A growing trend has been developing in Italy,
with the number of clubs owned or controlled by North American investors steadily on the rise.
Today, Roma, AC Milan, Fiorentina, Parma, Spezia, Bologna and Venezia are all under
American or Canadian control, more than a quarter of the league clubs.
But why? What does this pattern of investment represent?
2011 was the beginning of a new mini-era of sorts in Serie A. In August, a consortium
of American investors purchased a 67% stake in Roma for just over €70m. The deal, which saw the
Sensi family relinquish their control over the club, was necessary, but accepted grudgingly.
In response to the takeover, then president of the Italian Football Federation, Giancarlo Abete,
said that "It makes us sad, as I'd love for all the legendary families
who made Italian football great to remain in charge of their teams."
In 2012, James Pallotta, one of the original investors and a Boston American with Italian
parents, bought a controlling stake, becoming the only foreign owner in the league.
"I think Roma is the most undervalued sports team and brand in the world,"
Pallotta said on becoming president, citing the city’s thousands of years of history,
its millions of tourists each year, and the club’s footballing heritage.
It was a fair theory. In 2013, Roma signed a ten-year kit deal with US giant Nike.
The year before, in another brand-building move, they’d reached agreement with Disney
to spend winter training camps at the company’s resort in Florida.
In 2020, however, Pallotta’s ownership would end in acrimony, frustration,
and heavy loss, and he would sell his shares for around €199m - but to more Americans:
the Texas-based conglomerate, the Friedkin Group.
And in the present day, they have plenty of company. In 2014, Canadian Joey Saputo was part of
a group that acquired Bologna. In 2018, AC Milan fell into the hands of the Elliott Management
Group, after previous owner Li Yonghong defaulted on loan repayments to the hedge fund. Then, in
2019, the Italian-born billionaire Rocco Commisso, founder of Mediacom, took control of Fiorentina.
A year later, in September 2020, Kyle Krause purchased 90%
of Parma for under €100m. On completion Krause, who also has Italian ancestry, revealed that he
had been looking to buy into Serie A ‘for some time’, referencing the competition’s potential.
“It used to be the No. 1 league in the world.
There is no reason it cannot get back to that, or close to it.”
Robert Platek, who bought Spezia outright for €25m,
also spoke of a specific desire to invest in Italian football.
‘Serie A football is in an elite class of its own” he said in February 2021.
The same year, another American was promoted into the league: Duncan Niederauer, with Venezia.
Niederauer is a former CEO of the New York Stoke Exchange and preaches fiscal responsibility,
proper budgets and a lack of ego, casting him a different light to some of the characters that
have, and continue to populate Italian football. And Serie A continues to have its quirks.
Juventus are actually the only club to own their stadium,
with most teams playing in grounds leased from local authorities, most of which haven’t been
refurbished since the 1990 World Cup, and which provide only modest matchday income.
Serie A’s broadcast contract is also only the fourth most valuable in Europe.
The current deal is valued at £788m/season, behind the Bundesliga’s £1.1bn,
LaLiga’s £1.14bn and the Premier League’s £1.67bn per season contracts respectively.
For buyers it creates an obvious advantage. Serie A ownership is available at a relatively
cheap price. In a 2021 Forbes list of the world’s most valuable clubs, no Italian side featured in
the top-ten and Juventus, ranked 11th, were the only one to have a valuation in excess of $1bn.
Even AC Milan ($559m) and Roma ($548m), one a multiple Champions League winner,
the other a regular participant, were sandwiched between Everton ($658m) and
West Ham ($508m), neither of whom have ever even taken part in the group stage.
It describes a league of under-appreciated assets. But It’s also a competition with
four Champions League places, set in a country dominated by a single sport.
As an investment opportunity, it’s also far more affordable than anything at the
top level of traditional American sports, or even in MLS, where the entrance fees
run into the hundreds of millions and, in 2019, the Chicago Fire was sold for $320m.
Many Americans also feel an ancestral attachment to Italy and it’s one of the symbolic homes of
the sport at a time when football is growing in the United States and when the country is just
a few years from hosting its second World Cup. Serie A is full of cautionary tales, certainly,
but there’s a logic to the gamble – and an apparent consensus for how to approach it.
In March, Parma announced plans for an extensive renovation of the Ennio Tardini stadium.
In May 2021, Robert Platek’s Spezia appointed architects to lead a three-year redevelopment
of the Alberto Picco stadium, and in the same month Bologna unveiled €100m plans for their
Stadio Renato Dall’Ara’s renovation. A new San Siro project is also under way.
So Step One for these owners is to make money from stadiums – and,
if possible, on more than just matchdays. Rocco Commisso has long since desired a new
ground for Fiorentina, but his attempts to create a new sporting centre – Viola Park – have been
frustrated to the extent that he’s now looking to sell the club. James Pallotta’s efforts to
move Roma from the cavernous Stadio Olimpico to a new 60,000 arena were also beset by difficulties
and the project’s failure was one of the factors behind his own decision to sell.
Pallotta is gone, but his early years at Roma still seem to capture the spirit of
this investment. In an interview with Sports Illustrated in 2013,
he attributed Serie A’s decline to a ‘failure to keep up with the times. In effect,
not keeping up with what's going on in sports.”
"Unless you get into the 21st century in terms of a stadium, social media,
branding (and) sponsorships”, he said, “you're never going to compete at those top levels.
And that characterises the challenge facing this second wave of investor-owners and the gamble they
appear to be taking – can they impact and alter a culture which is very resistant to change.