#Lazio 2018/19 financial results cover a season when they finished 8th in Serie A, which was a little disappointing after coming 5th the previous two years, but they did win the Coppa Italia and reached the last 32 of the Europe League. Some thoughts in the following thread.
#Lazio swung from €39m profit before tax to a €4m loss, mainly due to profit on player sales dropping €38m from €64m to €26m, though revenue also fell €5m (4%) from €129m to €124m. There was an even larger decline after tax to a €13m loss, due to €9m tax charge. 
Main reason for €5m decrease in #Lazio revenue was they did not accrue guaranteed revenue from next season’s Europa League (unlike previous year) to comply with new FIGC recommendation, which led to TV income falling by €3m (4%) to €82m: UEFA down €7m, domestic up €4m.
In addition, #Lazio match day revenue down €1.3m (11%) from €12.2m to €10.9m, while player loans fell €0.7m from €2.1m to €1.4m. On the other hand, commercial income rose €0.6m (2%) from €29.3m to €29.9m.
As a technical aside, this “international” definition of #Lazio €124m revenue is different to the one used in the club’s accounts, which also includes €26m profit on player sales and €0.3m increase in asset values to give a total of €150m.
#Lazio wages rose €6m (7%) from €80m to €86m, while player amortisation was up €8m (33%) to €30m and depreciation almost doubled to €2.0m. In contrast, other expenses dropped €12m (25%) to €35m, due to lower agent fees & player loans, & net interest fell €1.5m to €0.4m.
Even after the deterioration, #Lazio €4m pre-tax loss is actually one of the smallest in Italy. No fewer than nine clubs lost more than €15m, including Juventus €27m, Inter €40m and Milan €143m. Largest profits reported by Atalanta €35m, Sampdoria €19m and Sassuolo €13m.
The situation is much the same after tax, though #Lazio’s €9m tax charge resulted in a large €13m deficit. The highest losses have been posted by Italy’s traditional “big four”: Roma €24m, Juventus €40m and Inter €48m, all dwarfed by Milan’s shocking €146m deficit.
#Lazio made €26m profit on player sales, very largely Anderson to West Ham €24m. This was not bad, but represented a €38m decrease from prior year’s impressive €64m, which included Keita €29m, Biglia €16m and Hoedt €16m. Much lower than Roma €129m and Juventus €127m.
Despite last year’s loss, by and large #Lazio operate a sustainable business model, having reported profits in four of the last six years. Over that period, they have aggregated €54m of profits before tax, averaging €9m a season.
#Lazio EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), a proxy for cash operating profit, improved from €1m to €3m, though well down from recent peak of €25m in 2015. If we were to include player sales, this metric would be €29m.
#Lazio EBITDA of €3m is around mid-table in Serie A, but a fair way behind the best performers in 2018/19: Inter €78m and Juventus €36m. On the other hand, it is miles better than the likes of Milan €(62)m and Roma €(29)m.
#Lazio ongoing revenue has grown by €24m (24%) in the last 2 years from €100m to €124m. The highest increase in this period came from commercial €13m, followed by broadcasting €8m and match day €3m.
It is worth noting that #Lazio used to record guaranteed revenue from European competition in the preceding season’s accounts, e.g. 2014/15 revenue was boosted by €21m relating to 2015/16 competition. This is no longer allowed by the Italian authorities.
#Lazio €124m revenue is the 6th highest in Italy. To an extent, they are the “Inbetweeners”, as they are comfortably ahead of Atalanta €94m, but way behind Napoli €185m. Furthermore, still only a quarter of Juventus €494m and a third of Inter €377m.
Since 2016 #Lazio have managed to grow revenue by a third. However, their €30m growth has been significantly outpaced by Inter €194m and Juventus €123m, and is also below Napoli €40m and Atalanta €37m. That said, they have closed the gap to Roma and Milan.
#Lazio revenue is no longer enough to place them in the top clubs worldwide, as seen in the annual Deloitte Money League. In 2017/18, their €127m was €24m below Benfica €151m in 30th place. However, back in 2004, their ranking was as high as 15th.
#Lazio broadcasting revenue fell €3m (4%) to €82m, due to €7m drop in UEFA money to €10m (change in accounting policy), partly offset by €4m rise in domestic TV rights to €72m. Sixth highest TV income in Italy, though well behind Juventus €207m, Roma €145m & Inter €139m.
Increase in #Lazio domestic TV revenue is due to the higher 2018/19 deal plus a changed distribution mechanism: 50% equal share; 30% performance (15% last season, 10% last 5 years, 5% historical); and 20% supporters. Benefited from equal share increasing from 40% to 50%.
According to UEFA, #Lazio earned €17m in 2017/18 for reaching the Europa League quarter-final. They have not yet published final figures for 2018/19, but my model estimates around €13m for reaching the last 32.
If #Lazio do qualify for the Champions League, there will be a significant step-up in revenue. As an illustration, in 2018/19 the Italian clubs earned big money, as follows: Juventus €95m, Roma €58m, Napoli €50m and Inter €48m.
As it stands, #Lazio have received a respectable €60m from Europe in the last 5 years, ahead of Milan €27m & just behind Inter €67m. On the other hand, they are miles behind Juventus €451m, Roma €285m & Napoli €188m, due to their consistent Champions league qualification.
