“Your Questions Are My Questions” – The RCS Paradox

7th October 2013. The traditional Giro route launch event takes place in Milan attended by the media and a sprinkling of ex-race winners. Amidst the usual pink tinged razzmatazz one face is missing.

Michele Acquarone, race director, is notable by his absence. Suspended by parent company RCS after 10 million euros reportedly went missing from the RCS Sports budget, he watches the presentation on TV at home in Milan, suspended from his job whilst an investigation takes place. On 3rd December 2013, Acquarone is fired from his position, marking the end of the shortest tenure of a Giro director in the race’s history.

Acquarone called a press conference to put his side of the story and has given several interviews – to Scott O’Raw at Velocast and the Outerline who recently published their own roadmap for the future of cycling.

But I had questions of my own I wanted to ask so I contacted Michele Acquarone who agreed to answer them by email. What follows is a verbatim transcript of our question and answer session.

Your background is in marketing. What attracted you to working in cycling?

I love sports. Every single and different sport. My first (real) job was at RCS and at RCS I could work for almost 10 years at the Marketing Department of La Gazzetta dello Sport, the most important Italian sports newspaper. In these years I have done in parallel experience within the media industry and the sports industry. They were important formative years in which I gradually learned about the business logic of media and sports. I was lucky enough to live very close (and sometimes even the inside) many sport events like the Olympics in Sydney, many Formula 1 and MotoGP Grand Prix, the most important tennis events, some NBA games, many football matches around Europe and then ski, snowboarding, volleyball and beach volleyball. Of course, last but not least, the Giro d’Italia. I remember the Big Start from Rome in 2000, the blessing of Pope John Paul II and the indescribable love of the fans. At that time, for the first time I realized the big power of cycling. From that moment on, my relationship with cycling has grown from year to year. The fact that I was born in Sanremo and as a child I saw so many thrilling finishes of the Milano Sanremo made it all very romantic.

All these experiences have enriched me and I learned something from each one. I also like to say that my passion for rock music pushed me to travel a lot to “hunt for concerts” and I realized that sports and entertainment are territories inextricably linked that have fans in their lowest common denominator.

It’s all about fans who always look for excitement and involvement. Fans are the only true engine in the sports and entertainment industries. I remember when I spent 4 hours in line to get a Bon Jovi’s autograph or when I spent the night in front of the Hilton Hotel in Milan to shake hands with Metallica. My son Alessandro was 6 years old when he had been waiting all morning for a Nedved’s autograph and he cried the rest of the day when Nedved, after training, ran from the back to avoid fans. It’s been a huge and unforgettable delusion. Simple examples to reiterate that all of our work revolves around fans. Without fans everything collapse. Every athlete, artist or manager working in our business must never forget it. And this has been my attitude since the first day I became Managing Director at RCS Sport.

I love that you understand the fan experience – it seems to me that a lot of people connected with the sport have forgotten that they were once fans too. I read your recent piece on the Outerline and whilst I think you have interesting things to say about economic stability for the sport, I don’t follow teams – if I wanted that kind of fan experience I’d follow football! What would you do to keep on board ‘old school’ fans like me who follow the sport as a whole?

I don’t believe in old or new school. Cycling you love is the same I love. 200 colourful riders riding in marvellous places through two wings of crazy fans. What I miss is enjoying watching all the top riders in all the top races. I want to see all of them, always in the race. So we need a balanced calendar and a regulation that pushes teams to ride top races always with top riders.  In a few weeks we will see some of the top riders in Australia and some in Argentina? Sometimes less is more.

I believe strong teams can easily engage new fans. It’s not my idea. I just see what happened in UK with Sky and in Australia with GreenEdge. These are very good examples and I just copy successful case histories. Some fans will follow their favourite team, some others will follow their favourite rider, some other just will follow the race and the panorama. All together will enjoy cycling. Don’t you think?

 You were close to signing an historic TV rights sharing agreement for the Giro – did that ever happen? How would you fix the problem of financial stability in the sport?

Problems of procycling are many and we could talk for hours and hours. The shadow of doping, a World Tour regulation with no sense and a calendar totally anachronistic are the main problems which must be added to all the problems of women pro cycling that unfortunately is almost no considered.

