In the past few days the stadium debate has once again erupted involving AC Milan, Inter, the City Council and other connected parties.
In a column for Corriere dello Sport (via Radio Rossonera), the journalist Alessandro Giudice explained why the idea makes sense on a financial level and above all why, contrary to claims otherwise, ‘it is not a question of a lack of money’ from either club.
Giudice writes that ‘net of the rivalries of fans, the idea of a shared stadium makes a lot of sense on a financial level’. He explains this further: ‘The evaluation criterion that a business investment must always respond to is the Net Present Value (NPV).
‘It requires that the discounted value of future cash flows, which are thought to be obtained from the investment, is higher than the resources that must be spent to make it happen. If the NPV is positive, the project makes sense. Otherwise, don’t do it. No investment can escape this simple test.
Essentially, it is a question of ‘whether the construction costs can be covered by the higher revenues expected in future years from ticketing and collateral activities such as catering, events, sponsors and whether the difference between revenues and costs, discounted by the cost of capital, adequately remunerates the invested capital’.
The journalist went on to speak about the issues that stadiums can have generating revenue, remarking that they ‘do not live more than 50 days out of 365 between league matches, cups and events’.
He clarifies that if a team from the same city uses the stadium for another 50 days – i.e. Milan and Inter continue to share – it does not take anything away from the other team’s revenue, while the amount of future returns remains substantially the same as the clubs would get from an exclusive stadium.
Giudice closes with a consideration: ‘The crux of the matter is all here and those who believe it is a question of missing money are wrong. Exclusive ownership is a fetish from which no particular advantages arise because the value of a stadium does not reside in legal ownership (in some cases not even possible, since it involves concession rights) but in the ability to generate extra revenue’.
