Luca Marotta Tuesday, January 11, 2011 23:17
Waiting for the results to 31 December 2010 the Group headed to AC Milan SpA, here we will try to make some considerations on the relationship between this group and the so-called "fair financial play, "based solely on the consolidated financial statements at December 31, 2009. In a nutshell, we are facing some problems represented by a negative shareholders' equity, a high net debt and cost of key personnel.
AC Milan SpA owns 100% of the share capital of Milan Entertainment Srl, whose corporate purpose is the management and exploitation of brands owned by or in the availability of AC Milan SpA for commercial purposes; 100% of the share capital of Milan Real Estate SpA, which has as its object the development of initiatives in the real estate sector to 100% of their capital Milan's Fund Foundation. And the 50% share of the consortium set up by San Siro 2000 FC Internazionale Milano SpA for the technical management of the San Siro stadium in Milan, 45% of the share capital of the company Asansiro Srl (S. Development Agency Siro Srl), formed with FC Internazionale Milano SpA (45%) and the association Chiamamilano (10%) with the aim of promoting, in relation to the San Siro stadium in Milan, studies, projects and activities to promote the coordination and implementation of programs agreed with public and private institutions and associations. The rules of fair play requires to consider the consolidated financial statements when a company operating a professional football club controls other companies, as in the case of AC Milan SpA Among the key points of regulation are the principle of business continuity and the absence of negative equity.
The report of independent auditors to the consolidated financial statements of Milan says that business continuity is ensured by the Shareholder Fininvest SpA, which has committed itself to provide adequate financial support "for at least a year from 31/12/2009 . This means that we are not in the presence of management "virtuous" that produces useful and will 'pay', but a management that requires the "patron", as evidenced by the existence of a heritage Consolidated net negative. The Group's net assets at December 31, 2009 Milan was negative for 71.9 million euro and is worse than the negative result of € 64.4 million at December 31, 2008. Also in 2007, consolidated shareholders' equity was negative 47.5 million.
Instead, if we consider the financial statements of AC Milan SpA, in 2009 was a net positive for € 26,998,198, while in 2008 amounted to € 43,606,215 and € 70,597,129 for 2007 was positive, as d 'Moreover, in 2006 to € 77,575,828. Given that Milan Entertainment srl has a net positive for 197.5 million and Milan Real Estate has also a net positive 11.8 million, We will wonder how it can become negative net worth of the group. The answer is simple: When you draw up a consolidated balance sheet are eliminated transactions between companies of the group. In the case of the Milan Group, based on the equity of AC Milan SpA, were diverted to € 112.3 million of intercompany transactions and added 13.2 million as surplus and shareholders' equity and € 85 000 as the consolidation process.
also to better understand the extent of intra-group transactions eliminated, remember that Milan Entertainment Srl (ex Milan Services Ltd), in 2005, she received the contribution at the business having to subject intangible assets, contracts, personnel, assets and liabilities and including the right to use, fixed-term (period of twenty years) and with limited content, the brands owned by or in the availability of AC Milan SpA (to translate in simple words, read "transfer of the trademark"). The value of the business called "commercial user and service management," emerged as a result of a sworn report prepared by the expert estimation prof. Paul Jovenitti was estimated at 183,662 thousand. This contribution was approved with effect from 1 October 2005. It 'good to remember that the prof. Paul Jovenitti is the same expert who has written The report estimated the value of contribution of Inter Capital Ltd.
The consolidated value of production was 327.6 million, an increase of 37.7% from 237.9 million in 2008. It is noteworthy that the production value in the financial statements it benefits from a revenue item "extraordinary" and a voice of "non-recurring."
The extraordinary item of income is: "Gains on disposal of players' registration rights, amounting to € 74,024,450. This very considerable amount was achieved mainly due to gains on the sale of Kaka to Real Madrid and Gourcuff to Bordeaux. Consider that, with regard to capital gains, the amount recorded in the previous year was significantly lower, being equal to € 20,453,442.
The non-recurring income item is: "Sundry income, amounting to 20.5 million on the sale of the" Library Milan. "
Excluding capital gains, the increase in production value in 2009 was 16.6%. The increase is attributable to participation in the Champions League 2009/10 edition and the transaction with the Group for the RAI and RTI Spa "Library Milan." In essence, the RAI and RTI SpA Group has bought the rights of economic utilization of the historical pictures of AC Milan SpA revenues races are increased from 28.3 million of 2,008,000,000-31.8000000 2009, an increase of 9.71%. Voice of the value of production "to increase fixed assets capitalization cost of the nursery", amounting to 6.1 million (5 million in 2008), should not be considered as "relevant income" for purposes of financial fair play, as it represents a transfer of costs excluded from the determination of the breakeven point. Income from sponsorship amounted to 29.4 million and relate primarily to sponsorship BetandWin 10.5 million and 13.1 million for Adidas. Proceeds from sales and royalties amounted to 27.3 million, an increase of 5.33%. The proceeds from the sale amounted to TV rights € 133.5 million and were up 9% compared to 2008. The Milan group has received in 2009 by SKY 68.8 million, from RTISpA 37.4 million, 20.4 million by UEFA, the mutuality of the teams host 5.8 million and € 947 000 from the League.
As mentioned above, for the year 2009 was very important revenue item "Sundry income" that passes from the negligible figure of 471 000 € to € 20.5 million, due to an agreement with Rai and the Group Mediaset for the ownership of the archive of images of the home matches of AC Milan, which cost 15.9 million more buyers the option of 4.3 million in time for the exploitation of such rights.
