Dated 12 Aug 2013
[article=http://sportsillustrated.cnn.com/soccer/news/20130812/as-roma-american-owner-james-pallotta/#ixzz2jNPLHdXC]James Pallotta, a 55-year-old investor from Boston, stood in a hotel elevator next to Junior Tallo, a 20-year old forward from Ivory Coast wearing earbuds, and asked the younger man what he was listening to.
Tallo replied, but his thick accent left Pallotta confused for a second. The American billionaire leaned in, took a glance at the player's iPod and said, "Oh, Lil Wayne." Pallotta then seamlessly offered up a lyric from the rapper's hit, 'Love Me.'
Tallo laughed.
"I went to see Jay-Z on Sunday night," Pallotta continued. "I'll send you my playlist."
Speaking to SI.com a few moments later, AS Roma's majority owner and president explained his effort to bond with the young Ivorian.
"It's a team. You're a family. It's not indentured servitude," Pallotta said. "What a lot of people lose sight of with these teams, is that they're kids. And not only are they kids, but they just moved from Brazil or Croatia or Argentina, and they're in Rome. You have to mentor them and have them feel that they're a part of the family."
A first-generation American reared by Italian parents in Boston's famous North End, which he called "the most Italian section in the United States," Pallotta is accustomed to straddling cultures. Now he's straddling continents. He is the only foreign owner in Serie A, and that's taken some getting used to in a country so proud and protective of both its identity and its calcio.
Last week, in fact, Italian Football Federation president Giancarlo Abete was quoted saying that while interest from foreign investors was flattering, "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."
But it's a global sport, and Pallotta's path to success requires abandoning past provincialism. Roma typically has featured a cosmopolitan roster (a French coach with a Spanish name currently manages a team comprising players from up to a dozen different countries on four continents) but like many of its Serie A rivals, it was slower to embrace soccer's post-modern trappings.
At the highest echelon of the European game, a global brand no longer is a luxury. It's a necessity.
"Unless you get into the 21st century in terms of a stadium, social media, branding, sponsorships, all that type of stuff, you're never going to compete at those top levels. You're just not," Pallotta said. "It's just a fact of life in sports."
So 1,500 years after the empire fell, Rome is feeling the itch. Pallotta wants more than the Scudetto. He wants AS Roma to conquer the world and his native U.S. -- once a soccer backwater -- represents a pivotal component of that strategy. The Giallorossi have forged partnerships with well-known American companies like Disney and Nike, are making inroads into youth development and just completed a second consecutive summer tour of the U.S. and Canada, which included an appearance in the July 31 MLS All-Star game. And they're just getting started.
This isn't Pallotta's first foray into sports ownership. In 2002 he purchased a small stake in his beloved Boston Celtics, which at that point was in the midst of the longest championship drought in team history.
Now a co-managing director at Pallotta's investment, management and marketing firm, Raptor Group, Sean Barror used to work on corporate sales and business development for the NBA franchise.
"When Jim's group bought in, the team was a bit of a shambles. Strong brand, good fan base but had fallen on hard times," Barror told SI.com. "From a business standpoint, our mantra for the first there years was that we had to raise the floor before we raised the ceiling. You have to build the right foundation around your business before your realize its true value."
The Celtics were champions in 2008 and nearly won again two years later.
"We've been quietly raising the floor [at Roma]," said Barror, who now handles the club's marketing and sponsorship deals from Raptor's Boston office. "When we have that success on the pitch, we anticipate the ceiling will be that much higher."
Success on the pitch hasn't come easy, despite Roma's relative popularity. Since three area clubs united to form Associazione Sportiva Roma in 1927 it has claimed just three Serie A titles (one in the past 30 years) and one continental trophy -- a predecessor to the UEFA Europa League called the Inter-Cities Fairs Cup back in 1961. The Giallorossi have been consistently competitive, winning nine Coppa Italia titles, finishing as Serie A runner-up 11 times and falling to Liverpool on penalty kicks in the 1984 European Cup final. But for the most part, they've played a distant second fiddle to the powerhouse clubs from Milan and Torino in both silverware and support (not to mention the big-name European giants from England and Spain). To Romans, that's frustrating. To Pallotta, it represented a classic buy-low opportunity.
"I think Roma is the most undervalued sports team and brand in the world," he said. "If we do it right, Roma is worth multi-billions with the whole thing we want to put together. It's an incredible opportunity."
The club no longer is considered one of the sport's most valuable by Forbes, which revised its list of the top 20 soccer teams in April. Real Madrid leads the way at $3.3 billion and Newcastle United, valued at $263 million, is 20th.
That's a steep climb, but Pallotta has experience building value. He rose from modest means to create and then manage an investment portfolio worth some $12 billion. Several years ago, as he began moving beyond hedge funds and diversifying his business, Pallotta developed an interest in Roma after financier George Soros launched a bid for the club. It eventually fell through. Pallotta wasn't much of a soccer fan, but he found the relatively low price and the potential power of Roma's brand "kind of interesting".
