Milan court drops probe of former Infront Italy executives linked to Serie A rights
By Jonathan Rest
Three former senior executives at the Italian arm of agency Infront Sports & Media have been cleared over allegations of financial wrongdoing and collusion with broadcasters in the award of media rights to Serie A, the country’s top-tier soccer league.
The probe, which dates back two years, involved then Infront Italy president Marco Bogarelli (pictured), vice-president Andrea Locatelli and managing director Giuseppe Ciocchetti.
In April, Milan prosecutors renewed a call for the arrest of the trio for “alleged contribution to undue financing practices in Italian club football” and an “alleged manipulation of the administrative process of the Lega Serie A media rights tender for the 2015-16 to 2017-18 period,” but the case has now been dismissed by the Milan Court of First Instance.
Infront told Sportcal today: "Infront Italy acknowledges that the Milan Review Court has fully rejected the request of arrest for the former Infront Italy managers."
The court found that while the executives had "maximised their profits from an entrepreneurial point of view... it did not cause damage to the football league, football clubs or competitors."
It ruled there had been no criminal activity.
The case centred on the distribution in 2014 of domestic live media rights to Serie A from 2015-16 to 2017-18, in which Infront had an advisory role, and followed allegations that the auction may have breached domestic and European competition rules.
Prosecutors claimed that the process was "in violation of the standards of transparency and fair competition."
It was alleged that the league and Infront Italy officials colluded with Mediaset in selling premium rights to the commercial broadcaster for the three-year period.
The rights were sold to Mediaset and pay-TV's Sky Italia for a total of €943 million ($1.1 billion) per season, a 14-per-cent increase on the value of the previous contracts.
However, in May 2015, an antitrust probe was opened, with Italy's competition authority and financial police visiting the headquarters of Lega Serie A and the offices of Mediaset and Sky. The probe hinged on the premise that the league and Infront failed to award the rights to the highest bidders in the auction, as they were required to do by law.
In the auction, Sky offered the highest bids for the two main live rights packages but was only successful with Package A (paying €357 million per season), with Mediaset granted Package B despite offering less money (€280 million per season). Mediaset also secured Package D, having bid by far the most (€306 million per season), but then sub-licensed those rights to Sky for €215 million per season.
By law, Serie A was obliged to award rights to the highest bidder, but it was also forbidden from awarding all of its premium rights to a single bidder.
The league and the clubs had initially supported accepting a proposal put forward by Infront to “maximise” rights revenue by awarding Packages A and B to their "opposite" number, i.e. Package A to Mediaset and Package B to Sky, with Package D going to Mediaset.
That scenario would have netted the clubs a total of €1.078 billion, more than the €943 million they ultimately secured. However, in the end, ostensibly to avoid the need for complex sub-licensing arrangements, a decision was made to give Package A to Sky and Package B to Mediaset.
Mediaset was also awarded Package D despite the fact that it had attached a condition that its offer would only stand if it were also awarded Package A or B, in apparent violation of the rules of the tender, which stipulated that conditional offers were prohibited.
Infront Italy was appointed to act as the media adviser to Lega Serie A, guaranteeing a minimum of €5.94 billion over the course of six years from 2015-16 to 2020-21. The agency committed to bringing in an average of €980 million per season in the first three-year cycle of its mandate and a minimum of €1.04 billion per season over the following three years.
Late last year Bogarelli and Ciocchetti left Infront, with the duo said to be planning to launch a new business in the international sports rights market.