AC Milan’s Financial Turnaround Signals a Promising Future

A decade ago, Milanese football was in a dire state with two historic clubs, Milan and Inter Milan, struggling financially and falling behind the dominant Juventus. However, recent developments have shown a remarkable comeback for both clubs. In 2021, Inter Milan ended Juventus’ dominance by winning Serie A, followed by AC Milan clinching the title the following year. Last season, the two Milan clubs even reached the Champions League semi-finals, with Inter making it to the final. While Inter faces ownership issues, the return of both clubs to the spotlight signifies their recovery from obscurity.

In August 2022, Milan was sold by Elliott Advisors to RedBird Capital Partners in a €1.2 billion deal, emphasizing the significant progress made by the club. RedBird already had investments in various sports entities, including Ligue 1 club Toulouse and the Fenway Sports Group, owner of Liverpool and the Boston Red Sox. Milan’s appeal as a pivotal club in Italian football made it an attractive prospect for investors.

Under RedBird’s ownership, Milan experienced significant changes during the 2022-2023 season. Notably, they achieved their first pre-tax profit in 17 years, a stark contrast to the previous four years of substantial losses. With accumulated losses of nearly €500 million, Milan reduced their deficit to just €60 million in 2021-22 and recorded a profit of €13.5 million in the latest financial year.

The club’s revenues reached a record €400 million, closing the gap on Europe’s major clubs. While still trailing Juventus, who generated €460 million, Milan surpassed their city rivals, Inter, for the first time since 2016. The resurgence of both Milan clubs contributed to a significant boost in matchday income, with Milan’s averaging 71,828 spectators at the San Siro for Serie A matches, the highest attendance since 1993. This surge in attendance can be attributed to the fans’ enthusiasm following the club’s resurgence, the 2022 title win, and potential anticipation of a new stadium.

The topic of a new stadium is still under discussion, with Milan interested in relocating to the San Donato area. While the city of Milan wants to preserve the iconic San Siro, a modern stadium similar to those of Real Madrid and Barcelona could enhance the club’s status and competitiveness. The club’s television income increased by 31% to €175 million, driven by their Champions League campaign. However, their early exit from the current season’s Champions League will impact their broadcasting revenue, making the Europa League more significant in terms of earnings.

Milan’s commercial revenues also demonstrated considerable growth, rising by 41% to €146 million. The club has become increasingly attractive to sponsors and business partners, recently forming partnerships with companies such as the Dubai-based CFI Financial Group, Leyu, and Sekabet from Asia. The stability of Milan’s wage bill and reduced wage-to-income ratio from 93% in 2020 to 43% in 2023 have been pleasing factors for the club’s board.

RedBird’s emphasis on on-pitch success and financial sustainability has become evident through their addition of Zlatan Ibrahimović as an advisor. Ibrahimović’s global presence, his respected status as a player, and his entrepreneurial skills make him a valuable asset for both AC Milan and RedBird. With improved finances, Milan has also been able to invest in their squad, making key signings such as Charles De Ketelaere from Brugge for €32 million.

While Milan lost the Scudetto in the 2022-23 season to Napoli, they remain in contention for the Serie A title in the ongoing campaign. As partisanship and traditional rivalry are set aside, both Europe and Italy benefit from a prosperous AC Milan. The latest financial figures for 2022-23 demonstrate the club’s positive trajectory and promising future.