AC Milan’s commercial revenue took a big hit during the 2018-19 season, a report has revealed, continuing a worrying downward trend at the club.
The Rossoneri ended the aforementioned period with losses of around €155.9million, an increase from 2017-18 under Yonghong Li’s ownership.
La Gazzetta dello Sport reported that one key area of expenditure was a problem in particular, namely the €35million more spent for the cost of personnel (such as player wages).
A report from the same outlet has now taken a look at another problematic area, namely the €6million reduction in commercial revenue from the 2017-18 period.
The Rossoneri took €56.8m of commercial revenues in 2018-19, which to put it in perspective is almost €30m less than the €86.5m that Milan peaked at in 2015-16.
Essentially it comes down to three key areas: sponsorships, advertising and merchandising – all of which Milan had historically been the leader in Italy.
At the beginning of this decade Milan earned €80million from the commercial sector, double that of Inter and Juventus, capitalising on a global fanbase and innovative schemes.
However, there has since been a radical transformation of the entire football club, such as multiple changes of ownership and a lack of success on the field.
The absence from the Champions League for six seasons in a row has proved costly, and although Casa Milan was born (earning almost €3m last season) and the income from the hospitality of San Siro (€5m) has increased, the sponsors have fled.
The proceeds from the technical sponsor (which changed from Adidas to Puma) went from €18m in 2015-16 to €11m in 2018-19. It has also been reflected in merchandising, which dropped from €11m to €9m.
The other item which has seen sharp decline is the sale of multi-product promotional advertising packages to commercial partners, which fell from €29m in 2015-16 to just €12m in 2018-19, in particular due to the failure to renew several contracts expired in June 2016.
So far the main sponsor Emirates has remained, a contract worth €14m per season, but the partnership is due to expire at the end of the season with Milan desperately needing to increase its turnover.
Essentially, the strength of the brand is not what it used to be, while elsewhere in Italy the club’s rivals are thriving.
In 2018-19 Juve collected €170million from the commercial sector, while Inter will reveal their accounts on the 28th but in 2017-18 they made €139m.
There is much work to be done on the field, and all the while Ivan Gazidis has arguably even work to do in order to restore Milan back to an elite status off the field.