Four years ago, Elliott Management took over AC Milan literally by default. As one of their biggest skeptics, now that they have officially turned the club over to RedBird Capital, I can only say thank you. Despite never having run a football club and having a global reputation for being a vulture fund, Elliott did almost everything they said they would do, even during a global pandemic. They kept their promises, unlike any other owner in the past forty years, and Milan are in the best shape financially that they have been during those years, as well. They brought back Maldini and oversaw a project to modernize the club, with a project that is exciting – and even winning – with young talent that promises a bright future. They are leaving the club so much better than they found it. So thank you, Elliott management.
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| Their vision and backing have propelled Milan back to the top in record time |
The closing of this deal happens the week before the Derby. So ironic, because a little over five years ago, in the week leading up to a Derby, there was a fateful sale closing, too. That closing, of course, was the shambolic sale of the club by Berlusconi to Yonghong Li, an ownership that took longer to negotiate than it lasted, and ended very, very poorly. The Chinese fake businessman also claimed to be a fan of the club, but just turned out to be an insolvent dragon.
In perhaps the most ironic twist of fate, that failure led to what UEFA and so many others dreaded most – a takeover by Elliott Management. I was one of those people who dreaded the prospect, until I saw what happened when a charlatan was allowed to destroy my beloved club. Despite never having run a football club, Elliott actually had a plan to bring Milan back to where it should be. And they had the actual money to do it, as well as shrewd business sense, two things that are often lacking even at other Italian clubs. What began as a worst case scenario became literally the best thing to happen to Milan in decades, if not ever.
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| Elliott brought back the heart and soul to our sporting sector |
The most obvious clue that their plan was going to work was that it was the first plan to pass the all-important Maldini Litmus Test. That they actually brought Maldini back to the club instantly created so much faith and credibility in their project. Even he exceeded all expectations, most notably quietly and masterfully replacing Donnarumma and his overpriced agent with the fantastic Maignan at a fraction of the wages. Together with the likes of Boban, Massara, and the scouting team of Moncada, Maldini has been able to completely turn the sporting sector around from a patched-together ill-defined squad to a cohesive and well-planned squad of mostly young, talented players, as well as the right balance of experienced players. It is truly incredible.
Because of Elliott and their sporting vision, we saw the return of Ibrahimović, a move that was healing for fans as well as instrumental in returning the team to winning ways. Milan returned to the Champions League, now two years in a row, as we should. And obviously, the team that was finishing 6th, 8th, or even 10th place in Serie A are now the Champions of Italy once again. All in the space of four years under Elliott's plan. The transformation has been nothing short of remarkable.
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| From midtable to top of the table in record time |
As CEO, they hired Ivan Gazidis, a close friend of Gordon Singer, son of Paul Singer, Founder of Elliott Management. He is my least favorite part of their plan, but you cannot say that he did not have experience in football. He came in and negotiated with UEFA to end the FFP nightmare created by previous ownerships for once and for all, clearing four years of FFP violations with a voluntary one year exclusion from Europe. Given where the team was in the rebuilding process, this was actually a blessing, too.
Elliott backed Gazidis' initial spending spree to build an app, a media studio, and more, but he also came good on the business side of things to increase sponsorships and revenue. Most impressively, this was done during a global pandemic, when other clubs were going the opposite way. It has become a great time to be a Milan fan because of the financial security of the club, even turning a small profit this past season after years and years of losses. Our total shirt sponsorships alone jumped from €14 million to €39 million to now €56 million annually. We went from a sinking ship financially to debt-free and back in the top 20 in revenue in the world in the Deloitte Money League.
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| Love him or hate him, he has implemented Elliott's vision |
This week, Gazidis pointed out in an interview that "Paul and Gordon Singer's fund has been a solid shareholder in difficult times: it could have stood still waiting for a buyer but instead decided to invest in growth" (as translated by Meytar Zeevi of Rossoneriblog) In fact, while Milan may be facing a fine from UEFA for the initial years of investment and losses under this management, they are the only club in the top six Italian clubs that is already prepared to meet the requirements of UEFA's new financial sustainability regulations (replacing FFP.) Elliott have wiped clean all of Milan's debt and created a healthy, strong, and sustainable business model for RedBird Capital to move forward with.
