AC Milan’s losses for the 2018-19 season are part of Elliott Management’s plans to clear the accounts before a sale, according to financial expert Luca Pagni.
Earlier in the week it was revealed that the Rossoneri came out of last season around €155.9million in the red, an increase of €20m from 2017-18 under Yonghong Li’s ownership.
However, reports then claimed that there are indicators of financial strength from the balance sheets, including a €119m equity increase from the previous period.
The club’s directors are not worried about the numbers and it has even been claimed that Elliott are in fact now ready to invest more and continue to rebuild the club.
MilanNews.it spoke to La Repubblica‘s economic correspondent Luca Pagni to gain more insight on what the figures mean.
“Considering the situation, they accelerated the clear-out of the balance sheet,” he said, as per Football Italia.
“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.
“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.”