FM20 – The Preamble and Save Reveal

Serie A has been in relative decline for a number of years now, with Inter Milan the last Italian side to win the Champions League under Jose Mourinho back in 2010. The treble-winning side came after Internazionale racked up losses of in excess of £1bn over the preceding decade, funded by oil-backed Moratti, who openly admitted to buying success. Before that, AC Milan were the last team to win the prize for the best European club, exacting revenge over their 2005 defeat to Liverpool, lifting the trophy in 2007.

Italy as a nation ranks third amongst the list of countries to have had a side win the Champions League (previously the European Cup), shared between AC Milan, Inter and Juventus. Yet sides from the boot of the continent have yet to win the pinnacle of European football in any of the last nine years.

If you take the Ballon d’Or as a measure of footballing pedigree of a league, and remove the ‘Ronaldo effect’ (CR7, not R9), then Serie A hasn’t had a player in the top three since Fabio Cannavaro won the prize in 2006 – and even then, during the Summer of 2006, he had transferred to Real Madrid following Italy’s World Cup win. Italy even failed to qualify for the 2018 World Cup, for the first time since 1958. Why?

It has been well documented amongst football-centric economists that success is strongly correlated to wage expenditure – put simply, when it comes to employing footballers, you get what you paid for. Using the data available within Football Manager, I was able to put together a rough idea of the number of players over £100k at each club within four leagues – England, France, Germany, Italy and Spain – to examine the ability for the clubs to pay players big contracts, which should predicate success on the football field.

The graphic above clearly documents that Serie A is well behind the likes of the Premier League when it comes to the ability for sides to spend money on paying high wages, with twelve sides able to pay wages of £100k/week or more. Combine this with the graphic below demonstrates just how seriously the likes of AC Milan have fallen in their ability to pay big contracts to big name players, and also highlights how dominant Juventus are when it comes to their wage bill within their respective league.

It’s telling that, at least according to the game database, both West Ham and Leicester have the same number of players on contract of £100k/week or above and Crystal Palace have one player more than AC Milan. This graphic, if accurate, probably also helps to explain the gripes of Spurs players and the contracts on offer from Daniel Levy.

Concentrating this down onto just Serie A, looking specifically into player age for comparison, and remembering that player wages have a strong correlation to success in a league, then again we can perhaps see why Juventus won their eighth Serie A in a row in 2019. No prizes for guessing which dot represents Ronaldo in the below graphic. If we ignore Buffon, at 41, then in nine of the different age brackets below, Juventus come out on top. They also are the leading wage payers across age profiles, a clear sign of forethought and consideration of the future of the Club.

Besides Donnarumma, at 20, AC Milan don’t feature close to the top of the wage outlay, until Pepe Reina, the back up goalkeeper at 36. Having two goalkeepers being the highest paid at their respective age is not necessarily a sign of strength and planning for a club.

Serie A Player Age-Wage comparison

Whilst not necessarily a good guide, measuring the domestic success of a club by how many players make up the national team squad sees only two players in the AC Milan team deemed good enough for the Nerazzurri – Donnarumma and Romagnoli, the club captain.

Taken from

AC have considerably declined from their last zenith back at the start of the millennia. Forbes list AC Milan at 18th in their Business of Soccer list, with a current brand value of $583m. This is lower than both Schalke O4 and West Ham and their brand is valued at only a third of that of Juventus’s $1.512bn. The only other club inside Forbes’s top twenty clubs to also make a net operating loss in 2018 were Everton and they find themselves in a similar ignominious state when it comes to their 2019 league position.

There have been a number of factors which have contributed to the demise of one of the world’s former favourite team.

Juventus’s monopoly, taken from Latin monopolium meaning to have exclusive control of a commodity or trade, over the Scudetto in the last eight years has seen regular influx of Champions League money into Turin to help fill the coffers of the Agnelli family (owners of Fiat). They have been able to report positive operating income in all but one of the last ten years, in part thanks to their move to their fully club-owned stadium, the Allianz Stadium, back in 2011. They’ve used this money wisely in the transfer market, picking up high profile signings on free transfers (whilst admittedly paying considerable signing on and agent fees). They have also signed players, such as Bernardeschi, Pjanic and Higuaín, who have performed well in their domestic league, strengthening their side and weakening rivals.

In comparison, AC Milan have fallen from pillar to post following the withdrawal of Berlusconi’s money back in 2017. In each of the last four years, AC Milan have reported a net operating loss, and in 2018, control of the club was taken over by Elliott Management – a hedge fund – following the disastrous short-lived takeover by Chinese businessman, Li Yonghong. Li’s takeover of the Rossoneri was partially financed through borrowing from Elliott Management, with high interest loans, loans which Mr Li was not able to repay, meaning that ownership transferred into the hands of the hedge fund owners. More on this in the fantastic TiFo video below.

Elliott Management seem determined not to be the long-run holders of the keys to AC Milan, stating their intent to raise the level of success before selling the club on for a profit. To achieve this, they recognise the need to increase the frequency of wins on the pitch.

