Scaroni explains why he is proud to be ‘president of the only team in Milan’

Yes. I think that I completely understand what’s Gerry Cardinale’s project and end game, or at least I suppose I do; it’s speculation but I think that if we observe what’s going on, chances are that this is really what’s behind it. Still, even for his own hidden goals, he is not going correctly about it. Let’s see. In my understanding, here is what I think he wants:

1) Get youth players on the cheap and develop them, so that later they can be sold for a profit (see the selling spree idea, below). That explains the emphasis on investing on Milan Futuro.

2) In the relatively near future, dangle the idea of a new stadium to prospective buyers of the club. For this, do get SOMETHING going (like purchasing the San Donato area, cleaning it up, talking with the San Donato mayor, also still talking with Milano’s mayor for a possible purchase of San Siro which sounds like a stalling strategy) but actually don’t complete the job (see the stalling part above), because if you were actually serious about completing it, it would take an investment of more than 1 billion Euro, therefore destroying the profit at a point-of-sale. So, by starting the project but not finishing it, Gerry can say to prospective buyers: “look, get on board while you can, for a bargain. See, this club will in a few years own its own modern stadium; I’m already working on it; and then it will explode and become extremely profitable.”

3) Continue to make the UCL in order to profit from the prize money, merchandise, and ticket sales, so that the club continues to post a positive financial account which would also impress prospective future buyers who won’t want a club full of debts. For this, actual Serie A titles are not required; that explains why he said that top 4 is good enough and winning is boring.

4) Don’t spend too much on new signings of more established players with smaller developing potential, again so not to eat into the profit margin; that explains the 20M to 25M cap, and the hiring of a cheap, yes-man coach who doesn’t request big investments.

5) Hang on to some essential players for now… (which explains why Theo, Rafa, and Mike were not sold despite all the speculation last mercato) but don’t be surprised if when Gerry decides to sell the club, a couple of months earlier he goes into a selling spree, in order to generate funds to pay back the vendor’s loan that he still owes. That would also include the young prospects like Camarda, Zeroli, Liberalli, etc.

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OK, so from the standpoint of an American private equity fund that responds to share holders and couldn’t care less for silly things like Italian Serie A trophies that don’t actually deliver a whole lot of money, what he is doing seems to make sense. Why should American investors care about “soccer” anyway? They find it boring and think that the real profitable sports are American Football, Basketball, and Baseball. But hey, since the Arabs seem to be silly enough to like to purchase “soccer” teams, let’s get into it so that we buy cheap, clean up the financial mess, balance the books, increase the valuation, and later we sell the teams to them for a bigger price, for a profit!

However where he is wrong, is that he underestimated the other Serie A rivals and opponents. The above strategy is making the club drop to mid-table, while Inter, Juve, Napoli, Atalanta, and even lesser clubs like Fiorentina and Lazio, are actually trying to win titles or at least compete (more efficiently than we do) for the 4 UCL slots.

So, the push to cheap mediocrity to ensure a positive financial account is actually likely to have a negative impact on the bottom line, because if the AC Milan club misses the UCL spots, it will be an enormous blow to the club’s valuation. Not only Gerry will not make the 120 plus million Euro in prize money, merchandise, and tickets, but also the world-wide brand of AC Milan will suffer, and that impacts on the money too. Kids in the United States won’t be buying Milan jerseys if the club is not even in the UCL. They are bandwagon and fairweather fans anyway, which explains why such a young club like Manchester City has such a huge following in the USA; its because they win, and new fans want to join a winning operation.

In this situation, his hope of eventually trying to sell the club for a huge profit to some Arab sovereign fund may find no takers.

The Arabs are rich enough. They are not in it for money, which they get more than they can spend, from oil, not from football. They are in it for prestige and cultural prominence. They want to thump on their own chests and say “see, we the Abu Dhabi royal family own 81% of Manchester City (true), one of the top 3 best clubs in the world.” They will NOT want to purchase a controlling interest in some Italian mid-table team that doesn’t even make the UCL.

So, Gerry directed his clown puppet Ibrahimovic to hire the mediocre Fonseca, thinking that he’d be able to get away with it and still make the UCL thus preserving the profits. Big mistake. Hire mediocre people, expect mediocre results.

So now I’m curious to know if Gerry will recalibrate once he realizes that the way things are going, the valuation of his asset is going down the drains.

Gerry is probably not stupid. He wouldn’t be this rich if he were very stupid. So, I think there will be some end point to our current misery. Once he realizes that Fonseca is not getting us to next year’s UCL, he will drop him like a hot potato, and may actually scratch the cap and tell his minions to hire some competent players, in order to make it back into the profitable UCL and revamp the world-wide AC Milan brand.