Questions Arise About Accounting Irregularities at Rome’s Famed Cinecitta Studios

There may be a problem with the annual accounting procedures at the iconic Cinecittà Studios in Rome.

The auditing firm PricewaterhouseCoopers (PwC) reportedly uncovered irregularities or misstatements in Cinecittà’s financial statements. As a result, the company may need to correct its already audited accounts, presumably in order to refile them with amended numbers. While the accounts were audited and certified by Ernst & Young, the inspection by PwC suggests that at best there were accounting errors made by the previous management and/or board of directors, and, at worst, something far more serious.

According to the La Repubblica newspaper, PwC has identified a 6.7 million euro ($7 million) shortfall, or hole, in the accounts. It is not known whether this could lead to accounting adjustments that produce a financial loss which exceeds Cinecittà’s issued share capital.

PwC informed the Cinecittà shareholders on Sunday about its findings. The Italian Treasury Ministry  owns the company, while the Ministry of Culture oversees its operations. The previous CEO, Nicola Maccanico, and Cinecittàs board members, were responsible for approving the accounts for 2022 and 2023 statements. The accounts were certified by Ernst & Young.

Chiara Sbarigia, Cinecittà’s president and a board member recently re-elected for another term, spoke with The Hollywood Reporter Roma Monday about what she knows, but she cautioned that everything is still under review, and that the situation could change in the coming days.

“I was informed Sunday, along with the board, at the same time as the shareholders,” Sbarigia explained in a phone interview on Monday afternoon. She stressed that “the shareholders meeting isn’t over yet, it is still ongoing, so it’s still an open issue we hope to resolve soon, in a few days.”

The Hollywood Reporter Roma has learned that there are ongoing talks involving Cinecittà board members, the Ministry of Culture and the Treasury Ministry. These talks are aimed at clarifying and resolving the issue, which has already become a political hot topic in Italy. The hope is that the shortfall is purely an accounting error, and not an actual loss, which could require fresh capital from the government. Cinecittà’s 2024 balance sheet, which is already looking gloomy, could take a major hit.

Sbarigia said the first time that she heard doubts expressed about Cinecittà’s books was on August 1, 2024, during a board meeting. On that date, Cinecittà’s CFO, Claudio Ranocchi, presented a credit note that needed verification. The board then decided to hire an auditing firm to conduct a detailed review, and a few weeks later, PwC was given the job.

Cinecittà’s board of directors has issued a statement saying that it was “fully aware of the emerging situation, which only came to light after the resignation of the former CEO, Nicola Maccanico, on June 25.” They said that the new CEO, Manuela Cacciamani, “is working tirelessly to resolve the issue.”

Maccanico has preemptively denied any wrongdoing. In an interview with La Repubblica, he rejected the notion that he “cooked” Cinecittà’s books. “Absolutely not,” Maccanico said. “The financials were certified by Ernst & Young, so any insinuation about the accounts is baseless.”

Maccanico, the son of the renowned Italian politician Antonio Maccanico, added that it would be unfair to hold him responsible for Cinecittà’s current problems. “It’s not fair to talk about old management and new management,” he told La Repubblica. “Cinecittà is facing a revenue collapse due to delays in the tax credit reform, which caused uncertainty and then led to production companies leaving Italy.”

The government is expected to refute the accusations about the tax credit management in the past two years, with some arguing that since many international producers abandoned Italy, causing Cinecittà’s revenues to decline. Others, however, dispute this. Another mystery.

Maccanico did not respond to The Hollywood Reporter Roma’s request for comment.

The key issue now is whether this is simply an accounting mistake, or if there really is a 6.7 million euro hole in Cinecittà’s books, as reported. For now, the story of Cinecittà feels like a financial whodunit, with the next development expected before Friday.