Giro d'Italia about to be sold?

Milano Finanza reports RCS Media Group is under pressure to cut huge debt, RCS Sport denies

A report in Italian financial newspaper Milano Finanza has suggested that RCS Sport, the Italian company that organises the Giro d'Italia, could be sold in an attempt to shore up the finances of parent company RCS Media Group.

RCS Sport is the second biggest race organiser in professional cycling after Tour de France organiser ASO, and so any eventual sale could significantly change the balance of power amongst leading race organisers in professional cycling. As well as the Giro d'Italia, RCS Sport organises Milan-San Remo, Il Lombardia, Tirreno-Adriatico, Strade Bianche, and new races the Dubai Tour and the Abu Dhabi Tour. RCS Sport is also involved in other sports such as basketball, running and football.

Milano Finanza makes its claim on the front page of its print edition, confirming that RCS Media Group is facing a series of financial deadlines that could force it to sell RCS Sport and the Spanish media group Unidad Editorial, which publishes sports newspaper Marca and other titles. The board of RCS Sport is set to meet on Thursday to approve the company's latest trading accounts which will confirm debts of €440 million. Milano Finanza suggests that the sale of other assets could be considered.

The high amount of debt is set to trigger the need for further refinancing, but it seems neither the banks or current shareholders are willing to invest further resources in RCS Media Group, leaving the sale of key assets as the only remedy. RCS Media Group has already sold the iconic offices of its newspapers in the centre of Milan and recently sold its book division for €126 million, reducing its debt from €526 million.

Previous CEO Pietro Scott Jovane had built a business plan around key newspapers Corriere della Sera and Gazzetta dello Sport, and RCS Sport. However, he has recently left the company, with replacement Laura Cioli yet to announce her plans.

RCS Sport told Cyclingnews it had no comment to make concerning the reports in Milano Finanza, believing there is no truth to it.

RCS Sport is profitable thanks to the Giro d'Italia, and its income and influence has risen thanks to the creation of the Dubai Tour and the Abu Dhabi Tour. The company was rocked by the discovery of a huge misappropriation of funds in 2013, with a reported €16 million disappearing from bank accounts. A police investigation is still ongoing but RCS Sport has always refused to discuss details of the suspected fraud. Former head of RCS Sport Michele Acquarone was sacked after the misappropriation emerged but has always denied any wrongdoing and is locked in a legal battle with RCS Media Group to try to clear his name.

Based on current turnover and profitability, RCS Sport could be worth an estimated to €80 million, making it a relatively low-cost acquisition.

In the past, ASO has been linked to a possible acquisition of RCS Sport, which would give the French company a dominant position in professional cycling.

ASO's parent company, Éditions Philippe Amaury, recently sold the struggling Le Parisien/Aujourd'hui newspaper to luxury brand LVMH for a reported €50 million. According to a statement quoted by Le Parisien at the time of the sale, the Amaury group CEO Philippe Carl said he wants to "accelerate growth of its sporting activities around its subsidiaries and ASO Team in a dynamic market."

During the summer, ASO fought hard against the introduction of a series of reforms of professional cycling which could lessen its influence on the sport, while RCS Sport opted for a more diplomatic role and was in favour of the reforms. ASO threatened to pull its races from the 2016 UCI WorldTour calendar. After long negotiations and debate within the sport the reforms were agreed by the UCI Management Committee at the world championships in Richmond with ASO’s races listed on the calendar.

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