♪ francine: paolo scaroni is one of italy's most prominent businessmen. he has been chief executive of oil giant eni and enel, but it is not just industry and banking. paolo scaroni recently took over as president of a.c. milan, one of the world's most recognized football clubs. today on "leaders with lacqua," we meet paolo scaroni. thank you for joining us. so is the business of football different to energy and banking because of the emotions of the fans?

paolo: well, it is very different. emotions play a big role in football. you have to take account of it, of course, because fans want your team to win always and don't care very much about your results, your economic results. this creates a discrepancy between the expectation of the fans and the expectation of the shareholders. ronaldo plays for one of your rivals, does it mean a tying football is back? paolo: i think so. i really think so. italian football has been losing ground in the last 10 years. the best example of this losing ground is that italy did not play in the world cup for the first time since 50 years or even more. we have ahe fact prestigious hedge fund buying will make a difference.

francine: what does it mean for elliott strategy going forward? are they looking to find an owner and sell it? paolo: my guess is that since it is a hedge fund, one day they will dispose of milan to a buyer and looking to make a profit at the end of the day. francine: does a.c. milan need a signing of someone like ronaldo to be back in business? paolo: we are kind of back in business. as you probably know, we have a player who is playing with us. -like.ronaldo francine: he is a great player, don't get me wrong. do you think there will be more positions? paolo: this year, no. we made 4-5 major acquisitions. there is no doubt that the team of milan is stronger and younger

than last year, so we are quite happy to have this team now. on top of that, we have with us two players maldini, a legend, , so he is set to bring back milan where it should have been. francine: football, it's getting players work together, work as a team. what is the manager's role, and what is the president's role? paolo: there are several figures on the football team now. there is the company, with the chairman, chief executive, and the board. i chairman of the board. am for the time being, i am also the chief executive. not very long, but for a few weeks more, probably yes. then we have the people who take care of the choice of the players, in this case ronaldo and maldini. they have been the leaders of the campaign for the new players in the last six weeks.

then there is, of course, the trainer, the trainer of the team, which is the glory of milan. we can say that today that milan is in the hands of milan fans. all of us we have been for many years, and this is a positive thing. , you are paolo scaroni a titan of business. are there parallels between how a team plays and how an industry group, listed company, performs? what is the secret? paolo: let me say one thing first. there are people who are much more expert than me in football. they always say the same thing. the match is won by the team, but the tournament is won by the company. you cannot have a long-term strategy if you don't have behind you a strong company. we have built a strong milan from a financial point of view, from organizational point of view, and in this respect is similar to a company, not to eni

two enel, but a real company. francine: what happened to the chinese owner? you follow this? paolo: no, i don't follow that very much. for me, it is a mystery. they are gone. they have disappeared. we don't hear from them anymore. i don't know exactly what they are doing now. certainly they lost a lot of money in this one year venture with milan. francine: but milan is financially sound? right? there is no question about it. paolo: financially sound, no problem at all. right now we are moving ahead with a good balance sheet. we will comply with the financial fairplay rules, but so everything is fine from that point of view. francine: do you think italy is free of match fixing in football? paolo: yes, i think so. i have not heard about it in the last few years. francine: what is your biggest hope for a.c. milan? is it that becomes a top four? paolo: it has to go back to the

champions league in the long term. we are not expecting any quick results. there is no quick fix in this business, but longer-term, milan has to be one of the big players in europe. francine: you have always loved football, right? what attracted you to football again? paolo: my story is long. when i was here in the u.k., chieft time when i was executive of one company, i was at the same time chairman of the football club. francine: which is where you were born? paolo: which at that time was owned by a u.k. plc, and they asked me to be the chairman of the team. so from that moment, i stopped to be just a fan, but became an also an actor in this business of football. and this is probably the reason why i was chosen as the chairman of milan. francine: if there is a buyer , right, that wanted to buy a.c.

milan, what do they misunderstand about italian football? paolo: italian football is similar to football played in germany or the u.k. or france. they say, the mechanism behind football are the same. you have to have players. you have to have tv rights. so it is the same thing at the end of the day. francine: so how much do care about tv rights? at the end of the day, this the indole, be-all. all, be all. paolo: what i discover about football, it would be the final of the european championship, manchester united against real madrid. you will have 350 million europeans watching tv. almost nothing else attracts 350 million people in front of tv. francine: do have a footballer past or knew that you would love

higher orlov to play football with? paolo: i like these players like myself, probably when i played kind of smallf, guys who never let me see any balls. these kinds of players. francine: up next to, from football to energy, we talk how the oil industry has changed and what is next with paolo scaroni, who led some of the biggest italian energy companies. ♪

