No more lire means no more lure to Italy

It was cash that made Italy's Serie A Europe's number one league and it is cash, or rather the lack of it, that could prove to be its downfall.

For decades the huge transfer fees and massive salaries offered by Italian clubs, the so-called 'lure of the lira', saw the world's finest talents head to the peninsular to fill their bank accounts and provide local fans with what they considered to be the "most beautiful championship in the world".

Michel Platini, Zico, Marco Van Basten, Lothar Matthaus and Diego Maradona, some of the greatest names in the game, all made fortunes out of Italian football in the 1980s and 1990s.

But now that the once seemingly endless flow of cash has run out there are few big names being lured to Italy.

On Tuesday, Lazio, who won the Italian title two years ago and celebrated by breaking the world transfer record to sign Argentine striker Hernan Crespo for $54.1 million, were given a week to sort out their finances or risk being barred from the championship.

AS Roma, champions in 2001, were given the same warning along with six Serie B clubs and 15 teams from Italy's third division, Serie C.

Those clubs with serious debt problems are finding that they cannot even sell their way out of trouble as there is no one to buy their players, leaving the clubs with huge salaries to pay to players with lengthy contracts.

BASIC RULES

Football has not always followed standard rules of business and profit has rarely been the real aim of most of the millionaires who finance the game. But it is abundantly clear that even the most basic housekeeping rules have not been followed in Italian soccer.

"The fact is that the money going out is double the money coming in," said Serie B club Genoa's general director Gianni Blondet.

Indeed, the figures speak for themselves.

A recent survey by the Italian financial newspaper Il Sole 24 Ore showed Serie A clubs made a combined operating loss of 702 million euros ($706.2 million) for the 2000-01 season.

The combined net loss for Italy's top-flight clubs was reported as 133 million euros.

Italy's four professional divisions racked up a total loss of 1.04 billion euros, the report said.

Some clubs, such as Lazio and Fiorentina, have even found they were unable to meet their commitments. Both failed to pay their players on time last season.

Fiorentina, competitors in the Champions League just three seasons ago but relegated to Serie B this year, must clear debts reported to be in the region of 22 million euros or they could fail to be registered for the championship.

It is a sign of the chaos that now reigns in Italian soccer that the 22 million euros needed to save one of Italy's proudest clubs, is lower than the market value of Lazio defender Alessandro Nesta.

The crisis comes just a few years after the game received one of the biggest cash injections ever with the birth of pay-per-view television.

FRESH REVENUE

With the arrival of new digital subscription channels, clubs were no longer dependent on ticket sales -- the new television deals provided a fresh revenue stream as well as a potentially lucrative vehicle for sponsors and advertisers.

But according to Perugia president Luciano Gaucci it is precisely that flood of new capital which has led Italian football into its current mire.

"The rights deals for television, rather than being a boost has in fact brought chaos. The cash that came in was spent on increasing player's salaries but the income did not equal the expenditure," said Gaucci.

"Above all that has brought into difficulty those clubs who did not foresee the current financial situation and the decline in spectators at the stadiums," added the Perugia president.

Gaucci's view is backed up by the Il Sole survey which showed that Parma spent 10.3 percent more than their overall turnover on players' wages alone in the 2000-01 season, while clubs such as Inter Milan and Lazio spent more than 80 percent of turnover on salaries.

The situation was even more dramatic in the second division, Serie B, where Ternana spent 183.1 percent of turnover on wages.

Overall spending on salaries in Serie A has doubled in the past four years at the same time as transfer fees have continued on an inflationary path.

Gaucci says his club has avoided difficulties by not over-reaching themselves during what are now nostalgically viewed as the boom years.

"We have always followed a policy that kept a close eye on costs and focused on developing young players," said Gaucci whose club has turned in a handsome profit on players such as Fabio Liverani and Marco Materazzi, bought relatively cheaply before being sold on to big-spending Lazio and Inter.

FULL CRISIS

Such an approach might be enough to help some smaller clubs out of trouble but what makes a difficulty into a full crisis is that just as Italian clubs are waking up to the consequences of spending more than you earn, the television money is beginning to dry up.

With little more than a month to the start of the new season on September 1, eight of the 18 teams in Serie A are without television contracts and many more in the lower divisions face the prospect of losing that vital revenue.

Pay-per-view has not been the success it was predicted to be and Italy's two platforms, Telepiu and Stream, are struggling and, not surprisingly, are keen to lower the cost of rights.

State television company RAI is trying to halve the amount it spends to secure the highlights package from the Football League, meaning that Italian clubs not only have to try to cut rising costs but they must do so in the face of declining revenues.

"The only clubs who will get out of this are those who can contain their costs," said Gaucci.