tare and lotito
Igli Tare and Claudio Lotito

Lazio closed their 2017/18 balance sheet with assets of 37.3 million thanks to three transfers made to generate high capital gains: Keita (29.3 million), Biglia (16.4 million) and Hoedt (15.7 million). Through this, the biancocelesti have obtained the second consecutive balance sheet in profit, after the assets of 11.4 million in 2016/17. The 2018/19 season could, instead, close with a negative result, but that will in any case not worry too much according to Marco De Santis.

The victory in the Italian Cup will not help getting close to a draw-even, because, in addition to bringing in about €4 million more than last season, it has guaranteed the presence in the next Europa League. Given the particular method of counting revenue from UEFA competitions by the club, the guaranteed minimum for participation in the Europa League group stage 2019/20 will therefore be included in the 2018/19 budget.

Compared to 2017/18, however, there will be almost 40 million capital gains, given that the only economic impact in the last 12 months was that of Felipe Anderson to West Ham for 31 million, which generated a capital gain of 23.1 million. Furthermore, depreciation and amortization increased by about 5 million, while personnel costs should not have been affected by significant increases.

Through this data, it is, according to De Santis, possible to estimate a closure of the budget with a deficit of less than 5 million, but it is not certain that small variations in the various items that make up the budget (and that cannot be estimated given the information in our possession) allow the club to close positively this season too.

That the 2018/19 budget closes with a “+” or slightly negative sign counts relatively little according to De Santis. This shows the positive aspects of a management, sometimes criticised by the fans, but that does not force Lazio to have to collect very high capital gains every year to keep the accounts in balance.

For the 2019/20 budget, assuming a similar trend to that of this year in the Europa League, and a new qualification for European competition, the 23 million of the capital gain of Felipe Anderson must be spun off for the time being and counting the approximately 4 million of worsening of costs, due to the first operations of the 2019 summer market (in particular due to the final redemption of Bruno Jordao and Pedro Neto for a total amount of 13 million euros).

The expected deficits as of today, with all the other balance sheet items held, should therefore not exceed 30 million, far from the 70 or so that the UEFA alarm bell would sound. This means that, in fact, even the worst results of this season on the field would not put the club at risk in terms of Financial Fair Play – even if it should be considered that, like De Laurentiis for Napoli, Lotito also has as first objective, if possible, of not closing budgets at a loss, rather than approaching dangerously the maximum level of expenditure allowed.

The amount of money that will be invested for the market will therefore be directly proportional to the income from sales. Bruno Jordao and Pedro Neto would seem to be about to return to Portugal to Benfica for 20 million, thus guaranteeing a capital gain of 7 million. On the starting foot there is also Felipe Caicedo, who, given his age (31 years) and the contract expiring in 2020, will maybe not get the renewal he wants and could leave the team. On the balance sheet its residual depreciation is less than one million and therefore the entire amount collected can be marked as a capital gain.

The big difference-maker could, however, be Sergej Milinkovic-Savic; who after a season of ups and downs would seem to have devalued slightly compared to the price of twelve months ago. Despite this, the Serbian midfielder would still guarantee a very high capital gain at the club, given that its residual amortisation is less than 6 million. Obviously the departure of Milinkovic-Savic would open horizons for the moment unexplored and would give Lazio the money necessary to point to a medium-high level player.

What can be said with certainty is that the budget situation of Lazio allows Lotito to continue to pursue the corporate objective of maintaining the club in the Europa League area, not forgetting the possibility of winning trophies such as the Italian Cup or the Italian Super Cup, dreaming of fourth place that would mean automatic qualification to the Champions League.

For a club whose turnover is about half of that of the fifth team with the highest turnover in Serie A, these are ambitious goals that the club has repeatedly managed to reach or come close to in recent years.

Thanks to

Marco De Santis, graduate in Statistical and Economic Sciences, owner of the blog Calcio e Altri Elementi”, dedicated to statistical, economic and regulatory studies related to football and other sports.