Saturday, October 21, 2017

How Will Milan Finance Their Spending Spree?

Luca D'Amico-Wong in Editorial, Serie A 22 Jul 2017

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milan ownership finances

How will Milan’s new ownership finance this massive spending spree? Let’s take a look. Image: Getty

Milan have embarked on one of the biggest spending sprees in recent memory. Let’s take a look at their finances and see how they will recoup some of the damages.

 

Merchandise/Tickets

With all the new signings Milan have made, there’s no doubt that we will see a massive increase in sales of both tickets and merchandise. Even with a mediocre lineup at best and poor results to back it up, the Rossoneri managed to sell 650,000 jerseys last year, good for tenth in the world. Whether a fan wants to buy a jersey of their favorite new signing or a club talisman, there’s no doubt that Milan will see a good boost in revenue from those sales.

Tickets seem to be back on the rise. While Milan did average 40,000 ticket sales a game last year, second only to Inter in the Serie A, there’s huge room for improvement. Milan sold only 16,000 season tickets last year, a number that they expect to shatter, estimates reaching as high as 40-45,000. That figure would mean that they would shatter their previous attendance averages, finally filling the San Siro for the first time in many years. As the money flows out, some of it will flow straight back in. The question is, how much?

Sponsorship

In Fassone’s interview with the Gazzetta dello Sport, he hinted that there would be another top level sponsor coming in next week. Who it is is yet to be seen, but it will provide some much needed cash flow for the Rossoneri. Milan already have two premier sponsors, Adidas and Emirates, but with Milan’s downfall in past years, the amount they are willing to pay has dwindled, leaving them with a meager but still respectable amount of money.

If Milan is able to replicate their previous successes, competition to sponsor the Rossoneri will become more and more fierce, leading to bigger and better contracts and more sponsorships. Good results would also earn Milan money via TV rights and prize money earned from European competitions. In short, the better they perform, the better they will be rewarded.

Future Plans

In his interview with Gazzetta, Fassone set some lofty goals. One was bringing Milan back to the top five clubs in the world within the next five years. The other was reaching a total of €400-500 million in annual revenue. Whichever is more realistic, probably the second one, is up for you to decide, but achieving either goal would be nothing short of a miracle. Those sorts of figures would mean that Milan would be able to compete with clubs like PSG and Manchester City for player’s signatures. Sure, they won’t match Manchester United’s or even Barcelona’s revenues, but it would be an excellent start and a huge jump up from where they were before.

The Chinese ownership also seems intent on placing the Rossoneri on the Chinese stock market. Whether or not this is a wise decision is not for us to decide, but the investors would lift some stress off of Yonghong Li’s somewhat questionable financial status, and it would allow Milan to conform more with FIFA Fair Play regulations.

 

Milan’s problems have less to do with money and more to do with FFP. From these initial glimpses into Milan’s finances, it looks like they have money to splurge. They just have to do it in a way that keeps FIFA happy. If they can manage to increase the revenue through sales and sponsorships, they will have a more flexible budget. But of course, this is all speculation. We’ll have to wait to truly see how the Rossoneri perform out there.

ABOUT THE AUTHOR

Luca D'Amico-Wong


Writer for Various Blogs including The AC Milan Offside on SBNation, Courtside Watch, Forza Italian Football, Clash Royale Tactics, and Soccer News. Loves AC Milan and Roger Federer. Avid football and video game fan who loves to travel. Will find blogging about football and video games in his free time.

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