AC Milan's Record Losses Show Path to Ultimate Demise

As AC Milan tried to cut costs, they somehow found a way to spend money they said they didn't have. This is one of the worst teams in their history, and they are paying a high price for it.

On Tuesday, Milan announced record losses for the past year, a number reaching €91.3 million, per Football Italia. Years of mismanagement have finally come to a head, with Vice President Adriano Galliani looking a lot like the man to blame through it all.

There are several reasons why the debt is so deep. The absence of Champions League football this season and the next is robbing Milan of tens of millions of euros. Ticket sales are plummeting along with their position in the Serie A standings. And while they have cut down their wages, they are still too high: Milan started the season with the third-highest payroll in Serie A at €94 million, according to La Gazzetta dello Sport (h/t Rossoneri Blog). 

Coach Filippo Inzaghi will probably face the sack by the end of the season, having lived under the threat of it for most of 2015. Milan already owed Clarence Seedorf approximately €10 million in compensation fees, per Rossoneri Blog, the price of sacking him not six months into the job. 

They did not learn their lesson. They are burning through another ill-prepared legend even though Inzaghi has not done himself any favours. The club brought in several decent players for the 41-year-old first-year coach during what was their most expansive transfer campaign in years, and still he has not coaxed the best out of his team.

Antonio Calanni/Associated Press

Mattia Destro, Alessio Cerci and Keisuke Honda would all start on teams above Milan—among them Fiorentina, Genoa and Sampdoria—but for some reason, they cannot find any consistency on this team. On paper, Milan are worth at least the Europa League; on the field, they are middling club.

The high price for mediocrity, however, starts at the top. Galliani has approached the last few transfer windows with the intention of signing every player either for free or on loan. He has gone out of his way to avoid spending money. But one look at the expenses suggests that Galliani has simply spent the money at his disposal the wrong way. 

They have paid millions upon millions to players who have absolutely no place on this team: over a million to midfielder Bakaye Traore, who played seven games with Milan, a raise to Sulley Muntari, who is still getting paid despite pulling himself from the squad; a contract worth €4 million to outcast Fernando Torres, whose wages Milan are partially paying despite playing for Atletico, and another €2.5 million per year for Michael Essien.

It's not even about the lack of investment; it's about bad business. If Milan wanted to waste money in this way, they should have just kept Zlatan Ibrahimovic and Thiago Silva. At least in 2011, back when the two were still Milan players, the team was competitive on several fronts. Sure, their wage bill was at a record-high €206.5 million, per The Swiss Ramble, but at least they were making money back in the Champions League.

Antonio Calanni/Associated Press

Milan sold Ibrahimovic and Thiago Silva to break even, and for a brief time, they did, with a total transfer fee of €62 million coming from Paris Saint-Germain. But in reality, the cost of selling those two players has been far greater than anything they saved from it. By missing the Champions League for a second straight season, they are giving up way more than €62 million. 

Owner Silvio Berlusconi's holding company, Fininvest, has had to absorb Milan's losses on an annual basis. Galliani admitted it himself: "No one has ever done more for Milan than Fininvest," he said, according to Football Italia.

But the board is starting to bite back. Giuseppe Gatti, one of Milan's shareholders, was not afraid to tell the truth to Galliani. "One must know when it's time to give up," Gatti reportedly said, per Rossoneri Blog.

That time is undoubtedly now. According to the Press Association, via Daily Mail, Thai investor Bee Taechaubol is in Milan discussing with Berlusconi a possible takeover. Fininvest and the rest of the shareholders cannot shoulder all the weight of this failing club anymore.