AC Milan are on the verge of being expelled from European club competition for breaching UEFA Financial Fair Play regulations. The Italian club – the second most successful in European Cup history – is expected to be excluded from the 2018-19 Europa League by the Adjudicatory Chamber of UEFA’s Club Financial Control Body this week.
The proposed sanction – which the European governing body envisages as a warning to overspending clubs – has raised doubts over Milan’s ownership as well as the futures of recent high-profile signings, including club captain Leonardo Bonucci. The Italy international has been identified by Manchester United as an option to strengthen their defence.
Signed from Juventus for €42million last July, Bonucci was the most prominent acquisition of a window in which Milan committed a total €250million to transfer fees while substantially increasing the club’s wage bill. Only Arab-owned Paris Saint-Germain and Manchester City invested more in player purchases last summer.
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While PSG and City won their domestic leagues by 13 and 19 points respectively, Milan limped to a sixth-placed finish in Serie A, some 31 points behind defending champions Juventus. A failure to secure one of Italy’s four Champions League berths made it impossible for the Chinese-owned club to keep financial losses within limits allowed by FFP.
In December, UEFA’s Investigatory Chamber rejected a voluntary agreement presented by Milan to restructure the club’s finances, stating that “there are still uncertainties in relation to the refinancing of the loans to be paid back in October 2018 and the financial guarantees provided by the main shareholder.”
On Monday, Milan released a video on social media demanding “equality, judgement based on the facts and equal rules for all”, while arguing that the club had “worked to make the organisation more efficient so we could run it in a virtuous manner”. Milan’s video is understood to have been ill received by senior UEFA officials.
According to a source at the governing body, the Adjudicatory Chamber’s recommendation that Milan be excluded from European competition reflects continued concern over Li Yonghong’s financing of the club and management strategy. Last summer’s aggressive spend on transfer fees and salaries was funded by debt as Milan “gambled” on securing Champions League revenues in the 2018-19 season, a practise the governing body would like to make an example of.
Li’s Sino-Europe Sports Investment Management company purchased Milan from former Italian prime minister Silvio Berlusconi in April 2017 in a complex transaction that included financing by an American hedge fund, Elliott Management. Further high-interest loans were taken on during last season and, if Elliott is not repaid by October, it can take control of Milan from Li.
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Milan’s travails have attracted the attention of third parties with the owners of Major League Baseball franchise the Chicago Cubs publicly stating their interest in buying the club last week.
“The Ricketts family brought a championship to the Chicago Cubs through long-term investment and being great stewards of the team,” the American family said in a statement. “They would bring this same approach to AC Milan. The entire family and the family’s financial resources are involved in this matter.”
Milan concluded seven transfers with fee commitments of €20m or more in the 2017 summr window. These included high-profile deals for Bonucci, Portugal striker Andre Silva, Cote d’Ivoire midfielder Franck Kessie and Turkey forward Hakan Calhanoglu.
Bonucci, 31, is on a short list of central defenders Manchester United have considered as reinforcements in the current transfer window alongside Toby Alderweireld, Jerome Boateng, Milan Skriniar and Caglar Soyuncu. Following a difficult first season at Milan, Bonucci recently told Italian television that he had “no problem whatsoever” at the club.