AC Milan Demonstrate Reality of UEFA Financial Fair Play
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A couple days ago, as the news about AC Milan's mega sale of Thiago Silva and Zlatan Ibrahimovic to Paris Saint-Germain emerged, I took to Bleacher Report, to say that there were no foreseeable benefits in the near future to this sale.
That was a rapid reaction. Now, the dust is starting to settle slowly and I can go from being an angry Milan fan to a rational and, in a way, thankful Milan fan.
AC Milan had to sell their two stars.
It sounds crazy, yes, but it would be crazier for Milan to continue warding off offers and paying their massive wages while playing in a stadium owned, not by them, but by the city of Milan, and to continue along the path of losing $80 million a season while a frightening destroyer of clubs edged ever closer.
That destroyer is the beast known as UEFA Financial Fair Play.
Clubs might not like it, but these regulations are for their own good. The world's biggest clubs such as Milan, Real Madrid and Manchester City are losing money every year because prices for players in the transfer market have soared, and along with that goes an increase in player wages. Clubs will have to be more concerned with their football-related expenditure: transfer fees, player wages, gate receipts, TV revenue, advertising, merchandising, sales of players and prize money.
The regulations set forth by UEFA's Financial Control Panel begin with this past season. From the 2011-12 to the end of 2013-14, teams can report a combined loss of $55.3 million for their football-related expenditure over that time. Should a club fail to hit this mark and lose more money, the guilty club will be barred from competing in that season's UEFA club competitions (Champions League and Europa League).
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According to ESPN's Gabriele Marcotti, the Rossoneri spent $250 million in player wages during the 2011-12 season, during which they recorded a loss of $80 million.
Ibrahimovic earned $30 million a season at Milan. His contract at Milan was set to expire in 2014. After this season, Milan would have either met the demands set forth by Ibra's world-class agent Mino Raiola or sell a player who will be 31 come next summer to the highest bidder.
Thiago Silva's contract was through 2017, which is the length of his new deal at Paris Saint-Germain, which pays him about $51 million. Milan were not going to get a better offer next summer if they kept the 28-year-old and had to keep his $10 million per year on the payroll. The timing for both players to leave was right given the regulations.
Milan have promised to replace Ibrahimovic with a champion, with Edin Dzeko believed to be the heir apparent to Ibra. The Manchester City forward would be added into an already talented attack, which features Alexandre Pato, Robinho, Stephan El Shaarawy and Antonio Cassano.
The club can replace Silva with a younger defender, such as Rolando, who wants to move to Milan. He could easily be available for somewhere between $12 million and $15 million. This will allow Milan to build a strong defense for the future with the service of players in their mid-20s with the likes of Rolando, Francesco Acerbi, Ignazio Abate, Didac Vila and Mattia De Sciglio while not having to pay lucrative salaries.
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Milan have a plan in place that builds for the future, while keeping the club fairly competitive in the present. According to Marcotti's article on ESPN, the club can expect to be paying 25 to 35% less in player wages than it did last season. They can do this while spending very little in the transfer market.
Milan also seem keen to work on building from within their youth and Primavera ranks, which include bright future stars like Alberto Paloschi, Nnamdi Oduamadi, Riccardo Ferreira, Gabriel and even Christian Maldini. The first team is already filled with great players under the age of 23, including Alexandre Pato, Stephan El Shaarawy, Mattia de Sciglio and Rodney Strasser who will help to build Milan's future.
AC Milan were the first club to sacrifice under the new regulations and thus have sent a message to the rest of Europe. Financial Fair Play is real. It will force clubs to make difficult choices, choices that may be unpopular with their fans. However, clubs have to ask themselves: would you rather win big in the next couple years then fade off into oblivion, or would you rather your club be able to be around and prosper for a long time to come?
Milan have answered that question loudly.
If Milan continue along this path of development they are going for with this rebuilding project, they will be back to being the force they are used to being in no time.
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