Clubs are tightening their purse strings as they suffer a cash crisis, writes Paddy Agnew, in Rome.
Even by the rarely dull standards of Italian soccer, this has been an extraordinary week. Not for the first time, most of the news was made off the field and that's notwithstanding an impressive 1-0 friendly win for Italy against Germany in Stuttgart on Wednesday night.
Twenty-four hours before that match, Prime Minister Silvio Berlusconi had broken off from his holidays in Sardinia to chair a cabinet meeting. He returned to Rome to waive off the threat of a national emergency - the risk that the soccer season might not start on time.
Accordingly, the Berlusconi government on Tuesday issued a decree intended to bring a halt to a summer-long juridical row which had seen the authority of the Football Federation's disciplinary tribunals totally undermined by a series of contradictory judgments in regional courts throughout Italy. In so doing, Mr Berlusconi presumably hoped that he had saved the day. Not so.
Three days later, and largely as a result of the government decree, all hell had broken loose. Serie A (Division One) was threatened with a schism between its biggest and smallest clubs, 19 Division Two clubs were threatening not to play in Italian Cup fixtures tomorrow or on the opening day of the league season next weekend, while at least three Division Three clubs were preparing to take legal action against the Italian Football Federation.
However, the level of organisational chaos currently facing Italian football could well be the least of its troubles. This week's row about who should or should not be relegated from Division Two has been played out against the background of an Italian football movement that appears to be in serious financial crisis.
Notwithstanding the fact that Italian soccer currently rules Europe - last May's Champions League final at Old Trafford was an all-Italian affair - its finances, like those of other major European leagues, would appear less than rosy.
Last season, Italy's 128 professional clubs returned collective losses of €1.8 billion (in Spain, the figure was slightly lower at €1.625 billion). The single biggest contributory factor to these losses are the inflated salaries paid to the top players.
Although Serie A teams last season earned a collective €1.08 billion by way of TV rights, sponsorship, merchandising and the box office, they paid out nearly all of those takings, €954 million, in salaries.
Such is the difficult situation in which many clubs find themselves that the federation opted to soften its fiscal controls rather than repeat the situation last year when the famous but bankrupt Fiorentina was demoted from the first to the fourth division, by way of fiscal sanction.
When clubs presented their account books last June in order to enrol for this season's championship, the federation's financial watchdog, Covisoc, agreed to settle for accounts that showed the club had paid seven out of the past 12 months of wages owed to their players. The clubs have until December to pay the other five months' salaries. So widespread is the practice of late payments that the federation presumably felt it was better to extend this leeway to the clubs rather than have to demote them for financial shortcomings.
Even if reigning champions Juventus returned figures marginally in the black last season, other big names of Italian soccer are heavily in debt. Lazio and AS Roma owe the Revenue Commissioners more than €100 million between them by last June. Inter Milan had annual losses of €50 million, notwithstanding a Champions League run all the way to the semi-finals. Overall, the debts incurred by Italian clubs rose by 28.4 per cent in 2002.
Italian clubs (like others in Europe) have been badly mismanaged. Over-optimistic estimates of increased revenues from pay-TV contracts in the mid and late 1990s prompted clubs to engage in a salary "price war" to attract the best talent.
It was all very well to pay guys like Alessandro Del Piero (Juventus), Argentine Gabriel Batistuta (then Roma) and Brazilian Ronaldo (then Inter) salaries in excess of €5 million (after tax) but when TV rights earnings failed to generate the expected revenue, many clubs had walked themselves into a debit situation.
It is hardly surprising to learn that this has been an extremely quiet Italian summer on the transfer front whilst it is perhaps even more indicative that some of the biggest names in Italian soccer have accepted salary reductions.
For example, 20 Lazio players have accepted extended contracts in which part of their salaries will be paid for via shares in the club. Lazio players' spokesman Mr Stefano Fiore recently told The Irish Times: "If you take on board the crisis hitting football all over Europe, then you have to acknowledge that players' wages have simply got out of control. Likewise, clubs simply can no longer spend more than they earn."
Famous names such Del Piero and AC Milan captain Paolo Maldini have also accepted cutbacks. Del Piero is expected to sign an agreement with Juventus through to 2008 that will see his salary reduced from €5.7 million per annum to €4 million, while Maldini has apparently taken a 30 per cent cutback.
A Champions League win will be worth less next season. In May, AC Milan picked up €45 million in match premiums but this season, the winner will play four games fewer (13 rather than 17), thus earning 35-40 per cent less.
It would seem that Italy's (and Europe's) top footballers this season will earn less money but play fewer games. That is, if and when the season starts.
