AC Milan has appealed to the Court of Arbitration for Sport (CAS), after the Union of European Football Associations (UEFA) sanctioned the Italian club with a one year ban from its competitions for breaches of its Club Licensing and Financial Fair Play Regulations (CLFFP). In a statement, the Italian club revealed that it had been sanctioned for a breach within the July 2014 and June 2017 three year financial period.

AC Milan had qualified for the group stages of the Europa League after finishing sixth in the 2017/8 Serie A. In a video on Twitter (see below), the club said that it had invested over €200 million, and its earnings before interest, tax, depreciation and amortisation (EBITDA) will be +€28 million. The club said that it had reduced operating costs by €6 million, and the first team’s salaries are below 60% of revenue.

Ahead of UEFA's judgement, we want to share with you some significant facts. We are expecting fairness, rulings based on facts, equal rules for all.#weareacmilan pic.twitter.com/KtQcLD5pmK

— AC Milan (@acmilan) June 25, 2018

However, the breach for which the club has been sanctioned relates to before June 2017, so UEFA’s Club Financial Control Body (CFCB) will have considered AC Milan’s financial results from that period. The club was sold to Rossoneri Sport Investment Lux for €740 million in April last year, which enabled the €200 million investment in its squad.

On 22 May, the Investigatory Chamber of the CFCB referred AC Milan’s case to the Adjudicatory Chamber, adding that ‘the circumstances of the case do not allow the conclusion of a settlement agreement’. UEFA said that ‘uncertainties’ remained in relation to the refinancing of a loan agreement that was due to be paid back in full by October 2018. 

Elliot Management provided Rossoneri Sport Investment Lux with a €180 million credit agreement to finance its takeover of the club in April 2017, as well as a later €128 million to finance player purchases and pay off debt. In March this year, it offered to extend the credit agreement, provided financial guarantees that the loan could be repaid were provided, reported Reuters. If Rossoneri Sport Investment Lux fails to pay back the loan, it is understood that Elliot Management could take control of the Serie A club.

UEFA said that it had sanctioned AC Milan for a breach of its ‘break even’ requirement. In simple terms, this requires clubs to demonstrate that they have not spent more than they earned within a set period. UEFA added that the full reasoned decision would be published in due course.