Since promoted back to Serie A, Genoa always finished in mid-table except a single UEFA Europa League entry. The squad changed, from Rubinho to Amelia, Eduardo and Frey. Why the squad so unstable? Actually Genoa profited on Bonucci and Ranocchia before they made their club debut.
It is a nightmare to operate a club in Italy. Low gate income, discrimination of TV income, made a few Serie A club made a profit. Genoa was lucky: net loss of EUR 3,720,686 in 2006-07; a net profit of EUR 1,504,757 in 2007-08; from 1 July to 31 December 2008 a net loss of EUR 7,829,339 and 2009 a whole year of net profit EUR 598,212.
While the equity of the company was a negative of EUR 217,266; a positive of EUR 1,787,492, a negative of EUR2,541,847 and in 2009 a positive of 3,457,940. It means, Preziosi actually only need to re-capitalize a few million in order to keep the level merely above the water table.
Bonucci was a piece-weight of Motta and Milito deal. In that deal, Milito actually cost Genoa a few million (<10million), and Motta, a free agent. The result? 28 million and 10.2 million. Despite a cash-plus player deal, Genoa bought Bonucci for 3 million and re-sold half to Bari for 1.75 million, Genoa sold another half to Juventus for 8 million! 8+1.75 - 3, that's how Genoa operate. Genoa also successfully sold Bolzoni after a loan (0.4M for loan, and 1.05M for 50% registration rights= 1.45M, moreover Genoa had gain 0.2M from Frosinone for loan). Only Acquafresca, with a price tag of 9.5 million, became a flop. The case of Meggiorini still uncertain. A 5million price tag, sold half to Bari but Bari could not afford to buy another half, made his single season with the southern Italy side a 0.96 million loan. Genoa also bought him back from Bologna for the same price the club sold him to Bologna, yet another free loan. Torino recently bought half of the tag but Genoa could got nothing for the rest. Genoa was good at scouting and develop players. It knew when the players started to shine, the club could not afford their wage. And keeping them, did not mean a consistent result. Moreover, good result, Europe qualification, means bigger squad, bigger wage bill but imbalanced revenue grow. They aimed for Europe because it is the destination of the showroom, a winter sale. However Genoa also failed to keep the back bone to keep the result stable. Udinese, however, sold Quagliarella, Motta, Sanchez, Pepe, D'Agostino, Inler and Zapter without affecting the result.
Back to the numbers. In 2006-07 windfall profit on players was EUR 6,136,607 (that means, the revenue to sell the player minus its un-amortize asset value) plus a loan income of 35,000. It almost offset the amortization of intangible asset (which most players contract, an way to reflect the transfer fee in installments)
of 8,459,065. Moreover a financial income of 7,288,833 from co-ownership that season (the excess fee what other clubs willing to buy the rest of the card or the discount other clubs gave to Genoa) The financial income exceed the write down of players rights of EUR1,518,007, the loan cost for the arrival of 314,500 and the cost of sending players out for EUR402,000.
Much improvement in 2007-08 season, this time 21,782,405 player profit, Loan revenue was 975,000. amortization was 10,982,644, write down was 1,404,398, loan cost (to and from Genoa) was 794,000 and 939,746 respectively. Lastly a financial income of 400,000 but counter-weight by the cost of 401,990.
In the 6 months from 1 July 2008 to 31 December 2008, the numbers were EUR12,051,762, EUR348,046, amortization was 11,837,028, write down 242,041, loan cost 1,021,000 and 62,750. Lastly a financial income of 92,321.
In 2009 (calender year), which was huge. EUR42,184,032, EUR1,336,376, with amortization of EUR29,843,388, write down EUR4,671,413, loan cost 582,000 and 1,413,366; Financial income of 3,201,500, cost 1,901,000.
What's the use of these figure? It means Genoa generated income from players and exceed the buying cost! the audience paid the wage of the players and other clubs paid for the value-add/scouting service!
However the president was too mad on the football market of 2010, the introduction of UEFA Financial Fair Play made him only able to do dirty flopping youth player value and sell players to Russia. The last fool was Inter which bought Ranocchia for 19million and sell Destro for 4.5 million. Except a few Middle East idiot, FFP forced the club to make economic decision, and then a expected cool down in transfer market by UEFA. Unlike, Udinese, which they really bought South American in very cheap price, buying European as well as young Italian is more expensive, let's wait and see how Genoa is affected by the ice age of "mercato".
