Warnings, media distrust and the great conflict: Five extracts from Cardinale’s interview analysed

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·23 de diciembre de 2024

Warnings, media distrust and the great conflict: Five extracts from Cardinale’s interview analysed

AC Milan owner Gerry Cardinale has stuck his head above the parapet again, and his words – along with those of the rest of the management – have caused a real stir.

First, some context is important. Back on December 11 the Harvard Business School released a document containing a very interesting case study on Milan, in which the most influential and important people at the club were interviewed.

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CEO Giorgio Furlani – who graduated from the same institute in 2007 – was spoken to, along with technical director Geoffrey Moncada, president Paolo Scaroni and Senior Advisor Zlatan Ibrahimovic, among others.

Obviously, the words of Cardinale inevitably made the most noise because he is the captain of the ship. What we do know though is that the interviews for this case study were conducted at the end of last season, which is worth bearing in mind with some of the comments.

Yet, chronological distance matters little when the present isn’t so rosy, and with that sentiment in mind we have decided to pick out some of Cardinale’s more striking quotes.

1. Against the grain

We start with the theme of spending, and there will be more to come on that particular topic. Cardinale has previously declared that he doesn’t intend to bankroll Milan back to the elite, because it would be irresponsible to do so.

In a rather interesting opening to his quotes within the study, he stated: “When we bought AC Milan, a lot of American sports team owners called me and said, ‘You’re crazy.’ They said, ‘You can’t do business in Italy,’ and ‘It’s impossible to make money in European soccer.’

“Most people who invest in sports clubs do it because they’re emotionally invested. They put winning trophies above everything else, and that often leads them to make the mistake of thinking that spending too much to field a team of stars is linearly related to winning. But that’s the worst thing you can do as an investor.”

Effectively, he is making an admission that for him AC Milan is a purely financial investment and he will not be dragged into getting too ’emotional’ with the money that he spends. As he was warned by industry professionals, doing so in European football is very difficult.

Cardinale has made it clear that he likes a challenge, even if it means going against warnings. However, when he speaks about the difficulties he has faced in Italian football and the country’s bureaucracy in general, he can’t say he wasn’t warned. Sometimes your peers know what they are talking about.

Photo by Marco Luzzani/Getty Images

2. Waging war

It would be fair to say that we don’t hear too much from Cardinale, who prefers to communicate through statements generally or on stage at business events. His absence at the 125th anniversary game and party certainly generated a mixed reaction too.

Speaking on the media in Italy, he stated to HBS: “I stopped reading the papers here, because they can just make it all up. I see this as a value chain with different components. The fans do their job, but the problem is that most of the other components in the chain make it harder for us to offer the best to the fans.

“The media often doesn’t help, and neither does the government. They recently took away the tax benefits we received when we paid players, making it even harder for us to compete with other leagues. How does this help us? They should understand that football is one of Italy’s biggest exports.”

In potentially the strongest response given in the interview, Cardinale makes it clear that he doesn’t have much time for the Italian media. In turn, that also probably offers an explanation as to why we don’t hear much from him in terms of interviews in newspapers or on TV stations.

What exactly he is referring to when it comes to lies in the media isn’t specified but it is apparent he has been upset with some of them. This climate of mistrust has made it harder to communicate with the fans, in his words, because it limits the opportunities to do so.

Turning to the government, Cardinale echoes the thoughts of the likes of Furlani and Scaroni in believing that they have taken some backwards steps since he has been at the helm. That damages the product he is trying to help the league sell globally, so his point is a fair one.

3. Checks and balances/

One of the issues that RedBird Capital have been very vocal about since day one is their desire to give Milan a new state of the art home to play in, and the owner was naturally asked about the topic.

“But building stadiums in Italy is a challenge – the last stadium built in Italy was in 2011 and had 40,000 seats. I would love to see a modern stadium built with 70,000 seats, but we are not getting much help from the municipality to get planning approvals in our preferred location.

“And I am still trying to deal with the mismatch between building an American-style stadium, which will probably cost over €1 billion, and not being able to charge American-style prices. It is a real challenge.”

The best thing you can do to get instantly up to speed on the stadium issue is read our most recent Substack bonus article on the matter. It is also worth noting that Scaroni spoke three days ago and uttered yet more contradictory words regarding the San Siro vs. San Donate duel.

Cardinale is obviously frustrated with how long the process is taking to get approval on either plan and break ground, and here we sign with him too. And yet, when this ownership group have made this particular project the one they are most determined to deliver, the lack of progress is frustrating all-round for fans.

What is more worrying for match-going supporters is that Cardinale has again made it clear that his vision is to move towards more expensive ticket prices (American-style). Given the pushback that has already taken place against the rising prices this will not go down well, even in a new home, though there may be a need for compromise.

Gerry Cardinale and Gordon Singer [Elliott]

4. Playing a different game

Returning to the theme of spending, Cardinale once again made a comparison with the field he is most familiar with – American sports – and Milan’s status as a historic powerhouse in football.

“What Berlusconi did with Milan reminds me of what George Steinbrenner did with the New York Yankees. Both were ‘buying’ titles [buying the best players in the world without regard to expense].

“In the 80s and 90s it was possible to do that, but now we can’t afford it anymore. We are competing with clubs in richer leagues and we can’t afford to pay players what they pay them. We have to spend every dollar of capital more intelligently than our rivals.”

These particular comments don’t need too much explanation. Effectively Cardinale is saying that the glory days of 30 years ago are gone when Milan could compete financially with Europe’s elite, and now they most try operate more efficiently.

Of course as fans the idea of spending every dollar (he means euros, probably) better than rivals appeals. When the fixed budget is already perceived to be unambitious, though, then there is a ceiling set in place that isn’t particularly high.

The level of Berlusconi’s spending can be debated but what he did do was set out with the mission to become Milan’s best ever owner, understanding that the way to make money was to spend money. Buying good players leads to trophies, a bigger club and more revenues in return. That model still applies as it did in the 1990s.

Photo by Marco Luzzani/Getty Images

5. Fighting a losing battle

We had to leave the best until last, and the most interesting passage from the interview was Cardinale’s open admission to the conflict between who he is trying to satisfy.

“For the fans, my job is to win the Italian championship every year – I get that. For my investors who are focused on bottom-line appreciation, my job is to position AC Milan to challenge for the Scudetto every year, qualify for the Champions League every year, and go as far as possible in the Champions League every year.

“That’s what maximises cash flow and brand value. It’s the consistency and lower amplitude in performance volatility that maximises value and ultimately longevity.”

On the one hand, he is aware that the fans demand success, especially after the Scudetto win two-and-a-half years ago. RedBird’s ownership in the eyes of supporters will be judged on trophies won, not the profit they emerge with nor if a stadium is even halfway completed.

On the other hand, he represents a group of investors who mainly care about AC Milan as a business asset, and his responsibility to them is to deliver financial results. In that sense, a top four spot and the occasional run in Europe ticks enough boxes.

What is worrying is that Cardinale has made it clear that he will satisfy his investors first and the fans second, and what that means is that the objective might never be to win the Scudetto every year as a club of such rich history deserves.

There is no acknowledgement of the fact that a platform was in place to build from after the trophy was lifted in 2022, rather than having to almost build from scratch. Phrases like ‘cash flow’ and ‘brand value’ alienate fans who would prefer to hear their club spoken about as a living, breathing entity rather than as a spreadsheet.

Cardinale’s comments are always polarising and this is no exception. However, what we will conclude by saying is that no previous preconceptions about his aims and RedBird’s ambitions as an ownership group have been disproven.