Pandemonium in Parma – How a club went bankrupt in a decade. Twice.

One of the most romantic stories in 1990s world football was the rise of Parma.  But then they followed up their historic success with two bankruptcies in as many decades. Debojyoti Chakraborty looks back at how the club was used as a pawn in an elaborate mudslinging game.

Conventional wisdom says that lightning does not strike twice. However, things might be different if you are in Parma—a bizarre land of financial mismanagement in football where the unbelievable has become a routine affair.

Parma is an Italian football club based out of its namesake city. In a country that resembles a boot with a ball, Parma can be found somewhere near the thigh. With a population of less than 200,000, the city has been historically recognized as one of the most sophisticated towns in Italy. The opera house Teatro Regio (comparable to Milan’s iconic La Scala), the town’s main square Piazza Garibaldi, parmesan cheese, the pasta maker Barilla,  the glassmaker Bormioli—Parma has everything befitting a nice, small, old-fashioned, wealthy, and conventional city. Established in this city that is famous for music and architecture, it’s no wonder that Parma, the football club, is renowned for its aesthetically pleasing and attractive style of play. The club is very proud of its academy which has produced quite a few eminent players for the Azzurri. Over the years, each and every manager in charge of the club had the dual responsibility of playing attractive football and developing young players. Even during the first real catastrophe in the club’s history in 2004, Parma had five of the Italian under-21 team players with them. Unfortunately, though, this very academy has made Parma a hatching ground for other Italian giant clubs. The most famous (and recent) player from their youth ranks—Gianluigi Buffon—was also snapped up by Juventus after establishing himself in the national team while playing for Parma.

Former Parma goalkeeper Gianluigi Buffon celebrates victory in the 1999 Coppa Italia Cup Final.

The club’s history can be traced back to July 1913 when the Verdi Foot Ball Club was established in the honour of legendary opera composer Giuseppe Verdi’s centenary. Later that December, most of this club’s players were brought together to give birth to Parma. Lack of direction from the club owners, economic struggle in pre-war Italy, political unrest during the World War era, and insecurity surrounding a football career among the local youth forced Parma to remain in the lower leagues for more than half a century. A bankruptcy, a takeover by a local club named Associazione Calcio Parmense, and a couple of legendary coaches in their formative years (Cesare Maldini and Arrigo Sacchi) still did not do much as Parma oscillated between Serie D and Serie B till 1989.

After being sidelined for most of its existence, Parma suddenly got its much awaited shot at fame in the 1990s. Much of this success was under the financial supervision of Italian business tycoon Calisto Tanzi. Parma witnessed a change in fortune as Tanzi’s ambitious plans first increased the capacity of their iconic and age old Stadio Ennio Tardini (Il Tardini) from 13,500 to 29,050. Better infrastructure, lucrative wages, and millions invested by a persuasive president attracted established coaches and famous players to I Gialloblù (The Yellow and Blues). Argentinian Hernán Crespo, Parma’s all-time leading scorer; Lilian Thuram, the most capped player from the French national team; Faustino Asprilla, a part of his own country, Colombia’s, golden generation; Italy’s 2006 World Cup captain Fabio Cannavaro—an ensemble cast was unleashed and Parma’s “golden generation” had arrived.

To be honest, these players were not really superstars when they arrived at the club. It is a testimony to the scout team of Parma that they managed to find these gems from different corners of the world. The results were there for everyone to see. Three Coppa Italia, one Supercoppa, and a narrowly missed Scudetto within a decade elevated Parma to a powerhouse club in Italy. The accolades were not won on their familiar backyard only—I Crociati’s (The Crusaders, derived from the cross in their crest) superb run included a couple of UEFA Cups (now known as the Europa League), one European Cup Winners’ Cup and one European Super Cup. These continental exploits made Parma the fourth most successful Italian club in Europe—behind only the twin clubs from Milan and Juventus. However, tragically, all of their major honours came in this short period of ten years between 1992 and 2002.