Edited on 6 August 2013
----------------------------------------
Eventually in 2010 calender year Genoa had player selling profit of 38,880,710; loan revenue of 2,915,330, co-ownership income 7,050,000
amortization 34,460,995 loan cost (to Genoa) 418,000 loan cost from Genoa 1,268,305, write-down of player 1,401,998 co-ownership cost 5,510,500: Net position: 5,786,242
player wage 47,648,255 TV revenue (including from UEFA) 32,134,601
In 2011, TV revenue 31,968,456, player wage 47,864,712
player profit 62,162,043 (mainly due to friendship with Milan and Inter), counter-option income 500,000, loan income 3,246,250 co-ownership income 17,024,500
amortization 40,801,899 loan cost 2,454,000 and 1,824,140 write-down 3,365,505 co-ownership cost 3,231,000 net position 31,256,249
Monday, 27 February 2012
Tuesday, 27 December 2011
Stacking goalkeeper, A phenomenon of Italian economic crisis?
First of all, did you know these name:
Paolo Tornaghi: Internazionale player
Matteo Trini: Juventus player
Niccolò Manfredini: Fiorentina player
Edoardo Pazzagli: Fiorentina player
Nicola Ravaglia: Cesena player
Ugo Gabrieli: Lecce player
Davide Petrachi: Lecce player
Gianluca Curci: Roma player
Diego Manzoni: Parma player
Serie A clubs stacking goalkeeper, a level that never saw in the past.
It had many reason that players failing to loan out. For example, they were ghost player in order to create fictional profit in player-swap. But most of the name were good player in "Lega Pro", just like Ravaglia, Manfredini and Trini. Did the club wished to stay as a extra cover as fourth keeper, the club wished to stack them in order to listen offer from Serie B? Not every youth product create profit. Inter produced Tornaghi, Bindi, Cordaz and Moreau but none of them create a real profit. (not paper profit from paper swap). Juventus only profited Mirante for 3 million EURO in recent years. However at least someone willing to borrow them, when they had money to pay wage.
In the past Serie A clubs had to pay a portion of TV revenue to Serie B, just like Premier League. However since the set up of Lega Serie A and collective TV bargaining, the obligation to pay Serie B from A also expired. The source of income of Serie B clubs were came from selling youth product to Serie A and a little TV income. The source of income of Serie A club? Serie A were heavily rely on recapitalization or the shareholder loan to survive. However the introduction of UEFA Financial Fair Play in 2010, or even before that, Inter, Milan and Roma started a balanced budget or even a surplus budget in transfer market. In Lega Pro Second Division, the league was shirked from 3 groups to 2 groups. That means about 10 professional team withdrew. For the survived team, they also cut their budget on player wage. Player turned 20 were considered young-professional but player under that age could consider as trainee. Clubs could offered them "young-professional: contract but it was more economical to borrow them from youth team. A professional with trainee wage and experience, is that really a professional? Looking at Melfi squad (http://www.webcitation.org/63wF88qLB) The inexperience squad was an example that how the club survived. Old experienced but slow player no longer existed in the squad. In exchange they were replaced with even more low wage young (born 1989 to 1993!) player.
In the past we saw clubs using player exchange to create profit. Mechanism was sold a youth player (which in accounting it had no value, as value was based on hiring cost) with a certain price (say a few million) to B. But at the same time, B sold another youth player back to A with the same price. If the price was right, there is nothing wrong. Clubs were free to swap their surplus defender with midfielder they need. However most of the deal in turn were flops. Did you remember Alberto Maria Fontana, Marco Varaldi and Martino Olivetti? Profit was created because the selling profit of a player was registered in the accounts instantly, but the acquiring cost was amortize proportionally to player contract. Say, selling a player for 10million and buy another player for 10 million in 5-year contact, would create a net effect of 8million in the first season and 2 million cost in each year in next 4 seasons. Adding the effect of VAT the deal only create cost over time but it do borrow the future revenue to that window. Looking at the recent transfer window. Boateng only signed by Genoa for about 6 million but half of the contract sold to Milan for 6 million but paid via a young striker who tagged for 4 million. In turn Boateng proved his price tag (over 10 million) but Giacomo Beretta? That even worst in Bologna "bilancio" (Italian words for report and accounts) Pisanu-Valiani both tagged for 2.5 million EURO for 50% rights? Pasi-Elia 1 million? Few days before the closure of 2010-11 financial year, Caidi-Luppi for 0.75 million? G.Bassoli-Gregorio for 1million?! Rickler-A.Bassoli for 1.5 million!! It is not illegal to make the deals (or very difficult to prove it was flopped and only for false accounting) but for years it was considered immoral in Italian media. The come back of these deal, was to avoid the negative equity appeared. Braca should used these method as Messi and Xavi were very under rated in accounting. However these players were recently graduated from youth team or struggle to find a place in Serie A. The true market price of Serie B player were below 1million. Most of these players were likely a toxic asset of the club, made the club already faced a negative equity but did not appeared on paper. In 2011 window, Parma also swapped Luigi Palumbo with Thomas Fabbri; while Vicenza was swapped Edoardo Bonicelli with Simone Tonelli. I did not had their accounts and reports yet. It was normal transaction if they had a low price tag, but if the tag was high, everyone know what the purpose was. The deals either delayed the bankruptcy or the club faced its turning point and started to make profit again.
