Cause “it’s (expletive) Rome": Pallotta on why AS Roma, American soccer, USWNT
On the fourth anniversary of his installation as president of AS Roma, Jim Pallotta remains as fired up about the project as ever.
The American executive, 58, has a plan to lift Roma into the Top Ten clubs in Europe once i Lupi finally move into their own stadium, finding a critical stream of revenue.
He’s navigated the skepticism of Italian fans to raise Roma’s profile while pushing Serie A in progressive directions, implementing the lessons from a life as one of the world’s top hedge fund managers into the game of world football.
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In an exclusive interview with ProSoccerTalk, Pallotta discusses all of that as well as $100 million transfers, the USWNT’s pay rate, the future of soccer in America, and what he’s learned from the Premier League.
PST: It’s been interesting to monitor your acceptance by Roma’s faithful. You definitely knew that it would be a challenge as an American owner of a massive European club, but was it as challenging as you expected?
Jim Pallotta: “Way more. And it still is challenging, frankly. It’s just a very different sport in Europe, as you know, in how things are done than being a partner in the Celtics or any other sport in the U.S.
“At the end of the day it’s rewarding but some things we’ve done pretty well, some things we’ve made mistakes on, some things we’re doing resets on. Net-net, from the outside, most people would think we’re doing a really good job but I don’t have a lot of patience. I tend to dwell on the mistakes and the things that we still have to do than any of the things we’ve done that’ve been successful. It’s the way I managed hedge fund money for 25 years. I could have five stocks having a great day and one that wasn’t and I’d be p***** at myself.
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“There are five or six levers that we haven’t even begun to pull in terms of the revenue side that gets us up there. We’re one of the top if not the fastest growing team in social media and digital media. We’re certainly leading the charge in terms of technology and things that we’re doing that no other club have done yet. We streamed a game live on Facebook, first team to that. Periscope, Twitter chats, Facebook chats, Medium and long format stories for our players and coaches. Using Google glasses and streaming it on YouTube and probably a dozen other things. We’re doing a lot of interesting stuff but we’ve got a long way to go, on merchandise, on stadium, on the entertainment district, I could go on and on, but the plan’s coming together.”
PST: Another way you’ve been out front is the devotion to analytics, something near and dear to your family as your son runs a company Tag that’s helped the club along.
JP: “We had an investment in his company Tag, but it’s one we use once in a while. We’ve built-in our own internal data analytics, both in Rome and Boston. We have some pretty sophisticated stuff that we’ve built on players, on performance on training. We just hired a couple more senior, not really data scientists, but higher end professors from a couple of schools where we respect what they’ve done.”
PST: Last year at BlazerCon, Roma execs discussed how Serie A would learn from the success of the Premier League. What have you taken from the PL?
JP: “What they do well, the Premier League, is the league is run well as a league. First and foremost they figured it out a dozen years ago or so. They run it well, more in line with U.S. leagues. Not quite the same but it’s 100 times better at the league level. That’s changing at the league level in Serie A and La Liga. It just has to.
“On the domestic TV front, Serie A has a really good TV deal. It’s the international one that’s not been a good one and La Liga just went up to $600 million and that’s way below the Premier League. There’s a massive opportunity in the next 10 years, let’s say, in Serie A, for the league TV rights to go up 10 times.”
PST: Roma isn’t waiting on the league, though. Your branding and marketing has been aggressive, and you have the advantage of having a unique and memorable color scheme and logo.
JP: “I’ll give you an example. There’ve been some studies that say the Roma colors are the most recognized colors in football in the world. Our designs we’ve been doing with Nike, we’ve been getting votes as one of the Top 100 uniforms. Copa 90 yesterday voted our away uniform the No. 1 uniform this year. I made us put on that wolf logo versus Romulus and Remus and people were going crazy. When I walk around a lot in the United States, if I’m playing golf and wearing a baseball hat, I’m either wearing a Roma hat with the colors or the one with just the wolf and everybody asks me, ‘What is that? The wolf head?’
PST: So I grew up a Celtics fan. We have that in common, but in Buffalo we learned to hate (Boston Bruins forward) Cam Neely, though I secretly loved him as a hard-nosed, nasty, but skilled player. Not necessarily the guy you expect to be on the board of AS Roma. What were you looking for in leadership when it comes to Roma’s board of directors?
