A cura di Francesco Saverio Miliani
Eighteen National Championships, seven Champions’ Leagues, five National Cups: we know a lot about the achievements and the numbers of the AC Milan football team, but we cannot say the same when it comes to its corporate side. In one of its latest shows, in fact, the Italian investigative news programme “Report” tried to go deeper into what really happened to the world-famous soccer franchise, after Elliot Investment Management took over the lead at the end of a controversial negotiation between Silvio Berlusconi and the Chinese entrepreneur Li Yonghong. *A Developing Situation* – Two official documents could overturn every certainty about the property of the club: a balance sheet and an anti-money laundering document, but the most controversial thing is yet to come; in fact, Paul Singer’s fund is not the majority holder. That key role is instead represented by <<Blue Skye>>, based in Luxembourg and held by Salvatore Cerchione and Gianluca D’Avanzo. *What do we know about Blue Skye?* – Not much, but the main hypothesis is that Elliot could be responsible for a large part of the capital without having the actual control of it: a paradox that has to be solved. The third actor in this controversial comedy is furthermore represented by <<Project Redblack>>, another firm based in Luxembourg, which should have power on the entire football club. *Elliott’s position* – However, Paul Singer’s fund claims to constitute – unofficially – 95% of the shares: at the end of the day it is a clear fact that both Cerchione and D’Avanzo could not carry all the expenses of such a big club. Again, another actor becomes part of the comedy, just to make things even more complex: a company based in Delaware, in fact, took part of AC Milan in pledge from the two Italian entrepreneurs. *The Balance Sheet* – In November, Blue Skye filed the first official documents, which cover all the operations that involved the company in 2017. These files tell us that at the end of 2017, 51% of Project RedBlack, which actually controls AC Milan, was already property of Blue Skye, but also Luxembourg Investment Company 159, again owned by Cerchione and D’Avanzo, broke into <<Milangate>> by buying a little share of Project RedBlack.These were the times when Yonghong Li borrowed from Project Redblack the money necessary to buy the Italian football club from Silvio Berlusconi granting AC Milan itself as a guarantee.After Project took over the club in 2018, it had 51% of shares while Elliott counted, as expected, the remaining 49. *Elliot replies* – As stated before, there is a second document, imposed by the latest anti-money laundering laws, which all companies based in Luxembourg have to produce in order to let everyone know who is in chief of the firm’s property.Therefore, in September 2019, Project Redblack declared Paul Singer as beneficial owner with 49% of shares, while Cerchione and D’Avanzo held 25% each. *A difficult conclusion* – Overall, anyone could think that Blue Skye, holding the 50.01% of capital, could have the majority of the economic and vote rights over AC Milan, but it does not take into account the fact that Elliot, in both terms, has a considerably higher <<weight>> than Salvatore Cerchione and Gianluca D’Avanzo.Why? All the tables filed by Project Redblack only show the partition of capital on nominal basis, but they do not cover at all the rights and burdens of different categories of shares involved and the TPECs connected to them.In fact, as reported on Project’s statute, there are three classes of shares (A, B and C), and two accounts related to them: one for Class A ones, which are owned by Elliott, and one for Class B ones, which belong to Blue Skye’s portfolio. Anyway, there is not a dedicated account for class C actions, which are in Cerchione and D’Avanzo’s portfolio but can be <<called>> by Elliot on the base of 1€-worth operation.Furthermore, by looking on Project Redblack’s governance, Elliott can appoint two members of the board of administration, while Class B share owners can only appoint one and nothing can be done by anyone who only owns class C ones; Elliott can therefore decide in complete autonomy over AC Milan, as all extraordinary actions, as stated in Project’s statute, regard different areas from the management of the Italian football club. *What about Class C Shares?* – Nothing can be said without uncertainty. As stated by the Italian blog Calcio E Finanza, those shares could have been inserted in Project Redblack in case a third investor wanted to “help” Yonghong Li in the operation two years ago and they’re still running as they will not have any power over AC Milan’s governance, unless Elliott will decide to call them for one euro and transform such shares into class A ones.