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Financial Foul Play



Fassone has always been “optimistic” about talks with UEFA about Milan’s Financial Fair Play status. As soon as the purchase of the club was completed, he met with them to request a Voluntary Agreement. When that was turned down, he met with them once again, providing even more documentation, about achieving a Settlement Agreement. And he was very optimistic about UEFA agreeing on a settlement based on FFP violations. However, the other day, they turned down the settlement agreement and referred Milan for disciplinary action. While their questions of “uncertainties” are difficult to argue, and Milan has failed to complete the tasks recommended by the investigatory committee, it’s still the only time I am aware of that a club has been referred because of the mistakes of past ownership and then punished for things that haven’t happened yet. It truly feels more like Financial Foul Play.

Unusual practices for a governing body

The original investigation was opened based on the books for the previous three seasons, all but about six weeks of which were run by Berlusconi and Galliani. As a new owner of the club, Yonghong Li had a right to ask for a voluntary FFP agreement, which he did. This would have meant that both Milan and UEFA agree to a budget and financial plan to be FFP compliant within a few years’ time. Seems reasonable, right? Don’t punish the new ownership for the past ownership’s mistakes, but at the same time agree to a plan for financial success. Helping a new owner plan for the future. That is what Financial Fair Play is all about – reducing the amount of debt and keeping clubs solvent so they can be successful financially.

This is where it gets tricky, though. That voluntary agreement was rejected because UEFA didn’t like the idea that the Elliott Fund could conceivably become a majority shareholder in the club. The debt to them was high enough that should Yonghong Li default on the short-term, very high interest loans, our club could come under the ownership of a financial institution rather than an invested investor. Considering that the voluntary agreement hinges on a financial plan going forward, I was surprised yet could also understand the rejection of this plan by UEFA. Also because the financial plan presented by Fassone hinged on a return to the Champions League within a year, which was always unreasonable. Placing a majority of the financial fate of the club on the hopes and dreams of results on the pitch certainly didn’t seem very responsible to me. But the voluntary agreement was about looking at a plan, not trial for past crimes. 

He's kept his financial agreements to date

After those meetings and the rejection of the voluntary agreement, Fassone met with them again and presented more documentation in hopes of a settlement agreement. My understanding of this agreement is that it is based on financial mistakes made, and both sides agree to an appropriate settlement, often in the form of a fine but sometimes including a limitation of players available for European competitions, etc. Whereas the voluntary agreement was more about looking forward, the settlement agreement is more punitive, looking back at the past. From all of the similar agreements I have read about previously, the punishments were quite small for very large infractions, and they were infractions incurred by the current managements.

That is where the Milan decision takes a major turn. Not only was the rejection of our settlement agreement not based on the books of the previous three seasons, as the original investigation was supposed to be about, but it was rejected on “uncertainties,” or future potential infractions. We are being punished for something we haven’t even done yet.

"Always cover your mouth when talking about UEFA or they'll punish you for things you are about to say"

Technically, the club was purchased within the three year timespan of the investigation, and the Elliott Fund debt incurred during that timeframe. From the first meetings, Fassone was told to get that debt refinanced without the takeover clauses by April, and he didn’t do that. However, the refinancing piece was about this season, which shouldn’t be considered under this investigation yet. Furthermore, their ruling that includes “uncertainties” is based on a future event, which is October of 2018. But we are going to be punished now based on something that hasn’t happened. And as Fassone pointed out, Yonghong Li has met all of his financial obligations since the purchase of the club, so it is harsh for them to punish us now based on a prediction of failure which has no precedent.

Three of the most likely punishments for Milan would be stripping us of our Europa League spot (which actually could be very beneficial for our growth,) a hefty fine, or sanctioning our transfer market. Those punishments are meant to be for teams who willfully ignored Financial Fair Play, for owners who owned their clubs during the time periods being investigated. And maybe I’m misinformed on this, but I’ve never heard of a club being punished based on future infractions that may or may not be made. I mean if they said we are going to punish Milan because of the previous three years, it would be weird enough, considering the ownership change. But to punish us for things that haven’t even happened yet just feels more like Financial Foul Play.


This post inspired by the music of The Beatles’ “Can’t Buy Me Love”