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Galliani: Serie A 'safe' from credit crunch

Ryan272010-05-04 18:42:03 +0000 #1
Guys, I just want to note a disclaimer. I am not posting this article because I want to stir up league debates. I thought this was an interesting take on Serie A finances. Poor stadia has been and will continue to be a thorn in the Italian game and its revenues. But at the very least it is encouraging that the very same pre-season financial checks (that get teams relegated) might ultimately help protect Serie A from the current global economic turmoil.


Milan general manager Adriano Galliani explains why the credit crunch won’t hit Italian football, but could affect other Leagues.

This week UEFA warned that they would clamp down on clubs that are deep in debt and possibly prevent them from entering continental competitions.

“The world of Italian football is not very indebted towards the banking system, because this business may run at a loss, but those losses are always covered by the shareholders,” said Galliani.

“Certainly, there is a debt to the banking system, but it is not excessive, so I don’t think there will be any great problems associated with that.

“However, there are most definitely clubs who are deep in debt and will have a few issues to deal with, but it does not appear to be an Italian problem.”

Italian clubs are forced to prove their financial stability before they are allowed to register for the new season with Serie A, B or C.

This rule is not the case in England or Spain, where many sides are heavily in debt and continue to spend record-breaking amounts on new players and wages.

This week Football Association chairman Lord Triesman warned “debts in English football as a whole have probably edged to the £3bn mark.”

After a period of frugal spending following the spate of bankruptcies that hit Napoli and Fiorentina among others, Italian football has gone back to splashing the cash on the transfer market, as only the Premier League spent more this summer.

“I don’t think there will be any consistent cuts in spending,” continued the Milan general manager.

“In Italy a football club earns two thirds of its income from the sale of television rights, then there is 20-25 per cent in sponsorship deals and 10-15 per cent from tickets.”

Galliani has often been vocal in his complaints at the economic system in Italy making it difficult to compete with Spanish and English clubs in terms of wages.

“It might be different if we introduced a law like there is in Spain, where foreign citizens – whether sportsmen or not – are given a different tax code.

“This is a huge advantage and England also have generally lower taxes compared to Italy, but above all in Spain the foreign citizens have a 24 per cent tax rate if they work for no longer than five years.”

nismo2010-05-04 18:54:09 +0000 #2
Well it seems like the EPL or English football are not taking notice of the credit crunch, as another Middle eastern investment firm is looking to buy out Charlton in the first division.

It's good anyway that us fans and Serie A will not have to worry itself too much about financial problems in clubs. We'll just stick to the same problems of poor stadia and hooliganism

It is quite a paradox. The EPL have the best stadia, good business model to market worldwide, not as much hooliganism, but the clubs are allowed to be financed on debt and operate on a deficit over the course of the season. While Serie A seems to have the same problems from the 80's but at least the clubs have to show financial accountability.
Ryan272010-05-04 19:17:03 +0000 #3
Another take from Channel 4, though not as optimistic:

Blog: Money matters

The credit crunch is leaving its mark on planet football, prompting James Horncastle to explain what it means for the Italian game

The credit crunch is as ubiquitous a phenomenon as any other in recent memory, bringing markets to collapse and consumer confidence to an all time low. While coverage falls on the poor and soon-to-be have nots, it’s perhaps a tad surprising to hear that footballers, yes footballers, are just as afraid as you and I about the financial future.

Take Liverpool left-back Andrea Dossena as an example. He moved to Merseyside this summer not only to better himself as a footballer, but also to improve his wage packet. With the collapse of several banks and panic rife on the streets of London, Andrea is now wondering whether leaving Udinese and Italy was such a good idea after all.

“If I had known certain things before, I would have thought twice [about moving],” said Dossena prior to Italy’s World Cup Qualifier in Bulgaria. “I would have asked for greater guarantees.” The 27-year-old is particularly disturbed by the plight of West Ham and the losses sustained by Barclays, the Premier League’s principal sponsor.

Dossena’s concerns are revealing in that they suggest a dimming of the Premier League beacon, which has recently attracted some of the best players in the world to English shores. The flip side of this theory is just as intriguing, though. For if the richest League in the world is hurting, what lies in store for Serie A?

Milan Vice-President Adriano Galliani seems to think Italy’s elite clubs will not suffer. “Certainly, there is debt to the banking system, but it is not excessive,” said Galliani on Saturday, before acknowledging that there could be casualties. “However, there are most definitely clubs that are deep in debt and will have a few issues to deal with, but it does not appear to be an Italian problem.”

Roma and Lazio could be afflicted by the banking crisis. Unicredit, an Italian banking group, has interests in Italpetroli, the heavily indebted oil company controlled by Roma's patrons, the Sensi family, and also has a substantial stake in Lazio itself.

Unicredit, recently lost 25 per cent in value, prompting Roma to release a statement that read: "Italpetroli has not asked for any extension of the terms of the repayment of debt agreed with Unicredit in the deal undersigned last July."

The statement went on to say: “Italpetroli and Roma clarify that the latter company is not part of the deal with Unicredit.” That should reassure worried Roma fans. But what of the other Italian clubs? The absence of a collectively negotiated TV deal and private ownership of stadiums surely leaves smaller clubs exposed.

The reality for Serie B clubs is worse. They only receive £5m in TV rights while clubs relegated to the Second Division are only entitled to £2m in parachute payments. Triestina and Avellino have already been docked points for financial irregularities and Ascoli are struggling to pay wages. So, as rosy as Galliani’s predictions are, I cannot help but feel that the credit crunch will squeeze some of Italy’s clubs to the limits of survival.



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