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The Chinese derby

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This weekend's game between AC Milan and Inter Milan was billed as the 'Chinese derby' with both clubs now having Chinese owners.  The lunchtime kick off was ideal for the Chinese market.

Inter's majority owner is a Chinese retailer with revenues in excess of £15bn..   The group has experience in football. owning Jiangsu Sining, runners up in the Chinese Super League last season.

AC Milan's owner Li Yonghong is more of an unknown quantity.  His net worth is put at £420m, though much of it appears to be in his wife's name.  He missed two different payment deadlines to buy the club.

He managed to close the deal through a loan from Elliott Management Corporation, an American hedge fund specialising in distressed assets, also known as a 'vulture' fund.   They will be charging £30m in interest, plus an 'arrangement fee' of £12m.

It is a leveraged buyout like that of Manchester United which worked well enough for the Glazers. However, Manchester United is a profitable club which could be squeezed to service the debt.  Milan are expected to announce losses of £60m in 2016, after recording £110m losses over the two previous seasons.

The plan is to increase revenues, doubling turnover to £400m in three years.   This would be achieved by increasing commercial sponsorship in Asia and qualifying for the Champions League.   That is easier said than done.   There are plenty of other clubs chasing sponsorship in Asia and Champions League qualification is by no means assured (AC Milan are currently 7th in Serie A).

The Italian FA still need to approve the deal and they have to investigate what other assets Li has and who his fellow investors are (if they exist).