MILAN — In one corner of Ivan Gazidis’ multiroom office high up in Casa Milan, AC Milan’s city-centre corporate base, sits a model of the proposed San Siro redevelopment. Gazidis, the club’s chief executive officer, stands over the white resin replica assured in his belief it will be “the best club stadium in the world” before looking up to point out the red girder of the Rossoneri‘s existing home, visible through a gap in the Milan skyline from an adjacent window.
Maintaining a simultaneous view of the past, present and future has been integral to the remarkable journey Milan have undertaken since Gazidis assumed his role in December 2018, five months after U.S. hedge fund Elliott Management took control of the club in desperate circumstances.
Founded in 1899 and a seven-time European champion, modern-day Milan were mired in uncontrollable debt and languishing in the middle of the Serie A table. The club were technically insolvent under the ownership of a Chinese consortium led by businessman Yonghong Li and in breach of UEFA’s financial fair play (FFP) rules. But after a radical overhaul of the playing staff, a revolution in financial and commercial strategy, slow but steady progress towards delivering that new stadium, their first Scudetto in 11 years and a return to the Champions League stage, Milan were sold in August for €1.2 billion to U.S. investment firm RedBird Capital Partners, which has ties to Major League Baseball sides the New York Yankees and Boston Red Sox.
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The club’s supporters can now look to the future with newfound optimism as Gazidis tells ESPN the story of Milan’s resurrection.
After years of lavish, unsustainable spending largely financed from his own personal wealth, former Italian prime minister and media tycoon Silvio Berlusconi chose to end his 31-year association with Milan by selling the club in April 2017.
Yonghong’s Chinese consortium agreed a €740 million deal, around €300m of which was borrowed from Elliott Management. However, Yonghong’s action plan was based on an improvement in on-field performance combined with significant investment from Chinese sponsors. Neither materialised despite a dramatic spend in his first transfer window. In fact, quite the opposite: the Chinese government dramatically changed course by seeking to restrict what it described as “irrational” large investments by the country’s prominent financiers in European football, a trend which included purchasing stakes in Manchester City, Aston Villa, Atletico Madrid, Espanyol and Lyon.
That shift in approach widened a black hole created by an estimated €240m outlay on nine players — including Leonardo Bonucci, Andre Silva and Nikola Kalinic — and perhaps inevitably in that context, a year later, Yonghong defaulted on his loan repayments and Elliott Management took charge of Milan at short notice in July 2018.
Milan finished that Serie A season in sixth place, 31 points behind champions Juventus. And, in the autumn, Gazidis was approached to lead the turnaround.
The 58-year-old had been at Arsenal since the beginning of 2009, where he overhauled the club’s management structure and earlier in 2018 had appointed the club’s first new manager in 22 years following Arsene Wenger’s departure. Gazidis was not universally popular among the Gunners’ fanbase as the club struggled to compete for the Premier League as it had historically done, while owners Kroenke Sports Enterprises were often accused of prioritising balance sheets over teamsheets.
Elliott Management was founded by Paul Singer, whose son Gordon is Gazidis’ close friend. Nevertheless, the former Major League Soccer deputy commissioner had doubts over taking on the task at Milan.
“It wasn’t the comfortable or low-pressure option,” Gazidis tells ESPN. “At the same time, I believed in the possibility of it. Milan is one of the great football clubs in the world and I thought we could bring something new into the Italian environment.
“My initial response was to say there might be other candidates more familiar with Italy but Elliott considered that and came back. As we both thought about it more, we decided we could take it on together.”
Gazidis did not join until December 2018, meaning he was not in place for a summer window in which Elliott attempted to spend its way out of trouble despite the appalling state of Milan’s finances. Milan had a turnover of around €200m but recorded a loss of €126m in 2017-18, chiefly because of a wage bill that sources suggest stood at more than 90% of turnover.
Without Elliott propping up the club, Milan were one step away from failing to pay wages, stadium lease payments or meet any meaningful day-to-day requirements. Yet they chose to invest heavily in players, spending more than €100m. Sources have told ESPN that one deal involved Milan paying a staggering €18m loan fee to bring in Juventus striker Gonzalo Higuain for a solitary season.
