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UEFA to cut prize money for next 5 seasons due to financial impact of COVID-19

Associazione Calcio Milan, commonly known as AC Milan announced losses of €195million in the fiscal year of 2019/20, which was due to ‘extraordinary circumstances’ compared to the €145.9million loss in the 2018/19 fiscal year.

According to Sports Business, the Italian side posted a loss of €145.9m for the 2018-19 financial year and a loss of €125m for 2017-18. It has now registered cumulative losses of nearly €700m over the past seven seasons, due mainly to dropping out of the Uefa Champions League over that period.

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The draft financial statement of the fiscal year 2019/2020 which ended by June 30, 2020, was approved by the Board of Directors of AC Milan as of last Friday. The draft is planned to be submitted in the next Shareholders meeting scheduled for 28 October 2020.

An official statement from the club said the 2019/20 season was heavily affected by the global pandemic and it was also due to the situation inherited from the previous ownership.

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The club said the health emergency affected the financial statement which as a result caused low revenue from the San Siro Stadium and other retail stores like Museum, Store, Casa Milan, etc.

In addition, the club referenced the impact of the pandemic on revenues of Serie A media shared by clubs, which led to the postponement of the TV rights to the 2020/21 season. The club also referenced their ban from the Uefa Europa League after breaching the Financial Fair Play rule.

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However, the club qualified for the Uefa Europa League after they finished 6th in the 2019/20 season and won their playoffs. They are hopeful they’ll be able to recover the amount lost due to their ban last season. They said, “that will be recovered in the next financial year.”

“With the 2019/20 season heavily affected by the global pandemic, there was a negative impact on the Club’s financial performance, one which was already suffering due to the situation inherited from the previous ownership. As a result, the Club registered a full-year net loss of approximately €195m.

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“The impact of the health emergency on the Club’s financial statements is as a result of the lack of matchday revenue and the subsequent reduction in commercial activities and lower revenues from the retail sector (Museum, Store, Casa Milan, etc.)

“Furthermore, the limited number of matches played (10 Serie A matches) in July and August 2020 also weighed on the accounting records and led to the postponement of part of the accrual of the TV rights for the 2020/21 season.

“Finally, it is worth noting that the Club was banned from taking part in last season’s UEFA Europa League, which had a further negative impact that will be recovered in the next financial year.”

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The club also commended its owner, Elliott Management Corporation, an American investment management firm, for their constant support through the herculean time.

The constant support of Elliott, which guarantees the financial stability of AC Milan, has however allowed important investments and the effects are expected in the short term.

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“At the same time, the Club launched an effective cost efficiency policy that entailed a significant reduction in player wages and top management salaries,” the statement continued.

The European Club Association has estimated that the European football industry will lose more than €3billion due to the global pandemic over the next two seasons, with 90 percent of this impact weighing on clubs.

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