AC Milan Face Financial Fair Play Sanctions After Settlement Attempt Failed

Gill Clark@@gillclarkyFeatured Columnist IMay 22, 2018

AC Milan head coach Gennaro Gattuso looks on prior the Europa League round of 16 first-leg soccer match between AC Milan and Arsenal, at the Milan San Siro Stadium, Italy, Thursday, March 8, 2018. (AP Photo/Luca Bruno)
Luca Bruno/Associated Press

AC Milan reportedly face UEFA sanctions for breaching Financial Fair Play regulations and could be thrown out of the Europa League. 

The Serie A side's case has been referred to the adjudicatory chamber after a settlement with UEFA could not be reached, per Rob Harris at the Associated Press:

Rob Harris @RobHarris

BREAKING: AC Milan facing UEFA sanctions for breaching financial fair play. Case referred to adjudicatory chamber after Milan failed to reach a settlement with UEFA

The Rossoneri qualified for next season's Europa League but could be excluded from the competition as part of any sanctions imposed, per PA Sport (h/t ESPN FC).

"It's important for us to take a position after the UEFA statement, said Milan general manager Marco Fassone, via calciomercato.com.

"We are very surprised and bitter about this news. I was expecting UEFA to offer us a settlement agreement. This has only happened once in the past involving a Russian club. UEFA said that the fact that the debt wasn't refinanced yet casts shadows. We continously paid the debt during the season without any doubts so yes I am surprised. This certainly hurts our image but we are still hopeful. Milan are paying for the 2014-2017 period but I still believed that we deserved an agreement. We will now talk it over with our lawyers."

AC Milan invested heavily in the squad in summer 2017 bringing in a raft of players including Leonardo Bonucci, Andre Silva, Franck Kessie, Hakan Calhanoglu and Andrea Conti among others.

However, their finances have come under scrutiny from UEFA investigators who have outlined their issues, as shown by Harris:

Rob Harris @RobHarris

Financial Fair Play. UEFA financial investigators on AC Milan: _ Club breached break-even requirement. _ "Remains uncertainties in relation to the refinancing of the loan and the notes to be paid back in October 2018."

The disciplinary hearing will take place in June, and there are doubts over the financial stability of the club's owners.

A Chinese-led consortium bought the club from Silvio Berlusconi for $800 million in April 2017. AC Milan took out a loan of over €300 million from American private equity firm Elliott, per the Associated Press (h/t The Washington Post).

The club are scheduled to repay the debt by October and "refinancing remains up in the air after months of negotiations," according to Football Italia.

AC Milan's finances will now be scrutinised more carefully, and sanctions could also involve a transfer embargo or a hefty fine, per Football Italia.

Football editor Anthony Lopopolo explained why a change of owner may be needed:

Anthony Lopopolo @sportscaddy

Before signing any players or talking about anything else this summer, Fassone and Mirabelli have to sort out the club's financial future. If Yonghong Li doesn't have the money – and it's becoming clear that he doesn't – then a change of ownership is vital.

AC Milan's heaving spending was undoubtedly part of a bid to return the club to the lucrative UEFA Champions League. However, the club had a disappointing season and only finished in sixth place, which means Europa League football.

Their poor performance on the pitch will have had a financial impact on the club. Fassone explained AC Milan would have to sell players if they did miss out on Europe's top competition, per Ben Gladwell at ESPN FC.

"The Champions League is fundamental for our project, but if we don't qualify it won't block our plans," he said. "It would just postpone them by a year, and we would have to find a way of making up for the loss in revenue from the Champions League by selling one or two top players."

UEFA have punished other top clubs for breaking FFP regulations. Manchester City and Paris Saint-Germain were both hit with sanctions in 2014 including a £49 million fine, transfer caps and restrictions on the size of their European squads.