Investigating AC Milan: Italy's Blatant Denial of Inter's Financial Reality

The Italian government and media have done some scandalous things to divert from, cover up, or flat out deny the existence of criminal conduct in the football world. The Plusvalenze cases come to mind, where so many clubs got caught cooking the books, but most have evaded all punishment. Usually, though, the biggest denial surrounds Inter and/or referees, such as in the Calciopoli scandal of 2006. But this year, they have pulled out all of the stops. As Inter's owner is being prosecuted for personal debts of over €300 million he owes in China and risks actually going to jail, Suning is also less than two months from losing Inter to an investment company for not repaying the €375 million they owe them, part of over €800 million in overall longterm debt. Yes, the league leaders, Inter Milan. Yet it is AC Milan that is being investigated. Italian officials are apparently worried that the company that manages €65.5 billion in assets still owns the club, rather than the company that manages €10 billion in assets. It's almost as if they are investigating AC Milan as a way to blatantly deny Inter's harsh financial reality.

Inter's reality, but sure, let's investigate AC Milan.

As mentioned on the last podcast, Milan's offices at Casa Milan were recently raided by Italian financial police in an investigation related to the sale of the club in 2022. Their investigation is reportedly of Gazidis and Furlani, whom they accuse of hiding information from the FIGC regarding the sale, claiming that Elliott Management still own/control Milan. Which is ridiculous, as a fan, because anyone can see how infinitely different the club has been run since Cardinale took over. From the last minute renewal of Maldini and Massara, to their sacking, the disrespect of the fans, the changes in approach to the building of the stadium, and most importantly, the sale of Tonali and extreme changes in transfer policies and procedures last summer. If Elliott still own Milan, someone hit them over the head or something, because this club is not being run remotely the same way as it was under Elliott.

Clearly, Gordon Singer whispering into Cardinale's ear at a match is proof that Elliott still own AC Milan.

What is more absurd is that the Italian authorities are concerned about which successful investment company helped Milan reach their first profit in 17 years their last fiscal year. They're worried about the club with a mere €71 million in debt, instead of the club with nearly a billion in debt that is about to be bankrupt. Are they worried that AC Milan are too financially stable? Are they threatened that RedBird are working around some of the red tape and pitfalls to try to build a new stadium for their club? Or are they just trying to make a bunch of noise so people don't notice that Serie A's referee darlings are about to simultaneously win the Scudetto and default their loans and thus change ownership?

It's not enough that Inter's deep, longterm debt of over €800 million (the most in Serie A,) and the possibility of Zhang and Suning losing the club was a big factor in Elliott not being able to build our stadium together with them. So Cardinale came in with RedBird and decided to try to build without them. Sure, Inter have sustained their operating costs through the shrewd selling of the players they bought that they never could afford, bringing down operating costs in recent years after being offered a settlement agreement from UEFA (again). But their overall debt is absolutely crushing, and Zhang has been unable to secure any new funding due to €415 million in bond debt, as well as the €375 million they owe Oaktree this May.

Inter's excesssive debt prevented us from getting a new stadium built for both our teams.

I have never understood how a club with this level of debt, an owner facing jail time for his debt problems, and with the club's serial operating budget problems as disciplined by UEFA, is still allowed to compete in Serie A or UEFA competitions, much less win trophies. In the lower leagues, clubs with this type of mismanagement would absolutely have to file for bankruptcy, be dissolved, and, if they were lucky, start over. Yet three years ago, Inter literally could not even pay their players at one point, and still won the league title that year. How is that "Financial Fair Play?"

Suning's ownership of Inter, as well as the tenure of President Steven Zhang, has been the ultimate crash and burn story for a football club. Suning bought the club at the height of China's investing in football craze, but when markets crashed, COVID hit, and Zhang's father eventually lost his controlling stake in Suning, things just went from bad to worse. Inter's success on the pitch came due to their exorbitant spending when they first purchased the club, hiring Conte, Serie A's highest paid coach, and also spending big on players. Their wagebill in 2020-21 was €149 million (compared to Milan's €90 million.)

Zhang spent €12m/yr. on Conte, who won 1 league title and flopped in Europe.

Their Scudetto win came at a price, the following budget year, they were once again disciplined by UEFA for failure to meet break even requirements, and entered into another settlement agreement, just two years after being let off the hook from their first one (although they actually did not exactly meet those requirements, UEFA called it "good enough" and released them from their agreement.) So they didn't learn, spent bigger, won a league title from buying a coach and players they couldn't afford. Now they have been financing their club's operating budget and have continued to win Coppa Italia trophies and compete in Serie A and UEFA competitions from the players they essentially bought illegally/overspent/could not afford. And no one cares. 