The costs amounted to 323.1 million up 3.2% from 310.9 million in 2008. Personnel costs increased from 176.5 million to 178.8 million, an increase of 1, 31%. The ratio of personnel costs and value of production amounted to 54.58%. The previous year this ratio stood at 74.19%, above the limit set by fair play (70%), partly because there were no income from the Champions League. However, the entry cost of staff is to be kept under control because, if we considered only the revenues from capital gains and adjusted by transfers to the capitalization of the costs of the nursery, the ratio would exceed the threshold of 70%. For this Milan must fit within a reduction in personnel costs, you can hardly realize the amount of capital gains each year Kaka. Anyway, we should deprive ourselves of important players such as Pato, who, 31/12/2009, has a net book value of 15.2 million. We wonder if the acquisition made during the last year buying players of the level of Ibrahimovic, Robinho and Cassano last, even if offset by significant sales, falls within this framework of reduction of personnel costs.
Depreciation and amortization are calculated amounted to € 43.9 million. 40.6 of these relate to intangible assets.
The item "costs for acquisitions players 'temporary', in 2009, increased by 4.1 million due to the purchase of Beckham and Senderos.
The difference between production value and cost of production was a positive 4.6 million in 2008 was negative for 73 million . The difference between income and expense was a negative 2.9 million. Income taxes amounted to € 11.1 million. The consolidated net loss was 9.8 million improvement compared to a loss of 66.8 million recorded in 2008.
The Milan Group's net financial debt amounted to 300.9 million and is up 17% from 257.1 million in 2008. In 2009, the debt is lower than the value of production, resulting potentially complies with the financial fair play, despite its high value, while in 2008 we have here a typical situation of "warning". However, for 2009, if purifying the production value of the extraordinary component, we would be faced with a situation of "warning".
Intangible assets increased by 106.8 million of 2,008,000,000-156.1000000 2009. The biggest increase has not affected the players' registration rights to benefits, which rose from 88.2 million of 2,008,000,000-97.9000000 2009, but the "Concessions, licenses, trademarks and similar rights." This item has increased from 1.2 million to 38.7 million, an increase of 37.5 million, and includes the rights of economic utilization of the historical pictures of AC Milan SpA does not exist in 2008, and charges related to the development of the official website of the software and business software "Milan Lab" of the Parent and AC Milan SpA Milan Entertainment Srl of society, and the different brands, "Milan", owned by parent company AC Milan SpA, is not subject to transfer to the subsidiary Milan Entertainment Srl
For multi-year rights to the performance of the players were invested 52.2 million euro , players have been sold with a net book value of 5.8 million and depreciation were calculated for 36.6 million euro.
Tangible assets amount to 26.7 million, a decrease of 584 thousand euro compared to 2008. Among the properties owned by the Group stand out in the Milan office in Via Turati n. 3, and some surrounding land Milanello Sports Centre Milanello owned by Milan Real Estate Spa and some valued flats of the same company for 4.4 million.
-term investments increased from 11.1 million to 4.9 million. Within this heading include partnerships of players amounting to € 4 million, including that of Paloschi exposed to 2.2 million.
The current assets increased from 172.3 million to 192.9 million. In particular, claims have increased from 167.4 million to 190.5 million. The largest amount of claims concerning the claim against the Real Madrid for the sale of Kaka, exposed for 47 million euro. Cash and cash equivalents decreased from 4.7 million to 2.3 million. Accrued and deferred to 31/12/09 amounts to 13.4 million (8.1 million in 2008). The total assets amounted to 394.1 million, while in 2008 was lower and amounted to 325.6 million.
"debts" is an increase of 15.92%, from 364.1 million to 422.1 million. Within the debt outstanding debts to banks, amounting to 170.7 million euro, a strong increase of 42.86% compared to 2008, when it was recorded while the remarkable figure of 119.5 million euro. This increase shows an easy access to loans in the Milanese club, although it is stated in the notes to this balance is due to "normal operations with the banking system."
Amounts due to shareholders at 31/12/09 amounted to 14.8 million and relate to an interest bearing loan of € 17.1 million partially converted into a capital contribution of 2.3 million euro. This change also took place to comply with regulations on transfer campaign (Article 90 paragraph 4 of NOIF), which requires compliance with specific indicators. However, according to the rules of financial fair play, the practice of "financing members "as an item of" debt "should give way to the capital contributions.
The other borrowings amounted to 117.7 million and 110.5 million to cover debts to the factoring company to advance funds for 6.7 million debts to leasing companies for purchase of property and debts to loan € 435 000 with Credit Institute of Sport.
The bank loans and other borrowings account for 73.18% of the assets, this means that for every € 100 invested in the group come from Milan € 73 credit.
Trade payables amounted to 53.5 million (36.5 in 2008) and showed an increase of 17 million. There payables the parent company Fininvest SpA amounting to approximately 2 million euro for the centralized system of VAT group. Tax liabilities, falling due in 2010 amounted to 21.7 million (20 in 2008) and were regularly paid at maturity. As for the amounts due to football clubs, 31/12/2009, the largest amount covered the 10 million due to Real Madrid to buy Huntelaar.
Amounts due to members and employees amounted to € 18.8 million (21.3 in 2008) and refer to monthly welded in January and February 2010. Again there is compliance with the rules of fair play.
Accruals and deferred income recorded an increase of 20.01%, from from 22.7 million 2,008,000,000-27.3000000 2009, and relate primarily to anticipated revenues for the sale of television rights and subscriptions.
In conclusion, the Milan Group has submitted a consolidated balance sheet for 2009 with a net loss of 71.9 million, net debt amounted to 300.9 million and a net capital amounted to EUR 229 million. You will not be able to increase revenues, will find itself in the need to reduce costs, especially those of the staff, considering that as a favorable element in the balance sheet at December 31 were as many as 11 players out of contract with the date of June 30, 2011.
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