May 23 – AC Milan look to have lost their battle to stay within UEFA’s Financial Fair Play regulations and have been referred to the Adjudicatory Chamber of the UEFA Club Financial Control Body (CFCB) by its investigatory chamber.
In December, UEFA rejected a request to waive Financial Fair Play (FFP) rules for AC Milan, saying they remained unconvinced about the club’s new Chinese backers. Under UEFA regulations, any team that spends more than its generated revenue faces possible sanctions. However teams are able to ask for a waiver to FFP rules under a so-called ‘voluntary agreement’ scheme.
However, UEFA investigators are unconvinced by AC Milan’s explanations over its inability to meet the break-even requirement or that a “settlement agreement” can be reached, particularly with the club needing to refinance and pay back a loan this October.
Milan have incurred losses of €255 million in the past three seasons – significantly more than the €30 million allowed – and late last year a Milan delegation reportedly travelled to UEFA headquarters to explain the current business plan.
“There are still uncertainties in relation to the financing of the loans to be paid back in October 2018 and the financial guarantees provided by the main shareholder,” UEFA said in a statement in December.
“AC Milan will continue to be subject to the ongoing monitoring process and the situation will be assessed again in the first months of 2018.”
That monitoring has led to UEFA’s statement yesterday saying: “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.”
A decision will be made on the club’s case “in due course”, said UEFA.
AC Milan is 99% owned by a Luxembourg-based vehicle, Rossoneri Sport Investment Lux, which is controlled by Chinese entrepreneur Li Yonghong. He completed the deal only after a protracted negotiation with former owner Silvio Berlusconi’s holding company as he struggled to raise the €740 million to complete the acquisition. After finally being sold last summer to Yonghong’s investment group, more than €200 million was spent on new players by the seven-time European champions.
AC Milan finished the Serie A season in sixth place, qualifying for the Europa League, though their participation is now in doubt with UEFA likely to move to sanction with a European ban.
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