Cash-strapped Parma teetering on brink

Paddy Agnew's Column

If part of your business involves travelling to football clubs to interview players, coaches and managers, then you soon form a definite opinion of the "company culture" that emanates from a particular club. If one month ago, your correspondent had been asked to fill in a "pen-pic" of Parma football club, I would have called it a modern, open-minded club that perfectly embodied the particular combination of industrial flair, sound book-keeping and skilful trading that has for long been a traditional hallmark of Parma, the city, and its surrounding Emilia Romagna region.

Last summer, when Parma announced they were reducing their player squad from 37 to 22 players, in the process reducing the wage bill from €70 million to €30 million, it seemed like a typical piece of good housekeeping.

The impression was that Parma was trying to work its way back to its debut years in Serie A in the early 1990s when the club had distinguished itself by combining winning results with modest annual budgets.

For much of the last decade and more, Parma has been a remarkable success story. The side from the provinces has matched strides with the greats of Italian and European football, in the process winning two UEFA Cups, one Cup Winners' Cup, three Italian Cups and twice finishing second in Serie A.

In our wisdom, many of us gave much of the credit for the Parma success story to the "canny, wise and enlightened" administration of the Tanzi family whose multi-national dairy giant, Parmalat, owns 98.5 per cent of the club. This week, however, in the wake of the €10 billion crash of Parmalat, a crash that owed much to "creative accountancy" of breathtaking dimensions, that earlier analysis does not sound so smart.

This week, Parma football club is teetering on the brink of liquidation. The new year has indeed begun as the old one ended, namely with Italian football (and perhaps not just Italian football) caught up in yet another dramatic financial crisis.

Parmalat is currently in the hands of a state-appointed administrator, Enrico Bondi, who has made it clear he will sell off any non-essential company asset in his desperate attempt to part-salvage the company, safeguarding jobs and suppliers.

Clearly, by the €10 billion standards of the Parmalat collapse, the football club represents small fry - small but appetising, given the seemingly never-ending fatal attraction that draws industrial makers and shakers to football clubs.

In that context, administrator Bondi's strategy seems clear enough - first, he hopes to save the club as a going Serie A concern and then, at a later date (perhaps at the end of the season) sell it to the first bidder.

All of this, needless to say, is easier said than done. For a start, even before the Parmalat collapse, Parma football club's most recent balance sheet was in the red to the tune of €77 million. For a second, the club needs €50-€60 million to cover running costs (above all, wages which have not been paid since October) through to the end of the season.

For the time being, some relief may be on hand via a corporate recapitalisation worth up to €50 million. Further relief will come from the sale or loan of players.

Players such as French goalkeeper Sebastian Frey and Italian international defenders Daniele Bonera and Matteo Ferrari could soon be on their way, either during the current January transfer window or next summer.

In the meantime, Parma is desperately looking for a Mr Goodbar, blessed with a passion for football and with between €150 and €160 million in the wallet. Any takers?

aleagnew@tin.it