Speaking of the sale of the club this summer to RedBird Capital, I had my doubts about that, too. The initial reports about the structure of the €1.2 billion sale were very sketchy. Still very little is clear about the actual specifics. We know that Elliott will retain two seats on Milan's Board of Directors, and are offering RedBird a vendor loan of between €550 and 600 million, according to reports. Gerry Cardinale, founder of RedBird, has also found investors in the form of Yankee Global Enterprises, who are rumored to be minority shareholders in the club, possibly up to 10% investors. Other reports claim that Main Street Advisors, a group that includes names such as LeBron James, Jimmy Iovine, and Drake, may also be passive investors in the deal.
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| Cardinale continuing with Elliott's project and vision |
Cardinale and RedBird have a long track record of success in sports and global marketing, as well as a long history with Yankee Global Enterprises, who also view Milan as a strong investment. One of the initial announcements of the partnership is the airing of match replays on the YES network in the United States, a network owned by a consortium of the Yankees, RedBird, Amazon, and Sinclair Broadcast Group. Another hint is that Milan may play friendlies at Yankees stadium in New York, where there are a lot of Italians and Serie A fans. This is just a drop in the bucket of the plans to make Milan an even bigger global brand.
The one part of their plan that Elliott Management were unable to complete was to build a new stadium. They have brought entire countries to their knees and have billions in assets, but were unable to break down Italian bureaucracy in just four years. I don't hold it against them. I am familiar with the empty promises of Italian politicians and the mindnumbing lack of vision and progress in Italy in general. RedBird are committed to the project, which is still in motion, thanks to Elliott, so we will see if it ever actually comes to fruition.
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| Gordon Singer attending a Champions League match as a Milan fan |
Elliott are definitely leaving the club in the right hands, despite initially negotiating with a Bahrain group called Investcorp. RedBird's vision for the club definitely aligns with Elliott's project. It is shocking how smoothly everything went through, too, just like Elliott promised. In spite of lawsuits filed by Yonghong Li and minority shareholders that looked to potentially delay the sale, and even the renewal of Maldini and Massara, the deal closed August 31st, technically a few days ahead of schedule.
Not that this was a charitable venture for Elliott Management, they also are getting what they wanted out of it, too. Despite investing heavily over the four years, they will make around €500 million on the sale of the club, plus the interest on the vendor loan to RedBird. Everyone got what they wanted (except for Yonghong Li and the minority shareholders, apparently.) But they have resurrected the beautiful club that is Milan, restoring the character and credibility on and off the pitch, and are leaving it in far better shape than when they took over, as well as leaving it in good hands. We as fans got so much more than money out of this.
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| Enjoying the fruits of their labors with 1 million+ Milan fans |
A couple of things stand out to me above all of the miracles that they have brought to my beloved club. One is the beautiful football. The financial stability, the return of Maldini, the young talent, and the trophies are all so overwhelmingly amazing, but every match, something I cannot take for granted is the return of exciting, attractive football. It is why we watch, after all.
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| Paul and Gordon Singer with Milanello... they fell in love with Milan, too |
Another thing that surprised me was Elliott's commitment to the fans. Even during the Golden Era of Berlusconi's Milan, fans were expected to pay obeisance or were given the "Let them eat cake" treatment by management. Elliott took our wounded, traumatized souls and brought healing and compassion, using more of a "customer comes first" attitude toward us fans. This was particularly evident in their farewell message when the sale of the club was announced:
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| More than just smart business |
That is smart business, but also the reason that more than a million fans lined the streets in Milano to celebrate the Scudetto win in May. They have restored the faith in Milan and created a global family. That Paul and Gordon Singer as well as Gerry Cardinale were there to celebrate, too, demonstrates the powerful relationships that have been created in what was seemingly just business. For all of these reasons, including the bright future of Milan, from the bottom of my heart, I say thank you, Elliott Management.
This post inspired by the music of The Beatles "In My Life"
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Reviewed by Elaine
on
7:41 AM
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