COVID-19 EFFECT ON SERIE A

The only record losses accumulated by Milan, Roma, Inter, Juve and Lazio as of 30 June 2020 are already more than double the red recorded by the entire Serie A in the 2018/19 season

The last in order of time to communicate the financial results was AC Milan which recorded record losses in the financial statements as at 30 June 2020 for 195 million euros. A very heavy deficit that is almost coupled with the red of 204 million accused by Rome. In the same period of time, Juventus has accumulated losses of 97 million, while the deficit of Inter (which lost 103 million as of March 31st) should settle below the 150 million mark. The best performance is that of Lazio which suffered only a 16 million deficit. In total these five top clubs alone have lost over 650 million against the 275 million reds of the entire Serie A in the previous season.

The AC Milan case: The Rossoneri Board approved the accounts of the last financial year heavily marked by the effects of the pandemic linked to the Coronavirus. “The Club was not immune from negative impacts on its financial performance, already heavily penalized by the inherited situation, with a final result for the year that recorded a net loss of around 195 million”, explains a statement from Milan, whose balance sheet it will be approved by the shareholders’ meeting on October 28th. “Excluding the impact of exceptional external circumstances, the results of the approved financial year can be considered significantly improved and in line with the expectations of the Club, committed to compliance with Financial Fair play”. In detail, the negative impact on the budget deriving from the state of emergency concerns the loss of revenues from the stadium, as well as postponing part of the TV rights linked to the 2019/20 season and the ban on participating in the season until June 30, 2021. Europa League for the agreement with UEFA after the failure to comply with the rules on Financial Fair Play. In addition to Elliott’s investments, in order to get closer to economic equilibrium, the Rossoneri also launched “an effective cost rationalization policy, also through a significant reduction in the amount of players’ wages and top management salaries. The constant support of Elliott, which guarantees the financial stability of AC Milan, has nevertheless allowed important investments, the effects of which will begin to be visible in the near future, “explains the company.

The AS Roma case: the Giallorossi club, at the request of Consob, has announced the estimates on the next financial statements, whose approval is expected at the end of the month. The Capitoline company expects a consolidated loss for the year of 204 million for the year ended June 30, 2020, in the midst of the Covid-19 pandemic. A record loss for Roma. The estimate for consolidated shareholders’ equity as at 30 June last is also negative for 242.5 million. According to what was communicated by Rome, the negative effects of the loss are partially offset by payments to the future capital increase of 89.1 million, made through the vehicle Neep Roma Holding Spa by the old owner, or by Pallotta. “In this context – reads the Rome press release – the total net financial requirement of the Group for the 2020/21 financial year is estimated at 140 million”. To meet this need, in addition to the normal financial flows and the possible sale of available assets (or transfers of players on the market), the capital increase already approved for a maximum of € 150 million must be taken into account.

The Friedkin family does not rule out the possibility of introducing this amount into the company, to carry out the project of consolidation of the accounts. So far, the new shareholders of Rome have paid out 77.6 million to support the corporate business, in particular 63 million as shareholder loan and 14.6 million in payment for a commission to the bondholders of the loan of the subsidiary Asr Media and Sponsorship. Meanwhile, Consob approved the prospectus of the totalitarian takeover bid promoted by Romulus and Remus Investments, or the current indirect controlling shareholder referring to the Friedkin family. The offer is € 0.1165 in cash for each ordinary share, with a maximum outlay of € 9,834,205. The operation will end on October 29, unless extended.

Published by Marco Perrotta

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