Parma Sham

When Europe's soccer clubs began to be turned into companies, almost like any other, the colourful characters who earn their livings on and around football pitches could be forgiven for feeling a bit rueful.

Getting involved in a world of balance sheets and shareholder meetings put their clubs' accounts on a solid footing. It opened the way for better stadiums and higher salaries.

But it also meant that men in sheepskin coats with sports cars and wallets stuffed with cash would gradually give way to others in grey suits with shiny limos and portfolios full of documents. And it seemed to presage an altogether more staid era for the game.

Well. Tell that to the fans and players of Italy's serie-A side, Parma, bracing themselves today for a shareholders' meeting to decide their club's fate.

Parma's situation is rather more than colourful. It is surreal.

The side is doing well. It is near the top of what is widely regarded as the world's most testing football division. Yet it faces ruin - probably more gradual than sudden - for reasons that have absolutely nothing to do with the standard of its play.

Though football's finances may have appeared to undergo a transformation, the fact is that many sides remain owned, in effect, by a single shareholder. Nowhere is this truer than in Italy.

Parma, for example, was the plaything of Calisto Tanzi, the founder of the milk and biscuits firm Parmalat, which owns almost 99% of the club's shares. Mr Tanzi provided it with a beautiful new stadium and the money to buy some of the world's best players.

But, in December, it emerged that his global food group was rotten to the core and now the administrator who has taken it over, Enrico Bondi, must decide whether to let Parma go bankrupt or find a way for it to stagger on to the end of the season.

The club notched up losses last year (of €77m) that were greater than its equity and, under Italian law, a club with losses in excess of its equity must either declare itself insolvent or secure a new injection of capital. Supporters were hoping that the new management of Parmalat might agree to convert an outstanding loan into shares, so that everything could carry on more or less as before until a buyer for the club could be found.

But, last night, Italy's industry minister said he had given Mr Bondi the go-ahead to sell up to three Parma players as a way of making good the shortfall. That could strip the side of some of its best talent and make it considerably less attractive to prospective buyers, who anyway seem to be in pretty short supply. Yesterday brought the third denial of interest from a big Italian business group.

As the investigation continues into the vast hole in Parmalat's accounts, it is becoming increasingly clear that Calisto Tanzi used his group for purposes that had nothing to do with business, but also that he used Parma for purposes that had nothing to do with sport.

His former chief financial officer told investigators earlier this week that large sums were diverted secretly to Parma football club. Some of that money may have helped secure the side's successes, which include two UEFA cups.

But, at the same time, prosecutors are looking hard at a string of transfers that they suspect were agreed as part of a trade in favours with the former head of another food group, Sergio Cragnotti of Cirio, whose business also went bust last year. Mr Cragnotti was chairman of the Rome-based club Lazio.

Among the players involved are Chelsea's Argentinian striker Hernan Crespo and midfielder Juan Veron, and the former Italian international Dino Baggio. According to reports this week, investigators are particularly interested in the movements of footballers and cash after 1998 when Cirio on the one hand and Parma on the other both found themselves in financial straits.

Lazio took, first, Veron in 1999 (for £18m) and then Crespo in 2000 (for £35.5m). Veron was sold at a profit to Manchester United two years later. But Crespo's price tag in both his subsequent moves (to Inter and then Chelsea) was less than half what Mr Cragnotti had paid for him.

On the other hand, his business, Cirio, had profited in the meantime by his sale, at a handsome price, of the main Rome dairy works to his friend, Calisto Tanzi.