What next for AC Milan after their owner was declared bankrupt amid a rejuvenation on the pitch?
As the Serie A giants face a nightmare scenario, our friends at Football Whispers assess if Milan can avoid selling off stars
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“THE fans that urge me to sell the club, I say that I love Milan and will never sell this club to someone who is not worthy or who couldn’t make it even greater.”
That was the promise of former AC Milan owner Silvio Berlusconi in 2010.
Last summer the former Italian Prime Minister finally sold up, bringing to an end a 31-year reign which saw the Rossoneri win 29 trophies.
Paying the £628m to take Milan off Berlusconi’s hands was Chinese businessman Yonghong Li. Except he wasn’t quite paying the full amount.
Instead he borrowed €340m from high-interest hedge fund Elliott Management in order to push through the sale and used a further €300m in offshore assets, stumping up just €100m in cash.
There were always doubts about the long-term viability of borrowing from Elliott, but those fears appear to have been realised with new reports in Corriere della Sera claiming Li is bankrupt.
What does that mean for Li and Milan? Our friends at attempt to get to the bottom of a sorry mess.
They say the grass isn’t always greener. But after the glory days of Berlusconi’s reign in the 80s and 90s, success has dried up in recent decades.
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Their 2011 title win, delivered by current Juventus coach Max Allegri, was the Rossoneri’s last. Milan, a club synonymous with European success under Berlusconi, haven't been in the Champions League since 2014.
Fresh impetus was needed and, despite fears over how Li was financing the deal, the takeover offered that.
Li quickly endeared himself to the club’s supporters, splashing €188m on seven new players while Gianluigi Donnarumma – a Real Madrid transfer target – signed a new deal to keep him at San Siro.
However, despite all the signs of encouragement, there were fears that it could all collapse.
The money lent by Elliott would be due back, with interest, and Milan would realistically need to return to the Champions League or sell star names to meet the repayments.
Italy’s top four teams qualify for Europe’s elite club competition.
Milan are seventh, as many points away from fierce rivals Inter who occupy the final Champions League qualification spot.
Head coach Vincenzo Montella was dismissed at the end of November with the gap between Milan and the holy grail widening by the week.
Clearly concerned they would not make the top four, Milan sough to refinance their loan from Elliott.
It’s a nightmare scenario.
Now reports in Corriere della Sera say the 48-year-old is bankrupt and his assets will be auctioned off on Taobao, the Chinese equivalent of eBay.
Furthermore, he is being sued by two Chinese banks: Jiangsu and Canton.
There are even reports Li was insolvent before he took control of Milan in April 2017.
Former Milan CEO Adriano Galliani refutes those claims, however. “Yonghong Li invested €740m to buy Milan,” Galliani told Mattino Cinque.
“We were assisted by a very important advisor and a famous law firm, as was Yonghong Li. Not only did he buy Milan, but another three important things happened.
“First of all, he presented the credentials to the Lega Calcio and was approved. Secondly, the Elliott fund loaned Mr Li over €300m, so they must’ve made their own evaluations.
“Finally, over the summer a transfer campaign worth €200m was completed, giving all the necessary financial guarantees and bank bonds that the Italian rules demand.
“I don’t know the reality of what is happening in China, but one plus one plus one makes three, so that’s how things have gone so far.”
So what does it all mean for Milan, one of Europe’s grandest old clubs? For now that is unclear.
Li’s tenure has been scrutinised from the outset.
In January he released a strongly worded statement refuting claims by Italian newspapers La Stampa and Il Secolo XIX relating to alleged money laundering.
But actions speak louder than words. The auction has been postponed from February 2 already and little will be determined until – or unless – it goes ahead.
It is not clear whether Milan would even come under Li’s assets as the club is owned by Sino-Europe Sports, a holding company in which the businessman owns a stake. How much is again unclear.
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The big concern for supporters will be the future of star names like Donnarumma, Leonardo Bonucci, Franck Kessie and Patrick Cutrone.
The worry had been the club’s most saleable assets would be sold in the event Milan failed to qualify for the Champions League in order to make up the cash shortfall to Elliott.
But if the reports are to be believed Milan are under financial pressure ahead of time. It’s hardly what Berlusconi promised eight years ago.