Serie A football club AC Milan has been cleared to play the Europa League as the Court of Arbitration for Sport (CAS) has overruled a UEFA ban on the club.
The CAS has overruled the decision of UEFA to ban AC Milan from Europa League stating the sanctions imposed on the Italian Serie A football club for violating the UEFA Financial Fair Play (FFP) rules were inordinate.
AC Milan had moved to CAS for an appeal after UEFA had banned the club from participating in the 2018-19 Europe League season for overspending on player transfers and wages and subsequently breaking the FFP rules.
The Adjudicatory Chamber of the Club Financial Control Body (CFCB) at the European football governing body had decided to exclude AC Milan from participating in the next Uefa Club Competition for which it would otherwise qualify in the next two seasons.
UEFA’s ruling meant that AC Milan were expelled from the 2018-19 season of Europa League for which the club had qualified by finishing sixth in the Serie A last season. An immediate intervention from CAS was therefore required as the team was due to compete in Europa League second qualifying round next week. Milan will now be able to commence its campaign with the group stages scheduled to commence in September.
CAS has partially upheld Milan’s appeal, overruling the Europa League ban and returning the case to the Adjudicatory Chamber of the CFCB to issue a “proportionate” disciplinary measure. CAS said: “The CAS Panel rejected AC Milan’s request to order Uefa to enter into a settlement agreement but acknowledged that the decision of the Adjudicatory Chamber of the Uefa CFCB to exclude AC Milan from the Uefa Club Competition was not proportionate.”
CAS upheld the CFCB’s verdict that AC Milan had failed to fulfil the break-even requirement, but noted that some important elements had not been properly assessed by the Adjudicatory Chamber, or could not be properly assessed at the time the ruling was issued. The ruling comes in the wake of recent financial upheavals faced by the club along with changes in ownership. CAS noted in particular that the current financial situation of the club was now better, following the recent change in its ownership.
Elliott Management Corporation (EMC), led by American billionaire hedge fund manager Paul Singer, has recently completed the takeover of the club after it’s Chinese owner Yonghong Li who had defaulted on his payments for the loan granted by Elliot to acquire the club from the former Italian Prime Minister Silvio Berlusconi in April 2017 for $926 million. The New York hedge fund helped finance the team, ending three decades of ownership under Berlusconi.
According to the reports Li, who was unable to arrange the amount, used a high-interest loan from Elliot, $419.3m in offshore funds and just $123.3m of his own money to carry out the purchase. Li, who owed Elliot $37 million, missed the last and final deadline this month to repay the company, paving the way for the firm to take control of AC Milan.
The investment firm also injected €50 million ($ 58.5 million) into the club to help it fight the recently imposed sanctions by UEFA.
Shortly after Elliots’s takeover, Italian business magnate and investor Riccardo Silva has acquired a minority stake in the club, a move that was seen as bringing in an Italian identity and support into its ownership structure.