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CR7 effect undermined by more chaos in calcio

The signing of Cristiano Ronaldo by Juventus put Serie A firmly back on the map. But a series of major problems in Italian football have overshadowed his arrival. Enzo Morelli, legal adviser to the Infront agency – the media-rights adviser to Lega Serie A – provides a personal view on recent developments.

TURIN, ITALY - SEPTEMBER 16: (EDITORS NOTE: This image was altered using a digital filter) Cristiano Ronaldo of Juventus celebrates after scoring the opening goal during the serie A match between Juventus and US Sassuolo at Allianz Stadium on September 16, 2018 in Turin, Italy. (Photo by Claudio Villa./Getty Images)

The signing of Cristiano Ronaldo by Juventus put Serie A firmly back on the map. But a series of major problems in Italian football have overshadowed his arrival. These include:

  • A government ban on gambling sponsorship, which could cost Serie A up to €120m ($140m) per season
  • The financial problems of the MP & Silva agency, which owes Serie A €38m
  • The failure of the second division, Serie B, to find 20 solvent clubs to start the new season
  • The collapse of a sponsorship deal for the Coppa Italia with train company Trenitalia
  • The possibility that the entire season of the third division, Serie C, could be scrapped due to the financial problems faced by many of its clubs
  • IMG launching an OTT platform for Serie A in over 20 territories around the world, having failed to secure acceptable offers from linear broadcasters for the rights.

Enzo Morelli, legal adviser to the Infront agency – the media-rights adviser to Lega Serie A – provides a personal view on recent developments.

This decade has seen Italian football reach some of the lowest points in its history, over and over again. Optimists could point to tangible signs of recovery: a significant increase in TV rights revenues (though at a lower rate than other leagues in the big five European markets); a new management for Lega Calcio Serie A; and a political system that does not dodge big challenges but tries to embrace them.

However, despite a record transfer market where even Cristiano Ronaldo landed on planet Italia, il calcio is still far from finding its way back to its golden era.

Apart from CR7, this summer will be remembered for absolute chaos in Serie B and Serie C; for the financial default of the MP & Silva agency; for the ban on gambling ads and sponsorship; and for the struggles of selling media rights in certain markets.

Gambling ban

The newly-formed government wanted to send out a clear message: the sports consumer and the TV consumer – who often overlap – shall not view any sports sponsorship or ads linked with gambling. As soon as the plan became public, the whole sports system protested loudly, but, unfortunately, with a lack of coordination and some confusion.

The counter-message was, however, as clear as the government message: football clubs and sport in general could be massively harmed by this law. Broadcasters will suffer too from a massive decrease in advertising revenues.

The discussion should have taken a different path: instead of a general ban, provisions aimed at limiting gambling addiction could have been introduced by creating disincentives. Or the prohibition could be limited to pure advertising forms such as TV spots and perimeter boards, leaving open the possibility of associative branding on things like club kits.

A blanket prohibition is wrong and will have counter-productive side effects, such as an increase in the level of illegal gambling.

MP & Silva problems

Sport – professional football in particular – will be affected in multiple ways by the financial problems of MP & Silva.

For a long time, MP & Silva has been a reference point both in Italy and the rest of the world. It built a great reputation on the strength of the blue-chip sports properties in its portfolio.

Three years ago, when the Lega Calcio renewed its deal with MP & Silva for the international rights to Serie A, nobody could have seen these problems coming. But perhaps it became a little more predictable towards the end of 2017, when the league decided to award its rights to IMG instead.

The situation we find ourselves in today is worrying, and not just for the €38m which is owed to Lega Serie A and its clubs. There are many Italian clubs and many sports leagues that are owed significant sums by the agency. I fear that these amounts will be hard to recoup. Like other pure brokerage businesses, MP & Silva has no material assets. Their wealth is built on immaterial properties – rights – as long as they manage to acquire them.

Trenitalia backs out

The Trenitalia controversy adds to the seriousness of the situation for Serie A. This has also come about through direct government intervention to block the deal. It has created some unanswered questions about the future role of Trenitalia in sponsorship activities.

Nevertheless, the investment projected in Coppa Italia by Trenitalia was not that significant – about €5m per season ­– and I believe that another sponsor will be found.

IMG goes OTT

IMG has provided a welcome positive note for Italian football. Through its deal for the international rights to Serie A, the league secured an increase in revenues and visibility for Italian football.

Creating an OTT platform was, from the beginning, a key feature of the agreement between the league and IMG. It was made possible by the vision of the league and its media-rights adviser, Infront.

An OTT platform owned by Lega Serie A and managed by IMG can supplement the agreements with broadcasters and helps provide visibility to the league and its competitions. Now more than ever, with the greatest player in the world playing in Italy, it is pivotal that the Serie A brand and the championship benefit from this 360-degree visibility.

In some markets where there are economic difficulties, such as Brazil, Turkey and China, where the market cannot meet Italian football’s expectations, the platform will not be complementary but will replace traditional licensing agreements with broadcasters.

A final thought…

Taken together, these issues raise question marks over the future of Italian football. But it’s a mistake to look at these as problems of football in isolation. There are problems which affect the whole of Italian sport. I would like to see a reform of the entire Italian sports system and sports culture, from the ground up.

Historically, direct government investment in sport, through what it gives to Coni [the Italian Olympic Committee, and governing body for all sport in Italy] has been just over €400m per year. It should be four or five times that, at least. Of course, the government should have the final say over how it is invested.

Sport is absolutely central to the lives of tens of millions of people in this country. Millions practise sport, even if it’s just basic fitness activities. The level of investment from central government has not reflected its importance to society. How is it possible that the main political parties dedicate no more than a couple of lines to sport in their electoral campaigns?

There are run-down sports facilities in nearly every town across the country. And sport has disappeared completely from the curriculum for primary and secondary school kids. How is that possible? How is it also possible that we do not have a single sports university that covers all aspects of sport, from sports science and fitness through to management?

Great Britain finished second in the medals table at the Rio Olympic Games of 2016 and third in London in 2012. That’s because after having performed poorly in 2004, the country implemented a clear programme and continued investing in that programme thereafter. Italy finished eighth in 2012 and ninth in 2016.

The French team that just won the World Cup was the youngest team to win it since Brazil in 1970. That wasn’t a coincidence. It is because France invests in sport; invests in sporting facilities to get young people involved; and has a law dedicated to promoting sport.

In the world of professional football, everybody knows that the stadiums across Italy are in an appalling state. In England, the central and local governments invested – along with club owners – in building new stadiums in the 1990s. It might be too much to expect similar levels of investment in Italy, but at the very least the authorities must simplify the rules so that private investors can build new stadiums. There is far too much red tape and too many restrictions on what can be done. Building can never get under way because there is always someone coming up with a new objection to each project. Some are valid – like issues around the impact of a stadium on its environment – but many are specious.

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