RedBird’s number one at Harvard Business School: “The Rossoneri club can become a 5 billion euro company”. Ibra: “My role is to be Zlatan”. Furlani: “Death threats for Tonali. Maldini? To realize Gerry’s vision, we had to change”
Milan under the magnifying glass of Harvard Business School. Twenty-four pages in which the Rossoneri club was analyzed by the prestigious Boston university school, where the CEO also graduated. Giorgio Furlani. A document that also reports several statements from the leaders of the Rossoneri club, starting from RedBird’s number one, Gerry Cardinale. And there is no shortage of words that will make the fans discuss.
cardinal
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“When we bought Milan, many owners of American sports teams called me and said: ‘You’re crazy’. They told me: ‘You can’t do business in Italy’. Most of those who invest in sports clubs do so because they are emotionally involved. They put winning championships above everything else and this often leads them to make the mistake of thinking that spending too much to field an all-star team is linearly related to winning. But that’s the worst thing you can do do as an investor. I think Milan has the potential to become a 5 billion euro company. I chose Furlani as CEO because he thinks like we think at RedBird. I understood that the most important element of the role of CEO in European football is financial responsibility and the ability to integrate performances on and off the pitch. Each of us brings something and we are all part of an integrated team. Most people would consider Ibra’s appointment as ‘showcasing’ or think of me as a celebrity-loving owner. . It’s the exact opposite: I’m looking for world-class people who can make us better. The fans do their job, but the problem is that most of the other components in the chain make it more difficult for us to offer the best to the fans. The media often doesn’t help, and neither does the government. They recently removed the tax advantages, they should understand that football is one of Italy’s greatest exports.” On Berlusconi: “What he did with Milan reminds me of what Steinbrenner did with the New York Yankees. Over the years ’80s and ’90s it was possible to do it, but now we can’t afford it anymore. We’re competing with clubs in richer leagues and we can’t afford to pay the players what they pay them. We have to spend every dollar of capital more intelligently than we do We have no rivals sold Tonali to Newcastle because we needed him, we sold him because we received an excellent offer and we made a risk-reward assessment. We collected 70 million euros plus an earn-out of 10 million, the highest figure ever Serie A. And thanks to that sale we bought six new players and completely renewed the team. We sell out of necessity, we sell out of opportunism.” On the stadium: “We may significantly renovate our existing stadium or build a new one that reflects these clubs’ current status as a live event entertainment company. For what the renovation would cost, we could probably build a completely new stadium. But building stadiums in Italy is a challenge. I would like to see the construction of a modern stadium with 70,000 seats, but we are not getting much help from the city in obtaining planning approvals. I’m not trying to Americanize Milan. I’m trying to introduce some American elements that can take Milan to the next level in a constructive way. Winning championships is obviously an important goal. But you have to balance this with ‘winning smart’. Inter won the scudetto last year and then went bankrupt (the reference is to Zhang, not to the club itself, ed): is this really what we want? For the fans, my job is to win the Italian championship every year, I understand that. For my investors my job is to position Milan to fight for the Scudetto every year, qualify for the Champions League every year and go as far as possible in the Champions League every year. This is what maximizes cash flow and brand value.”
ibrahimovic
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“Furlani and I first met during Elliott’s time. When he became CEO, we sat down to talk and he liked the meeting enough to encourage Gerry to meet me. Initially Gerry said he didn’t want to hire former players, but Giorgio convinced him that I was different. When it comes to numbers, we rely on Giorgio. When he starts making his calculations, for example on which players we can afford, he is a monster be Zlatan a lot to learn, but I think I also have a lot to give and I wanted to be in a position where I can make a difference. One of my responsibilities here at Milan is to grow the winning mentality of the team, to make sure the team delivers results to the players: ‘When you are here at Milan, if you get results, you can make history’. I am close to the team but not too much, I am in a different position than when I was a player together with many others who are still in the team.”
furlani
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“I had never considered sports as a career path. I had looked for jobs in finance, landing an analyst role. In 2010, I moved to Elliott, as an investment analyst. The mantra was that we could bring all types of investment ideas to the company: if it seemed like a good opportunity, we would have evaluated it. At the beginning of 2017 I received a call from a lawyer who asked me: ‘Have you ever thought about investing in Milan?’. ‘The teams in football they always lose money.’ So I replied more or less like this: ‘Are you out of your mind? Why on earth would I do that?’. But then I found out more about the matter. He explained to me that Li Yonghong had agreed to pay 740 million euros but that he was missing 300 million and that he would lose his pledge of 200 million euros if he couldn’t find the rest of the money within three weeks and thought, ‘Well, this seems like a situation where we can get a good return economic, regardless of what the business is’, so I decided to give it a thorough look. By July 2018 Li had stopped putting money into the club altogether. As he defaulted on his loan, Elliott took over the Rossoneri club. To say that Milan was poorly managed is offensive to poorly managed companies: it wasn’t managed at all. Elliott never intended to dedicate himself to managing a football team, it was a decidedly different investment than usual. For Elliott the priority was to restructure the team and stop losing money. For RedBird, the priority is to improve the team to move the business forward. And while for Elliott the focus used to be primarily on the sporting aspect, now the focus is probably equally divided between the sporting aspect and the rest of the business. Our goal became to stop the losses, to live within our means. As important as sporting success is, we realized that we didn’t have to get into success-at-all-costs mode: the extra costs you incur in chasing success can kill you financially. We needed to win more games by paying our players less. Our team was simply too expensive. What I learned from working with Gerry is that the more points of contact we have, even if they are brief, the better. We talk to each other every day. And then when he comes here to Milan, which happens about every six weeks, we spend one or two intense days together, with members of the management team and others.” On Ibra: “He’s someone who works a lot as a team player, he wants to work together.” On Maldini’s farewell: “It was a historic decision to let him go, for what it meant for the club and for its authority. But if we wanted to realize the vision that Gerry had for the club we had to change and move forward.” On the media and non-media pressure that exists at Milan: “I understood that there is no way to escape what they say on television or they write in the newspapers. It really hits you on bad days. And then there are even worse days, like when I receive death threats, for example when we sold Tonali. It’s in those moments that I thought: ‘Okay, you don’t get these things they teach at Harvard Business School.” On increasing the club’s revenues: “To do that, we need to focus on sporting results. Sporting success fuels revenues, and revenues support sporting success. It’s a virtuous cycle. In the world of sport, media and entertainment, Gerry he knows everyone and can call anyone. We have a much larger group of people and companies that we have access to with RedBird than when the club was owned by Elliott, and RedBird is more focused on growing the business side.”
Gazzetta dello Sport
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