American Shakes Up Soccer in Rome

Bostonian James Pallotta, a billionaire investor and hard-core Celtics fan, wasn't an obvious candidate for Italian soccer revolutionary.

He had never been to a soccer game before 2011, when he decided—with minimal deliberation, he says—to spend €12.5 million for a minority stake in then-struggling AS Roma, alongside other American businessmen.

Pallotta first intended to stay on the sidelines, but has since doubled down to where he personally controls around 40% of Roma, one of two Serie A teams based in the Italian capital.

Three years on, the venerable club's attendance is up, as are season-ticket sales, riding the team's resurgence to the Italian elite. Next season, Roma returns to European competition after clinching its first Champions League spot since 2010-11.

Pallotta estimates that increased ticket sales and merchandising deals will boost Roma's value to more than €500 million (about $688 million) next year. He says that value may more than double if he and his partners succeed in their most ambitious plans: building a huge new stadium and entertainment complex on the southwest edge of Rome.

Pallotta, who flew to Rome by private jet last week for Sunday's game against Serie A champions Juventus (Roma lost, 1-0), remains there this week. His partners, including Rome-based developer Parsitalia Group, expect this week to hand city officials their master stadium plan.

For Italian soccer and Roma, the stakes are high, financially and symbolically.

The American owners want to wrest the club from circumstances they say have held it back, including its home at the Stadio Olimpico, the worn-out arena, last overhauled for the 1990 World Cup, that Roma shares with crosstown rivals Lazio and the Italian national rugby team.

Some Rome officials say the city would benefit from the jobs and transportation improvements Roma promises. The stadium cost is estimated at €300 million.

For Italian soccer, the endeavor is a test of sorts: Beleaguered by corruption scandals, outdated stadiums and raucous—at times violent—fans, the country has failed to attract the American investors common to English soccer.

The result is that Italy is missing out on the soccer bonanza known to England, where television rights and commercial income are skyrocketing. In 2011-12, for instance, Serie A generated just over half as much revenue as the English Premier League, according to Deloitte.

In restaurants and streets of Rome, Presidente, as Pallotta is known, stops frequently to pose for photos with fans, a foreign celebrity who attracts adoration but who also has heard criticism, especially during losing streaks.

"The Americans," as everyone from the fans to the club's manager refers to the first U.S. investors to buy a top-tier Italian soccer team, sparked protests for redesigning Roma's logo, for example. Italian media and many Roma fans regarded them with skepticism.

"I don't blame them," Pallotta said. "There are plenty of places where foreign owners had a rough start or never got it going."

The Americans fired the team's manager last season, raised ticket prices, and did a sponsorship deal with Nike Inc.

Meanwhile, Pallotta and his team privately courted support from politicians and trade unions. Rome's mayor, Ignazio Marino, dropped by Roma's Christmas party in December, and translated Pallotta's speech to employees into Italian.

That same night, Pallotta gave his players engraved Rolex watches as gifts for setting a club record for consecutive wins at the start of a season.

And publicly, with cameras flashing, Pallotta presented the newly inaugurated Pope a Roma jersey last year.

"There's no way I would have spent a Sunday morning watching football before," Pallotta said. "Now it seems I can't turn it off."

On the planned stadium site, long known as Tor di Valle, sits an abandoned horse-racing track among giant cottonwoods next to the Tiber river.

Success is anything but guaranteed in Rome's famously complex bureaucracy. Also, some Roma fans don't want the team moved to the outskirts of Rome from its location near the city center.

But Mr. Pallotta says the new stadium is central to a Roma turnaround plan that includes increased broadcast revenue, selling stadium-naming rights for €15 million-plus a year, and attracting droves of Italian families, foreign tourists and luxury-box ticket holders for soccer, food, shopping and concerts year-round.

At a new stadium, Roma's owners say they would stop the tradition of fans carrying smoke bombs and flares into games. Acknowledging that tighter security might seem un-Italian, Pallotta says, "I want those fans to be rabid in the new stadium, but I want them to be sensible."

"Anyone who's been to an Italian football match realizes that the stadia are the core issue here," said Alexander Thorpe, a consultant in Deloitte's Sports Business Group. "A lot of the stadia that are being used are the ones from the 1990 World Cup."

That was the last major international tournament Italy hosted. Germany, England and France all have since used World Cups and European Championships as catalysts to revamp infrastructure.

Only one other Serie A club has undertaken a similar stadium project in the past decade. In 2011, Turin-based Juventus opened a modern, 41,000-seater that emphasizes hospitality, and lacks the giant fences separating fans from the field that decades ago appeared in stadiums all over Italy.

The result, according to Deloitte: Juventus's match-day revenue has more than tripled in the new venue. Roma isn't a client of Deloitte's.

Roma manager Rudi Garcia said that the Olimpico is large, but "it's still a stadium with an athletics track, a stadium that we share with the other club in Rome. We're not entirely at home."

Goldman Sachs Group Inc. is backing Roma with financing. U.S. hotel and real-estate giant Starwood Capital Group LLC has invested €40 million in debt and equity into AS Roma, and might do more.

Greg Carey, senior Goldman stadium-finance banker, predicts that other European soccer clubs will follow: "There's a lot of low-hanging fruit, especially in Italy, to improve the returns you're going to get."

This article originally appeared on The Wall Street Journal's website.