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| Antonio Galloni |
Antonio Galloni was in the news recently when he acquired Steven Tanzer's International Wine Cellar. The move was universally lauded by the wine press (here's my own analysis column), as it gives Galloni a 30-year library of wine reviews from a critic perhaps even more respected than himself. To my knowledge nobody has ever publicly questioned Galloni's independence, or Tanzer's.
However, the money to acquire the IWC had to come from somewhere. Galloni's spokesman would not respond when I asked where his funding was from, and said he was not available for an interview.
It's a shame, because Securities and Exchange Commission (SEC) documents aren't really my strong suit, nor that of the two business journalists I asked to look at this one. And I would love for Galloni to explain it from his perspective.
In case the link doesn't work (it's balky for me with Firefox), it's a Notice of Exempt Offering of Securities, file number 021-200691, filed on Aug. 2, 2013. You can find it by searching the SEC site for All Grapes Media.
As I read it, it means Galloni has 5 investors who have put up $850,000, but only three of them are named. Two are Galloni and his wife. A third is James Forsyth, who's listed on the Vinous website.
So who are the other two silent investors? Just friends with money? Perhaps someone with offices, just to pick a location known for its finance industry, on the Charles river Banks?
Or maybe it's someone with good reason to stay hidden. What if they own a winery in Napa Valley? Or Santa Barbara County? Or even somewhere abroad, perhaps in the southern hemisphere? Wouldn't it behoove them to have money invested in a site that could give favorable ratings on the 100-point scale?
When Robert Parker sold a large stake in the Wine Advocate in 2012, the wine media briefly got excited to lean that the buyer was a Singapore wine retailer who sells wine futures. But that news didn't seem to affect Parker's standing among his many fans.
Perhaps Galloni has learned yet another lesson from his former mentor: Most wine drinkers won't actually follow the money. But the trail is there, even if it the ending is hidden.
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I wouldn't worry about hidden investors. That is a relatively small amount of money to raise. How long is $850K to $1.2M going to last? You have to think Vinous is losing money. Did Vinous purchase Tanzer (a/k/a IWC) because he has financial difficulties? Perhaps Tanzer and Vinous are both struggling, or perhaps they are doing fine, and by joining forces they feel that they can raise more money and do well together.
ReplyDeleteIMHO, all these wine rating companies (JS, WA, WS, WE, IWC and Vinous). have a problem because they allow wine retailers to publish their reviews for free. I have stated this before, but I believe the power is shifting to wine retailers. They have the wines in stock, and in this day and age it is all about finding the best values, and the top wine retailers have no problem finding plenty of great wines. I just don’t see consumers rushing around to pay $100+ a year for a subscription.
There need not be any outside investors. It could simply be Tanzer, Galloni, maybe Forsyth (depending upon his role and stake in Vinous), maybe Josh Raynolds (but I doubt it) splitting up the equity. There may be one or more outside investors if Tanzer required some up-front cash to seal the deal, or if combined Vinous/IWC cash flow is insufficient to cover travel, draws and salaries. Indeed, the document was filed over a year ago, and may not even have been filed in contemplation of the IWC merger. It could have been done to facilitate outside investment, whether for Vinous cash flow needs or a potential strategic transaction other than the IWC merger. Or because Galloni needed to pay his rent or mortgage, or put his kids in private schools. One simply does not know from the filing...
ReplyDeleteAs a winery owner who has poured wines for Mr. Galloni, I can say that when it comes to his approach and standards, he has proven to me that he is beyond reproach. He has liked some of the wines I have made and disliked some of the wines, but he always gives me the same feed back this is posted in his reports and reviews, good or bad. Russell Bevan, Bevan Cellars
ReplyDeleteRegarding Charles Banks, if there is any evidence connecting him to Galloni and Vinous, you should put it out there. If not, you might want to make it clear that you are merely using Banks's name as an example to make a point. A baseless accusation that Banks is buying his own wine critic, along with virtually everything else in sight, may not go down well with Banks, and unlike Galloni, it would seem that Charles Banks can well afford to sue you...
ReplyDelete