Make way for the new sugar daddies of Maltese football

Why is Maltese football attracting interest from investors abroad?

The twilight of the 'big man' presidents that characterized Maltese football, has seen new "sugar daddies" pumping thousands into clubs, the latest being Riccardo Gaucci's takeover of Floriana FC.

But according to the Malta Football Association's chief executive Bjorn Vassallo, this is only the start for a new wave of foreign investors that will make Maltese football clubs autonomous and not dependent on local entrepreneurs.

"The recent increase of foreign investors is a step in the right direction towards making football clubs more competitive and able to compete on a European front. When they subsequently become companies, football clubs become financially independent - a crucial step in today's financial world," Vassallo said.

"Following the financial crisis, clubs bankrolled by one person have been treading a fine line, as a sudden change in the owner's riches could lead to their demise. It has now become clearer than ever that Maltese clubs can no longer depend on sugar daddies but must be self-sustainable," Vassallo insisted.

The football association's CEO said the MFA was committed to make the rules regulating company clubs more "flexible".

Earlier this month, a group of Italian investors spearheaded by Riccardo Gaucci, the son of former Perugia owner Luciano Gaucci, assumed control of Premier League club Floriana FC. Gaucci himself was appointed club president.

The news was met with trepidation by Floriana supporters at the AGM that confirmed the Gaucci bid - the voters were split down the middle on whether to accept another bid from English marketing expert Mike Farnan, but the club's committee forced the issue when Gaucci came forward with a €150,000 "down payment" to pay off salaries. His bid for takeover was instantly carried by the swayed voters.

Supporters who are suspicious of the Gaucci bid say the takeover is a risky move, given that the Italian entrepreneur is seeking to pour up to €18 million into a commercially redeveloped Independence Arena, where the club has its football ground.

Gaucci himself is no stranger to controversy: After Perugia became bankrupt in 2005, an Italian magistrate launched an inquiry on his father Luciano as well as his sons Alessandro and Riccardo himself. Luciano Gaucci escaped to the Dominican Republic where he stayed four years on hiding. He was subsequently condemned to a three-year suspended jail sentence. Gaucci returned in Italy on March 2009.

Since winning its last premiership title in 1992 under the presidency of Anthony Grech Sant, Floriana has been unable to secure a stable financing. Its latest president was Steve Vaughan, a boxing promoter. His tenure has been short-lived.

It's not only Floriana supporters who are sceptic about the move. Other Maltese clubs - notably Hamrun Spartans FC - got the short end of the stick in their deals with foreign investors. Drawing comparisons with the booming football interest in Cyprus, sports journalist Christian Micallef says he is suspicious about the increase in foreign investment in Malta, because Maltese football in itself does not offer any "attractive" quality for investors.

"There is nothing really interesting that makes Maltese football attractive for foreign investors so I am very sceptical about the increasing interest, more so because in the past, many clubs and foreign investors often ended up in arms and with a bitter taste in their mouth."

Micallef argued that there have been cases where foreign investors only came to Malta for the money and that when things went wrong, the clubs ended up worse off.

"The MFA and the clubs themselves must make sure that the investment is in the best interest of the club. A thorough due diligence test must be carried out and past cases must serve as an eye opener for clubs," Micallef insisted.

On this part, MFA CEO Bjorn Vassallo was quick to alleviate worries that foreign investors are here for the money only.

"Prior to giving the green light for any investors, be it foreign or local, the MFA conducts a due diligence test. This analyses the financial sustainability of the investors, whether it can deliver on its promises and most importantly, whether the future of the football club itself is in jeopardy," he said.

The due diligence test is however a bone of contention for sports journalist Sandro Micallef, who argues that this must be done by an independent auditing company and not by MFA officials.

"In an effort to ensure transparency, and to safeguard the interests of all stakeholders, the due diligence test must be conducted by an auditing company on all clubs, irrespective of their owners," he said.

Micallef was also sceptical and "perplexed" by the increase of foreign investors, as he underlined that "no one is here for charity."

"Unfortunately some clubs were left ruing their decision to allow their takeover by foreign investors, as these were often done for business reasons rather than personal pride," he said.

"At Floriana, after Gaucci pledged that he would not ask for this money back, this is probably a welcome sight for Maltese football, especially after certain foreign investors requested their money back when things went bad," Micallef argued.

In the wake of Gaucci's investment, Bjorn Vassallo is envisaging more foreign investment, saying financial sustainability could propel Maltese football into realising the MFA's dream: having a semi-professional league and for clubs to be at par with their European counterparts.

With Italy's proximity to Malta and the fact that several Italian footballers have already played in Malta, Vassallo says it is "no surprise that more Italians are opting to invest or coach in Maltese football."