A large search by the Guardia di Finanza, the Italian financial brigade, took place Tuesday afternoon at Casa Milan, headquarters of the Milanese club. In recent months, the Milan public prosecutor’s office had launched investigations linked to the sale of the majority shares of AC Milan, completed in August 2022, from the Elliott fund to Gerry Cardinale’s RedBird fund. Underlying this search, suspicions exist about the current president, Giorgio Furlani, and his predecessor Ivan Gazidis who allegedly obstructed the work of the Italian Football Federation (FIGC) on “the activity of the supervisory authority”. According to initial reports, the AC Milan club is in fact still under the dominant influence of Paul Singer’s Elliott fund. If this remains unlikely, the shadow of sanctions still hangs over AC Milan, in particular for having potentially violated article 5 of the UEFA regulations. This law on continental competitions prohibits the same person from exercising control or influence over several clubs registered in European competitions and if the suspicions are confirmed then a conflict of interest would be recorded with the Elliott fund which also owns shares at LOSC in France. On the Italian side, fines or penalties could also be decided for the next championships.
“Regarding the search that took place today in its headquarters, the AC Milan company appears to be a third party and foreign to the current procedure concerning its acquisition, completed in August 2022. The investigation, which also involves the legal representatives with signing authority, Giorgio Furlani and Ivan Gazidis, current and former CEO of the Club, assume incorrect communications to the competent supervisory authority. The company is fully cooperating with the investigating authority., defended the Lombard club in a press release published Tuesday afternoon. But this large ongoing investigation also highlights several other ongoing files, which have largely been kept silent for several weeks. Indeed, this legal case could perhaps accelerate the entry of an Arab partner in place of Elliott (now RedBird’s creditor). According to the daily Il Fatto Quotidianowhich cites documents acquired by the Guardia di Finanzia, the first discussions between potential Arab investors and AC Milan date back to December 19, 2023.
The PIF wants to make a big splash!
The idea of Milan as a major globalized sports hub, with ownership shared between the United States and Saudi Arabia, emerges from the search warrant written against the four suspects in the context of the sale of the Rossoneri club from the fund Elliott at RedBird. As reported by La Gazzetta dello Sport, the Saudi fund Public Investment Fund (PIF), which bought the English club Newcastle in 2021, is mentioned as the main investor intended to enter into the ownership of the club by buying a significant share. Indeed, in a confidential document entitled “Ac Milan Investor Presentation” and seized by the Guardia di Finanza, reference is made to the Saudi PIF which would receive “41.7% of shares thanks to the repurchase of 80% of the Vendor Loan for $487.5 million”. The PIF, the Saudi sovereign wealth fund, has a net worth of $861 billion and aims to reach $1 trillion by the end of 2025. In 2021, it bought Newcastle for €350 million and controls also the four big Saudi clubs (Al Nassr, Al Hilal, Al Ittihad and Al-Ahli).
“Vendor Loan” is the name given to the bank loan of 550 million, repayable in three years with an advantageous interest rate, that RedBird received from the Elliott fund. This means that Gerry Cardinale will have to return around 665 million euros to Paul Singer by the end of 2025 with interest included. The share that the PIF could acquire from Elliott in the event of an agreement would then be converted into equity, making the Saudi giant the second main shareholder of AC Milan. In a recent interview with Football and Financethe owner of RedBird, Gerry Cardinale, had confirmed his desire to open up to new members, without however directly referring to the PIF: “I am in Milan to stay for a long time and if it were up to me I would stay here forever. What is true, however, is that movements in the global economy must be taken into account and there is no doubt that in the Middle East there is a lot of liquidity and willingness to invest in sport ».
If it is still too early to see the Saudis and the Americans sharing one of the biggest clubs in Europe, what was only a simple rumor quickly denied a few months ago is becoming concrete information. Saudi Arabia wants to continue to establish itself sustainably in European football and Gerry Cardinale sees real potential for all branches of the club: “There is a lot of capital in the Middle East interested in investing in the sport and we are open to collaborating with potential partners who could join us both as sponsors and partners in the construction of the new stadium, or as as minority shareholders as true value-added partners, but as I said, I will not give up full control”, explained the American owner. We will now see whether the internal mess in Milan will slow down or accelerate discussions with Saudi Arabia’s Public Investment Fund (PIF)…
