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Rome's iconic Cinecittà Studios is drowning in red ink.
The Hollywood Reporter Roma has learned that the studios' losses in the first half of 2024 amounted to 13.5 million euros ($14 million), while Cinecittà's share capital stands at just 22.7 million euros ($23.8 million). Sources close to the studios report that the shareholders' meeting, scheduled for Thursday, will formally acknowledge the errors made by the previous management and may pursue legal action against former CEO Nicola Maccanico, who signed off on the 2023 accounts.
The dramatic financial turmoil engulfing Cinecittà has escalated in recent days, setting the stage for a potentially explosive resolution in the next chapter of this ongoing financial thriller on Thursday.
On Monday, it was revealed that Cinecittà president Chiara Sbarigia and other board members were informed on Aug. 1 of alleged irregularities in the studios' financial statements. An independent audit uncovered a potential shortfall of approximately 6.7 million euros ($7 million). Sbarigia confirmed to THR Roma that a PricewaterhouseCoopers audit had indicated the need to restate the company's financial results, requiring adjustments to past accounts.
The shareholders' meeting on Monday was deliberately left open by the Treasury Ministry, which owns Cinecittà outright, and the Culture Ministry, which oversees its operations. According to sources close to the company, this move was intended to allow time to determine whether a capital injection might be needed and how best to manage the embarrassing situation.
In an interview with Italian newspaper La Repubblica, former CEO Maccanico maintained his innocence. He said this could not have happened because the accounts had been approved by Ernst & Young. On Wednesday, he declined multiple interview requests from THR Roma. Responding via WhatsApp, he wrote in fluent English, "I have already said what I have to say...This is just not my moment to talk."
Maccanico -- who was appointed by the center-left government of Mario Draghi in 2021, the predecessor to Italy's far-right Prime Minister Giorgia Meloni -- has faced repeated accusations of mismanagement and negligence from center-right politicians. Meanwhile, Meloni opposition figures blame the Culture Ministry for its allegedly poor communication of new rules regarding tax credits for producers in 2022 and 2023, a move that they say discouraged foreign productions from coming to Italy and reduced Cinecittà's revenues. Maccanico has echoed this criticism, arguing that the tax credit changes hurt Cinecittà's bottom line.
Maccanico also came under fire for a controversial contract he is said to have approved with Fremantle, the global production and distribution company. Following his tenure at Cinecittà, he reportedly sought a senior position at Fremantle, but the hiring fell through due to non-compete clauses in his Cinecittà contract, which he may have overlooked.
Potential legal action may center on Maccanico's financial management during his time as CEO. His last day at Cinecittà was June 20, meaning he did not oversee the preparation of the first-half of 2024's financial report, which was finalized in mid-July.
On July 19, Cinecittà's new CEO, Manuela Cacciamani, discovered that the studio had incurred 13.5 million euros ($14.1 million) in losses during the first six months of the year. According to financial documents obtained by THR Roma, problems were already evident in the first quarter of 2024, which saw 6 million euros ($6.3 million) in losses on 12 million euros ($12.6 million) in revenue.
Additionally, Maccanico's 2024 budget for Cinecittà projected a 4 million euros ($4.2 million) profit on 77 million euros ($80.9 million) in total revenue, including 40 million euros ($42 million) from commercial activities. However, if second-half losses match those of the first half, Cinecittà risks wiping out its share capital of 22.7 million euros ($23.8 million).
While no immediate plans for a capital injection have been announced, government officials are expected to pledge support for the historic institution, promising to do "whatever it takes" to preserve Cinecittà. However, any financial bailout -- potentially costing as much as 25 million euros ($26.2 million) -- would likely be deferred until next year, pending the completion of the 2024 audited accounts in March 2025.