The (financial) importance of Champions League qualification has never been higher, as revenue rose 54% in 18/19, due to new commercial deals. However, the TV pool element, which has been good for Italian clubs in the past, has been largely replaced by UEFA coefficient payment.
This change in distribution rewards the traditional big clubs, as UEFA coefficient ranking is based on a club’s 10-year performance in Europe. Also highlights lower money in Europa League, where #Lazio ranking of 16th is only worth €2.4m against €19m in the Champions League.
#Lazio match day income dropped €1.3m (11%) from €12.2m to €10.9m, mainly due to hosting three fewer home games, mitigated by more season ticket income. This was the 6th highest revenue in Italy, but miles below leaders Juventus €71m, Inter €45m, Milan and Roma (both €34m).
In 2018/19 #Lazio average attendance rose 5% from 32,912 to 34,430, the fifth highest in Serie A, around 4,000 lower than city rivals Roma 38,622. The largest crowds in Italy are to be found in Milano with Inter 56,639 ahead of Milan 54,660.
#Lazio commercial income rose €0.6m (2%) from €29.3m to €29.9m, which is the 7th highest in Serie A. This important revenue stream is up 74% in the last two years, but is still only 16% of Inter and Juventus, both around €185m.
Due to the ban on gambling advertising in Italy, #Lazio had to renounce their €7m deal with Marathonbet, so are currently without a shirt sponsor. Macron kit deal is worth around €3m a year, though add-ons can take this to €5m. Note: Sassuolo €18m deal is with owners Mapei.
#Lazio player loans income dropped by a third from €2.1m to €1.4m. This is one of the lowest in Italy, where this is an important revenue stream for some clubs, e.g. Juventus €30m, Atalanta €13m, Genoa €9m and Fiorentina €7m.
#Lazio wage bill increased by €6m (7%) from €80m to €86m, due to a combination of strengthening the squad, contract extensions and bonus payments. As a result, wages have risen by nearly 50% (€28m) in the last two years, so the wages to turnover ratio is up from 57% to 69%.
Although the €28m #Lazio wages growth in last 2 years is quite steep, it has still been outpaced by the “Big Three” in Italy (Juventus €66m, Inter €41m and Roma €39m), which means that the gap has further widened.
#Lazio €86m wage bill is the 6th highest in Italy, exactly in line with revenue. However, the gap to the elite clubs is notable with Lazio’s wages only a quarter of Juventus’ €328m and around €100m less than Inter €193m, Milan €185m and Roma €184m.
Following the increase from 62% to 69%, #Lazio wages to turnover ratio is around mid-table in Italy – similar to Juventus 66%. Four Serie A clubs have reported ratios above 80%: Bologna (the worst at 88%), Genoa, Milan and Sampdoria.
#Lazio player amortisation, the annual cost of writing-off transfer fees, shot up €8m (33%) to €30m, which means that this expense has more than doubled in just four years (from €14m in 2015).
As a consequence, #Lazio player amortisation of €30m is now around the same level as Atalanta and Fiorentina, though still a fair way behind the “Big Five”: Juventus €149m, Inter €85m, Roma €83m, Milan €80m and Napoli €65m (2017/18 figure).
#Lazio have been steadily increasing their expenditure in the transfer market with average annual gross spend rising from €20m 2010-14 to €28m 2014-17 and €38m 2017-20. However, average sales have also grown to €46m in the last 3 years, leading to €8m net sales.
In fact, over the last 3 seasons, only 3 Serie A clubs have higher net sales than #Lazio €23m, namely Roma €74m, Genoa €52m and Atalanta €28m. In stark contrast, the biggest spenders over this period were Milan €327m, Inter €173m, Juventus €153m and Napoli €94m.
Interestingly, #Lazio’s €115m gross spend over the last 3 years is only the 11th highest in Italy, around half a billion below Juventus €609m. In 2018/19 player purchases included Correa €15m, Acerbi €11m, Pedro €9m, Berisha €8m, Cavaco €5m and Badelj €3m.
#Lazio net financial debt rose €10m from €46m to €56m, as gross debt was up from €50m to €60m and cash was unchanged at €4m. Financial debt was just €10m in 2012. They also have €40m transfer debt, though are in turn owed €49m by other clubs.
#Lazio €60m gross debt is the 5th highest in Italy, though it is dwarfed by the top three: Juventus €473m (partly for new stadium), Inter €436m and Roma €255m. Although not unmanageable, Lazio need to keep an eye on their ever-rising debt.
Despite the increase in debt, #Lazio net interest payable was cut by nearly 80% from €1.9m to €0.4m, though this was mainly due to higher interest receivable. This is considerably lower than the likes of Inter €29m and Roma €28m.
Although the amount owed by #Lazio in transfer fees increased from €33m to €40m, this is still only mid-table in Serie A. To give some perspective, gross transfer debt is more than 4-5 times as much at Roma €164m and Juventus €221m.
One major issue for #Lazio is the huge tax debt accumulated under previous owner, Sergio Cragnotti. Including interest & penalties, this came to €140m in 2005. New owner Claudio Lotito struck a long-term repayment deal of €5.65m a year. Greatly reduced, but still owe €43m.
If Lazio do manage to qualify for the Champions League, their finances would obviously benefit enormously. If not, they could always accept big money offers for some of their stars, especially the highly talented Sergej Milinkovic-Savic or the impressive Luis Alberto.
