panorama  › Football 24

Chinese billionaire comes forward as AC Milan’s most credible suitor

by Gianni Dragoni

Of the various letters of intent - and the many hoaxes that are circulating - Dalian Wanda’s is the most solid offer for a stake in the soccer team being owned by Fininvest, the holding company of Silvio Berlusconi. The potential Chinese partner has a well-defined profile, that of Wang Jianlin, a billionaire with a personal fortune estimated at $25 billion. According to The Economist, Jianlin competes with Jack Ma, the sponsor of Alibaba, for the title of the wealthiest man in China, other sources claim he is “only” the 4th richest man in China.

Whatever the case, he is a businessman with a fortune that could ensure reliability to Berlusconi, who is struggling with a club that is losing money and showing mediocre results on the field. In Serie A, AC Milan has been languishing between eighth and tenth place. The position of Filippo Inzaghi, the newly arrived coach, appears unstable. Inzaghi is the protégé of Vice-President and CEO, Adriano Galliani who, however, is in conflict with Milan's deputy chief executive, Barbara Berlusconi, daughter of the owner.

Jianlin owns the Dalian Wanda group, which bought 20% of Spain's Atletico Madrid a month ago for €45 million and two weeks ago, it bought the Swiss multinational, Infront Sports & Media for €1.05 billion euros. Infront, led by Philippe Blatter, nephew of FIFA president, Joseph Blatter, is the advisor of the Italian Football League for the sale of TV rights on the matches.

Fininvest ruled out that Milan is up for sale. But did not exclude the possibility of selling a minority stake, which could come about through a capital increase. Discussions on the valutaion of the club are open. How much is Milan worth? Exorbitant and improbable figures have circulated, like the one that values Milan at over €1 billion. Last year there was a rumor of a €500 million euro offer for 51% from Singapore tycoon, Peter Lim. Who knows if it was true. The offer was nonetheless rejected.

Milan's budget is in the red. Next year it won't even be participating in the Champions League and therefore won't have the boost of at least €50 million revenues guaranteed in Europe's highest competition for clubs. The latest approved and public balance sheet, that of the 2013 calendar year, shows a consolidated revenue of €254.56 million and a net loss of €15.72 million, after €23 million in gains at the so-called calciomercato. At the end of 2013, net financial debts amounted to €256.4 million, slightly more than the turnover.

Milan doesn't have its own stadium, it only has the Milanello sports complex where the Rossoneri train. A more realistic evaluation of the entire team is somewhere between €400 and €500 million, excluding financial debt. At these values, the potential 30% partner could therefore inject a sum of between €120 and €150 million. Who knows if that will be enough for Berlusconi. If this agreement were to go forward, there would be potential conflicts of interest to consider that are connected to the arrival of Jianlin, for his soccer investments.