... is quite puzzling. I just can't seem to grasp the logic here. We're the 7th highest valued club in the world, with a value estimated at €659 million. We're owned by one of the richest man not only in Italy, but in the world, with an estimated net worth of $9 billion. Yet we can't seem to spend a penny in signing players.

I understand that we can never compete with the European powerhouses and spend €35 million on this guy, €40 million on that guy. But not even €12-15 million? I swear, we are so cheap it's absolutely bewildering. Asking Rami to pay €500k out of his pocket to Valencia, acting as if €5 million for Dzemaili is €50 million, considering Taarabt's €4 million price tag as too high. And these are just a few rushed examples that come to mind.

There must be a reason we only go after free agents and rejects, but for the love of god I just can't figure it out. The FFP argument does not hold water cos everyone is spending nowadays, sometimes considerable amounts, even clubs that don't take part in the Champions League. We've even reduced our wage bill and our roster, yet nothing seems to be changing. The theory that we would follow Arsenal's example has proven to be another lie fed to the fans.

The only reason I can think of is that the owners (i.e. the Berlusconi family) simply DO NOT want to spend because they DO NOT care anymore. But then again we always face the usual "Milan is not for sale" every time there seems to be an offer in the air.

I just... I just don't get it. Any thoughts?

Revenues vs Expenses basically.

Our revenue stream is pathetically poor compared to other clubs in Europe. Serie A as such faces this problem. Milan's main revenue streams comes down to TV rights and sponsorships. Merchandise isn't awesome. Stadium income isn't awesome.

On the other hand, expenses are high. 700 million worth of assets can be quite hard to maintain, and I'm not talking just player wages. Even player wages take a hit because taxes are insanely high. We struggle to get rid of fringe players too. Simply because lower league teams in Serie A have absolutely no buying power. Contrast this with EPL where Everton can actually cough up 35 million to buy a Chelsea reject (no matter how good he is).

It's a tough situation. I don't know how we'll find our way out of this one, except for time and baby steps.

Not that argument! What would it take for Silvio to cough €18 million for Cerci? Or €5 million for Dzemaili? Nothing. But, oh wait, FFP! Yep, the perfect justification for our gruesome and worn out management.

Silvio can't spend. Milan doesn't belong to Silvio. Through a complicated arrangement, Silvio's income NOT EQUAL to Milan's income. Milan is it's own company.

You don't seem to believe that all the big spenders were in a far better position with regards to FFP even before we got there. All of them.

As for the other argument. One one side fans scream that 12 million for Matri was the most idiotic thing ever. Yet if we try and negotiate and arm twist to cut down the deals for two overpriced players, we're stingy. It's like they can't win.

No way in f@ck Cerci is worth 18 million. 15 million at best and no more. Same with Dzemaili. If he were that f@ckin good, he wouldn't need to be leaving Napoli to come to us.

So unless any of us screaming for paying those prices are willing to put up the extra millions that would be wasted in case these players flop, I don't see the point.

I'll hold my peace till then.

-----

R7,

If you read this thread, from a corporate point of view, is it possible at this point in time for Milan to 're-capitalize' itself from scratch?? To have a better fund to spend from? I mean without selling shares and all. Just re-capitalize itself?


How is Roma and Pallotta working out their finances? Roma was neck deep in debt. As bad as Inter. The banks were going to shut them down? How did he pay off the debts and then proceed to do further cash injections without it being seen as a debt?

People threw a fit about Matri because he was a complete and utter waste of time and money that we absolutely did not need. Galliani bought him to satisfy Allegri because for some odd reason they loved each other.

A midfielder is something we're actually in desperate need of yet nothing, we're being stingy on Dzemaili when we absolutely cannot afford to go into the new season with things as they are in midfield. There's a difference between overpaying for something that is frivolous and you don't need and paying for something you're in desperate need of

Our value is actually $850m, same as Chelsea.

Wow, either I'm a complete donkey or you're just pulling my leg here.

When I say Silvio, I'm obviously referring to Fininvest, the company that owns our shares, which is controlled by the Berlusconi family. Of course they can sign players for us! Who injects money into the club? Who covers the €30-something million holes every year? Who signs the Ibrahimovic's and Balotelli's when the club's revenues are practically offset by costs?

Silvio has been signing players for us for years, even when the finances of the club wouldn't allow it. However, that situation has come to a halt, which coupled with the FFP excuse has rendered us into a bum club that can't spend €5 million to save our lives.

This is what baffles me. I'm not even comparing ourselves to the English and Spanish and German clubs, but to act like such miserable cheapskates? What gives?