Meanwhile, Milan was not offered a settlement agreement like Inter was when we changed ownership, and ended up being forced into negotiating a one year ban from Europe instead. Not only have we met the requirements of our FFP agreement, we have actually turned a profit since. We also managed to stay in first place for half of the season that Inter won their Scudetto, and actually won the league the following year, with significantly lower wages, a manager being paid one-sixth of Conte's salarymore injuries, and a squad that was younger and less experienced, too. Inter continued to ignore the rules and benefit from their numerous violations, yet we were still competitive while playing by the rules. But sure, with that kind of sporting and financial success on and off the pitch, Italy should definitely be worried about Milan, not Inter.

Unlike Zhang, Gordon and Paul Singer pay their debts.

There is another pattern here. Milan were punished by UEFA because they were concerned about the intentions of Elliott Management, a well-known "vulture company." The same Elliott Management who brought Maldini back to the club, helped to restore Milan's reputation and bring it back to glory, and most importantly, helped to take it from a club in financial difficulties to one of the financially healthiest of the big clubs in Italy. Now, Italian authorities are investigating Milan again because they suspect that Elliott is up to no good. Even though it is very clearly RedBird who are making all the errors calling all of the shots now.

But what I truly cannot understand is why all of the alarms are not ringing around the clock about Inter's beyond shady ownership. UEFA's financial sustainability regulations, formerly called Financial Fair Play, only seems to cover the operating budget, it doesn't really seem to worry too much about ginormous amounts of debt for some reason, which is the real reason clubs end up in bankruptcy or being owned by shady people. So, because Marotta (who ironically just announced on Saturday that he will be leaving Inter when his contract runs out) has run their operating budget so well since their second FFP sanction, UEFA are apparently okay that last season's Champions League finalists could be repossessed by an American investment company in less than 60 days. Really?

The man who has kept Inter in the game announced this week he will leave the club.

And no one noticed that Inter was the only club never charged in the Plusvalenze case, even though their offices were raided. This, after not only avoiding all charges and consequences in Calciopoli, but actually profiting from the scandal, including their "paper Scudetto" in 2006, when they actually placed third. Which matters, considering that Inter think they are about to earn their 20th Scudetto, and will have the privilege of wearing the second star on their jersey indefinitely. 

It literally seems as though Inter can do anything they want, without consequence, and are, in fact, aided by the system (such as at least three wins this season that are admitted referee errors, including both Genoa matches. Or the complete lack of red cards awarded during matches the entirety of the 2021-22 season, just to name two examples.) Meanwhile, other clubs are investigated for fake issues or are punished by the system (such as the several matches we lost points in the 2021-22 season due to admitted referee errors, or the multiple cards and suspensions this season upheld by the sporting judge while Inter and other clubs were not similarly disciplined.)

Inter have a long tradition of cheating the system, escaping all accountability, and profiting from it all. 

Serie A does not seem to care that, after a Milano court of appeals held up Hong Kong's ruling that Inter President Steven Zhang is personally liable for the €300 million owed to China Construction Bank, or that Zhang is facing possible jail time in Hong Kong for nonpayment and possible perjury, and probably should not travel to Milano anymore, either. (Still waiting to hear about the New York case regarding the same debt.) Inter never even really got punished for flagrantly breaking the FFP rules under Suning's ownership, spending which financed their Scudetto win and their successes ever since, too. 

But now, their club's future is completely uncertain during their title run, and no one even cares? I know there has been a bit of a Scudetto curse of clubs falling from grace after winning the past four Scudetti, but this is absurd. Neither UEFA nor Serie A care that Inter could literally change ownerships before the last day of the season they are supposed to win the title for? Or that their owner likely cannot even attend the Scudetto celebrations in Milano because he owes €300 million and could potentially be arrested if he does show up? 

This is fine.

It seems that everyone is just fine simply handing the trophy to whomever owns Inter on that specific day no matter what they do, and just letting them keep going on and off the pitch. But sure, let's investigate the club that has had the healthy billionaire funds of two successive companies backing them, as well as healthy operating expenses and practically no debt. There is literally no comparison between the two clubs. Just when you thought that Italy and Serie A could not be more embarrassing or ironic. This investigation of AC Milan is simply a deflection – Italy's blatant denial of Inter's shameful financial reality.

This post inspired by the music of NIN's "Head Like a Hole"

Our next match is 
Serie A Week 30
Fiorentina vs. Milan
Saturday, March 31, 2024 • 20:45 CET (3:45pm EDT*)
*note the time difference due to Daylight Savings Time in the U.S.

Investigating AC Milan: Italy's Blatant Denial of Inter's Financial Reality Investigating AC Milan: Italy's Blatant Denial of Inter's Financial Reality Reviewed by Elaine on 3:00 AM Rating: 5
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