In 2011, fellow Bostonian Tom DiBenedetto cobbled together a consortium to buy out the Sensi family, which had controlled AS Roma since the early 1990s. Pallotta, perhaps feeling the tug of his Italian roots, joined in as a "passive investor" as DiBenedetto and his colleagues put up a reported $89 million for two-thirds of the club. UniCredit, an Italian bank, held the remainder.
Last year, when it was time for a capital injection, Pallotta assumed a controlling stake and became Roma's president. He told SI.com that his group has spent around $160 million to acquire its share and pay off debt, contracts and other legacy costs. It eventually intends to buy out UniCredit and take 100 percent of the club.
Meanwhile, Pallotta, Raptor and his fellow investors already have started to leverage Rome's branding potential. To borrow Barror's appropriate play on words, they're all firm believers that the capital, along with Serie A, is due a soccer "renaissance."
Said Pallotta, "Thirty million-plus tourists, thousands of years of history, as passionate a fan base as there is, I think, anywhere. It's a great, undervalued opportunity to create, with a new stadium, over time, one of the great teams in the world."
The most visible and symbolic change this season is the club's new logo. The traditional 'ASR' monogram, which featured below the famous image of the Capitoline Wolf, is no more. In its place is the word 'ROMA', in a font that appears chiseled out of marble, along with the club's founding year.
"Most people around the world you speak to don't either understand what AS stands for and second, a lot of people would actually say to me 'How is AC Roma doing?'," Pallotta explained.
Milan casts a long shadow.
"It's Rome that you're branding," he said. "Having 'Roma' there expands the brand potential exponentially."
Naturally, the alteration prompted protests. Posters reading "No Al Nuovo Stemma" -- "No to the new logo" -- were plastered around the club's Trigoria training facility last month.
Rome isn't the sort of city that turns its back on tradition. But the old way of doing things is part of the reason the club hasn't reached its potential. That devotion to the way it's always been, and the accompanying inertia, has resulted in Serie A's fall from the summit. The circuit was ranked Europe's best throughout the 1990s. Last year it slipped to fourth in the UEFA table, losing a Champions League spot in the process. Accusations (or even proof) of match fixing and incidents of violence and racism now seem to hit the headlines as frequently as a final score.
"I think it's just a question of in many cases, not keeping up with the times. In effect, not keeping up with what's going on in sports," Pallotta said.
Barror claimed that Serie A's slide, "Is a direct result of lacking commitment to infrastructure projects in the last 20 years."
Juventus is the only Serie A club that owns its stadium. It is one of two Italian teams (AC Milan is the other) that was among the world's top 10 in revenue generation in 2011-12, according to Deloitte. But in match-day turnover, Milan and Juve rank ninth and 10th, respectively, among that top 10. They each earned around a quarter of what Real Madrid, Barcelona, Manchester United and Arsenal pulled in.
Italian stadiums aren't lucrative. They lack modern, revenue-generating amenities. They're also not safe, which has added to the list of deterrents.
"You put people in cages, they're going to act like animals. That's just how it works," Barror said. "You don't have proper egress and entrance and access, ways into the stadium, dealing with the away side and home side, security, how you screen people coming through. It's very haphazard."
Roma will shift the paradigm. It's been sharing the cavernous Stadio Olimpico with rival SS Lazio for 60 years. But soon the awkward bedfellows will part ways. Pallotta has led an effort to build a privately financed facility seating around 60,000 spectators at Tor di Valle, located near the Tiber River about halfway between downtown Rome and the airport in Fiumicino. The club hopes to open the stadium in 2016 and the president said he envisions an adjacent retail and entertainment complex -- another very American amenity -- that will transform the surrounding area. His model is L.A. Live, which has profoundly altered the cityscape near the Staples Center.
Roma's home-front initiatives also include a ramp-up in its social media presence, which Pallotta described as yet another critical element of the modern sports industry. From Tumblr and Instagram to the online vote on the club's third jersey and the tens of thousands of surveys the team has conducted regarding the new stadium, "There's no question that what we're doing now in social media most teams weren't or haven't been doing."
Pallotta is an investor in Bedrocket Media Ventures, a New York firm that helped Major League Soccer launch its KickTV YouTube channel. He hopes to turn the club's analog television property into a similar sort of platform, which will spread the brand far beyond Milan or Madrid. Meanwhile, Roma is forging relationships with sports concerns and potential partners throughout the world through Raptor's marketing and technology consulting business.
While Roma's fans are learning to adapt, the players have taken notice. Speaking before the All-Star game, which Roma won easily, 3-1, over the MLS select squad, midfielder Michael Bradley lauded management's vision.
"The first thing that you see from Mr. Pallotta and the America owners is their enthusiasm, their drive, their commitment to build something ... to grow something that can really be something special in the world of European football," the Roma and U.S. star said here in Kansas City. "As players, you want to play at a club where there's big ambition. You want to be at place where everybody -- from the other players, the coaches, the members of the club, the president -- are all striving to build something. They're all striving to win something. So I think every one of us recognizes that and we're all excited to be a part."[/article]
