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Juventus, The Cost of Elimination

Elimination sent searing pain through black-and-white hearts on Wednesday, but it may burn a whole through Juventus’ coffers as well.

According to Marco Bellinazzo of financial newspaper Il Sole 24 Ore Juventus stands to lose approximately €20 million from this week’s Champions League elimination.  Juventus fans will recall the florid 2012-13 Champions League campaign that yielded €65.3 million, which did not translate into reckless investments on a “top player” but cautious ones such as the acquisition of Tevez and Llorente for €9 million combined.  One is left wondering what the quantum of net investment will be in the 2014 transfer windows considering this foregone revenue, increasing operating costs (by 13.5%, mainly due to a growing personnel expenditure line), and unforgiving Financial Fair Play thresholds.

Besides the early exit, another factor that will hinder repeating last year’s revenue record is the fact that in 2012-13 Italy’s TV market pool was be divided among two participating teams, while this year it will be divided among three (Milan, Napoli, and of course Juventus).  From this line, Juventus should be able to gain about €30-35 million.

Revenue from participating to the group stage is a flat €8.6 million per team, which is added to group stage performance rewards (wins, ties, and losses) which will earn them €2.5 million.  This brings Juventus’ total revenue to a range between €40-45 million, which is between €20-25 million less than the 2012-13 campaign.  Bellinazzo notes that this figure does not include foregone bonus revenue from sponsorship contracts, and revenue from hosting Champions League football at Juventus Stadium.

The silver lining, however, is that Juventus has an opportunity to soften the blow by going deep in the Europa League, which all factors considered (performance rewards, television market pool, etc.) may be worth between €10-15 million, thus reducing revenue loss (versus 12-13) to as little as €5 million, in the best case scenario that would see Juventus triumph in their home stadium, or to as much as €15 million in a sub-optimal outcome.

How will GM Giuseppe Marotta and President Andrea Agnelli manage growing personnel costs, reduced revenues, Financial Fair Play regulations, and pleasing a demanding fan base?



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