Yahoo Sports Milan CFO lifts lid on working under Cardinale, Yonghong Li’s time and rocketing revenues
The Chief Financial Officer of AC Milan – Stefano Cocirio – has shed some light on how decision making works at the club and how involved Gerry Cardinale is.
The prestigious Harvard Business School published a 24-page document in which it analyses Milan as a case study and they spoke to a number of members of the management. Naturally, the words of Gerry Cardinale have generated headlines amid a turbulent season so far.
The RedBird Capital founder and number one compared Milan to Inter and insisted that winning the league title then going ‘bankrupt’ is not something he will be looking to replicate. These words did not go down well with the Nerazzurri leadership, a report earlier today claimed.
As part of the study, they also spoke to Stefano Cocirio who works as the Chief Financial Officer, and his comments were relayed by MilanNews.
On Yonghong Li…
“We lent them €300m in April 2017. Li Yonghong brought his management team to the club and spent almost €200m on players in one summer. There were high expectations, but the team failed to deliver. And the owners ran out of money halfway through the year.
“They called us again, asking for a short-term loan to pay people’s salaries, which we agreed to. But a few months later, it became clear they couldn’t meet their obligations on our original loan.
“In July 2018, Giorgio and I parachuted into Milan on behalf of Elliott and spent time here assessing the situation from the inside. It’s fair to say it was much worse than we imagined. The club was losing €10m to €15m a month.”
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On Milan passing to Elliott…
“We looked at two paths. One was to sell the business immediately. And the other was to stay for two, three, four or five years, depending on how long it takes to get the business back on track.
“Path number one was difficult to execute: because the business was in such bad shape, potential buyers were not willing to pay a reasonable price. So that left us with path number two. The team we inherited had 32 players, which is at least seven more than we needed.
“Their average age was relatively high and many were on expensive contracts. So we knew we had to restructure the squad, focusing on younger players with relatively high resale potential.
“Older, more experienced players provide sporting performance. But from a financial point of view, they are a liability.”
On his role and that of Furlani…
“Usually candidates for these roles have spent their entire lives in football, but when it comes to contract negotiations, or financial decisions, or managing business operations, I don’t see why more qualified people shouldn’t be hired for these jobs.
“Giorgio and I are new to the roles we play, but with the mindset we learned at Elliott and now RedBird, we think we can be more innovative and effective than our peers.”
On working with Cardinale…
“Gerry constantly challenges us. He asks questions. Why are we doing this instead of doing that? Is there a different way of doing what we’re doing? Can we be more efficient? Can we be more aggressive? He’s very detail-oriented.”
On revenues…
“When we arrived, our retail and e-commerce business was managed by a third party, and we were only making a few million euros in licensing a year. We brought the business back in-house, and now we sell €35 million of merchandise through our own channels.
“We are the fastest-growing sports brand for Puma. In July, we will open our flagship store in Milan. Also, our main shirt sponsor was bringing us €9 million a year. Now we are at €30 million. But we have room to grow: some clubs earn up to €80 million from shirt sponsorships.”
On ticket sales…
“Five years ago, the vast majority of our tickets were sold in physical outlets. Fans would queue, but we had no data on them. We were limited in what we could do, but we found ways to improve corporate hospitality, offer different packages and introduce dynamic pricing.
“And it worked: in 2019 we had stadium revenues of €35 million, and this year it will be €80 million. Only 3,000 of the 70,000 seats are premium, but they now represent a quarter of our stadium revenue.”
