A half-billion-euro giant searching for its DNA

Three decades ago, they ruled the football world. AC Milan was like a luxury sports car speeding down the football highway—a lightning-fast machine always leaving its rivals in the dust. And, most importantly, it regularly collected trophies. Players like Gullit, Van Basten, Baresi, Maldini, and Papin became global legends. The coaches at the time, Arrigo Sacchi and Fabio Capello, were equally brilliant and innovative.

The golden era of the Rossoneri—as the club is nicknamed—was tied to the controversial tycoon and former Italian Prime Minister Silvio Berlusconi. Regardless of his personality, Berlusconi brought the club immense success. But the year is now 2019. Berlusconi no longer owns the club, and AC Milan is desperately searching for its lost identity. At the same time, it’s generating losses. In the most recent league season, the club posted a loss of exactly 145.9 million euros. The punishment for its massive debts came from UEFA, which banned Milan from participating in this year's Europa League.

A club that has won the Champions League seven times and claimed the Italian league title (Scudetto) 18 times has simply dropped out of the elite circle it once belonged to. "I remember how AC Milan crushed Barcelona 4–0 in the 1994 Champions League final. Back then, Milan was at the top of global football. Then, after ten or fifteen years came the last major successes, followed by a decline. I see the current situation as the result of a series of poor decisions by specific people in management," sports analyst Jozef Tokos told the Economic Daily.

The last time Milan won the Champions League was in 2007 and Serie A in 2011. Years of poor sporting performance are now taking their toll. While Milan’s revenues have stagnated over the past decade, the current winner of the prestigious Deloitte Football Money League, Real Madrid, managed to double its revenues in the same period.

In the latest edition of the Deloitte ranking, AC Milan placed 18th, recording revenue of 207.7 million euros. It was surpassed by clubs like England’s Everton and Germany’s Schalke 04. Milan lags behind especially in commercial and sponsorship income. While 70.2 million euros from sponsorships may appear solid at first glance, Schalke, for instance, recorded nearly 106 million euros. The rule that sporting success is the best marketing strategy has always held true. That’s why the Rossoneri urgently need to win something big. No sponsor wants to support a mediocre club, even one with a glorious past.

The man tasked with bringing the glory days back to San Siro is the club’s current president, Paolo Scaroni. A seasoned businessman, Scaroni previously led energy giants like Enel and Eni and maintains strong connections in Italy’s political and financial elite. He has close ties with Italian Deputy Prime Minister Matteo Salvini, among others. “With clubs like AC Milan, you have to climb two mountains at once. One is financial performance, the other is sporting success. And the two are closely linked. If you lose matches, your sponsorship revenue drops, your stadium empties, and you won’t have the resources to buy players,” Scaroni told the Financial Times two weeks ago.

On paper at least, Milan has a more than competitive squad. The team is valued at over half a billion euros and features highly talented young players like goalkeeper Donnarumma, Brazilian midfielder Lucas Paquetá, and forward Rafael Leão. The club spent 102 million euros on new signings this summer, but things aren’t clicking on the pitch. After eight rounds, AC sits only in 12th place, with a negative goal difference of 8:11. Coach Marco Giampaolo was dismissed after just seven rounds, but his replacement, Stefano Pioli, didn’t get a win in his debut either. (...)