Serie A Hopes Wall Street Can Get Help it Out of the B-Tier

(Photo credit: Chaos Soccer Gear/Unsplash)

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This Italian football league needs an assist from American lenders.

It’s no secret that soccer is the most popular sport in the world, but now Wall Street’s hunger for football is so great that major banks are happily lending to second-tier leagues like Italy’s Serie A, which up until recently did not look to have the brightest financial future.

New Plan: Get the Ball to the Italians

Though it has elite clubs like AC Milan and impressive footballers like Lautaro Martinez, Serie A has been dealing with financial and talent woes for the past few years. During the 2020/21 season, at the height of COVID, the league saw $2.7 billion in revenue, while the English Premier League brought in more than $6 billion. Despite organizations pumping millions of dollars into new players and increasing their debts, an Italian team hasn’t won the Champion League in more than a decade, and 2022 marked the second consecutive time the country’s national team failed to qualify for the FIFA World Cup.

With little liquidity, Serie A teams need backers with deep pockets, something they tried and failed to obtain in 2021, when not enough clubs supported selling a $2 billion stake in the league’s TV rights to a private equity firm. One of the biggest Serie A shakeups came last summer when Gerry Cardinale, CEO of the investment firm RedBird who helped create the New York Yankees’ YES Network when he was a banker at Goldman Sachs, purchased 70% of AC Milan, which currently sits 5th in the league, from Paul Singer’s Elliott Management for $1.3 billion.

Now more major investors are looking to join Cardinale. On Tuesday, Bloomberg reported groups like Goldman Sachs, JPMorgan Chase, and Deutsche Bank have expressed interest in financing Serie A’s media business:

  • Toward the end of 2021, the Luxembourg private equity firm CVC Capital Partners reached a $2.2 billion deal with Spain’s LaLiga for some of its broadcasting rights, and that money was funneled toward capital improvements, paying off debts, and acquiring new talent.
  • Also this week, sources told Bloomberg, Germany’s Deutsche Fussball Liga is looking to sell media rights to a private equity firm. It previously considered selling 20% of a new media unit valued at roughly $19.2 billion.

Very, Very Sneaky: Even those at the top of the league are getting slide tackled. For the 2021/22 season, Juventus FC reported a $275 million loss, the largest in Serie A history. The team also earned itself a red card recently after it was discovered that it had historically inflated player valuations during transfers. The club —which is normally one of Serie A’s most successful— was docked 15 points, dropping them down to 10th place in the league’s overall rankings.