To be honest, these players were not really superstars when they arrived at the club. It is a testimony to the scout team of Parma that they managed to find these gems from different corners of the world.

Parmalat, the club’s parent company and multinational Italian dairy and food corporation, grew alongside the football club. It is noteworthy that the club was an international travelling advertisement for Parmalat in the 1990s. As the company started expanding into Eastern Europe in the mid-90s, Bulgarian striker Hristo Stoichkov, a former Ballon d’Or winner on the last leg of his career, was bought from Barcelona for an astounding fee of £10 million (€12.8 million). Similarly, players from Ivory Coast and Ghana were signed as Parmalat set its eye on Africa.

After setting their foot in Serie A for the first time in 1990, Parma managed to hang on to the top-six list for an incredible 12 long years. This was the era when all Italian top clubs were run by billionaire businessmen and their aspirations saw their clubs vying for top international honours. This was the era of Seven Sisters as Juventus, AC Milan, Internazionale, Roma, Lazio, Fiorentina and of-course Parma came together to form a holy grail of football—ironically not too far from the Vatican.

Sadly, the ironies didn’t stop here. Il Tardini, one of the oldest stadiums in Italy, was built in 1922 coinciding with Arditi del Popolo (People’s Champions)—a watershed moment in Italian history—the first resistance against Fascism in Italy. Its expansion, however, was funded by Parmalat, which collapsed in 2003 with fraudulent charges worth €14 billion ($20 billion; £13 billion) in what remains Europe’s biggest bankruptcy. The scandal is often referred to as Europe’s Enron.

Parmalat scandal shocked the entire nation.
Parmalat scandal shocked the entire nation.

It was 10th January 2004. Parma were facing Inter in a high profile home match. But neither the players nor the spectators seemed interested in the match. How could they be if the entire board of presidents had resigned just 24 hours ago amidst speculations of a multi-billion financial scandal? Parma and its fans had gotten used to flexing their monetary muscles for a decade now. But as the saying goes, if something is too good to be true, chances are that there is something wrong. In April 2004, Parma were put up for sale. Tanzi was fined €10,000 and was handed a six months’ ban from football for false accounting of Parma in the 2002–03 season. Fans, who were once jubilant at the prowess of a sugar daddy, were left to curse their luck. Soon, Tanzi was arrested and he subsequently admitted to diverting about €500 million from Parmalat, a company owned by Tanzi, to family companies. He was sentenced to 18 years in prison. Parma, a mere pawn in the game, was left with nothing but huge debts, anxious players, staffs and supporters, and a very uncertain future.

But officials at iI Ducali (The Duchy Men) cannot blame everything on their notorious president. There were numerous obvious signs of wrongdoing that were ignored by all. Fiorentina were sent to the fourth tier of Italian football far away from the glamour of Champions League once financial maladministration of their owner, film mogul Vittorio Cecchi Gori, led them to bankruptcy in 2002. Things were so bad that even after selling top players like Rui Costa and Francesco Toldo, the club from Florence could not pay their players’ wages. Lazio also had to go through financial administration around the same time when their long-serving president Sergio Cragnotti had to leave the club. The reason? Another Italian entrepreneur, another financial scandal, another club bearing the brunt. The club from Rome somehow managed to salvage the situation, but not before having to sell star players like fan favourite captain Alessandro Nesta. Napoli, a club constantly threatening the stranglehold of the seven sisters, were locking horns with UEFA and other administrative bodies during the same time due to unlawful accounting practices. That malpractice ultimately resulted in their relegation and bankruptcy in 2004. In Italy, it is a matter of social and political recognition to own a football club. The Tanzi family was no different. They were there just like small children, flaunting their prized possessions.

