The AC Milan: a Corporate Management Lesson of a Disaster
- Matisis Consultancy
- May 22
- 6 min read
When Financial Short-termism Destroys a Historic Brand
On May 22, 2025, while AC Milan fans look on in disbelief at ninth place in the Italian league and the absence from European competitions for next season, we face a paradigmatic case that goes beyond sports. What we're witnessing is essentially the systematic dismantling of a global brand valued at over €1.2 billion, caused by business management that prioritized short-term financial metrics over the intangible assets that truly sustain an organization's value. This short-sighted approach is directly linked to the investment funds' goal of preparing the club for a quick sale with maximum profit—a serious strategic error that has sacrificed sustainable value for immediate gains.
At Matisis Consultancy, as specialists in business strategy and brand building, we have studied this case thoroughly to extract critical lessons applicable to any organization, regardless of sector. AC Milan's trajectory under foreign investment fund ownership represents a manual of what not to do in modern business management.
Timeline of a Corporate Disaster
Phase 1: Acquisition and Correct Initial Management (2018-2023)
In 2018, Elliott Management Corporation became the club's owner following the previous owner's failure to repay a €415 million debt. The first strategic decision was correct:
Appointing leaders with specific sector knowledge: Paolo Maldini and Leonardo Araújo in sports management.
Strategic investment in talent with revaluation potential.
Building an organizational culture based on excellence and the club's historic values.
The results came quickly:
Return to Champions League after years of absence.
Winning the Scudetto in the 2021/22 season.
Champions League semifinal in 2023.
Asset revaluation (players) and significant revenue increase
Rapid growth in brand value in recent years.
Phase 2: The Turning Point - Financial Vision Over Strategic Vision (2023-2025)
In June 2023, with the entry of RedBird Capital and Gerry Cardinale, the model broke down:
Firing Paolo Maldini, the main architect of the recovery.
Implementation of a philosophy summarized by Cardinale and later explained by Giorgio Furlani, Milan's new CEO, during a conference at Harvard University: "Our goal became stopping losses, living within our means... we had to win more games while paying our players less".
Organizational restructuring prioritizing financial profiles over sector experts, as shown by the appointment of Giorgio Furlani himself—an executive with extensive finance experience but no background in sports management or knowledge of professional football.
Dismantling the 2022 Italian champion team and consequently acquiring players without any specific logic or technical approach related to the team's playing style.
Phase 3: Consequences of Short-sighted Management (2025)
The effects of this change of direction were quick to appear:
Sports devaluation: From champion to ninth place in two seasons.
Massive economic losses: Approximately €50-70 million in lost revenue from not qualifying for European competitions.
Asset devaluation: Market value depreciation of the squad by over €100 million.
Reputational damage: Brand perception at historic lows according to Brand Finance.
Stakeholder disconnection: Massive fan protests and loss of strategic sponsors.
The Five Keys to Failure: Mistakes Any Company Must Avoid
The AC Milan case shows five fundamental errors that any organization must avoid at all costs:
1. Underestimating Sector-Specific Knowledge
The first critical error was assuming that business management is universally applicable without adaptation to the specific context. Investment funds replaced sector experts (Maldini, Boban) with purely financial profiles without deep understanding of the industry's specific dynamics.
Direct consequences:
Decisions disconnected from the specific market reality.
Loss of fundamental industry contact networks.
Erosion of competitive advantage based on specialized knowledge.
2. Confusing Efficiency with Effectiveness
The new management confused "paying less" with "being more efficient," applying linear cuts without strategic impact analysis.
Concrete manifestations:
Reduced investment in areas critical for growth.
Focus on financial metrics disconnected from real value.
Reductionist view of ROI ignoring medium and long-term returns.
3. Neglecting Human Capital Management
The third fundamental error was ignoring the impact of financial decisions on human capital motivation, commitment, and performance.
Documented evidence:
Exodus of key talent to competitors.
Toxic work environment according to internal testimonies.
Inability to attract top-level talent due to reputational damage.
Widespread demotivation with direct impact on performance.
