AC Milan CEO Giorgio Furlani has recalled that the club was rescued from a position of near-bankruptcy, and thus a path of financial sustainability is very much the right one.
Furlani’s involvement with Milan began when Elliott Management took control of the club in 2018, one year after Yonghong Li had purchased the club with loans from the hedge fund that he failed to repay.
The Rossoneri were in a dire financial situation at that point with huge losses being racked up and exclusion from European competitions because of Financial Fair Play breaches looming large.
However, Elliott Management and now RedBird Capital embarked on a path of cost containment and smart investment which has transformed the off-field fortunes of Milan entirely. In 2022-23 a profit was posted, whereas three years previously losses of almost €300m were registered.
During the DLA Piper Sport Forum with Luigi De Siervo (the CEO of Lega Serie A) and Urbano Cairo (the president of Torino and number one of RCS), Furlani shed light on the journey at Milan with his comments relayed by MilanNews.
Can you explain Milan’s path under Elliott and now RedBird?
“There was, when I was with Elliott, a control loan and then Elliott became the owner by chance, by mistake, by bankruptcy of the shareholder. Milan as a club was not sustainable as it is today and yes, it was close to bankruptcy.
“Like Elliott we had to make a great turn around, which was based on four fundamental pillars: firstly sporting success, because there is no project in football and in Milan that does not have sporting success as its basis.
“Secondly adjustment of costs, especially those relating to the players who were too high for the performances, thirdly the investments in the commercial area to have commercial revenues to reinvest and fourthly – alas – the new stadium…”
At what point is the stadium issue?
“We tried to do the San Siro project, now we’ve thrown ourselves into San Donato.”
What is your investment ideal?
“Once we generate resources, we reinvest them for the growth of the squad with the investment in the players.”
What is Milan’s next step?
“We made our first profit with the latest balance sheet after 17 years and this is part of a context of recovery starting from Elliott and a phase of growth with RedBird. In the last year we have strengthened the business part with new sponsors, new and renewals of partnerships, e-commerce, collaborations with companies such as the NY Yankees.
“Obviously economic success goes hand in hand with sporting success. Competitiveness yes, but not competitiveness at any cost. We are competitive and attentive to costs. Sports results bring revenues, but everything will be ruined if the Growth Decree were removed; without the decree it would be the destruction of Italian football.
“Since the Growth Decree has been in place we have found ourselves achieving great results in Europe as Italian football, because we are a talented business: we are under other markets on an economic level, we are in a difficult context…
“But let’s look: it is impossible to make a stadium project, there are limits on non-EU players, shorter contracts… The only lever that makes us competitive with other leagues Europeans is the Growth Decree.
“Our sponsors are foreign capital that enters Italy and which we then invest, the non-football projects are all financed by foreign money: when you can’t offer a good product without the best actors there is no point in making projects. To me it seems madness at a national economic level to remove the Growth Decree.”
Does the sale of Tonali indicate the strategy of wanting to sell a big player every year and then signing players? Will the big names remain?
“I do not know, we will see.”