Lets wait and see the fate of Italian football.
Paolo Tornaghi: Internazionale player
Matteo Trini: Juventus player
Niccolò Manfredini: Fiorentina player
Edoardo Pazzagli: Fiorentina player
Nicola Ravaglia: Cesena player
Ugo Gabrieli: Lecce player
Davide Petrachi: Lecce player
Gianluca Curci: Roma player
Diego Manzoni: Parma player
Serie A clubs stacking goalkeeper, a level that never saw in the past.
It had many reason that players failing to loan out. For example, they were ghost player in order to create fictional profit in player-swap. But most of the name were good player in "Lega Pro", just like Ravaglia, Manfredini and Trini. Did the club wished to stay as a extra cover as fourth keeper, the club wished to stack them in order to listen offer from Serie B? Not every youth product create profit. Inter produced Tornaghi, Bindi, Cordaz and Moreau but none of them create a real profit. (not paper profit from paper swap). Juventus only profited Mirante for 3 million EURO in recent years. However at least someone willing to borrow them, when they had money to pay wage.
In the past Serie A clubs had to pay a portion of TV revenue to Serie B, just like Premier League. However since the set up of Lega Serie A and collective TV bargaining, the obligation to pay Serie B from A also expired. The source of income of Serie B clubs were came from selling youth product to Serie A and a little TV income. The source of income of Serie A club? Serie A were heavily rely on recapitalization or the shareholder loan to survive. However the introduction of UEFA Financial Fair Play in 2010, or even before that, Inter, Milan and Roma started a balanced budget or even a surplus budget in transfer market. In Lega Pro Second Division, the league was shirked from 3 groups to 2 groups. That means about 10 professional team withdrew. For the survived team, they also cut their budget on player wage. Player turned 20 were considered young-professional but player under that age could consider as trainee. Clubs could offered them "young-professional: contract but it was more economical to borrow them from youth team. A professional with trainee wage and experience, is that really a professional? Looking at Melfi squad (http://www.webcitation.org/63wF88qLB) The inexperience squad was an example that how the club survived. Old experienced but slow player no longer existed in the squad. In exchange they were replaced with even more low wage young (born 1989 to 1993!) player.
In the past we saw clubs using player exchange to create profit. Mechanism was sold a youth player (which in accounting it had no value, as value was based on hiring cost) with a certain price (say a few million) to B. But at the same time, B sold another youth player back to A with the same price. If the price was right, there is nothing wrong. Clubs were free to swap their surplus defender with midfielder they need. However most of the deal in turn were flops. Did you remember Alberto Maria Fontana, Marco Varaldi and Martino Olivetti? Profit was created because the selling profit of a player was registered in the accounts instantly, but the acquiring cost was amortize proportionally to player contract. Say, selling a player for 10million and buy another player for 10 million in 5-year contact, would create a net effect of 8million in the first season and 2 million cost in each year in next 4 seasons. Adding the effect of VAT the deal only create cost over time but it do borrow the future revenue to that window. Looking at the recent transfer window. Boateng only signed by Genoa for about 6 million but half of the contract sold to Milan for 6 million but paid via a young striker who tagged for 4 million. In turn Boateng proved his price tag (over 10 million) but Giacomo Beretta? That even worst in Bologna "bilancio" (Italian words for report and accounts) Pisanu-Valiani both tagged for 2.5 million EURO for 50% rights? Pasi-Elia 1 million? Few days before the closure of 2010-11 financial year, Caidi-Luppi for 0.75 million? G.Bassoli-Gregorio for 1million?! Rickler-A.Bassoli for 1.5 million!! It is not illegal to make the deals (or very difficult to prove it was flopped and only for false accounting) but for years it was considered immoral in Italian media. The come back of these deal, was to avoid the negative equity appeared. Braca should used these method as Messi and Xavi were very under rated in accounting. However these players were recently graduated from youth team or struggle to find a place in Serie A. The true market price of Serie B player were below 1million. Most of these players were likely a toxic asset of the club, made the club already faced a negative equity but did not appeared on paper. In 2011 window, Parma also swapped Luigi Palumbo with Thomas Fabbri; while Vicenza was swapped Edoardo Bonicelli with Simone Tonelli. I did not had their accounts and reports yet. It was normal transaction if they had a low price tag, but if the tag was high, everyone know what the purpose was. The deals either delayed the bankruptcy or the club faced its turning point and started to make profit again.
