The large drop in revenues is a bit complicated - yes part of it was due to match day revenues those fell from €49M to €7M. Usually those are €70M+. But those are mostly offset by the fact that we played more games last year in the late summer, which is basically a wash…
So why did revenues crater? Capital gains. We had €172M in capital gains related to player sales = aka = fake revenue.
We plugged the losses related to Ronaldo even pre-pandemic with just a ton of sales designed to prop up profit. It’s one of the reasons why our depreciation expense is also so high (player swaps). While the loss is ugly, the cash flow situation is better. And net debt (debt less cash) was actually better year over year and while most of that was due to them selling receivables owed from teams for cash up front, the cash flow situation is much better than the accounting profit situation. And guess what? Without FFP, accounting profit is much less important because due to all the crap we did to prop it up, it’s a garbage number that hardly reflects the financial situation at the club. What I learned from reading the release:
- commercial revenue continues to steadily grow. It was up €16M
- Exor fronted €75M of the €400M on August 27 (makes you wonder if that was in reaction to Ronaldo leaving - allowing for potential late market opportunities)
- they expect a loss next year - which isn’t surprising given the massive amortization expenses they still have.
- they expect a cash flow deficit - that means they’re going to be investing based off their current levels of cash profit.
- they expect 2022/2023 to be when accounting profits will start to improve big time.
I still believe 2022’s summer will be one of heavy investment. I know a lot of Twitter accounts are obsessed with the “losses” but a lot of these charges are non-cash meaning that the situation is better than it looks.
My forecast for next year is:
Revenues that will be slightly up. They won’t be a lot higher because last year had a bunch of late summer games that increased TV revenues. I would expect mid €440-450M + whatever capital gains they realize on players sales but I ignore that because it’s fake revenue. I would expect the wages to be significantly down…probably from €298M to about €250M. I expect operating profit before player amortization to improve from €-12M to €30M. Given that the Juventus is guiding to a cash flow deficit this year, I can only assume they’re planning to invest…
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