The latest player transfers among Serie A clubs have shown a clear pattern. On the one hand clubs such as Inter, Milan, Roma, Napoli and Fiorentina have been very active, either to turn around a season that has been highly disappointing so far (Inter and Milan), or to try to find the missing piece for a championship calibre team (the case of Roma and, to a lesser extent, Napoli and Fiorentina).

 Figure 1: Udinese's best deals
in terms of capital gain

 On the other hand, smaller clubs do what they can in order to  survive in the top division, maintaining a very liable balance  between results and finances, which often means sacrificing  the best performing players of the first part of the season,  who usually go to the abovementioned top clubs. This is the  case of Hellas Verona, the most efficient team in the first 19  matchdays, which have been overperforming, and which let  go their most interesting prospect Jorginho (to Napoli)  without  even replacing him.

 As said, the pattern is clear and clubs in Italy and all over  Europe adopt one of two main types of business  model. The first pursues the enhancement of the  ordinary management, therefore the maximization of  revenues from match day income, sponsorships, tv  rights and merchandising.

 Of course, in order to achieve such results certain key  ingredients must be necessary: a large fan base, a good  stadia infrastructure (possibly with a constant influx of  spectators) and above all, a great brand. Here is where Top  Clubs would stand.

 The second model could be named as trading. The aim  is essentially to achieve high revenues through the sale of  home-grown players or purchased at low cost through an  efficient scouting system. This model is typical of smaller  clubs, which can’t afford to compete for international    trophies but can still achieve important results compared to  the quality of their squad. 

 Ajax and more generally French clubs usually pursue such  route, but at the same time some Serie A clubs have also  developed these techniques. We already talked about  Parma’s “supermarket” system, whose success still has to be  proven. In this article the focus is on Giampaolo Pozzo’s  Udinese, which was one of the first to adopt such a strategy, and surely is one of the best examples of a trading club and proof that football clubs can be a profitable business.

The table below shows revenue distribution for clubs participating to the Serie A during the 2010-2011 season:

	Matchday Revenues (€ M)	Sponsor and Commercial  revenues	Tv and media rights revenues	Capital gain from player transfer	Other revenues
Bari	8.660 / 15%	5.029 / 9%	28.485 / 49%	14.280 / 25%	3%
Bologna	5.465 / 9%	8.836 / 15%	28.402 / 46%	12.444 / 20%	10%
Brescia	2.344 / 5%	- / -	26.687 / 56%	6.123 / 13%	26%
Cagliari	2.912 / 6%	6.458 / 13%	31.670 / 64%	2.993 / 6%	11%
Catania	4.286 / 8%	6.865 / 12%	26.845 / 49%	15.747 / 28%	3%
Cesena	3.876 / 8%	2.803 / 6%	20.776 / 44%	16.401 / 35%	7%
Chievo	2.213 / 5%	4.929 / 11%	22.909 / 51%	5.457 / 12%	21%
Fiorentina	11.070 / 13%	19.266 / 24%	42.325 / 51%	3.914 / 5%	6%
Genoa	6.367 / 6%	7.490 / 7%	32.135 / 31%	38.881 / 38%	17%
Inter	32.428 / 12%	41.966 / 15%	124.421 / 45%	51.458 / 18%	11%
Juventus	11.552 / 7%	43.270 / 25%	88.711 / 52%	16.552 / 10%	7%
Lazio	8.206 / 9%	13.462 / 14%	51.083 / 55%	18.507 / 20%	3%
Lecce	2.878 / 7%	3.306 / 8%	24.077 / 59%	4.506 / 11%	15%
Milan	29.525 / 12%	66.715 / 26%	109.600 / 43%	25.533 / 10%	9%
Napoli	22.070 / 17%	32.231 / 25%	58.447 / 44%	9.138 / 7%	7%
Palermo	8.949 / 9%	7.398 / 7%	40.759 / 40%	25.408 / 25%	19%
Parma	3.614 / 4%	6.739 / 7%	27.920 / 30%	37.184 / 40%	20%
Roma	31.017 / 20%	28.541 / 19%	78.042 / 51%	7.821 / 5%	5%
Sampdoria	7.202 / 11%	7.970 / 13%	33.527 / 53%	2.701 / 4%	19%
Udinese	3.697 / 4%	4.809 / 5%	34.499 / 35%	41.789 / 42%	14%
TOTAL / AVERAGE	208.332 / 10%	318.435 / 16%	930.961 / 46%	356.928 / 18%	10%