The wage bill was a product of a squad built in the typical Milan traditions, replicated so often across Italy: older players with experience and others with lofty reputations to withstand the pressure described by the colloquialism “la maglia è pesante” (the shirt is heavy.)
“There were a lot of contracts like that, almost too many to name — expensive players like Bonucci for example,” Gazidis explains. “They signed Gianluigi Donnarumma, an excellent goalkeeper, but to a huge contract in order to keep him. Go through the team, the contracts were out of whack with performance. There were probably 10 different examples of players who fall into that category. And players, when they are overpaid relative to their performance, are really difficult to get out.
“We’re actually just getting to the end of unpicking the last ones this season to make the wage bill more efficient. But when you are able to get those players out, you need someone to play. The only way to bring new ones in is to spend money and then the question is how to spend effectively and efficiently.”
Alongside Elliott executive Giorgio Furlani, Gazidis decided to instigate a shift towards investing in youth, not an original approach by itself but one particularly at odds with convention in Italy. Short-termism is standard; experience is lionised. Fans are unforgiving.
“We faced a lot of scepticism about the policy of signing young players, especially in Milan,” he continues. “Italy in general I think is sceptical about giving young players a chance, Milan in particular because of the pressure of the crowd and the San Siro environment has a reputation that young players can get crushed there.”
In Gazidis’ first transfer window, Higuain’s loan was ended abruptly — a statement of intent by itself — while young prospects Lucas Paqueta, then 21, and Krzysztof Piatek, then 23, were acquired from Flamengo and Genoa respectively as a sign of things to come.
But it was the summer of 2019 when the nucleus of Milan’s team began to develop. Ismael Bennacer, 21, Theo Hernandez, 21, Rade Krunic, 25 and Rafael Leao, 20, were among the incomings as the average age of the squad began to fall — Milan had an average age of 29.7 in 2009-10, the highest in Serie A; by 2020-21 it stood at 24.3, the club’s lowest in two decades — and underperforming high-earners were moved on.
“Those players we signed that summer are still core elements of the team today,” said Gazidis, whose recruitment strategy was honed at Arsenal by the club’s experience of using StatDNA, a U.S.-led analytics company the Gunners acquired in 2012 and took in-house to inform their transfer policy.
“Very often, what I see at football clubs is the scouting and the analytics are at odds and that creates an issue inside the club. We managed to line them up extremely well together. Analytics are facts. Saying you don’t believe in analytics is like saying you don’t believe in facts. There are explanations behind the facts you need to look at. Facts don’t give you the answers, but they can ask a lot of very relevant questions. It isn’t so much about concept as it is about execution.”
That execution also relied on the input of sporting director Frederic Massara, chief scout Geoffrey Moncada (both appointed by Gazidis), and Paolo Maldini, the legendary former Milan defender turned technical director.
“In the recruitment process, Paolo is fundamental, speaking to each of these players to understand the way they think and what is motivating them.” Gazidis explains. “We call him our point of reference. Paolo is speaking to the agent as an initial point of contact.
“The next conversation is directly between Paolo and the player, with Ricky as well. Immediately, he is developing a relationship in the recruitment phase because he knows the insecurities that young players have. He’s been through it all himself, he knows their concerns.
“Theo is a good example. He’d been in the Real Madrid system but had been out on loan and they were prepared to let him go. Paolo met him in Ibiza where he was on holiday in the summer. They sat and had a coffee or lunch together and a long conversation where they formed a bond that still exists today.
“Paolo really understood that Theo had development to do as a footballer, but also as a young man, and Paolo took him under his wing. You still see it today. Paolo goes to the training ground virtually every single day.
“He’s not intrusive into the coach’s territory but always has a word for a player for what they are going through, what happened in the last match. This morning with Theo, the two say hello to each other and there’s a big hug. Theo looks at Paolo almost as a second father. Paolo has that relationship with number of the players.”
