The situation at humbled Italian giants AC Milan appears to be going from bad to worse. The season began with expectations that the normality of success would return to the club following heavy investment from the club’s new Chinese owners.
It ends with the very real possibility that the one scant consolation of an underwhelming season on the pitch, securing Europa League football for next season, will be snatched from their grasp.
The Rossoneri are traditional giants on both the Italian and European stage, only Real Madrid have won more European Cup titles, but they have fallen on hard times recently, unable to match the power of Juventus and their assortment of title rivals.
AC no longer sit at Europe's top table
The Milanese club endured three consecutive seasons with no European football whatsoever, less than a decade after winning the Champions League and having qualified for the competitions in each campaign this century prior to that.
This season saw a return to the Europa League at least, but a limp last 16 exit to Arsenal showed just how far they had fallen from their once lofty heights within the sport. A report in the New York Times this week now states it is ‘very likely’ the club will be banned from competing in continental competition next season.
Once consider footballing royalty, a sixth-placed finish encapsulated the current position on the pitch of Milan, but their situation off it is what is of genuine concern.
New ownership has been a disaster
Controversial former owner Silvio Berlusconi’s leadership came under heavy criticism with resources viewed as insufficient while the structure of the club was not one befitting of their status: underinvestment mixed with substandard recruitment created a scenario of instability both on and off the pitch.
Li Yonghong’s long-awaited takeover of Milan was completed in April last year amid the promise of heavy and sustained investment in the playing squad, yet the nature of the deal was met with great scepticism in the Italian press and by former players.
Despite initial claims the takeover had the backing of the Chinese government, Li’s Hong Kong-based Sino-Europe Sports Investment paid a reported €100m as a deposit in 2016 before three further payments totalling €150m.
The remaining lump sum was then paid off using a different holding company based in Luxembourg called Rossoneri Sport Investment. As the takeover was completed, it emerged Li had borrowed €300m from the US private equity fund Elliott Management - which has been described as “a vulture fund” due to its tendency to lend funds to failing companies.
Reports suggest the Chinese government are reluctant to sanction significant investment in outbound projects hence the withdrawal of their backing and forcing Li to scramble away for significant funds to complete the deal. There have been various reports since of bankruptcy fears, with the big outgoings last season based on future earnings of Champions League football.
The money involved with playing Europa League football is only a fraction of that amount but now that looks set to go too, along with the club’s famed name taking another embarrassing PR hit. For a club who has won 18 domestic league titles, the current scenario is beyond the pale.
“This certainly hurts our image, but we are still hopeful,” said the club’s chief executive Marco Fassone. Fans of the Rossoneri will need a lot of hope over the coming months.
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