My thoughts and analysis on #ACMilan, what landed us here, what we did, what is happening and what will be happening IMO. I will take a look chronologically as far as I can recall. Hopefully, this makes the Milanisti that read it understand, comprehend and be patient for a bit.
Today is one fine day in February 2020. If anybody wants to look up the winners of the European Champions Cup [that later became the UCL] or as we fans like to call it The Cup with Big Ears then you easily find that Real Madrid CF has 13 trophies. The second club on that list is:
@acmilan with 7 European Cups. This is despite Milan not playing a final in the last 13 years! In all this time not a SINGLE European club managed to equal the 7 cups. Not a single one. This is not a living in the past tweet but a factual rendition of what Milan’s place is contd.
in world football. It is still one of the most storied and glamorous clubs in world football. It has a global and passionate fan following in every continent of the world. The twitter following of Milan the last time I checked was 7m followers. To put some perspective into this..
The New England Patriots that have been arguably the most dominating side in any sport for the last 20 years have less followers than Milan who have been a non-entity for 13 years IMO. This glamour and success is not alien to the Rossoneri.
Milan reached the final of the European cup in only the third edition in 1958 against Real Madrid. That game was lost 3-2 after extra time. Milan was the first Italian club to lift Big Ears in 1963 in Wembley. These are facts. This is history. This is irreversible.
Milan went to win their second European Cup against a young and rising Ajax side that could not match the onslaught of clinical perfection in a 4-1 drubbing. Real, Benfica, Inter & Milan were the only sides who had won 2 or more European Cups when 1970 arrived. All before Silvio.
Milanisti won’t have a lot to talk about the 70s and most of the 80s. With glorious and glamorous history comes time to reflect on what went wrong and how to fix it. Except for one smaller European trophy there was nothing from 1969 to 1989 for Milan fans to celebrate in Europe.
The 70s welcomed AFC Ajax, FC Bayern Munich and Liverpool FC to embark on their European adventures with 3 for Ajax (71, 72, 73) , 3 for Bayern (74, 75, 76) and 2 for Liverpool (77, 78) in the 70s. Liverpool (81, 84) would two more in the 80s. The club of elites was expanding.
This lean period for Milan for twenty years was also a lean period for Serie A teams as only Juventus FC was able to win in 1985 in tragic circumstances in Heysel. Just one winner in all this time as Milan was suffering. When the club faced darkness and nothing but darkness ...
A young, hungry and aspiring media magnate by the name of Silvio Berlusconi came in to buy the club in 1986 (a year after Juve won). The “vision” and “ambition” of the club changed immediately as leadership always flows from the top. Silvio wanted to take the club to the top.
A gentle reminder that it took 20 years for Milan to win the third European Cup. That was the gap. In 1988 Real (6), Liverpool (4), Ajax (3), Bayern (3), Benfica (2), Inter (2), Milan (2) and Forest (2) were the multi-winners. That is what this gap did. This is football.
However, as in life there is light after darkness and Milan did see light. Lots of it. I believe it started with a header. 😊 Not just any header but a phenomenal neck muscle extension and turn with a fully airborne @MarcoVanBasten aka The Swan of Utrecht.
When that ball went in off the post it earned a first leg 1-1 draw in Madrid against Real Madrid led by Manuel Sanchis that had been winning La Liga regularly for the preceding years and also trying to win their seventh European Cup that had been eluding them since 1966.
The second leg was in Milano and a game that is just one part of many parts of the foundation stones of the European Cup. Real Madrid were defeated 5-0 in a historic second leg of the SF. Il Grande Milan was back. A statement had been made. After twenty years of suffering.
Some fans would have remembered the 60s. Some would have only seen darker days. Some would have only remembered the relegation days. And then some would have seen the great days with Sacchi’s Milan. Such is football. It moves in cycles and no team stays at the top.
Milan would go to the final in Barcelona with confetti and greetings from the Catalonians due to their animosity with Real. 90,000 Milan fans descended to the Camp Nou to fill it. The hunger of not being in a European Cup final for twenty years was just one too many years.
Milan dominated the final and cruised to an easy 4-0 win. Another sign of a club that knows how to play finals and scores freely in them. This was to be the second final where Milan scored 4 in a final. The third one with 4 scored was coming in 1994 against Cruyff’s dream team.
Milan went on to defend the title in 1990 and that would turn out to be the last time the European Champions Cup was successfully defended. It can’t be undone. It is football history now. When Real won it back to back to back from 2016-18 it had become the UCL.
So, Milan went from a lean period of twenty years to winning 3 European Cups (89, 90, 94). The controversial final of 1993 and Marseilles winning it to ruin an almost perfect campaign for Milan is a contentious issue. It should have been Milan’s title on the pitch, not after.
