Elliott Management face a dilemma regarding AC Milan as the club’s value is currently in decline, according to a report.
Having taken control of the club in 2018 following a year of Chinese ownership, the American fund had the idea of regenerating Milan from a financial and sporting point of view, and sell it within a few years obtaining an important capital gain at around €1.2billion.
According to La Gazzetta dello Sport on Sunday – as cited by MilanLive.it – Elliott rejected a €620million offer from Czech tycoon Daniel Kretinsky – a figure well below their demands and valuations.
The problem is that Elliott have so far struggled to turn the Rossoneri ship around. A lack of commercial revenues, despite the arrival of a strategist like Ivan Gazidis, means that Milan remain light years away from Juventus in that sector.
In the last two-and-a-half years Elliott has lent €80m to Yonghong Li and €128m for the subscription of two bonds to help the club. They injected capital which cost €32.4m in June 2018, spent €265.5m in 2018-19 and a further €60m between July and September 2019.
If the refund of the two bonds (including interest) of €141m is deducted, the total outlay of Elliott in the Rossoneri operation amounts to €525m, of which €345m ended up in the club’s coffers.
Many expenses, but the revenues do not match. The paper adds that above all the value of Milan is in sharp decline as the difficult of improving the sporting side has been underestimated. Elliott has spent €125m to improve the squad, but the results are insufficient thus far.
Continuing in this direction is becoming tiring: if the goal of Elliott Management was to increase the value of Milan and sell it for huge amounts, the opposite is currently happening.