Financial expert Luca Pagni suggests Milan’s record €145.9m losses are part of Elliott Management strategy to ‘clear’ the decks for a sale.
Eyebrows were raised when the club announced the balance sheet for the 2018-19 season had them running at an unprecedented loss.
However, the directors are not concerned and so MilanNews.it asked La Repubblica newspapers economic correspondent Pagni to explain the situation.
It is all part of the same strategy that saw the Rossoneri agree with UEFA to back out of the Europa League and try to wipe the slate clean in terms of Financial Fair Play.
“Considering the situation, they accelerated the clear-out of the balance sheet. If Milan had qualified for the Champions League, they would’ve had an extra €39m at least in revenue. With that money, everything would’ve changed and they probably would’ve decided to make a more conservative balance sheet, postponing this process.
“The big problem we see here is that the sponsorships have dropped and so has the overall revenue. So far, Ivan Gazidis has shown no progress on that front.
“On top of that, the cost of personnel has increased enormously with an extra €35m, a part of that going on the salaries of Gazidis, Leonardo and Paolo Maldini.
“So faced with this complicated situation, and the poor sporting results, they decided to accelerate the process by getting rid of all the dead weight in one go, including old contracts.
“I was frankly surprised Elliott didn’t do this in the last financial year, but as they had just arrived, it perhaps wasn’t possible. I am not saying that they will certainly sell in the short-term, but that evidently this is being done to make the club more appetising for a future buyer.
“Milan don’t have debts with banks, so in case of due diligence, the potential buyer would find a clean slate.”
Pagni also points out the Financial Fair Play problems could also be resolved with the aid of this ‘gap year.’
“If Milan qualify for a European tournament in 2020-21, they will aim for a Settlement Agreement and will be able to work out a plan without that €146m to consider in the next balance sheet.
“The positive for Milan fans is that they no longer have Silvio Berlusconi, who didn’t have any budget for the transfer market in the last few years. There’s no Yonghong Li, who at one point didn’t look like he could afford lunch and dinner on the same day.
“Elliott are solid owners. They are ambitious, according to them. Some have suggested it all revolves around the new San Siro stadium project and sponsors tied to that could enter into the club.
“I think it’s safe to say Elliott have something in mind, whether it’s a sale of the club or something to increase the revenue.”
Elliott Management were never meant to own Milan, but effectively repossessed the club when previous President Yonghong Li defaulted on payments for a loan he had used to purchase it from Berlusconi.
MysteriousElf
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you can give Berlusconi dis team to run for 2years, am things will get better... Berlusconi know what Milan weak point, the red and white team is running through him. we need hi now!
you don't know what berlusconi did to Milan? you're not a true Milan fan. he destroy Milan's economics by eating all its money with the party's that he had plus he had galiani that sold all the good players. and last he sold Milan to a Chinese business man that didn't know anything about football, Milan and about business that's why Milan have debts with the banks so we don't need berlusconi. if he comes back Milan will out from football for good . as a club I mean . we need someone that knows about football, business , respects the team . and last to be true when it comes to business for the team
AbdullahAftab
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I really wished Luis Vuitton bought us but that was a rumour I really wish a wealthy owner buys us not a average businessman
sucbilptuz
1
Whatever they do I just want milan to be great and wealthy again
Keyacprsz
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forza milan
rabaimptyz
1
Enough with Berlusconi . He is the that returned this grand team in this situation. He screwed all the glory of Milan in last 5 years of his management and sold to Chinese guy that does not know nothing about soccer .
fatbcpyz
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you can give Berlusconi dis team to run for 2years, am things will get better... Berlusconi know what Milan weak point, the red and white team is running through him. we need hi now!
lented
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we need to be playing in Europe ...so sell it and play that's us ....
WhenDaPimpsInTheCrib
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i dont even care anymore