Milan with the three additional titles had changed the winners’ equation dramatically with Real (6), Milan (5), Liverpool (4), Ajax (4), Bayern (4) being the only clubs (except LFC) to wear the European star on their sleeve. Clubs with at least 5 wins or 3 consecutive wins could.
After every glamorous and glorious period, darkness does pay a visit lest we forget and that did happen to Milan again. There would not be another European Cup final for 7 more years for Milan since Athens in 1994 against Barcelona with Romario, Stoitchkov, Koeman and Guardiola.
Milan would then start another glorious era from 2002 onwards till 2007 with three more European Cup finals and arguable under-achieving in 2004, 2005 and 2006 as the team was that strong during that era. You can’t have it all.
By the end of 2007 there was so much success for Milan but one thing was missing -> it was social media. Milan’s success came in a period before the advent of Facebook, Twitter, & Instagram so the traction that that sort of success could drive through discussion was missed.
It was Galliani and Silvio’s blunder to not use the AC Milan brand to enhance it with so much success over a 25 year period. Instead, their energies and focus was on Silvio becoming a successful politician to become the PM. They both succeeded in this endeavour.
Milan could have become even more bigger as a self sustainable brand as you make big decisions in a time of success, not during the time of rebuilding or failure. The investment in the club had practically stopped from 2004.
Some purchases were made but the hunger, desire and ambition had already changed by then for Silvio. He got busy with politics while Galliani was handed the reigns and he was not the visionary like Silvio to bring success. Leadership flows from the top and Galliani was no leader.
Slowly and gradually Milan got weaker and weaker and it was not affordable to sustain the club financially anymore. Silvio wanted to cash in after stripping the club of all its assets. The huge selfish mistake Silvio made was based on greed.
He demanded €1bn at first and then eventually sold the club for €740m to somebody who nobody knew as that was the only way to cash in on the club that should have been sold for €450m tops. Nobody had the resilience or patience to deal with Silvio.
Nobody wanted to take on AC Milan with so many irregularities in the accounts. Only somebody like YH Li could purchase the club and take it off his hands if that is what really happened. A crazy spending spree of €180m took place with a €220m commitment on transfers (loans).
In hindsight it was an absolute disastrous Summer of buys by Fassone and Mirabelli. Relying on Montella was a grave error. Changing to Gattuso was an equally bad decision.
YH Li defaulted on a high interest loan and Elliott Management took charge by default. A club that was in turmoil since Silvio’s time had the additional burden of the disastrous ~€200m spending, overpaid players and fresh player contracts to deal with.
Elliott took charge. They brought Leonardo in. They brought Maldini in. They immediately tried to start cleaning up the accounts by clearing debts and also make money available for squad replenishment for Leonardo. In parallel they put an unbelievable offer for Ivan Gazidis.
Maybe Elliott thought that YH Li, Fassone, Mirabelli had made a mess and they could stem the tide, clean up accounts, clear debts, make the team stronger and show how it is done. It backfired spectacularly as some soft decisions were made. Retaining Gattuso was a mistake.
A few months later, Higuain, Bonucci, Caldara and Piatek are gone. Laxalt was only recalled because of Antonee Robinson not concluding. Paqueta is not a regular. These are all very expensive transfers that have not worked out for Milan. Galliani, Mirabelli and Leonardo.
It is a string of errors in player recruitment, judgement on squad needs and ignoring the impact on club finances. Gazidis joined in December and within months fell out with Leonardo who left. Maldini was on the cusp of leaving but stayed as he was promoted with Leo’s salary.
A wrong appointment in Giampaolo the coach backfired. The inability to sell by Maldini due to high demands or just not understanding the market at that time as this was all new to him ended up hurting Milan further. A string of bad decisions that went back over a decade continued
Some good additions in the form of Theo, Bennacer and Krunic joined. Rebic started improving from January. Zlatan and Kjaer have helped with the progress. However, Milan in the sporting front are still some distance from a finished article. It is a work in progress.
Financially speaking last Summer and this January will go a long way to help the club avoid a massive €160m annual loss. It will not happen again when the books close in July 2020 for Milan. Milan’s wages have cut down and some player sales and possible payments for ...
Loaned players will help boost the club revenue (without UEL and UCL) and cut down losses. Both the windows included show that Milan has curbed the spending and gradually taking it one step at a time to improve. How much improvement is debatable as the table is the final judge.
Milan is a heavy financial burden for an owner. The team is not a top four side meaning no UCL which in turn means a big financial hit. To make the team better requires investment and to do that losses will happen. It is a an endless abyss. To get out of it there are few ways.