♪ francine: the energy industry has undergone huge changes over the past decade. haas governments and business increasingly turned green in the face of climate change.

but how are companies managing the change, and what with the next decade look like? paolo scaroni was the chief executive at the italian oil giant eni and enel. at enel, he created a separate wind energy unit for the company. how did you get into the energy industry? paolo: well, i was at that time, i was living in the u.k., and one day through the italian ambassador in london, i have been contacted by berlusconi, who was at that time, for the first time, prime minister, or maybe the second time, and he proposed to me to join enel. he was looking for an international manager, italian, so i joined enel. francine: did you meet him and speak about it? paolo: yes, i met him in the embassy first. and then a few months later, he made me a call and gave me a

meeting in rome. it was a saturday, if i remember, made me the proposal. second time i saw him. francine: what was he like? paolo: well, he was in very good shape. you know, he was the kind of, he had been hiring managers all his life, so he had the attitude not of the political man, but of the entrepreneur who was looking for a manager for his company. francine: when you look at the energy space and, of course, the energy industry, do you think investors under or overestimate the change of pace? paolo: let's say the investors are not looking to what happens in the next three or five years. when you look ahead, the real question is when renewables will take the place of oil. and this is a question which is still under discussion. everyone has his own views on it. francine: and do you think it will take a little bit longer than people expect it to? paolo: my view is very simple.

no, i say as long as at lunchtime i am looking for a place where i can plug in my iphone, which happens even today, as long as this happens, the time of the oil industry is not finished. in my view, and i said this to the students of john hopkins university last year, when you r iphone will last a couple of weeks, the battery, then you should short oil stocks, not before. francine: but that could take, what 10 to 15 years? , paolo: nobody knows because we need to replace the batteries. the lithium batteries, which had have been invented in the 1980's, a kind of old technology, which uses cobalt, which is another problem for several reasons, with a new technology that makes the

batteries lighter, which lasts longer, which we can store more energy. the, we are there, not at the time where renewables will replace oil. francine: do you worry about underinvestment in the oil industry in preparation for renewables, what that would do to the price of oil? paolo: that is the issue. today, we have an oil price, and i think this will stay as it is for the next three or four years. every time the oil price moves shale oil in america will act as a kind of ceiling, so $70 to $75 a barrel will be the price for a few years, then the lack of investment might push prices higher, even in the region of $90 or $100, probably three or four years, and less investment unless investment

picks up again, and you have all this unknown. francine: i remember chasing you around the world trying to get a comment 20 years ago when i used to cover opec. at the time, did you think it would change so quickly? did we underestimate the force that shale producers in the u.s. have become? paolo: certainly everyone underestimated the force and the volumes of shale oil. because now i have been reading that shale oil might pick up to 10 million barrels a day, so 10% of the world production can come from shale oil. now this has been such a threat to the industry that we achieved two results. first of all, an alliance between saudi arabia and russia, which was unknown and unexpected. and second, even within opec, group made, soa normally nots

disciplined, this time has been disciplined and reduced production by 2 million barrels a day, which has been a major force to move prices within the the region of $50 to $60 from $30 18 months ago. francine: you were also surprised by this business friendship between saudi arabia and russia to keep control over oil prices. paolo: you know, fear is very important. fear of this unknown element of shale oil has been the trigger for having russia and saudi arabia getting together. and then all the rest. francine: the oil industry has tricky politics, right? you have different factions, different politicians, different risky parts of the world. do you like your job? paolo: i love my job. it is a fascinating job, a which was a mixture between industry and foreign policy, which i found particularly fascinating. francine: one person, who you

the awardse you got on the same day, went into politics. would you ever go into politics? paolo: no, i don't think so. as a matter of fact, politics by made by an oil man does not have much to do with politics made by a foreign affairs minister. we use bilateral approaches. while a foreign affairs minister is multilateral. every decision takes one country and the impact on other countries as well. at the end of the day, we are always talking about money in the oil industry. ministeroreign affairs is talking about several other things than money. francine: up next, what kind of management style does it take to transform companies and industries as different as banking and football? more with paolo scaroni next. ♪

♪ francine: paolo scaroni knows a thing or two about leadership. after running two of the biggest companies in italy, he's in in charge of one of the countries most popular football club, a.c. milan. he brings that experienced to columbia business school, where he sits on the board, but what kind of leadership does it take to succeed in fields as different as energy and football, and what will happen to italian politics? paolo scaroni is still with me. let's talk about italy's future. what were the relationship be between europe and italy five years from now? paolo: now that is the most difficult question you have asked me. all this will depend from italy, and europe as well.

