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A new Fiorentina stadium - Why team performance and a stadium are both top priorities

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A simple look at the finances behind the stadium project. What it means to Fiorentina and Fiorentinis

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Torre di maratona, giovanni berta stadium, florence 30s Photo by: Touring Club Italiano/Marka/Universal Images Group via Getty Images

Much has been researched, discussed, revealed and commented on as it pertains to the stadium; its viability and level of priority. Let’s start this article with the painful truth. The team is not performing well enough on the pitch. The management has not performed well enough in their three mercatos to date. That said, the issue of the stadium and the performance on the field are not an either or. They are clear and distinct mutually exclusive events that need to be addressed as soon as possible and at the same time, as the convergence of this decision with our future success, or lack there of depends depends on what we do here and now.

Background:

At the start of the 2008/2009 season Fiorentina were sitting pretty. Fiorentina, led by legendary and current Mister, Cesare Prandelli managed to finish 4th in Serie A, qualified for the Champions League group stage after defeating Slavia Prague 2-0 on aggregate in the qualifying round, transferred to the UEFA Cup after finishing third during the group stage to Bayern’s first and Lyon’s second where they lost in the round of 32 to Ajax (2-1 aggregate).

During 2008/09 Fiorentina had revenues of 101 million euros, not far off from the average of the top 20 clubs in the world at 197 million euros and about half that of Juventus. To put input and output of revenues into perspective, during this same year only two leagues were able to achieve operating profits - the Premier League and the Bundesliga. Why? It is partly due to the increased valuation of players and money spent for them in the market, but also due to the increase in salaries vs the increase in revenues. Taken from the NY Times article, the combined revenue of the English Premier League, Ligue 1, the Bundesliga, Serie A and La Liga during the 2008-09 financial year grew 3 percent from a year earlier to 7.9 billion euros, or $9.4 billion, while salaries in the big five leagues increased by 305 million euros, or 6 percent, in 2008-9 to exceed 5 billion euros for the first time. Real Madrid had revenues of €401 million, Barcelona €366 million, Manchester United €327 million and Juventus €203 million.

With 101 million in revenue Fiorentina were able to bring in several well known and loved players: Alberto Gilardino (€14million), Juan Manual Vargas (€12million), Felipe Melo (€8million), Stevan Jovetic (€8million) and Gianluca Comotto (€4.8million). That is an output of €46.8million, a number that was only offset by an input of €20million from players sold.

Flash forward:

When Rocco Commisso took over Fiorentina, the clubs revenue had declined from the €101million in 2008-2009 down to €94million. What happened to the rest of Europe’s revenues? In 2018-19 Barcelona recorded a European high of €840.8million, Real Madrid had €757.3million, Manchester United had €711.5million and Juventus €459.7million. To provide some additional Serie A competitive perspective, Inter had revenues of €364.6million and Roma had revenues of €231million.

So why did most team’s revenues double when Fiorentina’s decreased? Many reasons can be looked at. Fiorentina has not been in European competitions since 2016-17. Fiorentina for many years under the Delle Valle did not try to get a shirt sponsor (used “Save the Kids” for charitable purposes) and had very unfavorable contracts with Le Coq as their kit manufacturer. Fiorentina realized very little revenue off of all Le Coq jerseys sold by the club, as a result of contracts negotiated under the Delle Valle. Under the later years of the Delle Valle ownerhship the Fiorentina brand became stagnant and even lost global fans. One example is that of Viola Club China who has a couple thousand members today, where they were once 30,000 to 40,000 fans in the early 2000’s. And of course, there is the issue of a stadium that is not state of the art, not generating revenue and owned by the city of Florence, who has not maintained or upgraded it.

Lets take a look at one interesting note on Juventus’s increase in revenue in comparison with Fiorentina’s decrease. Yes, admittedly Juve is a global brand, attached to the Agnelli empire of Fiat, Ferrari and Jeep and followed by millions of established fans. But the most noticeable difference in their balance sheet over the past 15 years comes after 2011. What happened in 2011? Juventus opened up their brand new stadium. Matchday revenues went from €11.6million in 2010-11 to €31.8million in 2011-12, €38million in 2012-13 and they progressively got higher until they realized matchday revenues of €65.5million in 2018-19. In order to see these kind of returns one would have had to invest in Tesla stock at the same time the stadium opened up. Where is Doctor Emmett Brown when I need him?

Florence’s need for a new stadium:

There are many reasons why the city of Florence, its citizens and its government needs this stadium and the revenues it would realize. To not spend much time here though I will just post this video of Mayor Dario Nardella appealing to the world’s wealthy to help them sustain their city’s monuments as they are facing hundreds of millions of euros in debt as a result of the lack of lost tourism revenue. What would hundreds of millions of taxable revenue each year and one thousand new jobs created do for the city trying to rebound post pandemic?