FIGC, the football federation in Italy, has time and again tried to impose some regulations to prevent any club closing shop due to financial collapse. But at the same time, they have been guilty of not having the gumption to stick to their own decisions. It was found out that only half of the teams in Serie A were meeting the regulations imposed by FIGC at the end of the 2006–07 season. FICG simply could not impose ban on the defaulters due to commercial reasons. So, they had to ease the restrictions. Under the new norms, the teams only had to have cleared players’ and coaches’ wages in order to start the season in Serie A. Needless to say, this paved way for clubs to grow their debts in a controlled way, and have more Parmas down the road.

Eventually the Parmalat scandal resulted in the collapse of the parent company. Parma were ordered to operate in controlled administration until January 2007. Three star players, striker Emiliano Bonazzoli, defender Aimo Diana, and fan-favourite Brazilian striker Adriano were immediately put on sale to pay for others’ wages. Not only the most lucrative of players on their books, Parma were in danger of losing every other player on their books like then Italian under-21 star Alberto Gilardino, French goalkeeper Sebastian Frey, Brazilian midfielder Junior and Japanese star Hidetoshi Nakata. The future looked really bleak.

Parma – in a state of transition throughout its history

But this was only the start of doomsday for Parma. With financial unrest and lack of a visionary owner to pull them out of crisis, Parma struggled to retain their best players. Managers also came and went without anyone’s notice. They needed a play-off against Bologna to survive in Serie A in 2005. Parma were bought by Tomasso Ghirardi for £39 million (€59 million) on January 2007, prompting fans to be hopeful about the future. It actually turned out to be worse as the bumpy ride finally culminated in Parma getting relegated at the end of the 2008–09 season. Fortunately for the club, however, reform started right from that point. First under Francesco Guidolin and then with Roberto Donadoni, Parma were once again established as a strong top-tier club in Italy.

But at the same time, major clubs in England, Spain, and Germany were starting to perform better in European competitions. Better financial control, bigger sponsorship deals, and wider reach to global audience meant that they could attract superstars from every corner of the world. Clubs from Italy were finding it difficult to cope up with this changed dynamics and subsequently their performances saw an alarming dip. By 2012–13 Italy’s UEFA co-efficient was no longer competitive enough, and, as a result, they had lost one vital UEFA Champions League spot. Serie A clubs went desperate over a reduced number of European spots. They were spending more than they could afford to. Serie A had become more competitive in itself which only increased the pressure on mid-table clubs like Parma. Not good enough to push for those elusive top spots, not too bad to be relegated either—the standstill was simply not acceptable for the ambitious owners. The situation only worsened from this point.

On the last day of the 2013–14 season, Parma defeated Livorno 2–0 to finish sixth in Serie A, their best finish since 2004. The win also secured them a spot in the Europa League the next season. It was an emotional return to Europe, after a decade-long struggle to get back amongst the elites of the world. But within a day, it became apparent that things were not quite right at the club. The owners had bitten off more than they could chew. Financial mismanagement again grabbed the headlines as Parma were denied the chance to play in Europe by FIGC for not paying $325,000 in taxes on loaned players around the world. A staggering 250 players were reported to be in the books of Parma, mostly loaned out and playing across the world with different teams. To put this in perspective, top Serie A clubs at that time owned not more than one-fourth of that number. Many concluded that the policy to bring in random players to find the right combination and go for that elusive glory had cost them dear. There was another, and more emphatic, view that it was an intentional strategy—buy young players, nurture them by loaning out, and then sell them for profit.

President Ghirardi immediately stepped down. He was booed and criticised for leaving the club to sink. A century-old club was going to go down. But pretty much in line with the sophisticated nature of the city, fans also shied away from any kind of violence. Perhaps the Parmalat incident had already seasoned them for such days. Only Parma’s biggest fan group, Boys Parma 1977, carried out a fake funeral at Ghirardi’s hometown Carpenedolo, with the character of Ghirardi dressed as a pig.

Parma’s supporters shout slogans during a protest march after the match against Udinese was called off.

