The winter session of transfer market it does not open with the same conditions for all Serie A clubs. The first decisions of the independent Commission for the supervision of the budgets of professional football and basketball clubs have introduced operational limits for some clubs, directly impacting sporting and financial strategies. In particular, two companies will have to move with caution, while another, after a complex summer, has obtained the green light. The official verdict stated that Napoli e Pisa they will only be able to operate on the market a zero balance. The measure requires that each incoming transaction be compensated by a transfer of equal economic value. This is not a total block on the transfer market, but a limitation that significantly reduces the room for manoeuvre, especially for clubs aiming to strengthen their squad during the season.
The expanded labor cost parameter
The decision is linked to the failure to comply with one of the parameters established by the regulation: the indicator expanded labor costs compared to revenues. For both companies the relationship was found not to comply with the established thresholds, making it necessary to apply the sanction foreseen for the first infringement.
The criterion used by the Commission is that of the expanded labor cost, an indicator already adopted by UEFA for the control of the accounts of professional clubs. The parameter relates the overall cost of personnel, which includes salaries, ancillary charges and related costs, with the company’s total revenues.
In order to operate freely on the market, this ratio must not exceed 80% of revenues. When the threshold is crossed, the regulation provides for a series of progressive measures. In the case of Naples and Pisa, since it was the first violation, the limitation of the zero balance marketwithout reaching a total block.
The differences with Europe
Napoli have complained several times in recent days about the decision taken towards the club. In Europe, in fact, the financial fair play it works differently. Before reaching the stop sign there are a series of measures: fine, possible agreement and only after that the maximum sanction. Only after these three possibilities does the market block arrive.
Napoli’s expanded labor cost is equal to 240 million per year between amortization and gross salary. The club inserts most of the cost of the price tag in the first two years of the contract, thus creating a very low depreciation fee but a higher capital gain when he then sells. This method, however, increased the cost of labor, becoming decisive for the measure taken by the independent Commission for the supervision of the financial statements of professional football and basketball clubs.
What does “zero balance” actually mean?
Operate with zero balance implies that the wage bill and the overall cost of the squad cannot increase. In practice, if a club decides to buy a player, it must first free up resources through a sale. The economic value of outgoing operations must compensate that of incoming operations, avoiding new net disbursements.
This rule affects not only outright purchases, but also formulas that can have an impact on the cost of labor, such as expensive loans or contracts with high salaries. Interested clubs must therefore carefully plan each move, evaluating both the sporting and financial aspects. In the summer session it was Lazio who was affected by the measure.
The other control indices
In addition to the expanded labor costs, the system of supervision of the budgets of professional clubs is based on two other key indicators. The first is the liquidity indexwhich measures the ratio between current assets and liabilities and serves to evaluate the company’s ability to meet short-term commitments. The second is the debt ratiowhich relates the level of debt to revenues.
Compliance with these parameters is necessary to avoid sanctions. In the event that a club exceeds one or more indices for two consecutive sessions, the regulation provides for the tightening of the measures, up to the total blocking of the market.