Milan finished the 2018-19 season in fifth place, 22 points behind champions Juventus, but the wider environment for this first major recruitment drive darkened dramatically after the club were found to have breached UEFA’s FFP rules between 2015 and 2017.
It was a complex case but essentially, Milan successfully appealed a two-year ban only to then be referred to UEFA’s financial watchdog again in April 2019 for a second breach: alleged excessive spending in 2018. Lengthy negotiations followed and Milan accepted a one-year ban from European competition for the 2019-20 season.
“I knew coming in this was going to have to arc and part of it would be a low point,” Gazidis says. “That probably was the lowest point, having to take that ban, being in a situation where almost everything had to be turned around, every aspect of the club. To take a ban for a club whose reputation is built on Champions League football was a very difficult thing to accept. But Milan had never been thought of as a business before. Clubs are social and cultural institutions but if you don’t have a solid business plan behind it, the wheels can come off the wagon.”
Losses for the 2018-19 season totalled €146m, an increase from €126m explained by Gazidis as inevitable “even with good management for a year or two because you had to turn it around — there were fixed contracts that need to be serviced which weren’t going away.”
And Milan started the 2019-20 season badly. Four defeats in their first seven Serie A games saw them fall 10 points behind Juventus and that led to the sacking of Marco Giampaolo as head coach.
Stefano Pioli was appointed as an interim boss until the end of the season, a steady if not particularly inspiring appointment. The 56-year-old had been around Italy, coaching Parma, Palermo, Bologna, Lazio, Inter Milan and Fiorentina (among others) competently in most cases, albeit without a track record of silverware at the very highest level.
A 5-0 thumping at Atalanta just before the Christmas break preceded mixed run of results in early 2020 — four league wins, three draws, two defeats — before Italy became the first European country severely affected by the COVID-19 pandemic and headed into lockdown.
“Maybe we were at our lowest point when Covid hit,” Gazidis says. “Inside the club, we were beginning to see light at the end of the tunnel. But outside the club, the team had a coaching appointment that had not worked in Giampaolo and we had to make a change.
“There was a lot of pressure on us going into January and February and then lockdown happened. We were beginning to see some green shoots, we believed we were doing the right things. But actually, something grew within the group during that lockdown period, even though they weren’t physically together. They somehow just bonded and Stefano really got to know them well.
“A little bit like Paolo, he wants to understand the players as people and he cares about them. That makes them ready to run through a wall for him. [In lockdown] We were not under that pressure [of playing] every three days. They were able to pause and connect with each other and the relationships formed during that time have carried forward and developed. We came out of lockdown and the performances just grew and grew.”
Italian football resumed on Friday, June 12 as Milan drew 0-0 with leaders Juventus in the Coppa Italia semifinal second leg (losing 1-1 on away goals). Juve went on to win their seventh consecutive Serie A title while Milan ended in sixth place, 17 points adrift. But the coda to their campaign hinted at the alchemy Gazidis describes.
Pioli’s side were unbeaten in their final 12 matches, winning nine times and amassing a higher points tally during that period than anyone else in the division. Milan continued to build, adding experience in Zlatan Ibrahimovic and Simon Kjaer, a sprinkling of older heads to help guide a young group.
“Both of them contributed a lot,” Gazidis says. “They came in and provided broad shoulders for the young players. Ibra never accepts less than 110% from anybody at any time. Ibra was extremely demanding on everybody. We actually tried to bring him in a year earlier, but Ibra felt it wasn’t the right time.
“He was playing with the LA Galaxy and wanted one more year there. With Zlatan, he’s obviously a very powerful personality. If he came into the wrong environment, that could lead to friction. I think our environment was the perfect challenge for him, one of the biggest in his career. Could he lead this group to a Scudetto? He really embraced that.”
And how. Europa League football returned to San Siro while Milan challenged for the Serie A title in 2020-21, remaining unbeaten domestically until early January when they were top of the league before defeat to Juventus triggered an inconsistent run of results. Rivals Inter ended up winning the title by 12 points, but Milan’s second-place finish secured a return to the Champions League for the first time in seven years.
