Il Sole 24 Ore analyzes how AC Milan could afford the unprecedented summer spending spree and how it affects UEFA and the Financial Fair Play.
After the heavy investments in the transfer market made by the new Chinese Milan, many wondered where did the money came from and how will it be financially explained, especially given the looming issue of the Financial Fair Play. Marco Bellinazzo, a well known journalist very much prepared on economic issues, explained the situation on the online edition of Il Sole 24 Ore.
Currently, AC Milan is clearly out of the constrains imposed by the Financial Fair Play, which envisages a maximum of 30 million euros loss. In the last three years, the rossoneri have accumulated losses of 250 million euros. With the conquest of the Europa League play-offs, the club will return to be under the control of UEFA. However, this controls will begin next fall and any penalties will apply only for next season. In fact, the management is taking full advantage of this situation by spending and strengthening the team as much as possible.
At the same time, this club is working on the well known “Voluntary Agreement“, AC Milan’s financial plan to adhere within the parameters of the Financial Fair Play in three years. UEFA has postponed every decision in October, meanwhile the rossoneri will be able to modify this plan by adding some extra guarantees. If this plan results unsuccessful, the sanction would be even more serious than those which UEFA would have applied automatically.
AC Milan are looking to build immediately a competitive team for three reasons: “The main goal is to persuade UEFA about the concrete chance of returning to Champions League and boosting revenues by relaunching the business, in particular in Asia. To regain the political confidence of the Beijing government lost during the negotiation and perhaps attract new Chinese financial investors or partners. And finally, to recover resources to meet financial commitments with Elliot Management Fund“. Marco Fassone, however, has always been quiet, claiming he also has a plan B in the event of missing Champions League qualification for next season.
Regarding the mercato (read here), AC Milan still have another 120-130 millions to spend, counting the latest sales. “The Elliott Management fund has the club in pawn and in return has lent to Yonghong Li about 320 millions. Milan was paid 520 millions, another 90 millions served to cover the 2016/17 losses sustained by Fininvest and another 70 millions were used to repay part of the outstanding debt. In total, it was a 680 millions operation. Yonghong Li poured out of his own pocket or through funding (especially from Huarong) just under 500 millions. The Elliot Fund, as said, lent to Li Yonghong 320 million. In addition, Li is making a capital increase of 60 million (22 already paid)”.
The management is always at work to give continuity to the great revolution initiated last April. In addition to the numerous official arrivals, the wait is now all for the new attacker. The 21 year old Andre Silva is not enough. The number one target is Andrea Belotti, along with Pierre Emerick Aubameyang. Nikola Kalinic is the alternative. The summer is still long. AC Milan fans are calm, other teams fans a little less.
