Are the growing American investment in Italian football a blessing or a curse? This article explores the potential dangers of private equity ownership and calls for a united front to protect the soul of the beautiful game.
The attractiveness of Wall Street investment in Serie A, Italy’s top football league, is fading.
What was once seen as a potential lifeline for struggling clubs is now viewed with growing distrust.
Venezia FC’s recent promotion to Serie A under an American Billionaire ownership and the recent takeover of Inter Milan by California based Private Equity Oaktree Capital, have increased concerns about the incentive behind these financial billionaires running Italian football teams.
Is this a blessing or a curse for Italian football? In the case of Inter Milan it could be a curse if a quick sale materializes.
Private Equity (PE) firms like Oaktree Capital are not known for any romantic attachments to assets.
PE objective is to maximize profits, often through short-term strategies that prioritize financial gain over long-term sustainability.
They typically buy companies at low value, make management and operational changes to increase their value. Then sell them quickly for at least a 5x return.
This approach, while successful in the business world, can be detrimental to football clubs, which are more than just businesses.
In the case of Inter Milan, it could mean selling the team within two years to a hungry buyer. A buyer which would not hesitate to drop USD 900 million for the prestigious assets.
Think of the Saudis or the Emiratis for instance.
American Investment & Future Of Italian Football: A Clash of Cultures?
Football clubs are intertwined into the fabric of their cities and their communities. In the case of Inter Milan, for million of Italians the extension of their family.
They represent a shared history, a source of pride, and a rallying point for fans. Football teams are not simply assets to be bought and sold. Or traded like stocks or commodities.
However, this is precisely how private equity firms tend to treat them.
Their focus on extracting maximum value in the shortest possible time can lead to decisions that harm the club’s long-term prospects.
Such as selling off star players, neglecting youth development, or cutting corners on infrastructure investments.
Inter Milan, one of the most prestigious Italian clubs in the world with a rich history and a passionate fan base of over 55 million, is now in the hands Wall Street PE’s business model.
Oaktree’s reputation for aggressive asset management in the real estate sector for instance raises red flags about their true intentions for the Nerazzurri.
Will they prioritize the club’s long-term success and competitiveness, or will they simply strip it of its assets to maximize their return on investment?
The history of private equity ownership in football is full of contradictions and shortcomings.
In the UK, Manchester United’s decline and underperformance under the billionaires Glazer family’s debt-packed ownership is a good case study as the model has failed.
In Rome, financial turmoil and mismanagement of the US led AS Roma team have affected its performance. Which has reminded us of the potential negative impacts of the PE model applied to football.
These Italian clubs, once the leaders of European football, have struggled to maintain their competitive edge.
In some cases due to the short-sighted and quick profit driven strategies of their owners.
Italian Football – More Than Just A Business
Italian football are more than businesses. They are cultural institutions, a source of national pride, and a way of life for millions of fans and families.
It is a sport immerse in tradition, passion, and a deep connection between clubs and their communities.
This is what is at stake as American investors and billionaire control now 14 teams across Italian football leagues.
While Italian football desperately needs financial injection and sophisticated management, they should not come at the expense of the football culture, and longer-term winning performance on the field.
Perhaps time has come for Italian football teams to wake up and resist this hostile takeover.
Therefore, the future of the sport is based on protecting its soul from the controls of those who seek to exploit it from a financial standpoint.
Subsequently, fans, players, and club management must work together more systematically to safeguard the values that make Italian football unique and prosperous.
In conclusion, the international fight for the Italian football which started during the tough years of Covid, will only accelerate.
With the United States and Petro-dollar Gulf competing for the higher trophies.
By: Andrea Zanon
Andrea Zanon is the Founder of Confidente and Empower Capital. With 25 years of entrepreneurship, operations, sustainability and technology experience,
He is an international advisor who has worked for financial institutions and entrepreneurs on sustainability, international affairs and development
