It was once fashionable in sporting circles to have a copy of Sun Tzu’s The Art of War hidden away in the kitbag. Former Brazil coach Luiz Felipe Scolari famously gave a copy to his players ahead of the 2002 Fifa World Cup. Countless other sports strategists swear by it too.
One of the pearls of wisdom from the 6th century BC Chinese general came to mind when I was pondering the latest installments in the long-running soap opera known as Italian football: in the midst of chaos, there is also opportunity.
Let’s start with the chaos. On October 9, the Italian finance police arrested a Swiss-based Italian national, Andrea Baroni, a tax adviser for the consultancy Tax & Finance. Baroni is currently in San Vittore jail in Milan charged with money laundering.
Clients of Tax & Finance include, according to Italian media reports, the Infront Sports & Media agency, the MP & Silva agency and Bee Taechaubol, the Sino-Thai businessman in talks to acquire 48 per cent of AC Milan for €480m.
Later that same day, the finance police raided the offices of the top football two divisions, Serie A and Serie B, along with those of Infront, which acts as media adviser to both leagues, of the broadcaster Mediaset, the clubs Genoa and Bari and the home of Riccardo Silva, founder of the of MP & Silva. The raids were ordered by the Milan district attorney’s office.
According to media reports as yet unconfirmed by the police, those who are under investigation include: three senior managers from Infront Italy – Marco Bogarelli, Andrea Locatelli, and Giuseppe Ciocchetti; two senior managers from Mediaset – Giorgio Giovetti and Marco Giordani; Silva; Lazio president Claudio Lotito, Genoa president Enrico Preziosi and Bari president Gianluca Paparesta.
There are two main areas of investigation. The first is into whether there has been occult financing of certain clubs from Serie A and Serie B to enable them to fall within the parameters laid down by Covisoc, the body charged with deciding whether clubs are financially fit to enrol in the league.
Magistrates are examining the origins of a loan of €15m into a personal Swiss bank account held by Preziosi, which he then paid into the club accounts and a deal in which Bari was paid €460,000 by Infront for sponsorship rights. Payments to two other clubs, Sampdoria and Brescia, are also coming under the microscope.
In the midst of chaos, there is also opportunity for Italian football
The second line of enquiry is whether the auction for the sale of the live rights to Serie A, which took place in 2014, was interfered with illegally in such as to procure a benefit to Mediaset. Rival pay-television platform Sky Italia had outbid Mediaset for the two main live packages but was only awarded one. Sky and Mediaset later agreed a deal which enabled Sky to broadcast the matches of all 20 clubs.
Separately, the handling of the auction is under investigation by the country’s antitrust authority over a possible anti-competitive agreement between Mediaset and Sky, with the tacit agreement of the league and Infront, with the object or effect of excluding potential competitors from the market. The authority will report next April.
Infront has confirmed that three of its managers are under investigation but said that the agency itself is not, a distinction that will be appreciated by lawyers and Jesuits everywhere. Preziosi says the loan was completely above board. Paparesta said there was nothing iffy about the sponsorship deal. Mediaset said that it had “always acted with total respect for the rules”.
Infront’s new owners Dalian Wanda will not be the only ones praying that the agency comes through the process unscathed. The entire football movement in Italy has become dependent on the company. In its advisory deal with Serie A, Infront guarantees annual income of about €1bn, which accounts for 60 to 70 per cent of the income of most clubs. Separately, it has marketing and sponsorship rights deals with 12 clubs from Serie A and six from Serie B worth over €100m per season in total. It acts as an intermediary for 15 of the 20 Serie A clubs to sell their archive rights to either Sky or Mediaset. And it acts as adviser to the football federation, the FIGC, for the sale of certain national team sponsorship rights, with a minimum guarantee of €57m over four years.
Without getting into the rights and wrongs of the situation, it seems reasonable to ask whether it was intelligent of those who control the national sport to have become so heavily dependent on the fortunes of one agency.
Land of Opportunity
One of the effects of the freefall of Italian football from its glamorous 1990s heyday is that clubs are now “distressed assets” which represent fantastic opportunities for growth, US trial lawyer Joe Tacopina told the Leaders Sport Business Summit in London earlier this month. Tacopina is now on his third, Venezia, having previously bought into and then sold out of Roma and Bologna.
Italian clubs are going for a song and, if run like global businesses rather than the village shop, can generate big returns.
Tacopina bought Roma, as part of a consortium of US investors, for €130m. Its enterprise value is now €400m. He bought Bologna with Canadian businessman Joey Saputo when it was in Serie B for about €22m. Promotion to Serie A – with higher TV money and better sponsorship deals – has pushed the club’s value up to nearly €60m.
It’s not surprising that foreign investors are suddenly scrutinising the peninsula for sleeping giants.
Hope and Glory
Finally, Parma Calcio 1913, the Serie D (semi-professional) club created out of the ashes of the bankrupt former Serie A giant Parma AC, this month broke through its fan-funding target of €150,000 two weeks ahead of schedule. Its new management, under former coach Nevio Scala, are committed to building a club owned by its members and operating in total openness and transparency. I wish them luck.