Cardinale says he wanted €550m vendor loan: “I’m a corporate finance expert”

By Isak Möller -

Gerry Cardinale agreed on a €550m vendor loan when he bought AC Milan from Elliott Management in the summer of 2022. A loan that has been the foundation of controversial reports, which Cardinale now has clarified. 

The takeover was completed in August 2022 and the total price of the club ended up being €1.2bn, with €550m consisting of the vendor loan. If you are unfamiliar with the term, it’s a loan that the buyer takes out from the selling party, often used to facilitate high-value purchases.

Instead of raising funds/getting a loan from a third party, Cardinale decided to go with the vendor loan at a 7% interest rate as Elliott Management were open to this solution as well. In his interview with Corriere della Sera, which you can read in full, Cardinale spoke on the matter.

“I’m the one who wanted it, because Elliott did a great job. Nobody put a gun to my head. You can disagree with my strategies, but don’t invent stuff about them. I’m a corporate finance expert, so it’s baseless to assume that I’m experiencing difficulties 18 months after making these choices.

“It would be better to stimulate debates on how to bring Serie A back to being a reference league, or on the importance of modern stadiums for clubs,” he stated.

The loan had been the foundation of some reports in recent weeks, suggesting that the American was willing to sell the club early and repay the loan. However, as we have said on our Substack as well for a long time, Cardinale could raise funds but he doesn’t want to sell the club.

Tags AC Milan Gerry Cardinale


  1. There is no need for a lot of boring talk, and Cardinale cannot return the great Milan to what it was, so he must quickly sell it to the Saudi Investment Fund. (PIF)

    1. Yeah, because the Saudis really have shown they know how to spend their money… like on that joke of a league they have… and now all the players they bought are desperately trying to leave.

      1. If PIF buys us by we won’t be playing in the Saudi Pro League, we’d still be un the Serie A, so your argument doesnt make sense

  2. This is smRt… probably the club’s fianancial model was able to repay the 550M loan,but in taki git it allows intheory 550 million to invest.. which is basiclly 150 M player capex 2 years, 350 M for stadium complex…. all refinanced by future loans… as long as carefully managed with realistic income projections is a sound organic growth plan…
    Prob only planthat works for this model.. other than having a oligarch as an owner model…

    Thats different from the discussio. How to use the funds, and futbol debate here..

  3. Unlike Li Yonghong, Cardinale has major assets ($10bn) backing him and his investments. Also a good interest rate, and they have done business together before. This isn’t some unknown dude.

    1. You don’t really understand how funds and assets work do you? And saying 7% is a good rate settles it for you and your understanding of finances.

      1. 7% is a perfectly reasonable rate for a vendor loan. Sorry, but it just is, I don’t know what else to tell you.

        Cardinale has put us in the best position as a club we have been in in years but fine keep pretending it’s still the 90s.

        1. Correction, Elliott and previous management put us in a good position. Cardinale is yet to prove us anything. For now he’s known as someone who sacked our legend and sold fan favourite.

        2. Elliot put us in a financially stable state…. Cardinale is just a cunning smart bloke…. Borrowing to buy d club and using d club to find d loan .. reason we will keep selling players to fund d Mercato and using corporate sponsors/gate takings n prize money to fund his debt…. After paying d Elliot debts, he will now use d whole of Milan as collateral for loan to build d stadium . Milan is just paying for everything whilst Cardinale enjoys d money…. It’s call using ur enemy’s hands to catch a snake….🤣🤣🤣

        3. Lol heck no 7% is not a good rate for a vendor loan of that size when corporate bonds at the time of purchase was around 4-5%. Hahaha wtf am I reading. Why do you guys swallow up everything this guy says? Like ask basic questions… why does one need a vendor loan or what are the terms of the loan? Vendor loans are provided when someone wants to purchase something from a company but doesn’t have ALL of the funds right away to do that. And the full amount they secure it through the company itself that they are purchasing from via a loan. In this specific case it’s not a product but the actual club. Gerry bought Milan on an IOU because he did not have all the money required up front. Plain and simple.

          So all this backing of how many billions of dollars and such is irrelevant to the loan unless the owners of those assets are willing to liquidate for the other 550m (note he doesn’t actually own the assets, he manages assets on behalf of people). So far they’ve given him the first half of the 1.2bn, they haven’t given him the second half and it’s been over a year and counting. That’s the part thats really odd in all of this imo. But at the same time it puts them in a rock and a hard place (I believe he’s using this to his advantage) because if he isn’t able to pay the vendor loan through other sources either those same ppl bail him out or accept a lower stake in the club where they would have no decision making power.
          If he had the money or was liquid enough to purchase it at the time of sale he would have. It’s odd to me this issue hasn’t yet been closed off (also basically if he’s unable to pay a loan, he probably isn’t able to invest into the club).
          What’s the collateral? Isn’t it the purchased item itself… the club because it’s a …guess what…a vendor loan.. Elliott played this brilliantly. Plus the size of loan should be inverse to the rate of interest. For such a huge loan, that interest rate should be lower. And if he has access to these billions why not just issue corporate bonds at say 5% and would have paid less in interest AND not to mention actually own the club right now. He doesnt own money, he owns other people’s money.