1. Milan can speak to UEFA and bid farewell to European Competitions for 3 years. That makes FFP (which is a mockery and joke) a non-factor. Spend what is needed to build a side capable of challenging and winning the scudetto. Probability of this scenario is low. It’s a big call.
2. Continue on this path with lateral improvement which is slow and gradual. Spend within means which will be very little and hope some of the players become really good like Theo and Bennacer. Probability of this happening is really high as it is happening currently.
3. Sell the club. This is easier said than done. There has to be a demand and there has to be a buyer’s will to spend that much money. If somebody is going to spend €700-850m to buy Milan they will want something to make the post purchase process in their favour.
3a. What is that something that a buyer will want? They will talk to Elliott as Elliott is not Silvio so the accounts will be clean, the due diligence process easier and an environment that is conducive to a sale.
3b. A buyer will want to recoup their investment so they will want a ready-made approval for a stadium complex. A stadium. Shops. Restaurants. Onsite hotel. Offices. A stadium park complex that entices people to come, spend the day there and spend money. 365 day revenue machine.
3c. It is not a big factor with all the football changes coming in 2022-23 but having a UEFA settlement agreement in hand will give a new owner the opportunity to flex their financial muscles and not have to worry about budgets.
So, does Elliott want to sell? Most definitely they want to. Can they sell the club as is and get the amount they want to for Milan? Most probably not. There have to be a few things to happen to get the ducks in a row to start the domino effect of the sale.
The stadium park complex should arrive by April 2020. It could arrive earlier and it would be better for Milan and Inter if it arrived in March. At the moment it seems the agreement is close because:
Both the Milanese clubs have agreed to pay the land lease from year 1 rather than year 32. Both have agreed to preserve a part of the San Siro as it is football heritage. How much will he aced exactly is unclear but a small part should be preserved.
There are some other things to finalise from an environmental perspective for noise, the buildings and overall revenue benefit for the municipality. These are difficult issues but not the major bottleneck which is clear now. So, March or April should bring the news we expect.
That should clear 3a and 3b mentioned above. It should garner interest from sponsors for the stadium rights, surrounding area, bids for shop rentals, hotel and restaurants. It’s a commercial opportunity so they will all come and want a piece of the pie. This will help the clubs.
A €1.5bn construction project that is likely to reach €2bn or even more will get attention worldwide. It’s not just a stadium being built but a big revenue machine being prepared. It will increase the interest in the club purchase.
There have been plenty of rumours of Bernard Arnault showing interest in Milan and even putting in a bid. However, these have been firmly denied by him and his son Antoine. They have a presence in Milan they say. That is true. Their products are available worldwide.
But there is nothing like brand loyalty with sports teams. There is nothing like fever pitch affection for a brand like a sports team. That is the untapped area which is waiting for the first mover advantage just like Silvio came in and swept all away by being the first one.
The one strategic advantage that Arnault has over somebody like QSI is that he has established brands that are renowned. The cross-pollination of those brands opens up endless opportunities to commercialise and enhance the reach further to an untapped area: football fans.
That is a decision for him, his board and his advisors to make whether it is worthwhile to invest in the fashion capital of Milan to purchase AC Milan, invest in the club to revive it and then use the success of the club to enhance all brands with ready-made brand ambassadors.
Milan is a high visibility club analysed under a microscope like other big name clubs. The pressure is high. It is not easy to own it and sustain the financial burden for a billionaire (like this linked in the past). It needs a financial behemoth to own it. Arnault or QSI can.
Will the club be sold? Everything till now points to a club sale IMO. Elliott has to curb the spending to cut the losses and avoid another €160m annual loss as that is a loss they would have to plug. If they do that they will want to recoup that from the sale & the price goes up
The stadium park complex approval will accelerate the sale. Elliott is not here longer term. Everybody knows that. It’s the timing of when the sale can take place is the question. It should happen by April/May. The rumours have stopped but there is a timeline.
There can’t be that many rumours without something being discussed in the background. If Elliott can’t sell the club by May then the only opportunity is Qatar after the 2022 World Cup concludes. It will not be that easy either.
There are buyers out there buying basketball teams for $2bn+ and NFL teams for $2bn+. Those buyers want a commercial machine which is where the stadium park complex comes into play combined with huge earning potential for football clubs on the pitch with prize money.
Milan fans are in the middle of another dark period that started way back after 2007. It shall pass and it will be better with light. It is much better now than in 2014. There is forward movement and it is gradual. It is not leaps but small steps. The firm decisions are good.
The next few months till June will start painting a clearer picture of what is happening. The results on the pitch or the frustration over individual mistakes by players is just a narrow vision of the full picture factoring in everything. I think the sale is coming.
The sale should be done by May but it is is so difficult to analyse with so many moving parts and factors that it could easily be postponed to a future date months later. Just observe and wait till June for a clearer picture.
