Elliott has commenced contractual proceedings that could grant the US private equity fund the power to determine the future of Italian Serie A football club AC Milan, according to multiple reports.
The Reuters news agency, citing a source familiar with the matter, said Elliott yesterday (Monday) installed its own managers on top of a Luxemburg-based holding chain overseeing AC Milan, Rossoneri Sport Investment Lux, effectively taking over control of the club.
This came after Milan chairman Yonghong Li last month failed to make a €32m ($37.4m) payment to Milan, the final part of €120m he had committed to pay the club as part of his deal to acquire it from former owner Silvio Berlusconi. Elliott stepped in to make the €32m payment and had the ability to secure full control of Milan if Li failed to pay it back by July 6.
In April 2017, former Italian Prime Minister Berlusconi’s holding company, Fininvest, completed the protracted sale of its 99.93-per-cent stake in AC Milan to Rossoneri Sport Investment Lux. The entity, which is controlled by Li, replaced the original Chinese bid vehicle, Sino-Europe Sports Investment Management Changxing (SES). Elliott earlier agreed to provide Rossoneri Sport Investment Lux with the necessary funds to complete the transaction.
Elliott provided €180m to complete the deal, plus a further €128m to aid investment in the playing squad, with AC Milan spending over €200m on players in 2017 alone. The loans, with an average interest rate of just below 10 per cent, will have to be repaid by October 2018.
Reuters said the final step in the current process could soon see Elliott become the majority owner of AC Milan, adding that while it has previously been disinterested in owning a club long-term it could seek to put Milan back on the right course before selling at a profit. Reuters added that Li is still seeking means to pay Elliott back by bringing in other investors and remaining a minority shareholder.
Italian newspaper Gazzetta dello Sport said that Milan will meet to approve the board changes in the next seven to 10 days. Chief executive Marco Fassone is said to have been unwilling to comment on the club’s future during the presentation of its new away kit on Monday evening.
The latest development comes after AC Milan last month said it would head to the Court of Arbitration for Sport (CAS) after Uefa imposed the stiffest sanction so far on a team from one of Europe’s top five leagues for a breach of its financial fair play regulations.
Uefa has decided to exclude Milan from participating in the next Uefa club competition for which it would otherwise qualify in the next two seasons. This means that Milan will be ejected from the 2018-19 Europa League after the club qualified by finishing sixth in Serie A last season.
Milan is also currently being linked to a number of takeover bids, chiefly from the Ricketts family, owners of Major League Baseball (MLB) franchise the Chicago Cubs, and Rocco Commisso, owner of the New York Cosmos.