Agreed about Cerci, I too think €18 million is not worth it, but Dzemaili? €5 million is not overpriced, yet we act as if it's a big deal, especially when our midfield is in such dire conditions.



It was in euro.

If FFP is such an issue, can anyone explain the spending of other top European clubs? I refuse to believe that PSG revenue's have been enough to sign and pay the players they have in their squad.

Even ignoring the top clubs, clubs that are much much much smaller than us spending and active way more.

They're getting investigated for this. That's also why they have that ban. Basically its like this.

You set up a firm called Aston Villa Holdings that spends a ton of money to buy the club and then even more to buy players. So now you're actually in the red, so what do you do?

You get kurtsimonw Airlines to become a 'sponsor' for a rather large deal that no one else has ever heard of to 'increase revenue'.

Now FFP looks at fair price. So is it fair for Airlines to spend that much in sponsorship when no other airline is putting up that sort of money?

So then kurtsimonw Airlines doesn't individually put up some much cash anymore, instead kurtsimonw tourism, kurtsimonw hotels, kurtsimonw financial services all get involved to put in a little bit here and there.

Ideally, you could even bring in your buddy JackSparrow Alcohols, Spirits and Soft Drugs Inc. to help out with sponsorships.

Unlike in Europe, we live and work in an autocratic environment where none of our corp's shareholders are gonna ask us what is the logic in investing so much of cash into a football club? Because, you know most of the shareholders are family and friends...or other rich people who love the glory just as much as you.

The above is what (to answer X-Offender), Finninvest don't have. The Finninvest Corp would probably get skewered if just after paying 500 million in fines, they proceed to invest 100 million into a football club that gives nothing in terms of revenue to the parent company. In the Middle-East royal circles they don't care. In the publically traded European stock market, they'll have your balls.

Imagine it's not Milan. Imagine it's some other firm that you've invested in for getting returns on. Place yourself as a shareholder, and not a football fan. Tell me how Berlusconi is going to get it passed at a board meeting?

But Jack, sponsorships are included in revenue. These clubs are making massive losses after doing what you have outlined above.

I do think it's purely a money making exercise for UEFA and they pick and choose stuff. PSG had a sponsor that wasn't allowed to go through by UEFA as it wasn't deemed "fair value", I believe it was less than £170m. United and Barca have both been allowed deals that make PSGs looks like pennies. Funny that.

On Milan:
Why re-capitalize? Borrowing is cheap, noting ECB discount rate is close to zero. Hence the Equity/debt mix should be at an optimal level. Fininvest continues to inject funds into equity to shore up losses on each calendar year, the same to safeguard Equity. Fininvest’s strategy is looking to sell the club whole or at the very least sell approx. 30% to finance the purchase of a new plot of land and construction of a stadium. Monetizing on a new stadium is what will get the wheel moving at Milan.

On Roma:
With Roma, you have to go back in time, circa 2008. At the time, the owner was Italpetroli (a fuel storage company), which had accumulated over 400M in debt. With the financial crisis, the banks were squeezed and the Sensi family (owners of Italpetroli) felt the pinch as they had mortgaged shares of Italpetroli against the facilities availed by Unicredit.
Sensi and Unicredit agreed to restructure, with a debt to equity swap (where the bank became owner to 49% of Italpetroli, which in turn owns 67% of AS Roma). At that point, Unicredit had full control of Roma (while Sensi, the president of the club had no say in the club matters – a transitional president if you will). Further, Unicredit hired a third party consultant to bring in a potential investor.
Enter the American consortium led by Pallotta in 2010 [James Pallotta (25%), Michael Ruane (25%), Richard D'Amore (25%) and a family fund (22.5%)]. They offered a little over EUR100M (club was valued at approx. EUR250M). Unicredit and Sensi wanted a higher valuation, but considering the scarce availability and interest from investors to invest in Serie A clubs; Unicredit agreed (despite Sensi’s reluctance) the transaction was done.
AS Roma is a new company today, and as of 11 Aug 2014 are wholly owned by the consortium of investors (not Pallotta alone). As a new company, AS Roma can raise debt with relative ease considering it no longer is under the indebted Italpetroli. Moreover, the consortium had participated in a capital increase in the new company the same not only to fund for a stadium but to safe guard equity as well (as equity had turned negative since 2008).

I don't know why we're even discussing this again, it's a never ending situation where we talk circles around each other

We're not spending because our owner does not wish to do so any longer, simple as that. He's left this club in the hands of Galliani with peanuts to spend and Galliani is doing his utmost best to continue running us into the ground. Silvio's biggest crime imo is not withdrawing his financial backing it's leaving Galliani to run this circus.

It is a matter of education I guess

My mistake.