♪ >> haula scrutiny is europe's most prominent businessman. he has been chief executive of many different utilities, but not just industry and banking. paolo scaroni recently took over as president of ac milan. it is one of the world's most recognized football club. today on "leaders with lacqua," we meet paolo scaroni. thank you for joining us. is the business of football different to energy, banking? >> emotions play a very big role

in football and you have to take account of it. your fans want the team to win always, and don't really care about your economic results. so this creates a discrepancy between the expectations of the fans. francine: does it mean that italian football is back? paolo: i really think so. italian football has been losing ground, and the best example would be that italy didn't play the world cup, but now, -- to have a prestigious hedge fund would make a difference. francine: what does it mean for elliott's strategy going forth? do you think they will -- ?

paolo: the decision is made by them, not me, but my thought is that since it is a hedge fund, one day they will dispose of milan, selling it to a good buyer, probably. francine: does ac milan need the signing of someone like renaldo to be back in business? paolo: we now have -- playing with us, and he is ronaldo-like. francine: but he isn't him. are there more acquisitions? paolo: there is no doubt that the team of milan this year is stronger and younger than last year, but we are quite happy to have this team now. and we are happy to have with

us, leonardo and maldini, who is a legend for francine: how much of football is leadership? what is the president's role? paolo: there are several leaders now, there is the company, a chairman and executive board. and i'm chairman of the board. for the time being, i'm also chief executive. not for very long, i think, but for a few weeks more. then we have the people who take care of the choice of the players, in this case, leonardo and maldini. they have been the leader of the campaign for the new players we've had in the last six weeks. then of course, there's the trainer of the team.

we can say that today, milan is in the hands of its fans. all of us have been, for many years, milan fans. francine: is there a difference between how the group plays and how -- paolo: let me say one thing, the people are much bigger experts than me, at football, and they say this. the match is won by the team, but the tournament is won by the company. in this respect, very similar to a company, maybe not to --

francine: what happened to the chinese owner? do you follow this? paolo: i don't follow it very much. they are gone, we don't hear from them anymore. we don't know what they are doing. they certainly lost a lot of money in this one-year venture. francine: but milan is financially sound, right? paolo: we are moving ahead with a very good balance sheet. we comply with the financial fair play rules, so everything is fine from that point of view. francine: do you think football is free of match fixing? paolo: i think so, i haven't heard of it in the last two years. francine: your big hope for ac milan is that it becomes a top four? paolo: in the long-term, we

aren't expecting any quick results. there aren't any quick fixes in this business, but longer-term, milan has to be one of the big teams in europe. francine: what attracted you to football again? paolo: when i was here in the u k, the time when i was the chief executive of -- francine: where you were born. paolo: at the time, they asked me to be the chairman of the other team. from that moment, i stopped being just a fan. i also became an actor in this business. this is maybe the reason he chose me as the chairman of milan. if there francine: if there were a buyer, who wanted to buy ac milan, how would they misunderstand italian football?

paolo: the mechanisms behind footballer the same. it's the same thing at the end of the day. francine: how much do care about tv rights? at the end of the day, that's the end all-be-all. paolo: -- manchester united against real madrid, you would have 350 million europeans watching tv. almost nothing else attracts 350 million people in front of a tv. francine: do you have a legend footballer? one that you would hire or just play football with? paolo: i always love players

like messi, probably because when i played football myself, these kind of small guys never let me see the ball. messi, of course, and maradona. francine: next, from football to energy. how the oil industry has changed, and what is next, with paolo scaroni, who led some of the biggest italian energy companies. ♪

♪ >> the energy industry has undergone huge changes across the decades as government and business increasingly turn green business increasingly turn green in the face of climate change. how are companies managing the

change, and what will the next decade look like? paolo scaroni was the chief executive of an italian energy giant -- created a separate wind energy for the company. francine: how did you get into the energy industry? paolo: i was a tech guy living in the u, and one day, through the italian ambassador in london, i had been confronted by berlusconi, who at the time, for the first time, was the prime minister. he proposed to -- he was looking for an international manager, italian. francine: did you meet him? paolo: i'm a him in the embassy first, then a few months later, give me a call, give me a meeting. it was a saturday, if i

remember. francine: what was he like? paolo: he was in very good shape. he has been a hiring manager for all of his life, so he had the attitude not of the political man, but of someone looking for a manager for his company. francine: when you look at the energy space and energy industry, do you think investors underestimate or overestimate the change of pace? paolo: the investors are not looking at what happens in the next three or four or five years. when you look ahead, the real question is when renewable will take the place of oil in the industry, and this is a question still under discussion. francine: and do you think it will take a little bit longer than people expect? paolo: my view is very simple. i say that as long as, at lunchtime, i'm 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 your iphone will last a couple of weeks, the battery, then you should short oil stocks. not more. francine: but that could take 10 to 15 years. paolo: nobody knows. we need to replace the battery windows, the ion lithium batteries -- the time of renewables is not the time in which renewables will replace oil. francine: do you worry about underinvestment in the oil industry in preparation for renewables?