 

We can see how capital gain from player transfers had a more significant impact on smaller clubs and an incredibly high impact on Udinese’s (as well as Parma’s) financial statements of that year, as it counted for 42% (40%) of its total revenues, more than doubling the league’s average.

Udinese would also have been the top-earning club in this particular revenue class if it wasn‘t for Balotelli’s transfer to Manchester City (Inter raised Mario in its youth sector and sold him for 30M€).

Analysing the club’s incoming and outgoing flow of players in the last five seasons we see how every year the club from Friuli has a positive delta.  

Season	Outflow (€ M)	Inflow (€ M)	Difference (€ M)
2008/2009	20.100.000	34.900.000	14.800.000
2009/2010	18.333.000	36.150.000	17.817.000
2010/2011	13.550.000	30.290.000	16.740.000
2011/2012	21.111.000	70.630.000	49.519.000
2012/2013	25.400.000	51.700.000	26.300.000

Udinese’s management is especially good at buying talents from minor leagues and at an incredibly low price, allowing a club with modest ambitions to bet on numerous young footballers with a cost effective team. 

It would be counter-producing for the club to buy so many players and keep them warming the bench, since they need game time to gain confidence and show their skills. For this reason, many go on loan to experience part of their growth as players. Most popular destinations? The English Watford FC, currently playing in the Football League Championship and the Spanish Granada in the Liga. Not surprisingly both clubs are owned by Pozzo.

As I mentioned earlier, several players repaid Udinese’s trust and later moved on to win championships and cups. We grouped the latest relevant transfers and the vintage big cashes in figure 1, keeping in mind that:

- half of Fabio Quagliarella’s rights to play where sold to Sampdoria for 1,5M€ in 2006 and rebought at the end of the season for 7,3M.

- Alexis Sanchez was transferred to Barcelona for 26M€ but the deal included another 11M€ in bonuses, which the Catalans only partially achieved. 

Amazing how many footballers where bought for barely nothing, or actually nothing at all, making the club earn high capital gains in an average period of three to four years. An exception has to be mentioned: the goalkeeper Samir Handanovic who was sold after eight seasons, most of which were spent on loan to Treviso, Lazio and Rimini.

Udinese currently has the youngest team in serie A, even though it’s market value is considered as the eighth best in the league by transfermarkt.com – a sign that other names will surely be added to the above table in the following market windows. Special focus should be granted to Luis Muriel (1991), Roberto Pereyra (1991), Emmanuel Badu (1990),  Allan (1991) and Nicolàs Lopez (1993), all playing for coach Guidolin and all with a promising future.

One of the most surprising aspects of this model, however, is the combination of economic and sporting results. Udinese, in fact,  finished 4th, 3rd and 5th in the last three editions of the Serie A.

This year’s (2013/2014) Udinese is hence underperforming compared to August’s expectations and results from the previous seasons. The reason for this has a name: Antonio Di Natale. The team’s captain scored an outstanding 26, 29, 28 and 29 goals in the last four years, but halfway through this season- his last according to his latest interviews- Totò is stuck at 7.

Undoubtedly his 36 years of age are a more than justified excuse, and something the management has surely thought about, especially since his announced retirement at the end of the season.

The Colombian striker Luis Muriel, born in 1991, has a current market value of approximately fifteen million and is in the sight of many European top clubs. Should Udinese allow their current best talent to leave the club as his predecessors in the name of capital gain, or should they keep the only player who could realistically substitute Di Natale both on the pitch and in the fans’ hearts?