For Napoli fans it has been an off-season filled with ever-constant speculation. Most of it surrounded star striker Edinson Cavani. Newspapers were filled with quotes from family members, plus a barb here and there between the player and President Aurelio De Laurentiis. Eventually the Uruguayan was sold to big-spending Paris St-Germain for €64.5m, ending a three-year love affair. Yet in a nutshell, that Napoli could command such intrigue and such a fee for one of their players was an indication they are back amongst Italy’s top clubs.
Compared to nearly a decade ago a summer transfer saga seems trivial. Wracked with financial problems, the club – relegated from Serie A in 2001 – was declared bankrupt in August 2004, with debts up to €79m.
The triumphs of the Diego Maradona era were a distant memory. With the Argentine wizard and President Corrado Ferlaino in tow Napoli won two Italian championships, the Italian Cup, Italian Super Cup and UEFA Cup. Maradona left in 1991 following a drugs ban and Ferlaino in 1994. The club passed through the hands of numerous owners as debts piled up. The team fell from grace on the pitch. It all culminated in 2004.
In came De Laurentiis – a successful movie producer – paying €30m for ownership. His aim was to get Napoli back to Serie A within five years. It took three. Nonetheless, this proud club was forced to start again as Napoli Soccer in the third tier – Serie C1 – for season 2004-05. They remained for another season, but earned two straight promotions to claw back into Serie A by 2007-08. By then the club had restored its old name of Società Sportiva Calcio Napoli.
It took only one season to reach Europe and after two participations in the UEFA Cup/Europa League, Napoli qualified for the Champions League in 2011-12, the first time since Maradona. That campaign ended with their first trophy since 1991, an Italian Cup triumph. Last term Napoli finished second to again reach Europe’s premier club competition. It has been a long, but rewarding, road for De Laurentiis. While wiping out their debt, he has built a team capable of challenging for trophies.
At a time of financial restraint for Italian clubs, Napoli posted a profit in their first four seasons back in Serie A. Include their season in the second division and it stretches to five. This despite high transfer expenditure aimed at refining the squad. In 2010-11 they were just one of six clubs to make a profit in Serie A. The Partenopei and Catania were the only clubs to record a profit three seasons in succession until 2011.
Napoli have been aided by strong revenue and growth. Clubs are reliant on major revenue streams of broadcast rights, commercial and match day. As expected given their rise through the divisions, Napoli have seen a steady increase in all facets.
Television rights are vital. It makes up the largest portion of Napoli’s income in the top flight. Broadcast rights accounted for just 11 per cent of total income in Serie C1, but 48 per cent in 2008-09. In comparison, match day revenue dropped 40 per cent to 16 per cent in the same period.
Television rights were worth €39m to Napoli in 2009-10, the sixth highest payment in Serie A. That was under the old price structure in which clubs negotiated deals individually. Now the structure is altered to curb the gap between the highest and lowest earners. Where Inter earned €138m in 2009-10 compared to Bari’s €12m, Juventus received €104m last term compared to Pescara’s €25m.
The big clubs were livid, but for outfits like Napoli the benefit was instant. Their takings rose to a €66m slice of the television pie in 2012-13. The new structure sees 40 per cent of the money divided equally amongst the 20 teams. 30 per cent is based on people – five per cent on the population of the city in which a club plays and 25 per cent on the number of fans. The remaining 30 per cent is split based on performances – five per cent depending on the previous season, 15 per cent on the last five years and 10 per cent on results from 1946 to the sixth season before last.
One area in which Italian clubs lag behind counterparts in Spain, England and Germany is match day revenue. Juventus have set about rectifying their situation with the opening of the Juventus Stadium, a privately owned venue generating more income than any other Italian stadium.
Napoli do not have this luxury. They play at the Stadio San Paolo, a bigger venue, but council-owned. As is the case with most Italian stadia, it’s in need of refurbishment. UEFA warned Napoli about the state of the San Paolo last season and made it clear that without restoration work it would be unavailable for European competition. Since they don’t own the stadium, all the club could do was appeal to the council.
“For the last six weeks we have been urging the council to intervene. We are even ready to anticipate funds to make sure the work is carried out in time, then taking it off the next annual payment we use to rent the stadium,” head of operations Alessandro Formisano said in February. “We are embarrassed by the attitude of the council, because there is urgent work the council needs to do on the stadium, but it is not happening and we haven’t even received any communication on the situation.” 25 areas of the stadium needed refurbishment and following a meeting with the council, it was agreed the necessary work – at a cost of just under €1m – would occur. De Laurentiis has spoken of plans to completely renovate the stadium but as is generally the case in Italy, to get from an idea to blueprints and then to building is an arduous journey.
In any event, the San Paolo’s average attendance for 19 League matches this past season was 39,636 – the fourth highest in Serie A. Only Inter, Milan and Roma broke the 40,000 mark. It’s a number Napoli have hovered around since their Serie A return, peaking at 45,608 in 2010-11. Napoli’s first Serie C1 season averaged 37,080 – with two 60,000+ attendances – and then 23,728. In the second division that rose to 35,176. These figures were well above the next ranking club.
