AC Milan Face UEFA Financial Fair Play Sanctions

MILAN, ITALY - MAY 20: AC Milan fans show their support during the serie A match between AC Milan and ACF Fiorentina at Stadio Giuseppe Meazza on May 20, 2018 in Milan, Italy. (Photo by Emilio Andreoli/Getty Images)

On Tuesday the Investigatory Chamber of UEFA’s Club Financial Control Body (CFCB) announced that AC Milan have breached Financial Fair Play. The club spent big last summer in an attempt to return to Europe’s elite but came short of their goals. Now they face even more problems as UEFA will soon decide on the outcome of their spending.

AC Milan Subject to FFP Regulations

Milan’s Spending

Milan have been under the watchful eye of the CFCB since their new ownership group, Rossoneri Sport, bought the club for over £600 million in April 2017. The group’s chairman is Li Yonghong, a Chinese businessman with a questionable past. Yonghong’s Wikipedia page is like playing a financially regulated word search. And the group needed a more than £250 million loan from the hedge fund, Elliot Management.

That loan is due to be paid back in October, with more than £40 million of interest. And that is the starting point for the CFCB. Their statement on Tuesday said: “In particular, the investigatory chamber is of the opinion that, among other factors, there remain uncertainties in relation to the refinancing of the loan and the notes to be paid back in October 2018.”

That does not sound good at all. But in the end, it will not be the reason for UEFA bringing down the FFP hammer. Milan’s decision to spend over £200 million on players and not break even will. They had hoped making it into the Champions League would be able to soften that massive money blow.

However, their spending was followed by a turbulent season. A bad start was followed by a coaching & system change that gave the team a fresh start. They used it to claw their way back up to sixth place and a spot in the Europa League, while also crashing out of the competition against Arsenal. But the Europa League payout is not as big as the Champions League payout Rossoneri Sport was counting on.

What’s Next

UEFA now has a little over a month to decide how severe they want to be in punishing AC Milan. They have the option to warn them, fine them or suspend them from European competition. They could rebound from a warning or fine, but being kicked out of the Europa League would mean almost zero spending this summer.

And for a team planning on additions that would be a big blow. Their spending should be curved by UEFA’s watchful financial eye anyway. But planned moves for Ciro Immobile, Marouane Fellaini or Pepe Reina will now come with extra scrutiny, and sales as well. Now we just have to wait and see what UEFA will do.

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