Italian football counts cost of stagnation
Twenty years ago AC Milan beat Barcelona 4-0 in a Champions League final in Athens.
At the time, Italy's premier football league, Serie A, was in its pomp, with Italian clubs winning the continent's top club trophy six times in a 12-year period.
International stars flocked to play in Italy, and top matches were broadcast around the globe.
Now Milan is the only Italian survivor in the last 16 of the Champions League, compared with four German, four English, and three Spanish clubs still in the competition.
So why has Italian "calcio" dropped behind these other nations?
"There are many reasons, ranging from low match-day revenues and other lacklustre commercial revenue streams, to issues of corruption and fan violence," says Harry Philp, a football finance expert at London-based firm Portland Advisers.
"This lack of commercial development means Italian clubs are falling behind their European counterparts.
"These issues are being exacerbated by wider economic problems in Italy."Home comforts
Low match-day revenues are connected to the fact that most teams - with the exception of Juventus - are playing in outdated stadiums, which they do not own, and in front of declining attendances.
It means clubs cannot charge a range of different ticket prices, and there is little in the way of hospitality and corporate facilities on offer, or merchandise for sale.
Serie A facts and numbers
- On average Italian clubs get 59% of revenues from TV
- Inter Milan, Napoli and Roma have expressed desire to build new stadiums
- Overall commercial revenues increased by 7% in 2011-12
- The majority of that growth was achieved by Juventus
- Serie A's rate of revenue growth was the lowest of the "big five" leagues in 2011-12
Source: Deloitte Annual Review of Football Finance 2013
For example, English club Chelsea makes six times as much from match day revenues as AS Roma
According to the latest available figures from the Deloitte Sport Business Group, Serie A clubs' match-day revenue declined by 6m euros (3%) to 191m euros (£157m) in 2011-12, driven in part by a 7% fall in average league match attendances to 22,005.
But since moving into a new stadium in 2011, Juventus has seen its commercial revenues more than treble.
"If other Italian clubs' stadia development plans come to fruition, new and improved commercial revenue streams will be opened up and their dependence on broadcast revenue will lessen," says Alex Thorpe, at Deloitte.'Major TV role'
The Spartan match-day experience has seen many prefer to watch games on TV.
According to Deloitte, during season 2011-12 Inter Milan, Napoli, and Roma saw more than half of their revenues come from TV money, and for AC Milan and Juventus the figure was close to 50%.
End Quote Andrea Agnelli President, Juventus FC
We used to be a destination for the top players in the world, now we are a country of transition for top players moving to other leagues”
"Television plays a major role in the financing of Italian football, with clubs more reliant on money from TV than in other major European leagues," says Mr Philp, who has spent more than a decade working with Italian clubs.
"The issue is one of diversifying revenue streams for clubs, to enable them to strengthen their financial position and develop their business model."
Until 2010 TV rights were sold by clubs on an individual rather than collective basis, something which exacerbated the financial gap between big clubs and smaller, and produced one-sided matches, which also depressed interest in Serie A.
The latest TV deal, according to Italian reports, will from the 2015-16 season guarantee the league 980m euros a season for domestic and overseas rights - exceeding the 900m euros annual payment agency Infront guaranteed last time.
But that number is still some way off what the English Premier League achieved in its latest deal cycle.Clubs for sale?
Juventus and AC Milan did make it into positions nine and 10 in the latest Deloitte Football Money League.
But Mr Philp points out that these clubs have also been fortunate over the years in being bankrolled by wealthy owners - a situation that may not continue.
Rivals Inter Milan and Roma have been bought respectively by an Indonesian consortium and a US-based sports capital group, - signs there is some overseas interest in investing in Italian clubs.
And Mr Philp says such major investment is necessary for Italian clubs to develop commercially.Title sponsor
As well as new stadiums, Mr Philp says, clubs need to establish new and smarter ticket-pricing strategies, introduce more and better corporate facilities, and develop wider commercial strategies.
"This latter point could include targeting potential prime markets such as in East Asia, much as Premier League clubs have done, and introducing sponsorship segmentation and different sponsor tiers," he says.
"Clubs such as Roma and AC Milan are now looking to use marketing techniques, including social media, seen in the US and other parts of Europe.
"Serie A should also be looking for a title sponsor along the lines of the Barclays Premier League."
Meanwhile it will be hoped that recurring flare-ups of football violence and racism are eradicated - both as social blights and as blocks to commercial progress.
"Sponsors are unwilling to get involved where issues of racism and violence are still commonplace," says Mr Philp.
"Italian football has much to do to create an investable business model which could potentially allow Italian teams to compete at the highest levels in Europe again."'Green shoots'
But it is not all gloom, says Mr Thorpe at Deloitte, adding that the Calciopoli scandal of 2006 has highlighted to clubs the importance of good corporate governance.
And he points to overseas ventures such as the playing of the Italian Supercoppa (their Charity Shield) in Beijing in 2009, 2011 and 2012. There are hopes to take the event back to China this year.
"There is a realisation that clubs need to do something," he says.
"The angle of decline is one you can't ignore, but there are green shoots there if you look at what Juventus has done, and what Roma and others are talking about on stadium development."