Pagni: “Milan’s balance-sheet clear-out makes the club more attractive for a possible buyer, there are 3 conditions to meet before Elliott can sell Milan”

Milan fans burn flare bombs and wave flags during Milan-Inter at Stadio San Siro on September 21, 2019. (MIGUEL MEDINA/AFP/Getty Images)

Luca Pagni has talked in detail about the -€146m loss in the consolidated financial reports for the 2018/19 season, explaining why it’s not all bad.

It was revealed this week that Milan will close the 2018/19 with a loss of €145.9 million, which is a negative record for the seven-time Champions League winners.

The big loss certainly did not come as a surprise for the directors or the ownership. Elliott have already covered financially for everything that is needed, and no big sales are planned for January either.

Luca Pagni, the financial expert of La Repubblica, spoke to to go into detail about the loss of Milan, explaining that it was completely the club’s decision to record such a high negative number, in order to prepare for a better future and have better balance-sheets starting next year.

“How do I explain the €146m loss in the consolidated financial statements compared to the forecasts of €90-100m loss? For one thing, it can be explained by the fact that the forecasts were wrong,” Pagni said. “Those were rumours that were probably around due to the fact that if you called someone close to Milan, they had an interest in keeping the figure low. Given the overall situation, they accelerated the so-called ‘balance-sheet clear-out’. If Milan had qualified for the Champions League, they would’ve had an extra €39m at least in revenue. With that money, everything would’ve changed and they probably would’ve decided to make a more conservative balance sheet, postponing this process.

Paolo Scaroni and Ivan Gazidis during Marco Giampaolo’s presentation at Casa Milan on July 8, 2019. (

“The big problem is that sponsors have dropped, and therefore the revenues have not increased. Gazidis has not shown anything from that point of view yet. In addition, personnel costs have risen enormously: an increase of €35m is disproportionate and part of that money comes from the salaries of Gazidis, Leonardo and Maldini. Then, we remember that at least three other directors were brought by the CEO in key positions for the club. In addition, there is the cost of the squad, in the budget that we’re examination there are the ownerships of Kessié, Ricardo Rodríguez and Çalhanoğlu are quoted.

“So, faced with this complicated situation, to which we must add some sporting results that are currently not very good, they decided to speed up the operation of making a balance sheet that frees them of weights, of devaluations, of old contracts in place, of commercial aspects and other things. They paid the expenses for all the things that dragged over time. On last year’s balance sheet, the salaries of Higuaín, Bertolacci, Montolivo and Josè Mauri also weighted, and in the next year it will be no more. I would also like to add that Leonardo convinced Elliott to sign Paquetá and Piątek in January.

Krzysztof Piątek and Hakan Çalhanoğlu during training at Milanello. (

“If this balance sheet clear-out can be interpreted in the perspective of a quick sale of the club? Look, I was surprised that it was not done in the last balance-sheet, but probably having just arrived at the time when the income statements had already been set, it was not possible. Returning to the question, the answer is ‘yes’. I am not saying that they will surely sell in a short time, but it’s clear that it’s an operation to make the club more attractive for a possible buyer, which would arrive with a balance sheet less negative. Furthermore, Milan have no debts with the banks. In the case of due diligence, in fact, the potential buyer would fine a clean balance sheet and a financial situation.

“A new stadium owned by the club would also be an attractive asset for a future buyer? Three conditions are needed to present yourself with credibility in front of a person to whom you want to see Milan: first, to settle the accounts inherited from the last ‘Berlusconiane’ management and the combined messes in the Chinese year; second, to have a stadium project started with at least the green light of the Municipality, which should arrive by the end of November; finally, to have a valuable team, not just in a sporting aspect. Giampaolo also missed out on this last point, because he didn’t let the new players bought in the summer to play. There were two mistakes, in my opinion, with Giampaolo: you had to give him time, and if you wanted a coach to play the new signings immediately then you shouldn’t have taken him.

Populous’ design for the New Milano Stadium. (

“The fact that UEFA are looking at three-year periods and therefore in their next evaluation the year of -€146m will also be included? For next year, however, Milan will be aiming for a Settlement Agreement, if they manage to qualify for a European competition for the 2020-21 season. Then, a recovery plan will be agreed, taking into account that the -€146m is caused by extraordinary things, which will be absent in the next balance-sheet and were derived by managements prior to that of Elliott.

“So it isn’t all black for the Milan fans like it was painted this week? It’s certainly positive that there’s no longer Berlusconi, with whom you had no budget available for the mercato, and that there is no longer Yonghong Li who, at a certain point, could no longer afford lunch and dinner on the same day, from a corporate point of view. Elliott is a solid owner, and ambitious, according to them.

“Some have suggested that everything revolves around the project of the new stadium and that some sponsors linked to the stadium can then enter into the club… they certainly have something in mind. Either a sale, after meeting the three conditions mentioned above, or something to increase revenues.”

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1 year ago

lol, where’s ck the defender of li brothel, i mean brothers?

1 year ago

Well all this is BS, financial loss is what it means, and no extraordinary shit happened, chapecoense’s tragedy is extraordinary.

Higuain Biglia sacking coaches and the high wages of the management is the reason why we are on debt.

Milan is a big block V8 leaking oil from the block….