The Milan Weekly Podcast was able to land an exclusive interview with pundit Gabriele Marcotti and the pundit gave his opinions on a few different subjects.
New pod #55 - a privilege and honor having special guest @Marcotti talk #Milan and #Azzurri with us— MilanWeeklyPOD™ (@MilanWeeklyPOD) October 16, 2018
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Naturally, with the recent publication of some of the financial information from Yonghong Li’s time at AC Milan, the subject of the new owners of Milan came up. Elliott Management, the hedge fund that currently owns Milan, has a rather negative reputation in financial circles.
However, Marcotti’s opinions on the subject of Elliott’s ownership of Milan were rather positive, as he said:
With Elliott, the big fear when they took over, was that they were going to go and just say screw this let’s get our money now, they were going to asset strip and sell whatever they could so they could get their loan repaid and then just move away.
They haven’t done that, in fact they’ve taken a view of turning the club around in the medium term. They wouldn’t have gone to great lengths in bringing Ivan Gazidis if that were the case....
Milan is going to have to be smart how they spend the money while at the same time being very clever in how they grow the revenue not just in Serie A but around the world and that’s going to be the challenge.
Elliott doesn’t have experience in sports, that is why they brought in Ivan Gazidis who does. Looking past Gazidis viewed from the outside, you have Gazidis who obviously is a pretty smart competent guy with tons of experience in football, and then they pursuaded Maldini to come back. First Berlusconi, then Fassone, all these people saying Paolo will you come back and he always said no. I think the fact he put his faith in this project I think is massive. Paolo Maldini doesn’t need to work, if he came back it is because he believed in the project, that is very encouraging if you are a Milan fan. Also Leonardo is another sharp guy who brings credibility to the project.
I think having gone down this road, I don’t think Elliott are going to pull the plug, they are going to see to what value they can grow the club. From their perspective, given the money they put in and the amount they lost when Li defaulted, if they can sell the club for more than 600 or 700 million euros they will have made a handsome profit. They think, and they’re probably not wrong, they can raise the value of the club to more than 1 billion. I think that is going to be their goal and their time horizon is 3-5 years.
Marcotti is entirely correct in saying that Milan can be worth 1 billion dollars, the Rossoneri have one of the most iconic brands in all of world sport, let alone football. And while all this talk of brands and money might be a little boring compared to the excitement of football, it’s important to remember that money side of football can be extremely important, besides the part about spending it on good players.
Elliott Management seems to be putting their money where their mouth is, and it’s important to remember that Elliott more or less “bought” Milan for the €300 million loan they gave to Li. They’ve already made their profit, so to speak, on the club and are looking to invest their money to increase the value of Milan. In three to five years, if Milan is back to being one of the powerhouses of world football that we all know they can be, Elliott can easily sell the team for €1 billion and triple their money.
Elliott has the reputation of being a “vulture” fund, looking to take distressed assets and grabbing all the cash they can from it before selling it on and leaving a smoldering crater where it used to be. However, in the case of Milan, the “vulture” aspect of the deal was not with the club, but with the dodgy Chinese owners. Li is the one that Elliott took to the cleaners, not the club, and well, no sympathy should be shown onto them because they are the ones who took out the loan and looked to use the profits from the club’s success to cover their losses.
If Milan had qualified for the Champions League, Li might have been able to secure more funding and loans to pay off the loans from Elliott, and Milan would have been a bit part of a giant shell game as the owners would have been constantly trying to borrow more money or secure more investors to pay off creditors and the club, eventually, would have suffered. At least with Elliott, the future is up front, and they’ve brought in professionals with experience in running successful clubs, as in the case of Leonardo, and ones with experience of making money from a football club, in the case of former Arsenal executive Ivan Gazidis.
Elliott may not be the savior we all hoped for, and let’s not forget they are in this for the money, but so far their moves have been to increase success on the pitch for the club because they realize that a successful Milan is a profitable and valuable Milan.