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Sports

The Broke Soccer Team That Got Sold for One Euro, Twice

For 25 years, Parma has been Italy's most troubled soccer team when it comes to bookkeeping. Can a new owner do anything about it?
February 13, 2015, 2:42pm

Parma nearly collapsed for the first time in 2004. Parmalat, the Italian food corporation run by Calisto Tanzi that bought the club in 1991, was having difficulty paying off a €150 million bond yield in December of 2003, which was strange considering the hugely successful company controlled about 50 percent of the market share in Italy at the time. Don't worry about the payments, Parmalat said. We have €3.9 billion sitting in a Bank of America account.

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As it turns out, they didn't. Bank of America checked their records and discovered that the money didn't exist. Parmalat had been forging transfers into and out of the account. Further investigation revealed Europe's equivalent of the Enron scandal: Parmalat was €14.3 billion in debt and effectively broke. Their stock price tanked; their executives were arrested; creditors sued. The company went bankrupt. Tanzi was dragged into court on various counts of fraud and embezzlement.

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Because of this, Parma had to suffer through an extended period where the club wasn't owned by anyone in particular. Parmalat still had control over them in early 2004, technically, but in the background, everyone was scrambling to find a buyer. The club lost €77 million in 2003's financial year and was declared insolvent. It was officially put up for sale in early 2005, and a temporary administration was put in place to manage the club until a buyer came along. Parma wasn't sold until January of 2007, to Tommaso Ghirardi, a mechanics industry millionaire. Ghirardi appeared to run the club responsibly for a time. Parma were relegated to Serie B at the end of the 2007-08 season, but jumped back up to Italy's top flight the following year and started to put together a string of respectable, mid-table finishes. There were some muted concerns in 2012 about player wages being a bit higher than was financially prudent, but at least the club wasn't owned by crooks anymore.

Calisto Tanzi, after the fall. Image via WikiMedia Commons

Then another crisis hit. Parma didn't pay the Italian government income tax on player salaries in November and December of 2013, then it stopped paying its players altogether. In December of 2014, the Italian Football Federation docked the club a point in the league table, hit it with a fine of €5,000, and Ghirardi and CEO Pietro Leonardi were banned from "club-related activity" for two months. Apparently "club-related activity" didn't involve selling the thing. Parma was purchased by a Cypriot-Russian company called Dastraso Holding Limited a few weeks after the punishment was handed down. The price: a single euro.

Dastraso functioned as a shady, corporate middleman for Rezart Taçi, an Albanian oil tycoon who claims to have €5 billion in assets. (That figure is almost certainly an overestimate, but he is indeed very rich.) Taçi tried to buy Milan from his friend Silvio Berlusconi in 2009 for €700 million and is perhaps best summed up by this quote from an Albanian diplomat: "[He] came out of nowhere, and no one really knows how he made his money. 10 years ago no one had heard of him, but now he's a big household name and has bodyguards wherever he goes. He lives in a huge house with masses of security."

Taçi was set to invest in the club, then apparently looked at its balance sheets and said fuck it. Antonio Cassano walked away in the January transfer window, claiming he was still waiting on some €4 million in back wages. Several other players demanded to leave the club and were subsequently loaned out or transferred. The team was already thin before the mass exodus, stuck in last place in Serie A with little hope of escaping relegation. The only reinforcements brought in were a couple loan players: Cristian Rodríguez from Atlético Madrid and Silvestre Varela from Porto. Rodríguez joined up without knowing the full extent of the dysfunction he was being brought into: "I did not know the players were in arrears for six months because salaries had not been paid. I thought there were only problems with the poor run of results at the club."

After less than two months in charge of Parma, Taçi sold the club a week ago, for the same price he paid, to Italian businessman Giampietro Manenti, who claims Parma's debts aren't as severe as reported—La Gazzetta dello Sport puts the number at €96 million—and has promised to start resolving them in the coming days: "We hope to pay off the income tax by the 16th [of February] and a few wages. Then, between the 20th and 22nd, we will pay off everything else." It remains to be seen whether the Italian Football Federation will give Manenti a bit of leeway in terms of getting his house in order, but at present, there is still a February 15 deadline for the club to pay its players what they are owed. The punishment for non-compliance is a three-point deduction in the league table. Given that the team seems doomed to play in Serie B next season, it probably won't matter whether the penalty is inflicted or not.

It also remains to seen if Manenti can be the first trustworthy owner Parma have had in 25 years. They're going to be relegated, but that isn't a death sentence. What will kill Parma is if they have yet another book-cooker in charge. It took a decade of malfeasance to get to this point, but the club is finally in the grip of a full-on existential crisis. Manenti says he will pay down the debts, that he will run Parma responsibly. The wolf has been at the door for a while now; it's gnawing through the wood. He had better be a man of his word.