AC Milan have reported a loss of €91.28 million for 2014, the highest in the history of the soccer club. What has to worry Milan fans is that the continuing to widen significantly.
In 2012 the club lost €6.86 million. In 2013 that loss had grown to €15.7 million and then rocketed to €91.28 million as the performance on the pitch match the financial results off it. Over the last ten years (2005-2014), AC Milan has accumulated net losses of €361 million – posting a profit only one year, in 2006 (€2.48 million).
No wonder that Silvio Berlusconi, who owns 99.93% of the club through his Fininvest holding company, is looking to offload 30% of the club as a way to provide the team with a cash injection. But talks are slow as Berlusconi somehow values AC Milan at €1 billion, while potential Chinese investors value the club at close to €500 million, excluding debt. That debt is around €334.5 million.
The financial report makes grim reading as revenue fell to €223.9 million from €254 million, while operating costs rose to €154.7 million from €151.3 million.
Financially stable clubs have a wage bill that is around 50% of revenues, but Milan’s is a 62.9%, which translates into €140.8 million.
Worrying is that Milan has negative net assets for €94.2 million, meaning it needs to be recapitalized by at least €100 million to keep going without having its book to be scrutinized in a financial court.
These results will cause concern at Uefa as the increasing debt means that Milan will not meet Uefa’s Financial Fair Play regulations. Then on the other hand, Milan will not be in Europe next season, so any Uefa restriction will not take place for 12 months at least.
To get back onto a solid financial footing, Milan needs to slash its wage bill to around €100, and look to build a team of good young players.