paolo: that's exactly the issue. what is happening today as 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 up, shale oil in america will act as a kind of ceiling. $70, $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 dollars, probably three years or four years, and it lets investment pick up again. and then you have all of this unknown. francine: i remember chasing you

around the world, trying to get a comment 20 years ago when i was trying -- when i used to cover opec. at the time, did you think it would change so quickly? did we underestimate what shale producers the u.s. would become? paolo: everyone underestimated the force and volume of shale oil. the volume, because now i've been reading that shale oil might go to 10 million barrels a day. so 10% of oil production can come from shale oil. this has been such a sight to the industry that we achieve two results. first, and alliance between saudi arabia and russia, which was unknown and unexpected. and within opec, there has been a glue, this time they've been pretty disciplined. they've been capable of reducing production by 2 million barrels per day, which has been the major force to move prices in

the region of $50, $60, from 30. francine: i guess you are also interested in this business friendship between saudi arabia and russia to keep business prices. paolo: fear is -- the unknown element of shale oil is having the trigger for russia and saudi arabia getting together, and the rest getting along. francine: the oil industry has tricky politics. different factions, different politicians. did you like your job? paolo: i love my job, it was a fascinating job, which was a mixture between industry and foreign policy, which i found particularly fascinating. francine: -- who you knew because you got that a word on

the same day. would you go into politics? paolo: -- in the industry, we use the bilateral approach. it's why the foreign affairs minister is multilateral. every decision it takes on one country has an impact on another country. and second, at the end of the day, we are always talking about money in the oil industry. the foreign affair minister talks about several things other than money. francine: 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. ♪

♪ >> paolo scaroni knows a thing or two about leadership. he's in charge of one of the country's most popular football clubs and brings that experience to columbia business school's where he sits on the board. but what kind of leadership does it take to succeed in fields as disparate as energy and football? let's talk about italy's future. what will be the relationship between europe and italy five years from now? paolo: that is the most difficult question to ask me, because all of this will depend on italy and europe as well. europe should become charming again, not just a sum of rules

to be applied. if europe becomes more charming, more appealing. more popular. then italy, and other countries, not just italy, would be closer. francine: is europe reforming itself? or are politicians around the world making the case, the benefits for being in the eu? paolo: you see, the point for me is that by choice of national government, we are building europe, which is not politically attractive. i was asking the other day, to a friend of mine, tell me, who was the predecessor to mr. juncker. i don't remember. he has been the president of europe for 10 years. i don't remember. gone, forgotten.

while everyone remembers mr. blair, or -- what does it mean? that we have built a europe that was not popular to the people? was a kind of technocratic mechanism. they manage a lot of money. they confine countries, impose rules. maybe power, yes. how can i say, not a europe that speaks to the people. francine: does that mean you will either have a more integrated europe or it will break apart? paolo: i don't think it will break apart. every day, we have examples of what happens if you are outside of major economic zones. look at what happened to turkey now.

imagine if they had, instead of the lira, the euro, the whole story would be different. i'm convinced that the euro zone will stay and europe will stay because it needs to state. the point is, how do we make europe more attractive to the europeans? francine: what does it mean to be a european politician, a european leader? how do you communicate differently to your citizens? paolo: people are skeptical, not just in italy, but everywhere. politicians are not popular at all, in every country in europe. even if they are popular, they are not popular for very long. look at what happened to mr. macron, for example. so, to communicate is not easy at all and we need to find new rules to communicate. francine: what is your leadership style? paolo: you should ask the people who work for me, it is not easy to judge one's own style. i might give you two or three

pieces of advice, which have been given. the first one, i've been trying to apply in all of my career, is to motivate people. 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 need is to see people doing what you want them to do. people do what they want you to do only if they are motivated. the first task of every chief executive is to motivate the people. francine: but how? is it through financial incentives, through inspiration? paolo: for everyone, there is a recipe. it is individual, not a collective. the only thing i might say is collective is to care. people want to be cared of. they understand in one second if you care or don't care. and then some people want to be

motivated through, you tell them they are extremely good. others, you challenge them. everyone has his own way to be motivated. that's my first advice. second advice, you have to try -- the chief executive should organize himself. the objective should be to do nothing, to be free. to be free to think, to be free to motivate people, to be free to look for mistakes. you have to always be relaxed. francine: so not to micromanage. paolo: don't micromanage. see the way everyone works, and look at that. control them, but don't do much. in fact, every time in my life,

the people that are truly important, i always like people who are relaxed, smiling, giving you the impression they have nothing to do. i have never seen people rushed if they are feeling -- francine: chief executives or politicians? paolo: both, you have to be organized. it is a very important thing, the way i look at it. number three, you should not stay too long in the same job. you must change jobs, maximum, every seven or eight years. and the reason to do that is, first of all, after a while, you don't have anymore fresh ideas. second, even if you have a good idea, it is not easy for you to promote it. third, even if you have -- if you are very convinced to deny what you've been telling --

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

it has been a fantastic experience. francine: thank you for joining us. ♪

♪ nejra: antisocial. president trump's campaign against what he is calling unfair search and social media. how would this shape tech regulation? playing it cool. the e.c.b. supervisory board member felix hufeld says regulators are in no rush to tighten capital demand over turkey risk. we'll bring you that interview. the clock ticks until brexit. are the chances of a no deal more likely? what will this mean for the regulation landscape? welcome to "bloomberg markets: rules and returns." i'm nejra cehic in london. "rules and returns" is the show