Throughout its grandiose history, AC Milan has never been a club to rear its own talent and pay close attention to the books. When Silvio Berlusconi purchased the Italian behemoth in 1986, the club was in a financial turmoil that only a wealthy magnate like Berlusconi could resolve. By injecting hundreds of millions of Euros into the club, the Italian tycoon propelled AC Milan to the top of world football, but the club found itself in a similar financial bog 30 years later when the landscape of modern football changed completely.
AC Milan is one of the few Italian clubs whose eye on the future is periodically churning out great talent. Join us in this series of blogs as we inspect AC Milan’s wise business model in the contemporary football world. For more blogs like this, check out the LV BET Sports Blog as well as our Twitter page.
UNFEASIBLE PRACTICES OF A BYGONE AGE
Although Berlusconi helped AC Milan bag troves of trophies, some fans are divided about his legacy at the club. The practice of spending big year by year not only stopped bearing fruit on the pitch, but it also financially sunk the club to a low that hadn’t been seen in decades. After several years without featuring in European football, AC Milan’s financial troubles snowballed into a debt of catastrophic proportions. Consequently, Berlusconi sold AC Milan to Chinese businessman Li Yonghong in 2017 with the hope that the club’s new proprietors settle the books and push AC Milan forward once again.
Yonghong, along with his selection of club board members, opted for an all-in: spending hundreds of millions of Euros with the aim of qualifying for the UEFA Champions League—a tournament whose earnings would expedite the club’s financial mend. AC Milan fans will remember with anything but fondness about the club’s lavish spending in the summer of 2017.
- Leonardo Bonucci – €42m
- Andre Silva – €38m
- Andrea Conti – €24m
- Hakan Calhanoglu – €24m
- Nikola Kalinic – €5m (loan) + €22.5m
- Lucas Biglia – €20m
- Mateo Musaccio – €18m
- Ricardo Rodriguez – €15m
That season’s total expenditure amounted to €186.5m. Despite the poorly programmed player-shopping spree, AC Milan finished sixth.
This failure didn’t discourage AC Milan’s board from splashing even more funds the following year, when it spent another €194.65m on player transfers. The Rossoneri improved their position to a fifth-place finish which would have qualified them for the Europa League had they not received a ban from UEFA. As it happens, haphazard spending without proportionate income breaches the UEFA Financial Fair Play regulations. Yonghong subsequently jumped ship and left the reigns to Elliott Management Corporation, who had already lent a large sum to the Chinese in 2017. Slowly but surely, the healing process began.
SCULPTING A NEW PATH
Elliott’s reign at AC Milan didn’t start off with a player-transfer diet—what changed was the scope of each transfer. Instead of chasing probable one-season wonders, AC Milan started eyeing potential talent that hadn’t yet blossomed. With €124m spent on the transfer market in the 2019/20 season, the Rossoneri only managed a sixth-place finish, but the basis to build on was created.
In the 2020/21 season, AC Milan spent just €32m, further consolidating the fact that a new path was being taken. Hyped-up players were being left for the newspaper headlines to use—AC Milan and its board had a clear vision: investing in young players and those marginalised by their club to create the foundation for a winning team.
Over the following years, AC Milan’s intelligent transfer moves, as well as its on-field success, resulted in their players’ value skyrocketing. Here are some of the best examples of that.
| Player | Amount purchased (€) | Current value (as per Transfermarkt) |
| Rafael Leao | 30m | 85m |
| Theo Hernandez | 23m | 60m |
| Ismael Bennacer | 17m | 40m |
| Sandro Tonali | 20m | 50m |
| Mike Maignan | 15m | 35m |
| Fikayo Tomori | 32m | 50m |
| Pierre Kalulu | 1.3m | 35m |
It was thanks to the players mentioned above, as well as other low-profile signings such as Olivier Giroud for €2.85m, that AC Milan won its 19th Serie A title in the remarkable 2021/22 campaign.
COMMITMENT IN THE FACE OF MISTAKES
AC Milan’s transfer wizardry is far from a spotless virtue with a 100% success rate. Paolo Maldini, AC Milan’s technical director, has bought in several players who provided a poor return on investment, but like many things in the footballing world, player transfers aren’t an exact science.
Moreover, AC Milan’s current trouble-laden season has stunted many players’ progress within the club’s ranks. Charles de Ketelare, Yacine Adli and Malick Thiaw are three prime examples of players who have been selectively chosen for their promising talent but haven’t met their expectations as of yet.
Nevertheless, the bottom line is that this is the club’s approach to new signings. Maldini has reiterated time after time that AC Milan won’t succumb to other clubs’ outrageous asking prices, nor will it give in to the increasingly greedy nature of contemporary player agents. Keeping the club’s books healthy is a commitment that shouldn’t be taken lightly, especially when you’re a club in the Italian top flight, where money can be very hard to come by.
POTENTIAL PROBLEMS
Although the modus operandi AC Milan is using is beneficial in more ways than one, there are several potential problems that might arise later down the road.
- Inexperience costs points: Purchasing low-profile and young players often means that they rarely have the experience to bring their team over the line. For this reason, a delicate balance must be achieved between young players and experienced ones—the signings of Zlatan Ibrahimovic, Olivier Giroud and Simon Kjaer were the cornerstones of AC Milan’s Serie A triumph last season.
- Patience is key: Some players take a long time to bear fruit. Two prime examples are Rafael Leao and Sandro Tonali. The former required three seasons to show his potential, whereas Tonali only started showcasing his brilliance after a lacklustre first season. Part of AC Milan’s recent troubles is that the club cannot afford to wait for its players to blossom, not when the going gets tough.
- Contractual crossroads: If you find a diamond in the rough, you’ll have to pay it for what it is. Once a low-profile player becomes a top-tier one, they will ask for a wage proportional to their talent. This has been a thorn in AC Milan’s side ever since the club opted for this business model. Gianluigi Donnarumma, Franck Kessie and Hakan Calhanoglu all left the club after being unsatisfied with AC Milan’s proposed wage. The same is said to be happening with Leao, who, to this day, isn’t happy with how his contract talks are going.
WHAT DOES THE FUTURE HOLD FOR CLUBS LIKE AC MILAN?
This business model, much like that of Borussia Dortmund and Brighton, is a wise one that will help preserve the health of AC Milan’s books. The Rossoneri are €71m in the red, which, compared to clubs like Inter (€390m debt), Juventus (€223m debt) and AS Roma (271m debt), is quite a noteworthy result, considering that AC Milan’s financial woes were all too similar. Furthermore, with an eventual investment in a solely owned new stadium, AC Milan is on course to greener pastures, granted that the club’s opinion on spending does not change.