The signs were always there. It started with an “Insert coin, save AC Milan” banner displayed by frustrated supporters during the end of Silvio Berlusconi’s reign at the helm, but things have only gotten worse since the former Italian Prime Minister relinquished his controlling stake in the club. A number of sales were mooted, but even at the very beginning of Yonghong Li’s takeover, it quickly became obvious that all was not right.
While many fans rejoiced at the idea of a mega-rich Chinese owner, Mr Li struggled to meet deadlines. He began talks to buy the club in August 2016, yet did not complete the deal until the following April, paying a total of €740 million which included covering the club’s existing debts of €220 million.
On the surface, everything was looking promising. Milan had returned to Europe after a three-year absence with a place in the Europa League, they had secured their first trophy since 2011 before embarking on an unprecedented spending spree that completely overhauled their outlook.
Promising and highly coveted midfielder Franck Kessie arrived from Atalanta, joined by former team-mate Andrea Conti as well as Ricardo Rodríguez, Hakan Çalhanoğlu, Nikola Kalinić and André Silva. Lucas Biglia was signed from Lazio, but chief among the acquisitions which saw confidence skyrocket was the capture of Juventus star Leonardo Bonucci, a defender at the absolute peak of his powers and a proven world class talent.
Then, the problems started.
As Milan prepared for their Europa League qualifying match against Universitatea Craiova, it was announced that Bonucci and Biglia would not be allowed to play because the duo were not yet registered. The reason stemmed from Banco BPM rejecting their approach to access the financial bonds required, but CEO Marco Fassone insisted that it was “just a technical issue” that presented no cause for concern.
Ordinarily, he might have a point, but given the continued delays Mr Li had already caused, it became the latest in a long line of concerning incidents. His takeover was only completed thanks to a high-interest loan from US hedge fund Elliott Management Corporation to the tune of €303 million, while the RAI programme “Report” later discovered another loan worth $8.3 million via a company based in the Cayman Islands.
Further alarm bells were set off when New York Times Beijing correspondent Sui-Lee Wee was reported to have “asked around and nobody knew who Yonghong Li was,” while a visit to his business headquarters in China found an empty building and an eviction notice.
On the pitch, Milan struggled, eventually firing Coach Vincenzo Montella after he failed to find a cohesive system that could bring the best from the plethora of new arrivals. His replacement – club legend Gennaro Gattuso – eventually did just that, salvaging the second half of the campaign and delivering some impressive results.
But it is the loan from Elliott Management that remained the most significant factor throughout the whole year. Including the 11% interest, a full €380 million must be repaid by October 2018 or the club can be repossessed as one of Mr Li’s assets. The company operates as a so-called“vulture fund,” loaning money to businesses known to be in serious financial crisis and fully prepare to take control of assets once payments fail to be made.
In May, UEFA refused to agree to a Financial Fair Play settlement agreement, a decision which stemmed from concern over Mr Li’s financial stability. “There remain uncertainties in relation to the refinancing of the loan and the notes to be paid back in October 2018,” read a statement, which was followed this week by the decision to exclude Milan from European competition.
They were also handed a hefty fine for violating the FFP rules, but the club announced immediately that it would appeal the severe punishment. Earlier this month Fassone told Italian newspaper Il Messaggero “Li Yonghong’s money is coming,” yet there has been no sign of that happening, with Elliott Management stepping in after yet another deadline was missed.
The CEO has begun to resemble something akin to the dog from the “this is fine” meme, insisting all is well despite fires raging all around him. Mr Li was due to increase the club’s capital but failed to provide the necessary €32 million last week, the vulture fund paying instead and the Milan owner now has until July 6 to pay it back or they will begin repossessing his assets.
Mr Li is currently in negotiating with two potential American investors to take over, but the deals have struggled over the last few days. All is most certainly not “fine” at AC Milan. It’s not quite “game over,” but someone definitely needs to “insert coin” quickly and substantially for a truly great club and a fanbase who deserve so much better.
