Despite a difficult era for AC Milan, owner Gerry Cardinale has voiced optimism in the club’s future. Cardinale spoke at the IMG x RedBird summit and expressed his vision for the Rossoneri: “What I’m attempting to do is apply what I’ve learned over 30 years in America to European football. There is a tremendous potential to restore Milan to its previous splendor.
As Milan prepares to face Venezia in Serie A, looking for their first win of the season ahead of their Champions League debut against Liverpool, Cardinale addressed a number of critical concerns confronting the club and the wider sports sector.
Regarding a new stadium, Cardinale noted, “We have ambitious projects, such as building a cutting-edge new facility to replace the now-outdated San Siro that we share with our rivals Inter.” He acknowledged the controversy around the plan, stating that “local politicians wanted the two clubs to invest in existing structures.”
Cardinale has decried the surge of private equity capital into sports, including football. He claimed that this interest has resulted in “massively inflated valuations” based on “simplistic notions” of the sector’s future growth. This approach, he argues, has a “negative impact on the ecosystem” because money is just parked in the industry without any genuine efforts to enhance core business performance.
Cardinale commented on investors in sports, saying, “This is my sector entering sports. The issue in my sector is that they are asset managers. They only want to acquire, which is bad news for intellectual property companies. He noted that sports asset owners frequently request that investors pay “control premiums for minority stakes without governance, without information rights, and without exit.”
Cardinale noted comparisons with the tech boom, saying, “It was enough to put a ‘e’ in front of something, and everyone wanted it.” What do private equity investors contribute? They provide liquidity, but there is a better way to do it. We’ll need to find a gentle landing because everything is currently inflated.”
Finally, Cardinale explained the current demand for sports investments: “The need for exposure to sports is due to these naive assumptions that sports always increase. It is not associated with macroeconomics, yet it has outperformed the S&P over the last decade. There is merit to these remarks, but now they are simply pushing it, and everyone wants to get into the industry.