The economic balance between the stakeholders is important but it’s more important to understand how to make the pie growing, otherwise we go on with the “battle of the have-nots” and no one can benefit from it.

We must not forget that we’re still talking about a sport where our top team, Team Sky reaches just 350k “likes” on Facebook and out top star Cavendish is around 300k. Nothing compared to other sports. Manchester United is around 38 million likes, Federer and Nadal more than 12 million each.

If cycling is unable to build a credible model that will attract millions of new fans there will not be any money to be shared.

Last years I tried to close that famous deal with JV, What we are speaking about was just a very simple deal. Nowadays revenues from television rights of the Giro are already redistributed to teams in the order of 40%. That’s pretty fair. But if the RCS tv revenues were going to grow in the next future (and that was my main goal since my first day at RCS Sport) the amount allocated to the team – according the contract as it is today – would not change and therefore their percentage would be lowered.
I proposed to teams to continue sharing with us the future growth of tv revenues in exchange for their help in growing those revenues: top riders and some exclusive rights to improve the quality of the tv production: i.e. footage in cars/buses, audio communications). It seemed to me a win-win model, JV agreed but something went wrong within AIGCP and the agreement fell through.

Gerard Vroomen wrote recently that he had to explain to the Cervelo team the connection between sponsorship and rider’s wages – he felt they lived in a bubble, that there was a total disconnect between what they did and where their wages came from. Why do you think a ‘win win’ deal might have fallen through?

 I believe they were just afraid to “sell” their rights (footage in cars/buses, audio communications) for uncertain revenues. But right now there is no cake to share. And if cycling keeps on going as it always did, there will be never a cake to share.

 You’d spent a decade in the marketing department before taking over as race director – what do you think went wrong at RCS?

I have no idea. In September we were working well as always, running the last events of the year and planning and designing the future. We were advised by the head of the group that there were administrative and financial problems in RCS Sport and that an audit was ready to start. Then I was suspended and fired without knowing anything else. I have repeatedly asked for an explanation, but I never received a response. RCS ended in a silence that I did not hesitate to define “deafening”.

Can you explain the set up of RCS Sport as part of the bigger RCS Media operation?

I just can say that RCS MediaGroup is a listed company and RCS Sport is 100% participated in RCS Mediagroup. Being a participated of a listed company means that the link between RCS Mediagroup and RCS Sport is strong. I can call it: total control.

You described the situation to me as ‘Kafkaesque’ – in what sense?

When we spoke, I still was suspended from work. I could not work, but at the same time I had to pay loyalty to my company. Isolated with the outside, I had to wait in silence while my personal and professional reputation was disintegrated. I was a caged tiger. I could not go forward or backward, stuck in midstream without knowing why I was finding myself in that absurd situation. With RCS who kept silent and acted as if I did not exist and I had never existed. I was totally deleted. Everything was (and still is) so paradoxical.

What do you mean by ‘paradoxical’?

Paradoxical is being fired with no explanations after 14 years of excellent results and after the excellent job we did on the Giro that has never been so healthy. How would you call it?

Some of the big Italian races have been losing money for some years now, haven’t they – Lombardia and Tirreno-Adriatico have both been reported as ‘under threat’. Has this impacted on the problems at RCS?

I do not see any connection with the scandal. Our racing all enjoy good health. Some are better (Giro, Sanremo and Lombardia) other less well (Tirreno, Strade Bianche and Roma Maxima) but overall the cycling department has always been very strong from the economic point of view. And all the projects and work of recent years was bearing fruit.
Over the years we have continued to invest, such as the HD production, to improve the quality standards of each property, and the results are still in front of us.

RCS have a variety of interests in football and there have been huge match fixing scandals in Italian football of late. Initial reports of the problems at RCS were simply that there was a 13 million euro hole in the budget. Why did cycling become the focus of investigation?

Difficult to answer because I know nothing about the audit and investigation. Certainly I do not see any connection with the scandals in Italian football and the scandal in RCS because RCS Sport has always worked in football only as an advisor on sponsorship rights. No links.

So the problem was in RCS Sport not necessarily cycling – I’ve heard rumours that the money in fact went missing from the Milan marathon. Surely RCS sport is small enough that the loss should have been noticed?