4. Destroying Brand Value
Perhaps the most costly long-term error was the systematic devaluation of one of the most valuable assets: the AC Milan brand.
Destructive actions:
Modifying visual identity elements without strategic justification.
Breaking with the organization's traditional values.
Disconnecting from the fan community and their sense of belonging.
Inconsistency in communication and positioning.
5. Lack of Responsibility and Transparency
The fifth pillar of failure has been the inability to take responsibility and correct course in the face of evident deterioration.
Worrying patterns:
Public denial of obvious problems.
Absence of strategic correction mechanisms.
Lack of transparent communication with stakeholders.
Constant search for external scapegoats.
The Milan Under 23 Case: A Microcosm of the Larger Disaster
A perfect example of management incompetence is found in the Milan Under 23 project, created to develop young talent:
Investment of €16 million (higher than many second-division teams' budgets).
Relegation to non-professional category in their first year.
Inability to correctly interpret competitive regulations.
Underutilization of the best young talents due to administrative errors.
Appointment of a foreign technical director (Jovan Kirovski) with no knowledge of the environment and values.
At the beginning of the year, when presenting Jovan Kirovski as sports director of the Milan Futuro project, Zlatan Ibrahimovic declared in a press conference: "Milan Futuro will be a copy of the first team. Kirovski has the same vision and ambition as us." Just like the first team, Milan Futuro crashed into total disaster.
This case shows the cascade of errors: significant investment + poor management + sector ignorance = massive value destruction.
Lessons for Any Organization: How to Avoid "Milan Syndrome"
What can any company learn from this corporate disaster? We identify five fundamental principles applicable to any sector:
1. Specific Knowledge Is Non-negotiable
Sector expertise isn't a dispensable luxury—it's the foundation for correct strategic decisions. Organizations must:
Appoint only people with adequate specific and technical knowledge as managers and directors.
Value and retain talent with sector-specific knowledge.
Ensure financial decisions are informed by market experts.
Create effective bridges between financial and operational profiles.
2. Value Is Created Long-term
Obsession with short-term metrics destroys sustainable value. Successful companies:
Establish strategic horizons of minimum 3-5 years.
Evaluate decisions by their overall impact, not just immediate savings.
Understand that certain assets require constant investment to maintain value.
3. Human Capital Is the Most Strategic Asset
In today's economy, people are the key differentiator. Organizations must:
Prioritize team motivation and alignment.
Understand that key talent has multiplier value, not linear value.
Recognize that organizational culture is a strategic asset, not a decorative element.
4. Brand Is a Financial Asset
Brand value isn't an intangible abstraction—it's an asset with direct impact on financial results:
Operational decisions must be evaluated for their impact on brand perception.
Consistency between declared values and real behavior is critical.
Emotional connection with stakeholders creates resilience in difficult times.
5. Responsibility Generates Trust
Finally, transparency and the ability to admit mistakes is fundamental:
Establish early feedback and correction mechanisms.
Communicate openly about both successes and failures.
Implement organizational learning processes to avoid repeating mistakes.
Dismissal is a necessary action when there's serious lack of competence.
Conclusion: The High Price of Management Incompetence
The Milan case between 2023 and 2025 will go down in management textbooks as a classic example of value destruction caused by the lethal combination of management arrogance, sector ignorance, and financial short-sightedness.
The most tragic aspect of this case is that it was perfectly avoidable: the club had already demonstrated the correct path between 2018 and 2023, with positive results both in sports and economics under the management of authentic sector professionals.
The final lesson is clear: no organization, however historic and valuable, is exempt from collapse when management incompetence disguises itself as "financial efficiency." Milan in 2025 isn't just the story of a football club in crisis—it's a case study on how to destroy business value in record time.
Is Your Organization at Risk of "Milan Syndrome"?
At Matisis Consultancy, we are experts at identifying risk patterns similar to Milan's case in organizations across any sector. Our approach combines deep sector expertise with strategic vision to prevent short-term financial decisions from destroying sustainable value.
Contact our team for an initial assessment of the risks that could be threatening your organization's long-term value.
Comments