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So What Now For AC Milan?

Can someone explain the master plan that someone has developed for the seven time European Champions? A team that finished second in Serie A last season has been absolutely gutted this summer.

Gone are Alessandro Nesta, Thiago Silva, Gianluca Zambrotta, Rino Gattuso, Clarence Seedorf, Mark van Bommel, Zlatan Ibrahimovic and Pippo Inzaghi. In addition, Milan has not exercised loan options for Maxi Lopez and Alberto Aquilani, so at the moment they are not returning. Can any team absorb such a talent drain in one summer and hope to still be competitive?

The issue with all Italian teams is money, or the lack of it. As Ibrahimovic said recently:

“Milan’s problem is economic. There is no money to buy five players, or even the ones we need. We made a couple of signings, maybe there will be a third.”

A look Milan’s most recent accounts (for the year up to 31 December 2011), an dyou begin to understand what the striker was talking. Last year Milan reported a loss of €67.3 million. Amazingly this actually represented a slight (€2.4 million) improvement on the previous year’s loss of €69.8 million.

With Uefa’s Financial Fair Play fast approaching, Milan had to do something. Ibrahimovic’s remaining two years of his contract amounted to a total spend of €48m, including the 50 per cent tax-rate, whilst Silva’s recently-signed five-year deal will cost the club €70m including tax. A €62m offer for the pair, combined with not having to pay their wages turns a potential €118m spend into a €170m windfall.

But that €170m boost only exists if Milan does not reinvest it in new players. If Milan turns around and buys the likes of Carlos Tevez, then the financial windfall from the Ibra and Silva deal vanishes. And if that happens, then what was the logic of selling the two players in the first place?

The challenge for Milan will rebuilding cheaply, while still finishing in the top three in Serie A. Last season, Milan made €39.864m from playing the Champions League. Without that money, they would be in a worse financial situation than they are now.

The long-term solution for Milan is to grow its revenues. The ground share at the San Siro is no longer financially viable with either Milan clubs. Inter have been looking at building their own stadium elsewhere in Milan, and AC Milan might have to do the same. That is what Juventus did and they expect to see their match day revenue at least double.

But that is a long-term solution. Milan’s more immediate challenge is to get younger, and cheaper, players in who can still compete for the title. Can they do that?

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