Fiorentina’s need for a stadium:

When I first met with Fiorentina President Rocco Commisso in September of 2019 he shared with me that the stadium is a priority for two reasons – the fans and the revenues.

“First and foremost, I want our fans to be covered from the elements as they watch the game. I don’t want them to be rained on in January and February or bake in the sun in May and August. Their comfort is very important to me. Second, we need the new stadium to be a revenue driver. Juventus is right now at €500 million in annual revenues and we are at €100 million. Their new stadium has been a critical element of their on-field success. Florence is a major tourist destination and we believe a new stadium could become a must-see attraction for the 15 million visitors passing through each year.”

Revenues and fans are the priority for this build, as well they should be. We will talk about future revenues shortly, but let us first discuss the fans. Rocco spoke to the comfort of fans being critical to this choice. Still being new to the club he probably didn’t know just how dangerous the stadium itself actually is.

Stadio Artemio Franchi is an active, heavily used stadium. Its sole purpose is to house football matches for fans to cheer on their club SAFELY. It is not a tourist attraction as its #135 TripAdvisor ranking would confirm. Looking at reviews on TripAdvisor, posters talk about the “electric atmosphere yet a stadium in disrepair.”

Now I have been to Florence many times and the same for Stadio Artemio Franchi. I have been at the Franchi pregame, postgame and during the day when there are no games while touring the Centro Sportivo Davide Astori. The stadium is beautiful. It has been used as the basis for many future designs in architecture. As a person who loves Florence for its architecture I can appreciate it. However, despite what some within the Brussels-based Pier Luigi Nervi Project Association may suggest, I have never seen anyone take their time away from the monuments in city center to come and take pictures next to the tower or spiral stairs. I have many pictures of them myself. They are truly unique and beautiful, and they would be incorporated into the design of a new stadium, but they are not a reason to stop progress, which is needed for the fundamental element of the fans and general public’s safety and welfare. Speaking for someone who has sat inside of the Franchi during some very cold rain, I would also appreciate the comforts of a covered stadium as proposed by Rocco Commisso.

Impact of a new Fiorentina stadium:

Taken directly from a 2020 financial impact study done by Deloitte:

“ACF Fiorentina is ready to invest €250milliom to build the New Artemio Franchi Stadium, so as to give the City and its Fans a state-of-the-art 50,000 square meter facility with 42,000 spectators, generate 1,000+ new jobs and ensure the Club has the resources it needs to compete for highest levels in Italy and Europe. A significant investment that could generate an overall economic impact equal to approximately 5 billion euros in 10 years between growth in revenues of ACF Fiorentina, new third party commercial activities, new jobs, extra tax revenue for the real estate development in the Campo di Marte neighborhood.”

Of the 5 billion euros of revenue realized from this project over ten years, 2.25 billion euros of that would actually end up in the accounts of Fiorentina. That is an estimated increase of revenues each year to €225million. To put that into perspective, that would take Fiorentina’s annual revenues from €94million now to €225million, close to that of the Milan’s of the world and above that of the Roma and Napoli. This number would help to justify many expenditures made (player purchases and increased team salaries) for purposes of Financial Fair Play, which carries a maximum of €30million of loss over 3 years.

Deloitte did provide some more detail to this increase. Currently today, Fiorentina realize only €5.3million per year of revenues generated from matchday commercial activities. That number would increase to projected €126million a year as quoted in their economic study.

The increase in revenues would come from a new commercial area open seven days a week with operations comprised of retail, hospitality (eg hotel) and a museum. Deloitte projects there will be at least 2 million people attracted to the stadium each year between fans, residents and tourists. Companies will therefore benefit most from the flow of fans and non-fans, both during the match day and during the other days of the week, which currently does not exist.

Now, do I honestly believe that this stadium would almost triple our revenues? No. But even if the stadium did for Fiorentina what it did for Juve it would add over €55million. This is realistic to think of because of Fiorentina’s sad current state of game day revenues (€5.3million), absent of large advertisers, zero revenues brought in from non gameday events and the overall lack of finances brought in from Fiorentina not owning it’s stadium today. The prospects of how a new stadium could help Fiorentina realize these revenues is what is exciting - a stadium naming, new sponsors, advertising, new kit manufacturers, tv contracts, new fans through increased global branding, tourism, hotel, European competitions, concerts, etc.

So what could the city of Florence and those who live in the neighborhood of Campo di Marte do with €2.75billion over the next 10 years? What could Fiorentina do with a safe environment for their fans and €55million more a season to spend in the market? Well that my friends I will leave up to you to debate.