The Fear Factor: why is AC Milan so afraid of Facebook?

Paulo Teixeira on Wednesday, 20 February 2013

According to Deloitte Football Money League 2013 report, AC Milan, sitting in eighth place, are the leading Italian club, collecting revenues of €256.9 million during the 2011/12 season.
Since 1986, the club has been under the grip of Fininvest s.p.a., one of the several companies owned by the Berlusconi family. When Silvio Berlusconi (77) took over, he enthroned Adriano Galliani (68) as general manager and former player Ariedo Braida (67) as sports director. Together, they sum up 212 years of age, almost twice the age of the club itself (114, founded in 1899). After 27 years in power, in retirement age, the Santissima Trinità (Holy Trinity), as it is known, is still going strong. A Holy Trinity hardly moving with the times, though, when it comes to understanding the power of social media.
As back-up for managerial purposes, the club can count on the loyal and unfailing support of a team composed of 10 consigliere (advisers). Among them, star attorney Leandro Cantamessa, who also runs AC Milan’s legal division.
Cantamessa and his crew are battling at FIFA a claim lodged by Brazilian club Botafogo FC for an unpaid training compensation of €300,000 – which represents roughly 3 days of subsistence allowance Berlusconi was ordered to pay to his former wife Veronica Lario by a Milan court in December 2012.
The flaws and blunders of the Ceregatti case have been exposed thoroughly on this page – which led to a complaint lodged by Cantamessa to the FIFA Disciplinary Committee on behalf of his client.
Astonishing as it may seem for a law firm of this standing, AC Milan requested FIFA - a private company, not a legal institution - “to prosecute Mr. Teixeira”. The club will surely have been disappointed when it heard of the action taken by FIFA - a 2-month suspension of my license. This however, was the maximum penalty football's governing body could wield without giving grounds for appeal. FIFA’s media department was swift to tweet their action under the headline: “First member of football family to be suspended/fined because of social media use”.
What is totally unknown to the public, however, is the negotiation that occurred backstage between the two clubs. Both parties now appear to be losers: Botafogo, desperately in need of the money; AC Milan, enduring the collateral image damage on the web.
“It’s better a bad deal than a good fight” exchanged the lawyers by email. But AC Milan’s settlement proposals, which you may partially read below, were totally out of proportion. Who could imagine that the most successful club in world football in terms of international trophies would suffer of this kind of Fear Factor?

Eyebrows up on Russian interest in Greek gas

By Ian Simm

As the privatisation of Greece’s Public Gas Corp. (DEPA) and its network subsidiary – the Hellenic Gas Transmission System Operator (DESFA) – enters its final stage, I decided to shed some light on a deal that is likely to be fraught with contention.

Last week, the Greek agency for privatisation (TAIPED) revealed the shortlist of five accepted bidders, which includes: Russian firms Gazprom and Negusneft, a subsidiary of Sintez Group; Greek firm M&M Gas; the State Oil Company of Azerbaijan Republic (SOCAR); and the Czech PPF fund, in alliance with the Greek GEK-Terna.

While it has not yet been announced, I understand Gazprom has bid 900 million euros (US$1.2 billion) for DEPA; Negusneft has offered 1.9 billion euros (US$2.5 billion) for both companies; M&M Gas has bid around 450 million euros (US$599 million) for DEPA; SOCAR has offered a similar amount for DESFA and PPF GEK-Terna has bid around 400 million euros (US$532 million) for the network operator.

The competition will now move on to the due diligence phase, where the contenders will review the two Greek companies for sale, and in early April the binding bids will be submitted, with a decision expected in early May.

Fair competition?

Both TAIPED and the Greek Energy Ministry have given their assurance that all the shortlisted companies will be obliged to comply with EU competition regulations and with rules concerning energy security for the country, emphasising that “only the price tag involved will be taken into consideration regarding the privatisation process for here on.”

An advisor to the Greek Ministry of Industry and International Investments, Andreas Banoutsos, recently told me: “For the moment, Athens would be pleased if there [were] a delay in the process, since there are matters unresolved regarding the compliance of Gazprom and SOCAR with the EU’s competition rules, since they are both producers and sellers of the commodity, and in a market the size of Greece there could be accusations by Brussels concerning monopolistic practices.”

Similar views were expressed also by Sintez’s CEO, Andrey Korolev, who in a recent statement to the media predicted that Gazprom would face competition issues. He went on to say Sintez was the only bidder that regarded the Greek market as a potential energy hub, rather than just as a market to be monopolised.

An advisor to the Greek Prime Minister’s office for strategic planning, Alexandros Arvanitakis, told me: “Greece, according to many reliable studies, may contain substantial amounts of gas and oil, thus this privatisation is not merely an issue of gathering some amount of capital, but will also play an important role in the energy security of the country for years to come and decisions should be made carefully and without haste.”

Bones of contention

It is no wonder that the Russian bids have ruffled EU feathers, as gas from Azerbaijan’s Shah Deniz Second Stage has long been eyed by Brussels as the saviour from the latter’s growing dependence on Russia through the EU-backed but maligned Nabucco pipeline.

Russia’s South Stream project is a direct competitor to Nabucco, and while Brussels must still approve its route, Gazprom aims to pump 63 billion cubic metres per year of Russian natural gas to Europe via the Black Sea and the Balkans beginning in 2015.

Thus, while the EU seeks to vary gas supplies – or at least reduce Russian dominance – Gazprom is attempting to increase its footprint on the European gas market.

Pundits in Greece have mused recently that while Negusneft is privately held by backers who have previously clashed with the Kremlin, the firm is already in close co-operation with Gazprom, since the latter is the exclusive supplier of gas, on favourable terms, to Negusneft’s power stations in Russia. Therefore their participation in the privatisation appears to contain elements of an unfolding business alliance.

The Azeris, on the other hand, may hesitate to commit to the process before the final decisions on the route of the Southern Gas Corridor are made, due in March. Should the competing Trans-Adriatic Pipeline (TAP) be selected by the Shah Deniz consortium, its interest in DESFA is likely to increase, as the latter manages the Greek network. However, should Nabucco West – the scaled-down successor to Nabucco – be chosen, SOCAR would likely drop out, as the pipeline would bypass Greece entirely.

The US recently called on Greece to consider its options carefully, an implicit warning against accepting the Russian bids. When asked to comment on the developments, a US State Department spokesperson, Victoria Nuland, said her administration had suggested it was in Greece’s interest to have varied supply sources so as not be held hostage over its natural gas trade. The statement is a clear shot across the bows of the bids by the two Russian firms. However, at this point, it appears that the Russian bids would be more favourable than the competing offers.

Significantly, Gazprom and its European partners, including Eni and Wintershall, broke ground on the US$16 billion South Stream on December 7, with Russian President Vladimir Putin brimming with pride. Putin has been central to the progress of the pipeline, and the December ceremony saw him come good on a promise to begin work on the pipeline before the end of the year.

“This event is important not only to Russia’s energy market, but for the entire European energy market … South Stream creates conditions for stable, unconditional deliveries of Russian gas to our main consumers in southern Europe,” said Putin.

While the stability of these deliveries may be questioned, it appears likely that as much as it may trouble the sceptics, Gazprom’s influence on the EU gas market is only set to grow.

South Stream Route