Fiorentina-West Ham, unobtainable balance sheets and the unemployed patron – Corriere.it

The exuberant David Sullivan, born in 1949, number one of West Ham and the volcanic Rocco Commisso, born in 1949, president of Fiorentina. Armed with cheers against each other in the grandstand of the Eden Arna in Prague for the Conference League final.

Eros and tlc

The former king of English porn magazines and the former Calabrian boy who created a 2 billion telecommunications empire in the USA (but the budgets are not available). Sullivan today a very rich unemployed (as he appears in the registry office), Commisso a businessman who thunders against bureaucracy in Italy while placing his holdings in opaque Delaware, the country with closed blinds.

Two clubs in profit

David has West Ham in profit and he also thanks a gentleman who has recently bought 27% of the capital: his name is Daniel Kretinsky, his group has 37 billion in revenues, 22,000 employees and many Italians pay him for the energy he produces. Rocco closed 2021-2022 with 46.8 million in profit thanks to Chiesa and Vlahovic, bequeathed by the Della Valles, valued and monetized: over 100 million in capital gain in two. Let’s see better.

West Ham, the new partner

Uefa semi-finalist last year and seventh in the Premier League (fourteenth this year) the London club closed the financial statements as at 30 June 2022 with 252 million pounds in turnover (1.16 at the exchange rate with the euro) against 190 million in previous year and 12.3 million net profit (-27 million). The new shareholder and co-president, the Czech entrepreneur and lawyer Daniel Kretinsky, took care of strengthening the equity structure. He took over 27% for 125 million that went to repay the corporate debt. Kretinsky has huge resources. The EPH Group (Energetick a průmyslov holding) is one of the main European electricity producers and the fifth largest in Italy after having purchased the thermoelectric plants of the German E.On. One of the engines of Eph, who then sold his 40%, was the financier Petr Kellner, who died two years ago in Alaska in a helicopter crash, known for the deals concluded with Generali of which he was a significant partner and adviser.

Tabloids and horses

With Kretinsky at 27%, David Sullivan went from 51 to 39% while his historic partner and friend David Gold (25%) died in January at the age of 86. In 2010, the pair launched a takeover on West Ham after 16 years (1993-2009) at the helm of Birmingham. Sullivan has an adventurous entrepreneurial history behind him. As a young man, with an economics degree in his pocket, he made his money selling adult magazines and producing erotic films starring his later girlfriend. Closed with X-rated publishing, he bought the tabloids Daily Sport and Sunday Sport, resold after 20 years in 2007 and in the meantime had successfully launched into the horse racing business while managing football teams at the same time.

Fiorentina Communications

We know almost everything about the football president Commisso, his passion and his utterances. A little less than the entrepreneur also because his natural propensity for communication is not reflected in the corporate segment even though Mediacom Communications Corporation (Mcc) is a group of cable TV and internet services exposed to the public, with 1.4 million customers in the US Midwest and Southwest (households and companies), but above all in the showcase with the Viola in the most followed sport. On the official Mcc website, the latest financial information dates back to January 2022 and summarizes the balance sheet data for 2021, moreover unaudited, i.e. unaudited. On the Fiorentina website we read that Mcc is listed on the Stock Exchange. Actually he hasn’t been for 13 years.

Delaware, 12 years ago

The parent company Mcc (which does the consolidation) and all the other Commisso holdings are based in Delaware, a tax and corporate haven that has nothing to envy to Cayman or the British Virgin Islands. Many large American groups are based here. An official request to the Delaware State Department – corporations sector on the deposits of documents made by Mcc (Filing History), returns a report based on which there are only 5 documents registered in 24 years, the last in 2011.

Debt and reputation

However, the considerable debt accumulated over the years for acquisitions and investments (as well as the ability to repay and gradually reduce it) has led Commisso to produce accounting information which shows that the group has an excellent reputation with credit counterparties (of which however the identity is not known): the average cost of senior debt, at least until 2019, was 3.8% and the operating companies were the guarantee. The data on the site indicate 2.2 billion in revenues for 2021 and a debt that has fallen to 1.2 billion from 1.7 in 2020 with a free cash flow after taxes of 510 million.

Guarantees Jmcc

But nothing is known about the flow of dividends that should rise towards Commisso and then partially descend from the other branch, that of the (presumably personal) financial company Jmcc which controls Columbia Soccer, both registered by Delaware, up to Florence. Jmcc which acts as guarantor for Fiorentina, signing letters of irrevocable commitment in September to financially support the club which, however, is doing very well on its own for now: in June 2022 it achieved 233 million in revenues (160 the year before) , 46.8 of profit (-10.3) and a reassuring shareholders’ equity of 218 million. A positive balance is still expected this year.

The BBB+ rating

Overall, between purchases, payments and sponsorships, Commisso has invested more than 400 million in the club. And in January 2023 it received the BBB+ rating with a stable outlook from Standard & Poor’s for the Mcc group. a credit risk assessment which confirms the investment grade range (the indicator of reliability for institutional investors) and which underlines the group’s adequate ability to meet its financial obligations. For comparison, six steps above Tim (B+) and one above Italy (BBB). S&P indicates in its report that revenues will remain stable, indeed they could have a minimal contraction to 2.1 billion, between now and 2024 while the EBITDA, which is a gross operating margin very indicative of the company’s health, should remain over one billion euros . But we will never know for sure: official budgets are not published. People also go to Delaware to get around the bureaucratic hassles imposed elsewhere by transparency rules and practices. In Prague, on the other hand, you only go to win.

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