Milan acted again in the market, spending a reported total of €80m to bring in defender Fikayo Tomori from Chelsea, goalkeeper Mike Maignan from Lille, as well as veteran striker Olivier Giroud, among others.
But it was the development of the existing core group which really propelled Milan forward in 2021-22. Primarily set-up in a 4-2-3-1 system, Pioli encouraged players to rotate attacking positions. Franck Kessie and Ismael Bennacer (or Sandro Tonali) provided cover as defensive midfielders, while the work Maldini had done with Hernandez helped him develop beyond all recognition.
The biggest transformation came in Leao, the poster boy for Milan’s new market approach, as he became one of the hottest properties in European football. Sources have told ESPN that Chelsea had a verbal offer for Leao rejected three days from the end of the last transfer window. Speculation persists that they are one of several clubs that could return with a new offer in January, while Milan try to tie down the Portuguese winger to a new contract.
“Rafa didn’t have an easy time here,” Gazidis says. “He wasn’t playing and when he did, his performances were up and down. He needed a little bit of time. He got that time and support. We didn’t deviate from our plan very much. And where we spent bigger money, we didn’t deviate from it at all.
“We had to have green lights from scouting, analytics, Maldini and me on the finances. The finances had to get into order and spending required Elliott to put more money into the club in the short-term and to have the faith in this group of people to make the right decision.”
That faith was rewarded last season in the most emphatic way: Milan won their first Serie A title in 12 years — and their 19th in total — finishing two points above Inter, eight clear of Napoli and 16 in front of Juventus. Leao won the Serie A MVP award, finishing with 11 goals and 10 assists from 34 games. And the average age of the squad was just 25.8, with only Spezia, Empoli and Torino recording a lower number.
Gab & Juls discuss reports suggesting Rafael Leao could sign a contract extension with AC Milan before the World Cup.
Milan’s success has been replicated in dramatic growth off the pitch. Led by another Gazidis appointee, chief revenue officer Casper Stylsvig, commercial revenues are expected to treble to €150m; the Brand Finance Institute describes AC Milan as the fastest growing club in the world in terms of brand value, while finance experts Deloitte rank the Rossoneri 19th, up from 30th, in revenue across Europe. Turnover is set to surpass €300m, while losses for 2021-22 were €66.5m, which is significantly down on €96.4m for 2020-21 and €194.6m in 2019-20.
“The fans sing ‘Pioli’s on fire’ but our commercial department has been on fire,” Gazidis says. “There are four pillars to our strategy. The first was fix the on-field performance. The second was enhance the capability of the organisation — getting the right management. Third was to drive the commercial revenues to a new level by bringing in good processes and the fourth is the stadium. That fourth one has been challenging at times.”
Populous, the same designers which delivered Tottenham Hotspur’s stunning stadium, opened in 2019, have been handed the responsibility of a creating a new home as iconic as San Siro. There are some who find the old stadium hard to let go, possessing an almost mythological status to football fans of multiple generations. Yet at the same time, it has one kitchen to serve about 80,000 people, the toilets are terrible, and the outside is made of concrete, making phone connectivity a huge issue. It remains an intimidating atmosphere but so much sound is lost in the spaces between the top of the stands and those red girders.
There are two proposed sites for the new stadium, dubbed “The Cathedral”: one a few hundred metres from the current San Siro, the other located around 10 minutes west. It will have a capacity of around 65,000, adjacent to 50,000sqm of parkland with space for multiple commercial units and parking below ground, while its estimated cost is around €1.2bn.
“We have a great, privately-funded project that I spent a huge amount of time on in my first year which has really got a bit bogged down in Italian politics and bureaucracy,” Gazidis says. “But now, there is a very big light at the end of the tunnel. We already have approval on the stadium, there are a couple of steps they are going through with a public debate. I’m very optimistic that stadium project will get underway next year with all approvals.”
It is the next step in Milan’s evolution and the plans are a significant reason why RedBird Capital Partners moved to acquire the club for €1.2bn.
