AC Milan & FFP - Update p10

UEFA statement yesterday:
The Investigatory Chamber of the UEFA Club Financial Control Body (CFCB) has decided to refer Italian club AC Milan to the Adjudicatory Chamber of the CFCB for breach of the Financial Fair Play regulations, in particular the break-even requirement.
After careful examination of all the documentation and explanations provided by the club, the CFCB Investigatory Chamber considers that the circumstances of the case do not allow the conclusion of a settlement agreement.
In particular, the CFCB Investigatory Chamber is of the opinion that, among other factors, there remains uncertainties in relation to the refinancing of the loan and the notes to be paid back in October 2018.
The Adjudicatory Chamber will make a decision on this case in due course.
The CFCB Investigatory Chamber will further communicate in June its other decisions in relation to the monitoring of the clubs under investigation or under settlement agreement.
 
MillionMilesAway said:
https://www.football-italia.net/121756/official-milan-fail-ffp-tests

"Doubts remain on how Yonghong Li will repay the massive €380m loan (including interest) to hedge fund Elliott Management, which is due in October."

That really is a massive loan! Have they done some Glazernomics and bought the club with a loan?
Click to expand...
Technically, the hedge fund has, which is one of the issues, even beyond the usary. If it is allowed, it opens up the potential for some very problematic ownership scenarios that could both destablize leagues (overall product) and impact FIFA/UEFA influence (future coffers, existence). Some of the hedge funds that could become players are far more powerful than either governing body, and they know that.

And that’s ignoring entirely the actual, legitimate sport ethics/business concerns with such an ownership structure. It’s one thing for owners to use revenue to pay back indebtedness incurred during the initial leveraged buyout (Glazers), it’s quite another to acquire a controlling stake in a football club entirely for the sake of investment income (turning a club in to a sort of dividend source). The implications are numerous and troubling for the game. It’s the Mike Ashley model taken to American levels of avarice.
 
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SebastianBlue said:
Technically, the hedge fund has, which is one of the issues, even beyond the usary. If it is allowed, it opens up the potential for some very problematic ownership scenarios that could both destablize leagues (overall product) and impact FIFA/UEFA influence (future coffers, existence). Some of the hedge funds that could become players are far more powerful than either governing body, and they know that.

And that’s ignoring entirely the actual, legitimate sport ethics/business concerns with such an ownership structure. It’s one thing for owners to use revenue to pay back indebtedness incurred during the initial leveraged buyout (Glazers), it’s quite another to acquire a controlling stake in a football club entirely for the sake of investment income (turning a club in to a sort of dividend source). The implications are numerous and troubling for the game.
Click to expand...

That's a good point.
 
Back in 2014 UEFA officials took great pleasure in arguing that they were taking action against Manchester City to secure the financial stability of the club which was threatened by the reckless spending of its owner. This is presumably why they will be taking action yet again against PSG who have dared to pay 200 million euros for Neymar and another 180 million for Mbappe. Yet this is money PSG, just like City, do have and will not incur one penny of debt. Yet what has FFP done to guarantee or even protect the financial stability of AC Milan? The club was sold by that squeaky clean stalwart supporter of FFP, Berlusconi, to one Yonghong Li, who did not have the money (some 400 million euros) to buy it. So he borrowed it from a hedge fund at high interest and now has to pay it back, which he appears unable to do, by October. Presumably the loan is, ultimately, secured on the club's assets ... AC Milan has "failed" FFP, which appears unable to fulfill in any way whatsoever the lofty moral aims that were routinely trotted out to justify its introduction some 5 years ago. None of tis will surprise any supporter of City or PSG. Nor will it surprise any of those critics who argued that FFP would have done anything to protect the financial stability of Leeds, Portsmouth, Rangers or any club in need of real protection. Add AC Milan to that list. But then we know what the real aim of FFP was...
 
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