WHEN football people usually talk about “turnaround” it usually refers to on-pitch performance and perhaps a fight against relegation. In the case of AC Milan, the club that was once the most powerful in Europe is in danger of falling even further away from financial competitiveness. AC Milan, despite their vast support and their place in football’s pantheon, continue to be a heavyweight also-ran, struggling to keep pace in Italy and almost invisible on the European stage.
In 2018-19, the Rossoneri made a record € 146 million loss, some € 50 million more than anticipated. This announcement was accompanied by the statement that the club’s current owners, Elliott Management, had saved AC Milan from going under and had so far injected € 325 million in order to keep the club alive.
The sins of the past have caught up on Milan, but it is somewhat mystifying why the club, in its current financial state, could still afford to spend over € 100 million in transfers before the 2019-20 season got underway. Furthermore, the club’s wage bill increased in 2018-19 from € 117 million to € 140 million. The 2019-20 season has seen a drop to € 115 million.
It’s also interesting that AC Milan’s income from ticket sales was down by € 1.2 million in a season in which their average home gate at the San Siro was up from 52,690 to 54,651. In fact, Milan’s average was at its highest for a decade and in 2019-20, they are playing in front of almost 20,000 more people than champions Juventus. Only their stable-mates, Inter, have higher crowds.
Yet AC Milan’s revenues were down by 14.7% from € 255 million to € 241 million. Although sponsorship income was lower, TV revenues rose to € 113.8 million. Player sales netted € 25.5 million versus € 42 million from the 2017-18 season. Costs increased by 19% to € 373 million.
There’s little doubt that AC Milan have been badly run for some time. Since 1994, revenue growth at the club has been 74%, in a time when modern football has snowballed dramatically. Juventus, for example, have seen their revenues increase by 750% and Inter’s by 356%. Even these figures are modest compared to others, such as Manchester City’s 3,369% growth.
When did the decline set in? The “bubble burst” long before Silvio Berlusconi exited in 2017. Using Deloitte’s Football Money league as a benchmark, Milan fell like a stone from the top three from 2006 and clearly got left behind. In 2006, their revenues were € 234 million, in 2019, € 207 million by Deloitte’s reckoning. In that same timeframe, Juventus went from € 229 to € 395 million and Inter € 177 to € 280 million. These figures underline the relative decline of Serie A over the past 20 years, but Milan’s revenues make dire reading.
The club’s last Serie A title was secured in 2011, but since then, the collapse of Berlusconi’s empire, resulting in players like Zlatan Ibrahimovic leaving Milan, started to impact on-pitch performance. Milan also lost patience with managers all too quickly. Nobody stays in the job for too long, only Max Allegri has managed the team for 100-plus games and the most recent incumbent, Marco Giampaolo, had just 111 days and seven games, of which three were won. To quote Frosinone manager, Alessandro Nesta, “Milan is a death trap for managers”.
They’ve also spent heavily in the transfer market but had little to show for their investment (eight years without a trophy). From 2010 to 2019, they spent € 850 million-plus and in 2019, they’ve spent € 183 million, which is more than Manchester City, Chelsea and Paris Saint-Germain. In that timeframe, they have one of the worst five negative balances from transfer activity.
At the moment, due to breaching Financial Fair Play, AC Milan are not involved in European football, a very bizarre situation given their heritage and the fact that the design of UEFA’s top competitions is skewed towards ensuring the big names are always competing. As with the revenues, Milan’s fall from grace is emphasised by their absence from the top table in this age of entitlement. They desperately need to be participating every year.
It’s not all gloom, though. AC Milan and Inter are working on a new stadium project that will see the old San Siro demolished. Chief Executive Ivan Gazidis told the media when the initial plans were unveiled: “We believe we have a very exciting project and one which we believe will be a shining light for the city of Milan and also for Italian football. Top clubs around the world are built on solid foundations and the first foundation is a world class stadium.”
Gazidis has said Milan are on a difficult journey and faced with a reality that cannot be ignored. “We took over a club on the verge of bankruptcy…we inherited debts that had to be paid… I want to reassure fans that we want to bring Milan back where it needs to be, capable of competing at high levels.”
The current financial figures suggest Milan fans will need to wait for that moment, for the Italian media reported that a star player may have to be sacrificed as a result of the losses. New coach Stefano Pioli has an unenviable task for he’s inherited a squad that has a poor discipline record – four red cards already this season. He’s also got some trigger-happy employers who are financial, rather than football, people. And to make matters worse, a supporter group was calling for him to be sacked before he’d even started.
Milan’s situation is bad news for Italian football, regardless of personal allegiances. This is a club that can rightly be considered as European royalty, yet their story is a lesson to the many clubs that are reliant on wealthy individuals propping up their economic base. A new stadium and a new focus can save AC Milan from continued mediocrity, hopefully creating a 21st century club that has a modern economic model. As we have said before, the city of Milan is yearning for it, Inter need it (although they probably won’t admit it), Serie A demands it and European football would be that much richer for a competitive Milanese club or two.