Clubs exceeding the ‘expanded labor cost’ threshold can now cover the excess with equity reserves, a change advocated by Napoli’s president De Laurentiis after the club’s January transfer freeze.
Napoli, despite boasting a net worth of €190 million as of June 30, 2025, faced a transfer block in January. This will no longer be the case from the upcoming summer transfer window, as the Italian Football Federation (FIGC) Council has approved proposals from Serie A, modifying Title VI of the NOIF (Internal Organizational Norms of the FIGC). The rule in question pertains to the ‘expanded labor cost,’ which measures the ratio of revenues (including net player trading profits) to first-team expenses (salaries, player amortization, agent fees). Previously, clubs exceeding the 70% threshold (valid for the next control; it was initially 80%) were unable to operate freely in the transfer market. They were obligated to maintain a zero balance between acquisitions and sales, with the risk of a total transfer ban in the subsequent session if their financial situation further deteriorated. This is precisely what happened to Napoli, one of only two Serie A clubs to breach the parameter (the other, Pisa, rectified its situation with shareholder contributions).
Assembly Discussions
Napoli’s president, Aurelio De Laurentiis, had vehemently called for a rule change, particularly in light of Napoli’s robust overall financial position, widely considered a model of sound management in Italian football. He challenged the fairness of a rule that prevented him from operating freely in the transfer market despite the club’s substantial cash reserves. While other top-flight clubs generally agreed with the principle of a change, they initially opposed an in-season correction. Specifically, Inter, Juventus, and Roma abstained from a vote, while Milan voted against it. Without unanimous support, the FIGC did not provide immediate approval. However, after further deliberation, all parties worked towards a modification of the NOIF to be valid for future seasons. This modification received the green light in the latest Federal Council meeting.
So, what changes? Clubs that exceed the ‘expanded labor cost’ can now cover the excess not only through shareholder contributions or the outright sale of transfer market or TV contract credits, but also by utilizing retained earnings. These retained earnings must be distributable to shareholders in compliance with current regulations, accounted for in interim financial statements (as of March 31 or September 30), and subject to a shareholder resolution that imposes a non-disposability constraint and quantifies the amount to be used. It is expressly understood that revaluation reserves and legal reserves cannot be used to offset the deficit.
Documentation and Future Strategy
Therefore, the overall financial and equity health of a club will now be taken into account. In Napoli’s specific case, despite recent substantial investments over the past two years that have altered its operational balance, the club can rely on resources derived from a rigorous application of financial discipline. Over De Laurentiis’s twenty-year tenure, Napoli has recorded an aggregate profit of €120 million. This capital was not distributed to shareholders as dividends but remained available to the club, partly reinvested in the team and partly held as cash. Consequently, as of June 30, 2025, Napoli is projected to have €174 million in liquidity and a net worth of €190 million, with €216 million in retained earnings (later reduced to €195 million after covering a €21 million loss from the last fiscal year).
By May 31st, clubs must submit documentation to the independent commission established by the Government (which has replaced Covisoc) for controls that will govern the summer transfer market. Figures related to the ‘expanded labor cost’ must reference interim financial statements as of March 31st. From the next monitoring, Napoli will also be able to prepare its documentation using the constant amortization method. The Azzurri, along with Udinese, currently adopt decreasing amortization rates for civil code purposes, a circumstance that further penalized them in checks conducted a few months ago. In any case, regardless of these rule changes, De Laurentiis already intends to scale back sports spending, which has increased by over €100 million in the last two seasons due to player salaries and amortizations. This decision aligns with Napoli’s long-standing principle of financial self-sufficiency. Therefore, maintaining the same rapid pace of growth seen in recent seasons, or that would be expected under a new high-profile coach, is considered unsustainable for the project.