          1. I have $2m to my name. Most invested making 9% and low risk.

            I want to buy a car. I’m offered 7% at time of purchase. I came easily buy for cash. However if I finance and hold for 3 years I clear 1.8-1.9% per annum (the missing bit are the upfront fees on the loan)

            Nobody of any means has “cash.” They have liquid instruments with an expected rate of return and the ability to liquidate them within a small amount of time.

            Just liquidating a sum like $550m can come with huge costs of the timeline is wrong.

            For us mere mortals imagine having $100k at 5% in a one year cerificate of deposit.

            Half a year in you decide to buy a car. The cost of that is typically $1250 (the current quarters interst) and a penalty. Paying cash, the price of the car went up $1250 … Now work that sort of math at 5500x the amount of money.

          2. Corp bonds at 5%. 5% is about the fed rate in the US. The prime lending rate in the US is 8.5%.

            Getting a 5% bond would be predicated on low risk collateral. 4% would be exceptional. Why should any lender take 4% when the US gov will pay 5% (yeah that is something of an oversimplification because it depends on the market but it holds water).

            Getting a lender to understand the finances of a football club is not trivial. It would take time and not necessarily (IMO not likely) come with a risk profile that would support 5%.

            I don’t know from Cardinale or Redbird. What I do know is none of us here has anything close to the understanding of their financial situation and few – if any – the means to accurately assess the variables involved.

            Thanks for Puli, RLC, Reinjders Mr. Cardinale. You could have pocketed that money. Thanks for Chuk, Okafur and Jovic to strengthen the depth of the squad. Yeah Chuks a bit of a bust at this point but nobody is perfect.

            Gratitude costs nothing and need not be financed.

          3. Size of the loan inverse to rate.

            Check rates on a jumbo mortgage vs. a standard mortgage.

            Rates are a function of risk analysis. On consumer markets it is simplified so there is better transparency leading to better liquidity.

            In the realm of over the counter loans it is all about risk. And who better to understand the risk of investing in ACM than … Yep you guessed it.

            Now if you believe 7% usurious then the real questions might be: Why are ACM so risky at a 1.2bn valuation. What are the structural risks? How likely are they and what are their financial impact at the 7% margin given? What would the new selling price be if the $550m is defaulted (presuming the vendor doesn’t want the stake in the club).

            Your entire post is based on the premise that ACM is a terrible investment because 7% is too high.

            Given the dire way Serie A markets it’s product. Given the lack of Italian government to simply get out of the way of new stadiums. Given Italian footballs over the top punishments of its constituents compared to other bodies, I’d say 7% looks good.

            Given Inter and Milans runs deep in UCL and Serie A potentially getting a 5 slot, I can sort of see why it is not higher.

          4. Sorry @MyKidPlayedSoccer I don’t know why there’s no reply button under your comment for me to respond but you are asking the right questions which is my bigger point. I assume you’re in the US. Things might work differently in other jurisdictions so there’s that. The thing is I was going to caveat my post by saying that I’m not a finance expert as Cardinale so there’s that too. I’ve only been in finance through work and then personal experiences. The rate on the corporate bonds was a quick search but timing matters esp borrowing rates so I looked at Aug 2022. Even your example the timing matters but I get the whole int rate risk differential thing. It also depends on if you’re getting a secured or unsecured line to get the car but I digress. I was just wondering why that money can’t be raised through a less expensive means like an issuance through the assets under his existing bonds, not him buying bonds per.l se which doesnt make sense. How did he raise the other 600m ? Is that his or other people’s money? When I mentioned liquidate it didn’t mean to hard cash but at least to cash equivalent. Like you, I can for example obtain a line through my current set of assets to purchase another house for instance at a lower rate than your example of prime lending rate at 8%. But I own my assets, wink wink.
            I don’t want a long post here but hope I can explain my line of thinking. My personal experiences involves RE… which follow the 5 year bond yield more. Not everything tracks the prime rate for instance, but maybe shorter term loans like variable mortgages which carry shorter effective terms. Not sure how it works in the US though. I didn’t assume Milan was a bad investment that is reflected in the interest rate of 7%.=After all , the club gave them that rate, right? The issue is having the money on hand to purchase the club and potentially other sources that are seemingly cheaper. He literally has billions of dollars from varied spruced which means his risk profile is lower. It should be easier to get a lower rate, no?
            The other question I have is how the interest is being accrued on the current vendor loan… compounded…or only is effective if not paid by term. I have no clue. Again I digress. Anyways, great questions. But tbh deep down I cough it up right now to him representing himself as an expert which he has credibility in. So there’s that 🤷‍♂️. But imo it’s still really, really, odd….

  4. Cardinale is not afraid of failing to pay the vendor loan because based on term of agreement in that vendor loan, only 550/1200 = 46% share would return to Elliot if he fail to pay. Cardinale would still has majority of Milan with 54% share.

    1. I dont think it works like that. Did you see the agreement? Anyway I think its all drama for nothing. The critique of Cardinale could be directed at the sport level but financially we would be world champions now.

    2. The agreement will specify the size of.the stake. So if Elliott wants control terms might be that default after n years is 51% at $550m. Or it could be as you say with the simplest form of “cutting the baby”

      The Ineos deal with ManU is an example of a more complex arrangement where we know some details.

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