Lets wait and see the fate of Italian football.
Saturday, 23 April 2011
Sampdoria budget
Sampdoria had announced its 2010 annual result. It was a net loss of €12,109,456 (revised from €11.5M.) Compared with 2009, was a net loss of €16,389,970
Wednesday, 23 March 2011
fate of Manchester United? (updated 29/3)
Red Football JV Limited had a loss of 105million pound in 2009-10 seaseon.
Despite Manchester United is one of the wealthiest club in the world, however the parent company of the club, Red Football JV Limited, was heavily affected by the debt. Thanks Glazer.
The structure of the club ownership is as follow:
Glazer family > Red Football JV > Red Football Limited > Manchester United Limited > subsidiaries (including the team itself, MUTV, etc.)
(intermediate holding company ignored , source)
Manchester United Limited was healthy. Red Football Limited had a EBIT of £27.3 million, but the total recognized losses of the financial year was £84.3 million due to the interest expenditure, which it had a net debt of £357.8M.
That's not the full story, Red Football JV Limited 2009-10 result, which could be obtained in the "Companies House", shown the group had a pre-tax loss of £109M, which isn't a good sign. In 2008-09 season the pre-tax profit of RFJV was £21.6M, which mainly due to the sale of Ronaldo (profit of selling players in 2008-09 season was £80.7M) The net debt was £566M in 2008-09 season.
Glazer is clever. He borrowed money to buy a hen which can lay golden egg. And bankrupt of the parent company did not affect the team itself. When the parent company was liquidated, the banker still able to sell the subsidiary without affecting the business. The net asset of RFJV was stood at £37.M in 2008-09 season. Sound inexpensive? But Glazer rejected an offer of £1.6 billion from Qatar ruling family. That's is, if Qatari only buy the the team itself and Glazer needed to clear the debt by its means, he still received net cash of about £1 billion, and if the Qatari bore the debt, that's mean it would cost more than £2billion. Glazer borrowed money to buy Manchester United, it is a good profit as he did not take his own money to buy it, but now he is the owner, and he knew there are potential buyers, and the family can borrow easy money from the group, just let see Glazer when he sold it for a new world record.
Despite Manchester United is one of the wealthiest club in the world, however the parent company of the club, Red Football JV Limited, was heavily affected by the debt. Thanks Glazer.
The structure of the club ownership is as follow:
Glazer family > Red Football JV > Red Football Limited > Manchester United Limited > subsidiaries (including the team itself, MUTV, etc.)
(intermediate holding company ignored , source)
Manchester United Limited was healthy. Red Football Limited had a EBIT of £27.3 million, but the total recognized losses of the financial year was £84.3 million due to the interest expenditure, which it had a net debt of £357.8M.
That's not the full story, Red Football JV Limited 2009-10 result, which could be obtained in the "Companies House", shown the group had a pre-tax loss of £109M, which isn't a good sign. In 2008-09 season the pre-tax profit of RFJV was £21.6M, which mainly due to the sale of Ronaldo (profit of selling players in 2008-09 season was £80.7M) The net debt was £566M in 2008-09 season.
Glazer is clever. He borrowed money to buy a hen which can lay golden egg. And bankrupt of the parent company did not affect the team itself. When the parent company was liquidated, the banker still able to sell the subsidiary without affecting the business. The net asset of RFJV was stood at £37.M in 2008-09 season. Sound inexpensive? But Glazer rejected an offer of £1.6 billion from Qatar ruling family. That's is, if Qatari only buy the the team itself and Glazer needed to clear the debt by its means, he still received net cash of about £1 billion, and if the Qatari bore the debt, that's mean it would cost more than £2billion. Glazer borrowed money to buy Manchester United, it is a good profit as he did not take his own money to buy it, but now he is the owner, and he knew there are potential buyers, and the family can borrow easy money from the group, just let see Glazer when he sold it for a new world record.
Wednesday, 2 March 2011
Post-Tsunami of economy? Half-yearly result of Football industry (2010-11)
| Team | Net income (loss) |
| Arsenal Holdings plc | |
| Red Football Ltd. | |
| Tottenham Hotspur plc | |
| Birmingham International Holdings Ltd | |
| Rangers FC plc | |
| Celtic plc | |
| Juventus FC Spa | |
| AS Roma Spa | |
| SS Lazio | |
| SL Benfica - Futebol, SAD | |
| Sporting Clube de Portugal - Futebol, SAD | |
| FC Porto - Futebol, SAD |
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