“The club does not have to be invented,” said Gazidis. “Pride comes from on field performances but also from values. We spent a lot of time making sure we were purpose led and authentic to values. We’ve done a lot of work on anti-racism, where we have been absolutely the leaders in speaking up about that. We’re investing in our women’s team. That would be an easy cut to make but we’ve actually doubled down on it.
“Milan is one of the giants of the game. It should be spoken in the same breath as Real Madrid. It just needs to be breathed back to life. I think we are doing that, but we are only at the end of the beginning. The next phase of growth will be really important.”
All of which begs the question of what happens next to Gazidis with his contract set to expire on Dec. 5. Sources have told ESPN there is the option to stay on but that he is considering his options after an exhausting spell in which he was diagnosed with throat cancer in July last year. Thankfully, the problem was identified early and he has since made a full recovery. So would he walk away now?
“I really believe the first responsibility of a chief executive is to try to make yourself replaceable,” he says. “This is a really robust organisation with great management at the senior level. All the senior managers here were brought in new, and they are top class people. I know there will always be a focus on individuals.
“If the club is in a better position now than it was four years ago, it is entirely down to the efforts of a lot of people: senior management team, staff, players and coaching staff. That is unchanged. The new ownership is involved because it likes the direction of the football club. It wants to take it further.”
AC Milan celebrated their first Serie A title in 11 years with a parade through a fan-packed city centre.
While they sit three points off top spot in Serie A this season, there are major challenges on the horizon. Milan were outclassed home and away by Chelsea in this season’s Champions League group stage, a sign of the distance left to travel in catching the Premier League powerhouses. Some also question whether the growth of private equity money in football is positive for the sport in general, whether these funds always act in the best interests of their clubs or pursue short-term gains for shareholders.
Ownership intentions became headline news last April when the European Super League (ESL) launched and failed within the space of three days. Milan were one of the 12 founding clubs, opting to jump on the bandwagon driven by those in more perilous financial circumstances, unhappy at UEFA’s distribution of wealth and the dominance of the Premier League.
Just this week, A22 Sports Management, a company representing the three clubs still clinging to the idea of the ESL — Real Madrid, Barcelona and Juventus — appointed a new chief executive, German media executive Brend Reichart, as its new chief executive. Reichart claims the ESL will relaunch within three years.
“The huge spending we are seeing in football is creating a lot of tension in the system,” Gazidis says. “It is making football less competitive, although it is the best football we have ever seen. It is a wonderful spectacle but there are fewer and fewer teams who are able financially to compete at that level.
“Obviously the growth of the Premier League means it is the epicentre of that. The spending at PSG has also introduced another element and outside the Premier League, Real Madrid, Barca and Bayern [Munich] will always be there. For Italian football, it has fallen behind. The one club in the last decade who has been able to be competitive because it invested in a new stadium and did things well is Juventus. But if football only becomes about spending and that’s the only metric — there’s so much pressure to spend it sometimes feels like that’s the thing that’s most admired — I find that disheartening.
“There needs to be a place for ideas and not just money. There needs to be a place for dreaming and new stories. We’re struggling to find that. The Super League was a bad formulation but it is an expression of this tension between clubs that have the backing that means they can do just extraordinary things and a less and less competitive environment in Europe. The Premier League is the Super League and the rest of Europe is trying to find a way to have a vibrant future.
“I’ve been advocating for closing the gap between Champions League and Europa League revenues for 15 years. That should be reduced. What goes hand in hand with that is effective cost control. FFP is the first attempt. It has been somewhat effective, actually, across most of the game. But it hasn’t controlled some of the extreme spending.”
Yet for Gazidis, it comes back to the stadium. San Siro is aiming to be ready for 2027 with Milan bullish as a club over the impact it can have.
“Once you have a shining example like that, other clubs have to follow,” he says. “It will regenerate the Italian football landscape and kick it into action. This country is a sleeping giant. The football clubs here are enormous because of the history, the culture they represent.
“Italian football has been through a hard time but I’m absolutely convinced 10 years from now, it’ll be thriving, playing in modern stadiums with some of the biggest club names, best style of play, most passionate fans in the world. What we do will have an impact not just on Milan the club, not just on Milano the city, but on Italy the country.”