The authoritative Swiss Ramble reviews the latest accounts of AC Milan.
The club’s pre-tax loss more than halved from €192m to €92m,
thus improving by €100m, as revenue increased €69m (40%) from €172m to €241m.
Profit on player sales rose €3m to €18m, while operating expenses fell €30m
(8%). The loss after tax was €96m. The €96m
post-tax loss is nowhere near the highest in Italy in 2020/21, as it is
comfortably surpassed by Inter €246m, Juventus €210m and Roma €185m.
It is worth noting
that Milan are responsible for six of the 20 worst losses in Serie A, but for
some perspective Barcelona posted a €481m loss last season. In fact, the big four Italian clubs have lost
a staggering €1.3 bn in the last two seasons (€591m in 2019/20 and €737m in
2020/21), though Milan were the least bad with their €291m deficit being the
smallest, behind Roma €389m, Inter €348m and Juventus €300m.
Milan have lost
an amazing €827m in last 8 years (pre-tax), though president Paolo Scaroni
said, “The trend is positive. We’ll see about breaking even further on, but it
depends on many factors, including whether we are in the Champions League. We
hope to improve our results.”
Broadcasting income rose €75m (118%) from €63m to €138m,
including revenue deferred from 2019/20 accounts plus return to Europa League,
and commercial increased €17m (22%) from €77m to €94m. This compensated for
COVID driven reduction in match day, down €24m to zero.
Commercial
revenue rose €17m (22%) to €94m, due to increases in sponsorship and
advertising. This is the third highest in Italy, but a full €100m below
Juventus €194m. It is the highest growth in Italy in the last three years,
though they actually had the most commercial income in 2016.
The Swiss Ramble estimates total the club’s COVID revenue
loss as €74m (€27m in 2020 and €47m in 2021), split between match day €47m,
broadcasting €16m and commercial €11m.
Profit on player sales rose €3m to €18m, mainly Suso to
Sevilla €20m, offset by €2m loss on Musacchio to Lazio. The transfer market has
crashed due to COVID, but this is still a relatively small gain, e.g. much
lower in 2020/21 than Atalanta €68m and Sassuolo €39m. Unlike many leading clubs, Milan have made
very little from player sales, only averaging €12m profit a year since 2014,
including actually losing money in two of those years. Same story this season
with small profits earned from sales of Laxalt, Olzer and possibly Hauge.
Poor player
trading is one reason they have struggled financially. In 5 years up to 2020,
they only made €72m profit here, which is miles below Juventus €563m, Roma
€372m and Napoli €325m. In fact, they only sold one player for a profit higher
than €20m in the last four years.
It is imperative that Milan do well in Europe to boost
broadcasting income, as TV rights in Serie A are relatively low. England €3.6
bn and Spain €2.0 bn saw big increases in 2019, while Italy was unchanged at €1.3
bn. In fact, the new 2021-24 deal will be lower.
The Swiss Ramble estimates that the club earned €17m for
reaching Europa League last 16 after the UEFA FFP one-year ban meant they could
not participate in 2019/20. Much lower than Champions League representatives:
Juventus €83m, Lazio €54m, Atalanta €51m and Inter €50m. They have only received €46m from Europe in
the last five years, miles behind Juventus €454m, Napoli €243m and Roma €209m.
However, they have earned around €45m from this season’s Champions League, even
though they were eliminated at the group stage.
The club had the second highest attendance in Italy of
around 50,000 pre-COVID, so they will be happy that fans have returned to
Italian stadiums this season. Capacity had been increased to 75%, but rising
COVID cases has meant a reduction recently.
The Milan and Inter joint project to build a new stadium has
been approved. President Scaroni said, “We cannot become protagonists again
unless we have a modern stadium. Without this, it is very challenging to bridge
the gap with top European clubs”, as seen by match day income.
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