team’s technical potential undoubtedly, but a necessary step nonetheless because a club can’t exist without money.

By the way, for those of you wondering about the math in the numbers above (if you subtract costs from income, they don’t add up to -900m), have a look at the press release file as there’s a whole bunch of other costs/income not taken into account here.

The Juve managers are expecting numbers to remain in the red for next season, as the transfers’ campaign resulting from the promotion to Serie A “substantially increased associated costs”. In other words, we are talking about transfer money & player’s wages syrocketing. Thankfully for Juve, income related to sponsors, tv rights, etc. should also be on the rise, but remember that without the substantial cash flow that the UEFA Champions’ League brings (Juve are out from European cups for at least another year), it’ll be a little while before the Bianconeri get in the green again.

Oh well, a new scudetto should help ease the pain… :)