They are just rumours. The Milan Marathon was in good healthy too. The problem is that nobody knows what happened. RCS did a “two months audit” but they didn’t tell anybody what they understood. Since the very beginning of the scandal RCS have never spoken. The only clear thing is that I have no job anymore and I have to wait for the police investigation to make things clear.

Angelo Provasoli Has claimed that it was your responsibility to make sure something like this did not happen. What could you have done differently?

RCS is a big company, listed on the Milan stock exchange, with thousands of employees, cross responsibilities and many levels of control. Before my dismissals RCS wrote to me that I was supposed to avoid any irregularity in the company. When I asked RCS to provide some evidence about my responsibilities their last who I was and I had no explanation provided evidence that the response was that my request was “specious”.

All this is incomprehensible to me and for this I put my trust only in police investigation and authority court that will have to understand and explain the meaning of all these events, including the heavy defamation that I have suffered.

If you should have known what was going on, shouldn’t your predecessor Angelo Zomegnan also have known?

We still talk about something I don’t know. RCS did the audit while I was suspended. May be they should answer you.

What kind of support did you have at RCS and what more could they have done to avoid this situation arising – for example, did they ever ask you to turn a blind eye to wrongdoing or did you report any wrongdoing that was ignored at the time?

Until the end of September all regularly proceeded with the utmost transparency. No one has ever asked me to do strange things, nor is there’s never been needed. For us, transparency and ethics have always been a showpiece. All in the light of the sun.

It seems though that there are a lot of chiefs in the RCS sport set up. Why do you think the decision was made to split the role held solely by Zomegnan between yourself and Mauro Vegni? And why has Vegni not faced disciplinary action?

A lot of chiefs? Split the Zomegnan’s role? I believe it’s the opposite.

When Zomegnan left I was asked to cover his position by myself. For two years I’ve been Managing Director and Director of cycling at RCS Sport and I’ve tried to do it with good attitude and good results.

Vegni was the “sport and technical director” at the cycling department during the Castellano age and during the Zomegnan age and he still was during the last two years. May be the only difference is that I love working in teams and I like give more responsibilities, more autonomy and more visibility to those who work with me.

About the disciplinary actions, I suggest you to ask to RCS…

What do you think happened to the 13 million?

I have no idea. RCS is a listed company. All it does is logged, the processes are defined so there are control mechanisms. I only know that today I’m without a job, my personal and professional image has been  devastated and I know that I’m not able to explain to my kids why their dad who has always been respected and loved by everyone today is at home without a job.

Do you think RCS simply used this issue as an excuse to get rid of you? Why might they have wanted you out of the organisation?

I don’t know. My job was much appreciated.  May be you should ask an interview with RCS…

Finally, what are you doing now? Have ASO/Unipublic come calling – the Vuelta could certainly use your expertise.
I want to go back to work as soon as possible and I’d like to stay in cycling. Where?  Everywhere in the world there is need of professionalism and enthusiasm. For ASO professionalism and enthusiasm are not lacking and they continue to achieve prestigious results to prove it. In ASO, there are dozens of excellent managers and probably they do not need me, but if it came a call, for me it would be an honour and I would go running.

Where do you see your future in professional cycling?

 Everywhere somebody cares about fans.

I sense you found some of my questions frustrating.

I was not frustrated with your questions; your questions are my questions. What’s happened at RCS in the last years? Why was I suddenly suspended? Why didn’t RCS protect me and let my professional reputation be disintegrated? Why after 14 years of honest work and excellent results did they put me in the middle of a street? Why was anybody brave enough to talk to me and look at me in the eyes?

There is nothing to do. We just need to be patient and may be one day we will find out who stabbed me in the back and why they did it.

19th December, 2013. RCS Sport announce the appointment of Paolo Bellino as general manager. Mauro Vegni will continue as technical director of the Giro, having survived the cull. Did RCS Sport see the opportunity to get rid of a man with a stated ambition to globalise and modernise the jewel in its crown, who was ready to sign away a share of the TV rights to the Giro? Should Acquarone have known what was going on and be held responsible – does the buck stop with him or with RCS multimedia? There’s still the question of the other 3 million euros missing from elsewhere in RCS. One thing is certain, until RCS choose to announce the results of the audit into those missing millions, none of us – including Michele Acquarone – will know for sure.

 

 

 

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