Ghirardi had left, but general director Pietro Leonardi stayed back to salvage the situation. It turned out that he did not do much other than weakening the team by offloading star players like central midfielder Marco Parolo, one of the team’s three representatives in Italy’s 2014 World Cup team. He also sold off the leading scorer Amauri, defender Cristian Molinaro, Walter Gargano, and Ezequiel Schelotto to earn some quick money. Their replacements were from lower divisions, untested, unproven, and simply lacked the quality.

Fans were shattered. They were looking at a completely new and weakened team. Even more humiliation awaited as the club exchanged hands in a span of two months—first from Ghirardi to a Russian-Cypriot conglomerate in December 2014 and then to businessman Giampietro Manenti—both times for a mere €1! Manenti promised to settle wages, unpaid since last July. But soon everyone became familiar with his favourite word whenever asked about the payment—domani (tomorrow). That day never came. Instead, within weeks, Manenti was behind bars on account of fraud and money-laundering.

Fortunately though, in a dog-eat-dog world, other Serie A clubs had chipped in with €5 million to help the club at least finish the season. Parma’s players could not take it any more. They, along with most of the staff, had not been paid all season. They had to pay for their own laundry, do with cold showers as the club could not afford hot water, compromise with their training regime since their training equipment had been taken away for auction, and drive their own team bus as several cars belonging to the club had been repossessed. Games were getting postponed as the club could not afford stewards or police at the Tardini stadium. For the first time in the modern history of the Italian top-tier football, a club had to cancel matches mid-season because they were broke. The players finally decided to enforce a strike.

Coach Roberto Donadoni and captain Alessandro Lucarelli held a press conference to address the media. Ironically enough, it had way more attendees than seen in any of their matches. At the same time, the multi-million-dollar training facility—one of the finest in Italy—stood empty outside. But the press meet continued, ironically, in front of a backdrop that featured the standard Italian football banner: a blue curtain crammed with the logos of every Serie A sponsor. None of them were brave enough to save a century old club.

At this point, the league authorities had to intervene. The league officials allowed Parma to finish the season, provided they were able to make a relegation parachute payment. The club again floundered. Parma were docked seven points for non-payment of wages and were automatically relegated to Serie B at the end of the season. In return, the club received an advance payment—to be distributed to all relegated clubs from Serie A—to pay off a proportion of their debts.

A large section of fans did not like this verdict. According to them, this was like delaying an inevitable death. So the fan club of Petitot Parma Club Association arranged for a protest during the next match. They chanted “Quel mazzolin di fiori”, an Italian folk song about a ditched lover, but with changed lyrics that asked for Ghirardi’s imprisonment. They also had a sign in front of them that read, “THEY MADE YOU PLAY … LEAGUE, GO F**K YOURSELF”. Other banners across the stands read: “FIGC AND SERIE A HAVE FAILED WITH US.” Chants cursed everyone in rotation—Ghirardi, Manenti, and Leonardi. The match was otherwise a dull affair with one of the poorest turnouts of the season. It ended without a goal against Atalanta, the fourth-worst team in the league, and yet drew praise from Donadoni who saw “signs of improvement”. Such had been the level of expectation from the team by then!

With a debt of more than £143 million (€200 million), Parma were declared bankrupt once again in March 2015. Not that no one saw it coming—the final hearing lasted a mere ten minutes—but when it was made official, the reality was darker than what was anticipated. No one was willing to ride the sinking boat and take a punt. Parma could not manage to get a buyer even with a valuation of mere £16.2 million. Mike Piazza, a legendary ex-baseball player and one of the investors, was their last hope. But even he opted out at the last moment. “It is with great sadness and regret that I have to announce I am abandoning negotiations to buy Parma FC…Together with my co-investors on the project, we did not feel the necessary investment to cover the current and future debts of a squad, whose foundation has been strongly compromised, was sustainable”, said Piazza in his official statement.  It is not that Piazza did not have enough funds to orchestrate the deal—his career earnings are over $200 million. It’s just that he did not feel confident enough about the investment. Though many did not agree with his decision, this was the final nail in the coffin for Parma. By then a defunct club, it was relegated to Serie D.

