John Elkann increases his interests in Corriere Della Sera

–

John Elkann

–

/ By Albert Hecht / 

JohnElkann, chairman of the vast Agnelli business empire, taking in the entire Fat group, as well as a variety of diverse business interests has never been regarded in the European business theater as being faint hearted. And he proved the point once again when led the Agnelli Group to become principal shareholders  in Italy’s largest and most prestigious daily newspaper publishing group, RCS Mediagroup.

John Elkann, despite the fact that he is only in his late thirties, already carries a massive weight of responsibility on his shoulders as Chairman of international car manufacturing giant Fiat as well as Chairman and CEO of Exor, the Agnelli family’s investment company which owns one of Italy’s largest and most famous soccer clubs, Juventus F.C. among a variety of other business interests.

Yet Elkann, who has been at the helm at Fiat and Exor for just two years, has consistently shown that he is not afraid to take calculated risks in the his challenging role as head of the family conglomerate.

However there are those on the Italian business scene who speculate that this time around John Elkann has taken on his biggest challenge to date, not so much in terms of cash but instead through locking horns with the powers that be behind the Italian printed media.

In simple terms Elkann has given the green light for Exor to increase their shareholding in Corriere Della Sera and its sister paper dealing mostly with Italian sports that goes under the label of Gazzetta dello Sport.

For the privilege of doubling their stake and becoming the largest shareholder in RCS Mediagroup, the holding company that controls the newspapers to 20%, Exor paid “just” €90 million. Hardly a staggering sum for a company whose  turnover can be counted in the billions.

What the Italian media industry experts are now the speculating is what Elkann will be getting for his money except a series of massive headaches.

–

–

Corriere Della Sera has been in print since the late 19^th Century, and from his very first issue has always delved deeply political and business issues in Italy. Anyone who knows anything about this Mediterranean country will be well aware that no shortage of intrigues and scandals, with Corriere Della Sera be responsible for unmasking many of them. Over the years many of the country’s leading industrialists, with possibly the best known being controversial former prime minister Silvio Berlusconi have pulled a lot of strings are being prepared to pay out a lot of money to find themselves with a seat on the board of the newspaper, usually because they are well aware of the fact that there is no better vehicle for influencing public opinion than Corriere Della Sera.

Possibly the only issue that Italians get more hot under the collar about than politics is sport and soccer in particular. And with Exor being the sole owners of Juventus, one of Italy’s oldest soccer clubs based in Turin, followers of Milan’s two large soccer clubs, where the paper is also based, will be checking ever line making sure that reporting is objective.

However according to those who claim to have insights on John Elkann’s business philosophy, his entire logic behind gaining controlling interest in RCS Mediagroup  is to address the poor financial performance of both the newspapers and, through gain controlling interest, maintaining an improved return on his investment. The Agnelli family has been shareholders in the newspapers since before World War II. They, as much as anyone else, will be concerned that the share value of the company has dropped by more than 90% over the last 10 years, while its gross income has fallen by more than a third in the last five years, reaching just €1.6bn in 2012, with the group carrying a net debt of close to €1billion.

Predictions for the future are less than optimistic with RCS warning their shareholders to expect a significant net loss in 2013, even more than the net loss of €500 million that the RCS media group returned in 2012.

The principal reasons for the drop in income was a major downturn in advertising revenues, with circulation dropping as its regular readers switch their allegiance to the internet.

John Elkann has not been slow in putting together a survival and recovery plan for RCS on which he will be focusing on switching production to digital mode and attempt to boost the newspapers’ profit margin as well as stabilize their revenues, having set the group a target of reaching these goals by the end of 2015.

–

 Brother Lapo Elkann / Getty

–

One of Exor’s first moves to reverse their hemorrhaging of capital that has become commonplace for RCS over the last few years, is to realize some capital through selling off the newspaper group’s headquarters situated in the heart of Milan, with Stephen Schwartzman’s  Blackstone Group reported to be interested. Once again Italian economic commentators are in a state of shock at the possibility of Corriere Della Sera uprooting and moving out of Milan; while those with a sense of history compare it the exodus by the UK’s leading daily spreadsheets from center of London 20 years ago.

There is little doubt that the establishment that have behind the Italian press for a number of years find John Elkann something of an enigma, coming with completely different insights on how to run a business than they are used to. And not only that but the US-born, Brazil-raised billionaire has a lot of hands on experience in the media world, being a member of the board of the internationally renowned Economist newspaper , as well as having recently joining the board of Rupert Murdoch’s News Corp.

John Elkann was born in New York, United States, the first son of Alain Elkann, a journalist and Margherita Agnelli, daughter of Gianni and Marelli Agnelli,

As a boy, Elkann lived in the UK as well as Brazil, attending high school in Paris, and University in Italy, which meant that he became and has remained totally fluent in four of the leading European languages, Portuguese, English, French and Italian. Elkann graduated from the Politecnico di Torino with a degree in management engineering in 2000.

By the time of his graduation, Elkann’s future had already been mapped out for him, with his paternal grandfather Gianni Agnelli having decided that John was the one who would be given the role of chairman of the family business empire after his nephew, heir-designate to the Fiat automobile empire presided Giovanni Alberto Agnelli, passed away from a rare form of cancer when aged just 33 in 1997. Giovanni Agnelli was the sake of the original founder of  Fiat, who established the company in 1899.

In the wake of the tragic premature passing of Giovanni, and with his own health failing, Gianni Agnelli picked out John Elkann to be his successor, when he was just 24 years old.

After gaining considerable experience working in various industry sectors, John Elkann joined Exor in 2002, and when his grandfather Gianni Agnelli passed away in 2003, and his great-uncle Umberto Agnelli the following year, Elkann was promoted to the role of Vice Chairman of both Fiat and Giovanni Agnelli and Company, the family partnership which controls Exor.

In 2010, John Elkann was named as Chairman of Fiat and Exor at the age of just 34.