Paul Singer’s Hedge Fund in Talks to Sell AC Milan for €1 Billion

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This is a message to the owners of the New York Jets: winning leads to more money. Try it out.

Just look at US hedge fund Elliott Management, now on the cusp of selling a top Italian soccer team acquired on the cheap four years ago for hundreds of millions in gains.

The Calm Before the Score

A global brand with a proud history of Italian and European championships, AC Milan was in disarray when Elliott took over in 2018. The Rossoneri (red and blacks) landed in the middle of the domestic table for several years and fell out of the prestigious Champions League reserved for the best clubs in Europe.

When AC Milan’s cash-strapped Chinese owners defaulted on a €32 million payment, Elliott — which had loaned them €300 million — seized control for an effective value of about €400 million. Elliott’s founder, the famed investor Paul Singer, has been called a “vulture capitalist” by critics for hunting for distressed firms to flip for a profit, but it’s hard to fault what happened next. The $38 billion hedge fund immediately injected AC Milan with €50 million and decided the team needed to win games to unlock value for its new owners. It worked:

  • Elliott greenlit the purchase of talent, from youngster Theo Hernández (acquired from Spain’s Real Madrid for €20 million) to wise-cracking veteran statesman Zlatan Ibrahimović, who has remained a decent goal scorer at 40. Last year, AC Milan finished second in Italy’s Serie A, and this year are battling crosstown rivals Inter Milan for the title.
  • According to estimates by Calcio e Finanza, AC Milan’s revenue is on track to top €300 million for the first time in the 2021-22 fiscal year, up from €260 million in 2020-21. Investcorp — a Gulf-based private equity firm with €42 billion in assets under management — is in exclusive talks to buy the club for €1 billion or more, according to the Financial Times.

Speaking of Distressed Owners: After a bid by the Chicago’s Ricketts family, which owns the Cubs baseball team, American billionaire and Los Angeles Dodgers co-owner Todd Boehly has emerged as a leading contender to buy English soccer giants Chelsea from Russian oligarch Roman Abramovich, who put the team up for sale under the pressure of international sanctions.