ROME — Italian media mogul and former prime minister Silvio Berlusconi has given the go-ahead for his Fininvest holding company to enter exclusive talks with a group of Chinese investors to sell off his beloved AC Milan, one of the planet’s most prominent soccer clubs and a longstanding symbol of his success.
Berlusconi’s green light for the exclusive negotiations comes after the tormented TV tycoon sat on the fence for months, reluctant to relinquish the club he often calls “my Milan.” Since Berlusconi acquired it thirty years ago, when it was on the brink of bankruptcy, A.C. Milan has won 28 trophies, including five European championships and eight Italian ones.
U.S.-based Galatioto Sports Partners is brokering the negotiations with a consortium believed to include China’s Evergrande Group, whose core business is real estate, and, indirectly, Chinese e-commerce giant Alibaba Group, headed by Jack Ma, according to sources. Alibaba have a movie unit called Alibaba Pictures Group.
Chinese Internet giants are now targeting sports, having muscled their way into global film and TV content.
The makeup of the consortium was not revealed in the official announcement made after a Fininvest board meeting.
“Milan’s long winning streak can perhaps be considered the biggest success in Berlusconi’s life,” says Beppe Severgnini, author of “Mamma Mia! Berlusconi’s Italy Explained for Posterity and Friends Abroad.” “It’s like selling the home in which you’ve lived your happiest moments.”
But those glory days are gone. Milan over the past five years has not won any titles and is currently deep in the red. Last year it suffered Euros 188.5 million ($215.5 million) in debt and a loss of Euros 89.3 million ($101 million).
Though Berlusconi is a billionaire his shoulders are not broad enough to pump the kind of cash into Milan that Chinese conglomerates or companies fueled by Arab oil money, who have been investing in European soccer lately, have at their disposal.
The Chinese consortium has valued the club at Euros 700 million ($798 million) including debt, according to several news reports.
China’s Evergrande Group is a real estate giant which has been diversifying as property sales dwindle. Evergrande co-owns China’s top soccer club Guangzhou Evergrande with Alibaba, which in turn is also one of the group’s minority shareholders.
Evergrande has spearheaded the relaunch and moralisation of soccer in China where president Xi Jinping is pushing to turn the country into a soccer powerhouse.
If the Milan deal goes through, it would mark China’s second major purchase in European soccer within a few months, after another group led by China Media Capital bought a $400 million stake in the Manchester City Football Club late last year. CMC is one of the biggest Chinese investors in Hollywood, most recently taking a minority stake in Brian Grazer and Ron Howard’s Imagine Entertainment last month.
As for Berlusconi, while a Milan sale would certainly rep a symbolic loss, the de-potentiated media-mogul-turned-pol, who is 79, isn’t doing that bad at least business-wise.
Advertising revenues at his Mediaset media conglomerate just leaped 4.5 percent in the first quarter of 2016, in results announced on April 27, a major turnaround after they crashed for years due to Italy’s brutal recession. Mediaset also forged a alliance last month with France’s Vivendi to create a European media powerhouse. And Mediaset’s Medusa movie unit is also back to being the country’s top film distributor this year.
And just as cautionary comparisons mushroom in the U.S. media between Berlusconi and Donald Trump, the Milanese magnate who went from real-estate to television to serving as Italy’s longest serving postwar prime minister – before being kicked out of parliament due to sex scandals and a tax fraud conviction in 2011 – is facing a steep decline. But he holds more clout than one might expect.
“In Italy there is a space for a moderate conservative force and this is the space Berlusconi is still trying to occupy, though he is very very weakened,” said Severgnini.
“The Berlusconi era ended in 2011. The only reason why he still has a role is that the current majority is weak in the Senate, so he still has some leverage. He can negotiate some things.”
There are two reasons why Berlusconi is still in politics at age 80, despite everything that’s happened to him, Severgnini added.
“One is a narcissistic aspect, which in his case is of fundamental importance. And the second is that it gives him a layer of protection of his companies.”