Italian football on the verge of a revolution

You say you want a revolution, you tell me that it’s evolution. Beatles weren’t thinking to Thomas Di Benedetto but their words fit him and his hope to change the world of Italian football. The 61 years-old tycoon, president of the Boston International Group and partner partner in New England Sports Ventures, who own the Boston Red Sox and the Liverpool, became the 21st president of the AS Roma. With his partners, Di Benedetto bought the 67% shares, investing € 70m (60 for the club, 6 for the “Fulvio Bernardini sports centre where the club trains and 4 for the brand).

Roma became the second Italian club with a foreign owner after Venezia, competing in the serie D (the top level non-professional league) owned on February 2011, after the second bankruptcy, by the former Russian major of Khimki Yuri Korablin. Traditionally, however, Italian football attracted more dodgers than serious entrepreneurs from abroad.

From 1997 to 2004 Enic owned Vicenza. The firm, with strong interests in the market of petrol, invested the noteworthy amount of 22 billions to help the club to make the breakthrough but the group, now holding 84% of the fully diluted share capital of Tottenham Hotspur Football Club, was forced to abandon leaving a 10-billion debt.

Also AS Roma has a past of announced deals with controversial businessmen. In 2004 Sulejman Kerimov, owner of the Nafta Moskva, an investment company with oil-related interests, seemed keen to buy the club but after two weeks he escaped from Rome after the Guardia di Finanza visited the club’s offices. Now he owns the Anzhi Makhachkala, the Daghestan-based club that famously signed Roberto Carlos offering €9m for two years.

Three years later the lawyer Joe Tacopina represented George Soros, but the deal wasn’t completed as it happened when, few weeks later, he announced his desire to buy Bologna but the expected payments never came.

Then, in 2009, Rezart Taci, a businessman in the Albanian new-economy, confessed his aim to buy 80% shares of AC Milan but he managed only to organize a friendly tournament in Tirana inviting the Rossoneri and filling the stadium. In the same year the American Timothy Burton promised to invest €200m in Bari, as a club and as a city, but his words blew in the wind.

But why Italian football has as a scarce appeal for foreign capitals? With 29 millions of fans, Italian Serie A is the third richer league in Europe generating €1.53 billions, slightly behind Bundesliga (€1.57 billions) but almost half as much as the English Premier League (€ 2.75 billions). But for a club owner reaching the break even in a short-period is quite hard because of the dominant role of tv rights as a source of income, while merchandising and gate-revenues are lower than in England or Germany.

The report “Football Money League” by Deloitte confirms the over-reliance on the tv-rights income. The five Italian clubs in the broadcasting top 20 each receive between 53% and 65% of total revenues from this source while only the Milan is among the top 20 European clubs for matchday revenue. In the first half of the 2010-11 season, Serie A matches have been seen by an average 23.092 crowd. Although Marco Di Domizio in his study “The demand for football in Italy: 1962-2006” highlighted the decrease had started after the match-fixing scandal in 1980, the reason for the actual disaffections are easy to find: fear/violence (the Tessera del Tifoso didn’t help to bring new supporters into the stadium) and old stadiums owned by municipalities. So club has no interests to activate a long-term business plan to change this situation and fill the gap with the English Premier League, considered as the benchmark, whose clubs received a quarter of their annual income from the gate revenues, twice as much as in Italy.

Juventus, that recently unveiled its new owned stadium, has opened new possibilities, but at the moment the Turn club represents just an isolated case. Without a specific law reducing the impact of bureaucracy and simplifying the procedures to build a multi-function sports facility it’s probably meant not to be followed.

Such disaffection wasn’t helped by the decrease in the competitive balance of the league, exacerbated by the individual selling of tv rights from 1999 that produced a wider gap between the haves and the have nots that made the season boring and predictable. The “Melandri law”, that reintroduced the collective selling, could have helped but only 5% of the revenues are split based on recent results, on the last season’s ranking. In this way, past results remains largely dominant, and the underachievement respect to the potential revolutionary effects of the reform are strikingly evident.

The “victory” of smaller teams in the battle to define the criteria to identify the number of fans (a hard duty in a delocalized football where the sense of belonging isn’t anymore geographically determined), an assessment determining how to share 25% of the tv rights incomes, more than €200m, isn’t enough to say something in the football hierarchies is really changed.

But it’s better than nothing. And the arrival of Thomas Di Benedetto is a further good sign meaning that the Italian league is doing the right moves. He has to face a hard challenge. According to the Football Money League 2011, non qualification to the Champions League brought a revenue drop of €23.7 and, despite a slightly increase due to strong domestic performances, Roma has registered the second lowest matchday revenues of any Money League club narrowly beating Juventus. On the other side Roma can count on the fifth highest commercial revenues (€22m) and consistent sponsorship deal with telecommunications company Wind until 2012/13 and a kit supply deal with Basic Italia until 2016/17 that guarantee basic fees of €5.5m and €6.8m per year respectively.

Now it’s up to him to prove he’s not just the latest dodgers. He says he wants a revolution, he tells that it’s evolution. Is it going be all right?


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