What is Strangling Serie A?

A look at the causes of the current decline of Italian Football – Part One by Ben Holmes.

From the mid 70s until the early 1990s, there was only one league where the very top players would prove themselves. While the Bundesliga, the Primera Liga and the English League attracted some foreign talent, the world’s top players would tend to gravitate towards what was, undeniably, the best league in the world; Serie A.

These were the halcyon days of Serie A; when the world’s top stars such as Careca, Platini, Van Basten, Gullit, Zico, Gascoigne, Boniek and of course, Diego Maradona played opposite or alongside a wealth of home grown talent, such as Paolo Maldini, Franco Baresi, Giuseppe Signori and Roberto Baggio, every week.

These golden days are now a dim and distant memory.

For without question, Serie A is in a state of decline. But what has caused this fall from the best league in the world, to arguably, only being the fourth or fifth most competitive league in Europe?

In this multi-part review, we’ll examine some of the key factors for this decline in detail, starting with the first and perhaps seemingly the most obvious reason why Serie A teams seem to be struggling. Money and more specifically, the TV Rights deal.

1. TV Rights

Are Italian clubs penalised by their television rights deal? To understand this, we need to compare the revenue generated by the top leagues in Europe and, perhaps more importantly, how this cash is divided between the competing clubs.

In a report from November 2013, TV Sports Markets revealed that the Premier League generates a total income of €2.206 billion per season, making it by far the most popular global sporting market.

Yet, somewhat surprisingly, Serie A is second on the list, albeit with a markedly diminished €974.5 million per season compared to the Premier League.

Yet that still places Serie A ahead of La Liga (€709.6m), France’s Ligue 1 (€639.5m) and the Bundesliga (€541m).

So compared to teams in France, Germany and Spain, Serie A teams do relatively well out of their current TV deal. Furthermore, with the new TV deal –agreed in late 2013- expected to push revenue up to at least €980m a season from 2015/2016, Serie A clubs in terms of TV rights alone, are the second best paid in Europe.

Yet while domestic TV providers will pay a high price for Serie A football, international TV channels are not so keen, indeed only recently Juventus chairman Andrea Agnelli remarked upon the fact that Serie A clubs only earn a tiny percentage from international TV rights compared to Premier League teams.

So, while domestic demand for Serie A action seems to remain, internationally, Serie A seems to lack appeal.

So is the issue of TV Right’s something of a red herring? Are there other issues in the Italian game that are contributing to the league’s current plight that not even a large influx of TV money can resolve?

Yes there are, and we’ll examine them in more detail in later articles, but simply viewing the TV Rights Deals as a lump sum is actually part of the problem. To examine why so many teams in Serie A are struggling, you need to look closely at how this money is divided up between the clubs.

Serie A TV Rights Deal – How the Cash is Divided Up

In the Premier League, the current TV deal is worth $5.5bn and runs until 2016. That money will be distributed, a third each season, to the 20 clubs in the Premier League on the following basis:

  • 50% is divided equally between the 20 clubs.
  • 25% is awarded to each club depending on their finishing position in the league table
  • 25% is awarded to each club depending on how many times they are involved in a live televised game.  (Source)

Even though this system is still heavily weighted in favour of the top Premier League teams, such as Manchester United, Chelsea, Arsenal, Tottenham, Manchester City and Liverpool who usually occupy the top 6 or 7 places in the league table and are involved in a high percentage of league games, it is still much fairer than the system in place in Serie A.

In Serie A, their much smaller pot of money is divided in a somewhat unusual (critics would argue, wholly biased) way:

  • 40% is divided equally between the 20 teams.
  • 30% is divided between the clubs based on population (5% based on the population of the city in which the team is based and 25% based on their average home attendance)
  • 30% is awarded to teams based on performances. 5% depending on the last season, 15% on the last five years and 10% based on results from 1946 up to the sixth season before the current one.

This means that the money generated by the Serie A TV deal is heavily loaded towards the teams who have large attendances, in large cities and who have a strong history in Italian soccer. Which essentially means, the big four Italian clubs, Inter Milan, AC Milan, Juventus and Roma.

In his excellent article Serie A: The Decline of a Footballing Giant, Yousef Teclab points out that the effect of this biased allocation of TV money towards the top Italian teams, works heavily against the lesser Serie A teams.

He compared the teams that finished 8th and 11th in Serie A and the Premier League and looked at how much cash they had available for transfers; he noted that in the summer of 2013, 11th-placed Norwich spent £26.5m on 8 players and 8th-placed Swansea City spent £21.4m on nine players.

In contrast, the two teams in Serie A who finished in these positions, Catania and Cagliari spent £7.05m and £1.32m over the summer and Cagliari actually made a net profit in transfers as they sold striker Thiago Ribeiro to Brazilian side Santos for £3m.

This is a crucial point that needs to be understood fully as to the decline of Serie A, especially when viewed in a historical context. In the past, even modest Italian sides have managed to attract some of the world’s finest talent to their clubs. Brazilian ace Zico was signed by Udinese just after the 1982 World Cup Finals, Danish striking legend Preben Elkjaer-Larsen and Argentinean ace Claudio Caniggia both played for Verona. Tomas Brolin, Faustino Asprilla, Hernan Crespo and Lilian Thuram played for Parma.

In the ten years between 1990 and 2000, the world record transfer fee was broken nine times, Italian clubs were responsible for that on seven occasions. Yet now, Italian clubs it seems cannot compete.

The situation is different now, especially when you look at the top players signed by Italian clubs from abroad in the summer of 2013. Many of the big name signings, such as Carlos Tevez at Juventus (from Manchester City), Mario Balotelli at Milan (also from Manchester City) and Kaka also at Milan (from Real Madrid) are players who were deemed surplus to requirements at their English and Spanish clubs respectively.

The fact of the matter is, by ploughing the vast majority of their TV money into the hands of the rich elite clubs, Serie A is choking competition. In recent years, only the new ownership at Napoli have spent big money in an attempt to break into the crucial Champions League qualifying places, with a degree of success.

Indeed, Napoli, once one of the poorest teams in Serie A, were the big spenders last summer, spending over £30m on Real Madrid striker Gonzalo Higuain, as well as making several other signings in a £76.5m splurge. Yet it should also be noted that many of these signings were funded by the £56.7m sale of Uruguayan striker Edinson Cavani to Paris St-Germain.

For the clubs without a rich benefactor, or the lion’s share of the TV cash, life in Serie A is getting harder and harder, with financial worries a day-to-day concern. A much fairer system in allocating TV funds would help alleviate that, but it is not the sole answer.

As we’ve seen, the TV Right’s deal is not the sole reason for Serie A’s decline, though it certainly has had an impact in entrenching the financial gulf between the haves and have not’s in the league, thus weakening its appeal as a result.

As we’ve seen, relatively few clubs in Serie A have money available to spend and with the financial crisis still rife in the country, this has led to an inability to bring top quality players into the country and an exodus of top players abroad.

Has this been a key issue in Serie A’s decline?

We’ll examine this more closely in Part Two.


One response to “What is Strangling Serie A?

  1. Pingback: The Perceived “Quality” of Italian Football and The Player Drain | WORLD FOOTBALL WEEKLY·

Comments are closed.