Yet winning isn’t necessarily going to help build up the bank balance, at least not domestically. Prize money for places between the top Italian and English leagues are barely comparable – the winners of Serie A receive just £3.87m, which is roughly equal to the team finishing 19th in the Premier League. When taking into consideration the Bundesliga prize money on offer, this blows both the English Premier League and Serie A out of the water, with the bottom team earning over £26m in prize money.

Income generated by the sale of TV rights is also well behind those of the other major leagues in Europe. The latest domestic TV deal in Italy sees Italian teams receive around half that of English Premier League teams from their deals – the Premier League is also generating far greater sums from the sale of international TV rights. This clearly impacts upon their ability to buy the top players but also demonstrates that TV companies are unwilling to invest heavily into showing football with half empty stadiums. AC Milan’s stadium can hold a capacity of 80,018, yet last year the average attendance was 54,651 (according to, a capacity utilisation of 68.19%. Compared this to the average attendance at the Allianz Stadium, which is lower at 39,193, but has a far better capacity utilisation of 95%.

The San Siro is an iconic stadium in world football and is probably a contributing factor to the attraction of foreign players wanting to play in the famed arena. Yet the council-owned stadium is in a state of decay. Both Inter and AC Milan are in talks with the council to build a new stadium. Parts of the stadium remain unopened when games are held, as they are deemed unsafe and visitors describe the place literally shaking when goals are scored.

Despite this, the Rossoneri’s fans are not keen to move on from the stadium, due to the memories that are tied up in the stadium. It will likely take years for AC and Inter to gain permission from the local council to build a new shared stadium, given that the council would then be forfeiting valuable rents it can charge the two teams for the privilege of playing games at the stadium. Renting the stadium means that both AC and Inter give up a large portion of match day revenues to the Milanese council – something that many of their other European counterparts do not have to do. AC Milan posted $99m match day revenues over the last financial year, which pales compared to $557m that Arsenal achieved over the same period, in part thanks to the corporate facilities they can provide at the Emirates stadium. This is not something that solely affects AC Milan. The majority of Serie A stadiums are council-owned and many of them are falling into a state of disrepair, with only a handful receiving an ‘upgrade’ in time for the 1990 Italia World Cup, and many have not been brought up to modern standards in the following 29 years, to include what would be consider de rigueur in new stadiums, for instance, modern turnstiles and large TV screens.

San Siro with its famous spiral staircases

Poor transfer business has also seen the team under perform their expenditure. The failure to transition smoothly from the mid-to-late 2000s away from the ageing team of Maldini, Pirlo, Kaka and Filippo Inzaghi, has seen significant investment into the squad, with little in the way of return. Recruitment of players at the back end of their careers, such as Beckham, the returns of Shevchenko and Ronaldinho, saw AC Milan rely upon its much vaunted medical department to maintain player fitness, whilst these players also benefited from playing in a slower tempo league than they may have come from. 2012 in particular saw a tranche of big name players leave, including Seedorf, Nesta, Gattuso, and van Bommel seven of which on a free as their contracts expired or they called time on their careers. This has led to AC Milan having a negative net spend of £438.86m over the last decade – the largest transfer deficit of the top five teams.

Data from

This is still affecting AC Milan to this day, as the club is still under performing based against the relative cost of its squad. In 2018-19, the team finished fifth, behind city rivals Inter, but notably behind relative minnows Atalanta, from whom AC Milan have bought a number of players from in the past.

Through the continually poor recruitment, AC Milan have been left with little opportunity but to shift their focus towards youth. The squad now has the lowest average age in Serie A.

The clear shift towards buying youth prospects is mirrored in their requirements of a coach as part of the club vision. Having a preference to sign U23 players and relatively firm declaration of desire to sign no players over the age of 30, combined with locking in first-team players for at least four years on their contracts seems designed to maximise players re-sale value after development from minutes on the pitch.

The added benefit of signing younger players from Elliott Management’s point of view is that they typically demand lower wages – which fits neatly with AC Milan’s need to bring back their wage expenditure under control, back into line with their revenue generation to avoid issues with FFP. Milan negotiated with UEFA to withdraw from the Europa League in 2019/20 due to their failure to meet FFP in past years, as part of a compromise and show a willingness to control their wage bill and balance their books after years of misspending.

Young players will be required too. Not a single Il Diavolo academy graduate currently at the club is deemed good enough to be in any of the Italian youth teams. Recruitment will need to start within the borders of Italy if the team is going to be able to fulfil its quota of home-grown players for Europa League squads. Signing young players is not without risk – player development is not guaranteed, in spite of minutes played. The squad lacks experienced leaders to mentor the youth and help them during difficult moments in games.

Without European football to generate extra revenue and increase their Club Coefficient, AC Milan look like they may only fall further from grace. At the start of the game, according to Football Manager, AC Milan find themselves in 80th position with only two years of European football in the past five years, both times in the Europa League. AC Milan have not seen Champions League football since 2013-14 since finishing 3rd in the preceding year.

Therefore, AC Milan will be the main save this year. The aims will be to:

1. Return AC Milan to Champions League football (for the 2021-22 season – more on why this season in my next post)
2. Oversee the move to a new, modern stadium
3. Continue to balance the books, using smart acquisitions and player sales
4. Win Serie A (within 3-5 years)

The next post will focus on analysing the current playing squad and the player recruitment approach to be taken.

To read this post, click the below image


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