Not that no one saw it coming—the final hearing lasted a mere ten minutes—but when it was made official, the reality was darker than what was anticipated. No one was willing to ride the sinking boat and take a punt.

The Ducali finished the season at the bottom of Serie A with 19 points. Even without the points’ deduction, they still would have been faced relegation. But the fans knew that their players had given their all. Even after being handed a sure shot relegation, Parma had defeated runaway leaders Juventus—only their second loss of the league season—in April, 2015. Amidst all the adversity and a certain relegation, it called for celebrations. And the team celebrated—by hosting practice in a public park in front of a thousand fans the next morning—their last hurray for some time. No more European football, no more glamorous Serie A, left to rot in the fifth-tier of Italian football with no chance of a turnaround for, possibly, decades. That seemed to be end of misery for all the Parma fans. Well, they were yet to undergo some more torture. Trophies won by the club, including the coveted UEFA Cups in 1995 and 1999, were put up for auction by the creditors. Even the gym equipment, furniture, and the Parma FC trademark were not left alone. Everything and anything that could be sold, were sold.

Serie A teams had a combined debt of about $1.8 billion at the end of 2013–14 season, many of them being in worse condition than that of Parma’s. In the lower division, quite naturally, the condition was even worse. As per FIGC’s 2014 annual report, in the first seven years of this millennium, as many as 47 professional football teams have closed shop owing to financial distress. The financial rule change in 2007 has not helped much—68 teams have collapsed since then.

In late March 2015, FIGC brought in another wholesome set of regulations to prevent any more Parma stories. Now any potential owner of a Serie A club, even if the buyer intends to hold as little as 10% stake, needs to furnish proof of their sustained financial stability. The clubs also need to balance their books and break-even within a maximum period of three years. Similar regulations are planned for lower divisions as well.

However, the demise of Parma is not a sorry tale in isolation. It just reinstates the terribly fragile state of a league that only a little more than a decade ago was considered the best in the world. The football culture in Italy right now is not conducive to fostering growth and attracting huge foreign investments. The likes of 2012 European Championship final appearance of Italy—where their lack of class was exposed in a 4–0 humiliation by Spain—or Juventus’ run to the final of UEFA Champions League in 2014–15 will likely be few and far between in days to come. Rather, the 2006 FIFA World Cup champions’ group stage exits from the last two editions of the tournament give a better reflection of the sorry state of affairs of football in the country.

And it is much worse than that, much beyond only football. Italy has been notorious for mafia ruling and underworld aristocracies for decades. With the economic meltdown, things have hit a new low. People used to forget their own misery and be happy with their opiate—football, the beautiful game. Alas, living in such fantasy is also not a viable option anymore. Serie A matches nowadays are played in half-empty stadiums. The legendary Milan derbies, which were once title deciders, are of little significance in the title race. Investors are afraid of pumping in more money, top level foreigners are skeptical. The collapse of clubs like Parma not only represents the demise of football, but also epitomizes the decline of human values.

Parma, a relatively small club, had definitely overachieved. But that success came at a cost. Over a little more than a decade, the club had to be declared insolvent twice. The fans are right in feeling aggrieved. They did not ask for those glorious 1990s. They were happy in their own  small achievements. As physics has taught us, it feels nice while going up, but it hurts that much more when dropped from there.


  1. Football Italia
  2. The Financial Express
  3. The Guardian
  4. BBC
  5. ESPN
  6. Feature Image Source – Sportsblog
Debojyoti Chakraborty

About Debojyoti Chakraborty

Debojyoti Chakraborty is a follower of English Premier League and European football. You can reach him at