Still a long way to go for finances for Juve

Yesterday at 04:51 AM

Juventus' pre-tax loss significantly increased in 2023/24 from €117m to €196m (€199m after tax), which the club said was "heavily influenced by the non-participation in UEFA competitions", as well as €36m of non-recurring costs.  Revenue fell €89m (19%) from €461m to €372m, while profit on player sales more than halved from €47m to €22m.

The main driver for the steep revenue decrease was broadcasting, which dropped €57m (37%) from €157m to €100m. entirely due to the lack of European TV money.

The other revenue streams were also impacted by not playing in Europe, as ticket sales fell €4m (6%) from €62m to €58m, while commercial decreased €16m (7%) from €219m to €203m.

Unsurprisingly, Juventus' €196m pre-tax loss was the worst result in Serie A last season: Not all clubs have published their accounts for last season, but for some perspective it was almost twice as much as the largest loss in 2022/23, namely Roma's €99m.

The last time that Juventus posted a profit was back in 2016/17, so they have now lost money seven years in succession. In that period, they have lost €894m before tax, including more than three-quarters of a billion Euros in the last four years alone.

The club has advised that it expects a "significant improvement" this season in the range of break-even, though this would depend on "the second phase of the 2024/25 transfer campaign", implying that there will be further player departures in the January window.

This is part of a strategic plan that should show "progressive improvement", leading to a "positive net result in 2026/27", though this is based on certain sporting successes, i.e. qualifying for the Champions League.

The importance of player trading to the Juventus business model is clearly illustrated by the steep reduction in club's bottom line in the last four years, when they only averaged an annual gain of €32m. This was €100m lower than the €132m in the preceding 4-year period.

The good news is that the club said it had already made €64m this season (with the January window still to come), mainly from the sales of Matias Soulé to Roma (€22m profit) and Dean Huijsen to Bournemouth (€13m).

Juve's average attendance of 39,416 in 2023/24 was only sixth highest in Serie A, over 30,000 below Inter 72,838 and Milan 69,461. Their crowds were also less than Roma 62,970, Napoli 46,967 and Lazio 44,142.

One other piece of bad news for Juventus is the expiry of the Jeep shirt sponsorship, worth €45m with bonuses, at the end of last season. The club is currently playing with the "Save The Children" logo on the front of their shirt until they can find a new main sponsor.

Juventus' wages decreased for the third year in a row, falling by €18m (6%) from €282m to €264m, the lowest since 2017/18.  Juve's wage bill really took off the season after that when they signed Cristiano Ronaldo. The club has been paying the price ever since, as this move effectively destroyed the previous good husbandry of their finances.

One of the root causes of Juve's financial difficulties is the amount they have splashed out in the transfer market, which can be seen from a comparison with other leading clubs. In the five years up to 2022/23, they had the second highest gross spend in Europe with €1.1 bln, only surpassed by Chelsea.

Juve's €279m gross debt is the third highest in Italy, though a lot smaller than Inter €538m and Roma €497m. Loans were originally take out for stadium development, but were then increasingly been used to finance investment in the squad.

Juventus have been very reliant on capital injections from their owners.  In fact, the €200m provided last season is the third time that the club has had to go to the shareholders for cash recently after €300m in 2019/20 and €400m in 2021/22, which means a total of €900m in just five years (equivalent to €889m after fees are deducted).

There's no doubt that this is an awful set of financial results, as Juventus were hit hard by the lack of European competition and lower player sales, both of which have been absolutely crucial to the club's business model.

However, there are a few signs of encouragement, as the board now appears to be much more focused on financial sustainability, though success on the pitch is imperative for the strategic plan to succeed.

As a minimum, Juve need to qualify for the Champions League, though this should definitely be achievable with their resources.

While they are clearly reducing the financial excesses of the past few years, though there's still a long way to go before they can declare victory.