European football leagues have been split on whether to sell media rights to private equity buyers. Italy’s Serie A thinks it can do a better job by itself.
The Italian top-tier league has made a risky bet that producing and marketing its own content will bring in more profit and revive its fortunes.
Chief Executive Officer Luigi De Siervo says Italian football can recapture its past glory, even without a direct capital injection by private equity funds. It now targets boosting TV rights income to at least €1.55 billion ($1.7 billion) per year, from less than €1.25 billion this year.
“The perception is growing that Italian football can return to the top of the world as in the good old days of the ‘80s and ‘90s,” De Siervo said in an interview in Rome earlier this week. “The idea is to bring talent in-house.”
Once Europe’s richest and most prestigious football league, Serie A has now fallen behind in terms of revenue and international reach. In 2021, an effort to sell a $2 billion stake in a new media rights company to an investor group failed after the plan didn’t win over enough clubs. The league’s TV rights revenue has lagged, and was just over half that of Spain’s La Liga in 2022.
The Spanish league struck a deal in 2021 with CVC Capital Partners to pump €2.1 billion into teams via a stake in its media rights business. A year later the French League sold a 13% stake in the commercial subsidiary of Ligue de Football Professionnel to CVC for €1.5 billion.
However, this week German clubs ditched a plan to sell a slice of domestic and international broadcast revenue to private equity firms.
Media Rights
Serie A has decided not to sell media rights directly to private equity buyers, but instead has the option of developing a product in-house, including live matches, highlights, and social media coverage, and then giving investors a chance to invest in this new product.
De Siervo’s plan to go it alone has been bolstered by a strong season for Italian teams, with Inter Milan, Roma and Fiorentina competing in the final of the continent’s top three tournaments. The recent victory of Napoli — once Diego Maradona’s team — in Serie A spurred celebrations around the world and renewed interest in the league.
Still, the Italian league hasn’t closed the door on foreign investment. An auction for domestic TV rights was announced earlier this week, with the goal of bringing in a minimum of €1.2 billion per year. If traditional broadcasters and media rights agencies won’t be able to satisfy the league’s conditions, Serie A plans to offer funds the possibility to invest for ten years in the league’s media channel.
Serie A has named Lazard as its adviser in the negotiations, with a mandate to evaluate both an equity injection in the company and a loan, according to a spokesman.
In the meantime, Serie A is building a team to market international rights, with the goal of increasing annual revenue to €400 million from today’s €250 million.
The league has also invested in a state-of-the-art radio and TV production center. In September, it will start its own radio service, from match running commentaries to talk shows featuring analysis by former champions and team managers.
“This is just the stepping stone to arrive in 12 months’ time to launch our own TV,” said De Siervo.