Italy's football dynasties to face penalties as clubs go under spotlight

The car horns were blaring again until the small hours on Tuesday night as Italians celebrated their team's last-gasp victory over Germany in the semi-final of the World Cup.

So much for a crushing and demoralising football scandal. While prosecutors at a sport tribunal in Rome press for heavy penalties against some of the world's most famous clubs, the fans seem to have lost attention. The players, many of whom are signed to one of the four top clubs threatened with demotion and heavy financial stress, are not, for now, showing signs of worry.

Carlo Carnevale, a strategy professor at Milan's Bocconi University, said: "We'll forgive and forget everything now that we've beaten Germany." But even without amnesia generated by success on the pitch, the fall-out from the scandal seems likely to be contained, at least as far as players and club owners are concerned. Some of the largest names in Italian business are involved but their reputations do not seem at risk.

This is in contrast to scandals at the dairy company Parmalat, which weighed heavily on senior bankers and business people, and to the troubles in the banking sector last year, which saw arrests of executives and the resignation of Antonio Fazio, governor of the Bank of Italy. Italy's successful business families have often owned football clubs without actually running them.

The Agnellis founded Fiat and are the controlling shareholders of Juventus. More recent arrivals at the top of business have followed the tradition. The Tanzi family were in charge of Parma, until the collapse of their Parmalat fraud-ridden dairy empire. Silvio Berlusconi, Italy's richest man and former prime minister, is chairman of AC Milan. Diego Della Valle, chairman of luxury fashion group Tod's, is the owner with his brother of Fiorentina.

Mr Della Valle told the Financial Times recently: "We make money here [at Tod's]. In Fiorentina we lose money. It's our family's Sunday hobby. We like soccer." Allegations emerged in May that club officials and match officials, together with others, were part of a corrupt system which saw improper selection of referees and others. The match officials are being investigated for behaving less than impartially on the field. Former executives at Juventus are alleged to be at the centre, and Fiorentina, AC Milan and Lazio are the other clubs involved.

But it is a scandal of hitherto unknown middle men, whose actions have not been traced definitively either up to the top or down to the players. Giacomo Vaciago, an economics and politics professor at Milan's Catholic University, said: "In this scandal the establishment is well protected, it is the middle men who were in charge while the top was distanced by two layers of command." Mr Della Valle at Fiorentina seems closer although it has not been made clear what he is alleged to have done. He recently spent nine hours with investigating magistrates, and said: "We are calm . . . Fiorentina's involvement is a mistake and we are ready to explain that we are a real victim." Tod's share price is almost exactly where it was in May when the scandal broke.

Even if reputational damage is limited, the financial penalties on the clubs could still be very heavy. Juventus, which is only a tiny percentage of the Agnellis' portfolio, could even be driven to extinction, some people close to the club have warned. The consensus is Juventus could probably survive a drop of one division. Sponsorship and television deals would be hurt, players might leave, and there would be a lack of lucrative European club football. But the club would be expected to bounce back.

Stuart Whitwell, joint managing director of Intangible Business, a brand valuation consultancy, said the cost could be over €200m (6m) over two years.

But prosecutors surprised the club by calling this week for a demotion of more than one division and that may prove fatal. Some, like Mr Della Valle have expressed the hope that, just as in other scandals, the system may emerge much changed for the better. Juventus has cleared out its entire board. But it has also lost Fabio Capello, its very successful coach, who was yesterday unveiled as the new man at Real Madrid.