Italy Would Like Their Taxes, Please

By: chris | December 7th, 2007

It’s no secret that some football clubs could use a crash course in fiscal responsibility. Or maybe just an online course from a local university in Economics 101. Italy is no exception. A recent study by the Ministry of Economy states that of the 193 clubs in the boot – ranging from Serie A all the way down to the amateur leagues – a few of them owe some back taxes. Namely 153. To the tune of €754.4m. Pocket change for Bill Gates and Scrooge McDuck, but worrisome in a league where the word “bankruptcy” is thrown around like a common greeting.

Many of these clubs exist, but don’t exist, as the taxes are a burdensome debt which was left by old regimes, under different names on occasion, and have little or nothing to do with current management. AGI news cites one example as Parma, a club which was once a small club, yet strong and competitive, with clout that belied their place in calcio lore, and a fantastic track record for developing youth and younger players; but was rocked by the Parmalat scandal in 2003-2004 and is now under new ownership. That ownership has no debts, but the old regime owes €81.1m, money which the Italian government will probably never see.

The president of the Finance Commission, Giorgio Benvenuto, is none too pleased with how things have gone down:

“These figures should make us think, the phenomenon is worrying. We have to fight against parliamentary measures preventing the revenue office from obtaining the taxes that are due, indulgence for the football system is for me incomprehensible. In this country it is difficult to obtain the renewal of employment contracts, incomes are damaged by inflation and enterprises have a difficult relationship with taxes, and I think that this situation should be followed with carefulness and rigor. Politics should not privilege this system. State aid should be devoted to other causes.”

The Top 5 clubs in terms of owing back taxes:

Lazio €129.1m
Parma €81.1m
Napoli €47.4m
Fiorentina €43.2m
Salernitana €42.5m

Lazio, a club which tip-toed the bankruptcy line recently before selling off its stars, is still the same old club and in a whole heap of trouble on and off the pitch – trying to make the CL knockout stage while fighting off domestic relegation. The others have all changed ownership and names. Parma FC was Parma Associazione Calcio; S.S.C. Napoli is the original name, but spent a spell as Napoli Soccer in the lower leagues; ACF Fiorentina used the name Fiorentina Viola after bankruptcy, also down in the dungeons; and Salertinana Calcio, currently in Serie C1, was formerly known as Salertinana Sport.

Surely this has more to do with Italian economics and society than anything on the field, but this is all too evident with Serie A books as well. Earlier this summer a list of financial results was released detailing the net profits/losses of all but 3 of the Serie A clubs during the 2005-2006 season. The study revealed an astounding total of €380m, spearheaded by the absolutely mind-boggling losses accumulated by Internazionale of €181.5m – where they’re putting serious test to the theory that money can’t buy you happiness (or scudetti). Next up was Juventus at more than one-fifth Inter’s total. No, Italy is not handling its calcio finances very well, it appears.

I know next to nothing about economics or finances, but none of these numbers seem to be a positive step in any direction.