Despite such attendance figures Napoli do not reap rewards financially. By 2011 Napoli’s match day revenue accounted for just 19 per cent of their overall income. It dropped three per cent in 2012, but thanks to hosting big Champions League matches against Manchester City, Bayern Munich and Chelsea, revenue grew €2.6m to €24.6m.
Commercial revenue stems mainly from shirt sponsorship. The Deloitte Money League placed Napoli’s 2011 commercial revenue at €35m, accounting for 30 per cent total revenue. This jumped to €38m a year later, thanks to dual shirt sponsors. Lete have been featured since 2005 and MSC Cruises signed up from the 2011-12 season. The two sponsors are believed to bring in a combined €10m per season. This remains below Juventus, Inter and Milan.
De Laurentiis was aiming to find a sponsor to shell out around €9m, with Lete paying just over €5m. When this was not forthcoming, he added MSC. Napoli closed the gap to the bigger clubs on this front, but the deal with kit manufacturer Macron – which began in 2009 – is well below those clubs. Macron replaced Diadora and paid per year around €4.7m. They have renewed their agreement for two further seasons.
With the rise of the club has come greater transfer expenditure, but also greater fees received. Napoli have made significant investments in their playing stocks each season since returning to the top flight in order to build the club from its main stage – the pitch.
The ‘Three Tenors’ – Ezequiel Lavezzi, Cavani and Marek Hamsik – proved lethal on the pitch and bliss for the balance sheet. Lavezzi signed for €6m from Argentine club San Lorenzo and was sold to Paris St-Germain for a deal reportedly worth just shy of €30m. Cavani was signed for €5m for an initial loan spell from Palermo, then €16m to make the move permanent. He was sold for more than triple that. De Laurentiis announced on the back of the Cavani sale Napoli’s summer budget is €124.5m, some of which has already been reinvested back into the squad. Hamsik signed for €5.5m from Brescia in 2007 and remains an integral figure. Should he be sold he would command a transfer fee to rival Lavezzi.
They’ve had three summer transfer sessions of heavy investment. In 2007-08 €43.5m was spent, while two seasons later over €51m was plunged in. At the start of 2011-12 Napoli spent €37m worth on players. Money has come back in, however expenditure has outweighed income. That’s not unexpected given their aim to reach the pinnacle of the Italian game. Napoli have been one of the bigger spenders since their Serie A return – along with Juventus – yet their wage bill is significantly less than the Bianconeri, plus Milan, Inter and Roma.
Napoli’s overall revenue has been on the rise. It went from a 2010 figure of €92m to €115m a year later. It climbed further still in 2012, up to €148m. This was thanks to the Champions League, in which Napoli earned €27.7m. In comparison, their Europa League jaunt a year before generated just €2.3m. Failure to qualify for the top competition in 2012-13 will hurt overall revenue for the season when figures are released. Yet having finished the domestic season second, they’ll be back in the Champions League in 2013-14.
Despite Napoli’s extraordinarily growth on and off the field over the past decade, De Laurentiis is not resting on his laurels. His aim is to further expand Napoli in Italy and abroad. To expand nationally they aim for further on-field success. Coach Walter Mazzarri has been replaced with ex-Liverpool tactician Rafael Benitez, confirming their burgeoning reputation. He is a proven winner both domestically – with Valencia in Spain – and in Europe, with Valencia, Chelsea and the Reds. The squad is strong and looks set to challenge for the Scudetto even after the Cavani sale.
Off the pitch, De Laurentiis has talked about the possibility of ‘satellite clubs’. It is a system Udinese have used to good effect in recent years. The Pozzo family, which owns the Serie A club, are also in charge of Granada in Spain and English club Watford. The latter play in the Championship, but very nearly won through to the Premier League, while Udinese and Granada are in their respective top flights. Udinese’s extensive scouting system means there is not room for all players to develop in Italy, so they are loaned to one of the other clubs. Pozzo is also aiming to build those clubs off the pitch.
De Laurentiis hopes to emulate this. “I want to export the Napoli model in four nations – Italy, USA, England and Brazil. I want to do that in the next six years. My idea for the English club is to start from a lower League.” He has said former Napoli Coach Edy Reja would take charge of the English club, whoever that may be. Third tier Leyton Orient were rumoured, but club chairman Barry Hearn declared no talks have been held with the movie mogul.
As his ambitious plans show, De Laurentiis continues to place faith and money in Napoli. These are exciting times for the club, with the team poised to maintain their upward trend. Off the pitch De Laurentiis continues to generate a profit. This was unthinkable when he took over, but De Laurentiis has proven to be a shrewd financial operator. Should Napoli be able to follow Juventus and Udinese’s leads on the stadium front, they will grow even further. From bleak days a decade ago, the sun is shining bright in the south of Italy.
Figures thanks to The Swiss Ramble and Deliotte.