europe should become charming again, not just a sum of rules to be applied to the countries. no, if europe becomes more charming, more appealing, more popular, then italy will come italy and other countries as well, will become closer to europe. francine: is this europe reforming itself, or is this politicians around the world making the case for the benefits of being in the eu? paolo: no, you see, the point for me is that by a choice of national government, we have built a europe which is not politically attractive. i was asking the other day to a friend of mine, tell me who was the predecessor of mr. juncker? i don't remember. he has been the president of europe for 10 years. i don't remember.

mr. -- gone, forgotten. why everyone us remembers mr. blair, i don't know, so what does it mean that we have built a europe which was not popular to the people? was a kind of technocratic mechanism. francine: power. paolo: where? they manage a lot of money. they can fine countries, rules, so maybe power, yes, but not a europe which speaks to the people. francine: does that mean you will either have a more integrated europe, or it will break apart? paolo: no, i don't think it will break apart. every day we have examples of what happens if you are outside major economic zones. look at what happens to turkey now. imagine that turkey, instead of

the lira, the euro. the whole story would be different. so i convinced the eurozone and will stay and europe will stay. the point is how do we make europe more attractive to the europeans? francine: what does it mean being a european politician, a european leader, in 2018? how do you have to communicate differently with your citizens? paolo: well, it is much more difficult because people are very skeptical. they, not just in italy, everywhere. politicians are not popular in at all in every country in europe. even if they are popular, they are not popular for very long. look at what happened in mr. macron for example. to communicate is not easy at all, and you have to find new rules to communicate. francine: what is your leadership style? paolo: well, you should ask the people working with me. it is not easy to judge one's

his own style, no? i might give you two or three which havedvice, been given to some of them. the first one, which i have been trying to apply all my career, is to motivate people. because i tell you how i see business. normally business decisions are pretty easy. you don't need to be an intellectual to run a company. but what you really need is people doing what you want them to do. now people do what you want them to do only if they are motivated. the first task of every chief executive is to motivate the people working with him. this is absolutely key. francine: but how? is it through financial incentives, inspiration? paolo: no, for everyone, it is individual. it is not a collective. the only thing i might say is collective is to care.

people want to be cared of. and they understand in one second if you care, or if you don't care, then some people want to be motivated through, you tell them they are good, you tell them, you challenge them. everyone has his own way to be motivated, but you have to care. that is my first advice. francine: number two? paolo: my second advice is you have two chief executive should , a organize himself as an objective to do nothing, to do nothing, to be free, to think, to be free to motivate people, to be free to look for mistakes. so, and you have always to be relaxed, relaxed. francine: so not micromanage? paolo: not micromanage. to organize it in such a way that everyone works and you look at them, control them, but you don't do much. as a matter of fact, every time i met in my life people truly

important, i always met people who were relaxed, smiling, giving you the impression they had nothing to do. i never saw people rushed if they are really important. francine: chief executives or politicians? paolo: chief executives and politicians as well, because you have to be organized. that is a very important thing. that is the way in which i look at it. francine: number three? paolo: you should not stay too long in the same job. you have to change your job maximum every seven or eight years. and the reason to do that is because of all, after a while , first you do not have any more fresh ideas. second, even if you have a good idea, it is not easy for you to promote it. third, even if you are very convinced to deny what you have

been telling for you is extremely difficult. and fourth, you start to become accustomed to your people you . you don't see anymore where they fail, and therefore, you do not change them anymore. in total, who once a chief executive who does not have fresh ideas? he cannot deny what he has been doing in the past because it is not nice. thirdly, cannot change people to make people really as they should be. well, it is not going to be a good chief executive. so you have to change. change is extremely invigorating. francine: is there something you would have done differently in your career with hindsight? one thing? paolo: one thing i would have been doing different in my career, probably i should have, i should have not stayed in italy for very long. you know, i lived in italy during 20 years, and then i came to the u.k. probably i should have come

earlier than that. it has been for me a fantastic experience. francine: paolo scaroni, thank you so much for joining us. paolo: thank you. ♪

>> coming up on "bloomberg best ," stories that shaped the week around the world. currencies sink and economies staggered around the world. >> too little too late is the story of this emerging market crisis. >> i despise the word contagion. >> testimony times two. candidate and tech titans answer questions on capitol hill. >> the question of misuse of these platforms is even close to addressed is false. theatrick leahy described setting on