AC Milan: There is a light that must never go out

THE Serie A title race looks like it may be a struggle to the finish between Inter and AC Milan, the first time the San Siro duo will fight it out for the scudetto since 2010-11. Although Inter were champions and Milan second in 2021, there was a 12-point gap between them. Milan are currently one point behind Inter, although the Nerrazzuri have a game in hand.    

Away from playing matters, AC Milan have made real progress, which after the past few years, must be a great relief for the club’s management. Although they made a loss of € 92 million, they have shaved around € 100 million off their deficit in a year. In the past five years, Milan have lost almost € 600 million. Their revenues, totalling € 240.8 million, were at their highest level since 2013 when they almost reached € 250 million. Calcio de Finanza has forecast the momentum will continue in 2021-22, with total revenues hitting € 300 million. The resurgence of Covid infections and the new (temporary) stadium limit of 5,000 will be a challenge.

Income for 2020-21 was generated from broadcasting and commercial activities, which increased by 18% and 40% respectively. Broadcasting totalled € 138.3 million, while commercial activity amounted to € 102.5 million, thanks to increased sponsorship and advertising. They have built on this fresh impetus with 25 new commercial partnerships since August 2021.

Ninety-two million euros may seem a daunting figure, but Italian clubs, generally, have been making huge losses during the pandemic. The improvements since last year implies Milan are on the way back and being run more proficiently. They returned to the UEFA Champions League in 2021-22, but they were drawn in a particularly tough group with Liverpool, Atlético Madrid and Porto and finished bottom. Regardless, they will have benefitted financially from being involved. If Milan are to regain their competitive edge, regular participation in the competition will be a pre-requisite. Their income from European competition is miniscule compared to Italian rivals Juventus. 

Similarly, Milan need to step-up their player trading efforts. In 2020-21, they made a profit on player sales of € 18 million, and over the past five years, they had earned less than € 100 million from this source. Compare that to the € 1 billion-plus made between Juventus, Napoli and Roma, and it is clear there is significant upside for Milan. In 2020-21, they sold Suso to Sevilla for € 21 million and Lucas Paquetá to Lyon for € 20 million. 

In a transfer market undoubtedly compromised by the pandemic, Milan spent far less than Juventus and Inter last season. Their gross spend was around € 35 million (source: Transfermarkt), while Juve spent € 155 million and Inter € 121 million.

Milan also need to leverage their brand to secure better shirt and kit deals. According to Brand Finance, Milan are inside the top 30 most valuable and strongest brands. Their shirt sponsorship with Emirates yields € 14 million and their Puma kit arrangements amount to € 13 million. Juventus, by contrast have a shirt sponsor, Jeep, that pays € 45 million and Fiorentina’s deal with Mediacom is € 26 million. Even Sassuolo have a better shirt deal with Mapei (€ 18 million).

Key to AC Milan’s future is the new stadium project which seems to have been discussed for years. Interestingly, of the most recent 150 stadiums built around the world, only three happen to be Italian. Milan’s new home, to be shared with Inter, of course, aims to be a revolutionary arena that will take the club’s matchday revenues from the usual € 30 million to € 80 million. Their CEO, Ivan Gazidis, is desperate to drive-up revenues in order to bridge the gap with Europe’s elite group. He knows Milan are still € 100 million from break-even, but hopes this will be achieved within three years.

Milan’s league form has recovered after a sticky patch and they have won their last three games, including a 3-1 home success against Roma. They’ve only lost one away from home, but slipped up before Christmas against Napoli at home. Fans are calling for action during the transfer window to strengthen the squad, but Milan will be only too aware that some of their biggest signings have not worked out too well. Milan are still dependent on 40 year-old in Zlatan Ibrahimović, who is their leading scorer with eight Serie A goals in 13 games. He cannot go on forever. Franck Kessie, a player who has become a target of some of Europe’s top clubs, may decide to leave Milan as he has yet to sign a new deal. This will be a blow to the Rossoneri, but they have been looking at Sven Botman of Lille and Manchester United’s Eric Bailly.

After some grim financial performances, AC Milan still have some way to go, but there is, at least, a light at the end of the tunnel, and when the new stadium arrives, the club can look the future in the eye.