JP: “The whole thing of putting the board together is people who could help us as opposed to getting a big name on there. Cam’s (pictured below) a good friend of mine for a long period of time, president of the Bruins, so he brings the sport side of it. Charlotte Beers is the original Madwoman and is great in terms of how we think about marketing and branding. Stanley Gold ran the Disney family, has a lot of experience in real estate and branding. John Galantic is the COO of Chanel. As we branch out our licensing business, John will be really helpful. The board has been put together with that thought in mind, versus just putting names on a board.”
PST: Let’s take a dive into American soccer. What’re your impressions of the game here?
JP: “You can split it up a whole bunch of different ways. The women’s program obviously has done a hell of a job in terms of how competitive they are.
“When I look at the youth program, they are getting better and better, and one of my guys Alex Zecca in the last 2 years has probably put together the best academy program of any European football team in the United States. We have 10 major academies, with weekly detailed programs that they all follow. We have coaches coming over looking for kids that we can bring back in Rome. Last week in Harvard we had four days of a number of kids coming in from around the country, and I think there are four kids we are bringing back to Rome to work and tryout. Kids from 12 years old up to 18. We kinda believe that we’re going to get a good look at a lot of the best kids in the U.S. that eventually can play in Europe. Those who are the best will because of the disparity of money and play today is just so different.
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“I think Don Garber has done a spectacular job with the MLS, but I don’t know how far it goes with European football. When I talk to a number of people who are owners, or looking to be owners -- and I’ve looked myself too -- it’s difficult to see how the monetary side of it closes, even in 5-10 years. In Europe, I think it actually widens.
“The TV contracts are just getting bigger and bigger versus the U.S. The ratings where they are, unless they move up a lot, and they aren’t going up because there are so many games being shown of European football. How many games are you going to watch? They’ve done a spectacular jobs building nice stadiums like in Kansas City, and you have a great local crowd, whether it’s Seattle, Portland or Kansas City, but it’s more localized versus global or even national. They’ve done a great job, but the numbers are gonna speak for themselves and we’ll see.”
PST: And beyond the TV numbers?
JP: “When the sponsorship deals for individual teams, or the merchandise sales, the TV contracts, or a stadium with 54,000 versus 22,000. Or if I have an entertainment complex that is a significant revenue driver, how do you get MLS teams to compete monetarily with European teams.
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“Just look at what Barcelona, Man Utd, and Real Madrid are bringing in. And we haven’t even touched the surface on TV deals with South America, which I think is going to take a while, Asia, which is massive potential, India, which everybody forgets is another 1.2 or 1.3 billion people and they want to make football huge, and Africa which a lot of great players are from. You haven’t really scratched the surface on transmissions to games in America. When you throw in another multi billions of people watching the games, there’s a lot of revenue potential, still in football.”
PST: When I spoke with Coach Spalletti last week, he spoke of having to sell a $100 million player because you could buy 2-3 very good players with that. It struck me that even a few years ago, we’d be saying 5-6 players. It’s not surprising that transfers have gotten this far, but what’s your take from a high level?
JP: “There are clearly some clubs that have decided that spending is okay with them in large amounts. In the case of Juventus, it looks like they’ll sell Pogba. Net-net, a neutral trade. I don’t think Juventus would’ve spent that much on a striker if they didn’t have Pogba behind it. Some teams have done a good job of putting together a really good team without spending stupid amounts of money.
“We won the scudetto in the U-18. I went and saw our 9 and 10 year olds and I was blown away at their potential. They are playing Barca-type passing styles at 9 and 10. The real goal is to build out a good internal program on one side to find a number of 16, 17 and 18 year olds who can play with you. And we’re spending a lot more time in building our data capabilities and our relationships on finding these players young here and a bunch of other places. Not just on the data side, but people with 30 years of football experience.
“Look at this year’s team, we’ve got Umar Sadiq (above center) and Ezequiel Ponce who are 19-year-olds. We’ve got an 20-year-old from Senegal (Moustapha Seck) who we think is gonna be unbelievable. We’ve got an 18-year-old right back (Abdullahi Nura) that unfortunately tore his knee up a little but in a year or two has a big career. We have a 22-year-old Federico Ricci that’s gonna get time at right forward, Leandro Paredes who we loaned out and now will fight Daniele De Rossi for starting time. Gerson who we took from Brazil, at 19 looks really good. You have to have that combination of experience, both externally and internally, and you’ll have some players who would be worth a lot.
Roma opens its 2016-17 Serie A campaign on Aug. 21 at home to Udinese, and will join the UEFA Champions League playoff round on Aug. 16 or 17.