RedBird, the owners of AC Milan, owe a substantial amount to the Elliott Fund for the purchase of the club, via a vendor loan.
The workings of a vendor loan are nothing new. In fact, they are part and parcel of large-scale interactions, such as buying a football club in this case. So, the one taken out by RedBird is well known at this stage. However, the figures have changed a few times due to interest.
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Value of the Vendor Loan
The latest changes arrived recently, thanks to Gerry Cardinale refinancing the loan, which was agreed in December 2024. At the time of purchase, the businessman paid €650m, rather than the €1.2bn that the club was valued at.
Then, the rest was to be paid back in a vendor loan scenario with an interest of 7%; however, it was refinanced until June 2028 due to the 2025 repayment deadline being unreachable. Today, Felice Raimondo, an expert on the situation, has provided an update on his Substack, via MilanNews.
“It must be considered that the previous interest, calculated on the annual instalment from June 30, 2023, to June 30, 2024, costs €50m annually, and the refinancing took place in December (halfway through the year).
“Therefore, the amount actually refinanced at the end of December 2024 will have been 634 + 25 = €659m. If we subtract the €170m refinanced by Cardinale from this figure, we arrive at €489m (exactly the amount cited in the press release).
“As of June 30, 2025, the sum had risen from €489m to €523m due to new interest, which, for half the year (from January to June), cost €34m. Considered over the entire year, this amounts to approximately €68m (slightly up from the previous €50m).
“This, calculated on the remaining €489m, corresponds to an interest rate of approximately 14% per annum, likely including potential brokerage and insurance costs, up from the previous 8%. (The exact amount will be known from the updated Luxembourg financial statements of Project RedBlack, ACM Bidco’s creditor, based on the latest official figures for 2023.)
“Therefore, barring further more precise corrections, we can consider that the refinancing will cost Cardinale:
– €34m for mid-2025
– €68m for 2026
– €68m for 2027
– €40m until July 2028
Total cost of the refinancing = approximately €210m.
“Provided that a new partner does not enter before the deadline, who can further refinance the debt or even eliminate it.”
Considering that the club could well be sold in the future, it remains to be seen how the vendor loan situation would be handled.
Would be good to know where that money is coming from, whether it’s from Redbird or Milan. At the moment, it seems to have been the former but I’ve not seen confirmation of that anywhere. Reckon you can find out SM?
Either way, Eliot ownership at least didn’t have this issue over its head.
“Would be good to know where that money is coming from, whether it’s from Redbird or Milan.”
We know that already. Milan’s money isn’t the owner’s money. It doesn’t work like that. The owner’s debt is the owner’s debt. Not Milan’s.
This is being paid by Milan capital gain, over the years, nothings paid by REDBIRD !
That’s why Milan is so opsest to be in revenue plus.
Getting a new stadium, that would allow Redbirn to refinance with a club valuation above 2billion, if they build new stadium.
Without this bad loan ac Milan would be much more financially free to invest, but for now we are limitted.
This is great business by Elliot, why not sell a club for 1,5 billion, just because some Chinese did not manage to pay back 300m loan.
That’s why Elliot did not sell the club to the Arabic owners, because their bid was, 1,2billion all paid, while redbird offered 1,2billion while 50% being a loan, and potentially still ownership of the club by ELLIOT, if REDBIRDD fail, and if they succee to pay in time then the sell would have been 1,5+ Billionst by ELLIOT a club they got for less than 300m
this is all speculation about the Arab investors. There is little to no credible sources specifying the Arab investors giving up 1.2 Billion in cash. In fact from my recollection on the available news coming out, the investors were said to have thought the valuation was far too high.
In fact aside from the valuation, the league and the red tape was seen as too much of a hindrance for the Saudi fund that eventually bought Newcastle. They first looked at clubs in Serie A.
I do think your idea that Elliot would rather have an asset that has owners be on the hook to them for a loan figure that is not substantial but is sufficient enough to be difficult for the owners to pay in full. This gives them a good chance to retain a cash flow of somewhere about 210 million in interest payments excluding the other costs.
I do agree the stadium will free up the club in making future investments in the club while Elliot will have an asset that will have approximately ballooned to 2 billion. I always said this journey is going to be cruel and hard because the stadium will resolve a major portion of AC Milan problems financially. If the new stadium is done right, the exponential improvement on the field will be substantial. But to get to that place, it will be extremely hard for the fans and the city.
What is helping the club right now is that the city cannot force the owners to play in the existing San Siro, It has been deemed unfit for use for 2031 euro’s. So the next battle is what can be improved, how many road blocks will the city put in the way to not make enough changes for the team to make enough revenue. It is all a political fight from start too the very end. So strap in for a long gruelling experience.
He is not talking about PIF. There was a bid from Bahrain fund Investcorp, and they came in for Milan even before Redbird. For a long time they looked like a sure thing, but out of nowhere it went to Redbird instead.
Safe to say, Elliott got the best deal for THEM, and not for Milan…
There is a reason why the Elliot Fund is nicknamed “The Vulture fund”.
Their only interest is making money, just like every american capitalist owner.
Saudi and other middle eastern owners dont mind making money but mostly just want to do sports washing.
Neither of them gives a rats ass about Milan as a club.
“This is being paid by Milan capital gain”
LOL. Nope. 😀 😀 😀 😀
You can check that from Milan’s finance reports.
2028…..
I have said it over and over and over – Gerry has to sell by 2028 – other wise he has to refinance the Vendor loan again – and that is not practical. Currently stands at 15% and it would balloon over 20% – no business man worth his salt would do that. Redbird are paying 50-70M IN INTEREST per year – not sustainable.
So we will be sold by 2028 at the latest. I pray it’s sooner
If he gets the arena cleared, and continues to increase revenues, he can get a higher valuation of the club and sell like 25% of it to another investor, then use that money to pay the loan.
I can see him selling a portion in 2026 or 2027 if they have a go ahead on the new arena plus are back in the champions league.