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AC Milan Sale: RedBird Capital Buys Team for $1.2 Billion


A.C. Milan, the storied Italian soccer team, is teaming up with one other storied franchise: the Recent York Yankees.

The Italian team, which last season secured its first league title in 11 years, announced Wednesday the completion of its long expected sale to a bunch headed by the investment firm RedBird Capital Partners that features the Yankees. The 1.2 billion-euro ($1.2 billion) price tag represents a serious payday for Elliott, the vulture fund that secured the team in 2018 after its former Chinese owners defaulted on a $300 million debt.

RedBird, led by its managing partner Gerry Cardinale, has been on a spree of acquisitions, with Milan becoming just the newest sports investments made by the firm. Last yr, it paid $735 million for a stake in Fenway Sports Group, owner of baseball’s Boston Red Sox and the powerhouse English soccer team Liverpool F.C.

The Yankees aren’t the one eye-catching name now attached to A.C. Milan. Media reports said the basketball star LeBron James, who owns a stake in F.S.G., and the rapper Drake would also own a minority stake of A.C. Milan.

For the Italian team and its supporters, the sale will mark one other chapter in its efforts to return to the highest of European soccer after a decade of decline marked by financial crisis and poor performance. Last yr, Milan, a seven-time European champion, qualified for the elite Champions League for the primary time since 2014.

Elliott seized the team in 2018 and set about repairing A.C. Milan’s balance sheet, which was one of the crucial distressed in all of sports. In 2020, the team had losses of nearly $200 million, with that figure halved a yr later because the owners slashed payroll costs by moving out underperforming aging stars and replacing them with younger — and cheaper — alternatives.

The changes paid dividends last yr with a surprise run to the Italian championship, a hit that positioned the team to be sold at what’s almost certainly the upper end of its market value.

“Our vision for Milan is evident: We’ll support our talented players, coaches and staff to deliver success on the pitch and permit our fans to share within the extraordinary experiences of this historic club,” said Cardinale, adding the owners would seek to leverage their sports and media assets to keep up “Milan’s place on the summit of European and world football.”

Milan’s sale is the newest high profile sale of a European sports team to American investors. It follows the two.5 billion pound ($3 billion) purchase of Chelsea Football Club, probably the most ever paid for a team in any sport, by a bunch led by California-based private equity firm Clearlake.

For Elliott, the sale means an amazing amount of benefit from an investment that started off as a $300 million loan to permit a little bit known Chinese businessman to purchase the club from its longtime previous owner, the previous Italian prime minister Silvio Berlusconi, in 2017. A couple of yr later, it ended up accountable for considered one of the world’s most well-known sports brands for an amount — despite all of Milan’s problems — that was below its market value.

The club poached Ivan Gazidis, a former vice commissioner of Major League Soccer, from Arsenal within the Premier League to run the club and step by step began to maneuver up the standings under Coach Stefano Pioli. A second-place finish in 2021 was followed by a title triumph secured by a victory on the last day of the 2021-22 season.

“When Elliott acquired A.C. Milan in 2018, we inherited a club with an amazing history but with serious financial problems and a mediocre sporting performance. Our plan was easy: to create financial stability, and to return A.C. Milan to where it belongs in European football,” Gordon Singer, Elliott’s managing partner, said in June when an agreement with RedBird was first announced.

Now that the deal has been accomplished, RedBird will almost certainly have to reassure European soccer’s governing body, UEFA, that it’s going to comply with rules barring one investor from owning a big share in two teams playing in its competition. Milan and Liverpool will each play on this season’s Champions League but haven’t been drawn to play in the identical opening groups. They might meet within the knockout phase. RedBird also owns the French soccer team Toulouse.

Milan has made a solid begin to the brand new season, unbeaten after 4 rounds of the brand new Italian season, counting on much of the identical roster it used to win the title last yr, spending just $50 million on latest talent, about half the quantity spent by the league’s richest team, Juventus.

While Milan is savoring success again, its long-term future is unclear, with significant investment required to construct a latest stadium. The team currently leases the San Siro stadium it shares with city rival Inter from the local government and is planning to construct a latest facility that it’s going to co-own with Inter. Progress has been halting, highlighting the issue team owners have in constructing latest facilities in Italy, where most top-division soccer teams proceed to play in aging public-owned arenas.

Milan’s financial firepower can be lagging behind Europe’s top teams, particularly the most important teams in England, where revenue — particularly television income — is considerably higher than in every other major soccer league. RedBird is co-owner of the Yankee Entertainment Sports Network, the most-watched regional sports network in america, and can look to tap that relationship to seek out latest growth, Cardinale said.

“We’re very happy to proceed our partnership with them and can look to explore opportunities together to broaden our fan reach and expand business opportunities which can be only available to franchises that operate at the very best levels of sports globally,” he said.

The investment in Milan isn’t the Yankees’ first foray into international soccer. In 2001, the team signed a joint-venture agreement with Manchester United, which didn’t yield the returns that either side expected, leading to the deal being quietly shelved. It’s currently a minority owner in Major League Soccer’s Recent York City F.C., which is controlled by United’s crosstown rival Manchester City.

The takeover by RedBird comes only a yr after the collapse of an effort by a bunch of 12 European clubs — including Milan — to establish a breakaway European super league. Though that endeavor embarrassingly collapsed inside 48 hours, the aspects that led to its creation remain as relevant today, including the untrammeled spending power of teams owned by wealthy Gulf nations. Owners of probably the most well-supported teams proceed to demand a greater, and reliable, share of European soccer’s television revenue, no matter performance.

With English teams pulling further and further ahead of rivals elsewhere, it’s unlikely that the established order is not going to be challenged again.

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