Seeing What’s Possible

Arena’s Deals

A collection of stories about Seeing What’s Possible.

AC Milan

Revitalizing the sports legend

In 2017, Arena and an Italian joint venture partner we’d worked with before were instrumental in filling a critical financing need that arose suddenly in a cross-border purchase of one of the most storied sports teams in the world: the Italian soccer club AC Milan. The team was being sold by the Berlusconi family to a Chinese national buyer, but essentially overnight the deal was in grave danger, the buyer stood to lose its roughly 50% deposit, and time was running out.


The approximately €300 million loan that rescued the deal was one that Arena and our Italian partner, together with a larger capital partner, sourced and underwrote, with the participation of the larger partner enabling the transaction to be closed within three weeks. This speed was necessary to preserve the buyer’s deposit, which was at risk due to an unexpected change in capital controls by the Chinese government.

AC Milan is one of the best known brands in sport and has won dozens of titles and championship cups throughout its history. According to Nielsen Sports, AC Milan has a fan base on par with or just behind the highly visible global soccer brands of Barcelona, Real Madrid, Manchester United, and Bayern Munich.

In addition to the popular soccer team, the women’s team, and the player’s academy, the AC Milan brand includes Milan Entertainment, which manages advertising and promotion activities related to AC Milan. AC Milan also owns Fondazione Milan Onlus, a non-profit charity that provides medical assistance, education, and housing to people in need in Italy and abroad, and 50% of M-I Stadio S.r.l., which is the servicing company that manages Stadio Giuseppe Meazza (a.k.a. “San Siro”), the stadium that is home to the AC Milan and Inter-Milan clubs.

For some time before the planned 2017 sale of AC Milan, the Berlusconi family had been hesitant to invest additional capital for player acquisition, and the club’s competitiveness had clearly suffered. The intended buyer planned to bring in a new management team for the club, improve team performance, reinvigorate the club and the brand, and grow existing and new lines of business—thereby improving broadcasting and stadium revenues and bolstering efforts to build out a revenue base in China.

The Chinese buyer, who was purchasing the team for €740 million, had advanced about half the purchase price, with the rest to come from a consortium of Chinese investors including a government-backed capital management company. However, when issues closing the transaction arose, it had to find a source for the remaining amount within weeks—which is where Arena and our partners stepped in.

Given the size of the overall position and Arena’s strict diversification limits, we joined in making the loan with a larger US investment firm, which was able to assume the lead position not only from a funding standpoint but also in terms of process, and which did so brilliantly. A central challenge for this lending consortium was performing the appropriate due diligence on the borrower very quickly, and this challenge was multiplied because the Italian authorities had to do the same. Structuring the loan to be constructive for the lenders in case of default by the borrower had to be done in essentially record time as well.

In the end, the intense planning paid off as default eventually did occur, the loan had to be monetized, and the result was that Arena and our partners assumed ownership of the franchise in a split of approximately 5% (Arena and our Italian JV partner) and 95% (the larger US partner).

In general, Arena was well protected from a structural standpoint owing to strong business covenants included in this deal. There was also great value in the fact that soccer is the most popular sport worldwide and that AC Milan remains among the most popular teams worldwide. Arena saw what was possible in this opportunity and alongside our funding partners stepped in when other funding entities could not—and this funding has helped to return AC Milan to the top of its game. The club finished each of the past four seasons in the top six and finished second in the Supercoppa Italiana in 2018-2019, finished second in the Europa League in 2020-2021, and made its long-awaited return to the UEFA Champions League this year—and is off to a fantastic start in the 2021-2022 season. That’s what the commentators would call a well-placed shot for Arena!