Skip to main content

Encouraging financial signs at AC Milan

The authoritative Swiss Ramble reviews the accounts of AC Milan: https://swissramble.substack.com/p/milan-202122-finances

Milan have lost an amazing €900m in the last 10 years (pre-tax), but the situation has been improving with the club reducing losses in each of the last two years.

Although not one club in Serie A managed to post a profit at the operating level, Milan’s €68m was firmly in the bottom half of the table, albeit considerably better than Juventus €243m and Inter €168m. Based on the most recent accounts, no fewer than 10 clubs reported an operating loss over €50m.

The importance of European money to Milan’s business model is very clear. The Swiss Ramble reckons they have earned €61m to date this season with another €11m available if they beat Tottenham Hotspur to reach the quarter-finals.

Milan have been very reliant on increases in capital from their owners with over a billion Euros provided since 2010 to cover the club’s substantial losses. That includes €545m from Elliott in the last four years, though they only needed to inject €5m in 2021/22.   In fact, looking at the amount of owner funding in the three years up to 2021 (defined as share capital plus owner loans), no club in Europe received more funding than Milan’s €540m, which was well ahead of Juventus €298m and Chelsea €296m.

Unlike many leading clubs, Milan have made very little from player sales, only averaging €12m profit a year since 2013, including actually losing money in two of those years.

There remains much to do before the club is fully sustainable, as they still posted a €60m loss last season after all the improvements.   However, there are encouraging signs, as outlined by chairman Paolo Scaroni, “I am convinced that, thanks to Gerry Cardinale's strategic vision and RedBird's experience and expertise in sports and finance, we will be able to further strengthen the AC Milan of the future."


Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more

Millwall punch above their weight

Millwall’s season was overshadowed by the tragic death of owner John Berylson following a car accident. The American had been an exemplary owner, beloved by the fans for his leadership, passion and generosity. Millwall’s finances had been pretty good during his tenure, which we shall explore by looking at the most recent accounts from the 2022/23 season, when the club narrowly missed out on a place in the play-offs after finishing 8th. Millwall’s pre-tax loss slightly reduced from £12.6m to £12.2m, as revenue rose £0.8m (4%) from £18.6m to a club record £19.4m and player sales improved from a £0.1m loss to £2.5m profit. However, other operating income dropped from by £1.1m from £1.3m to £0.2m, while operating expenses increased £1.7m (5%) from £31.6m to £33.3m. The main driver of the revenue increase was broadcasting, which rose £1.1m (12%) from £9.1m to £10.2m, though match day was also up £0.4m (7%) from £5.8m to £6.2m. In contrast, commercial fell £0.7m (19%) from £3.7m to £3....
Post a Comment
Read more