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A few days ago, Arsenal announced that their chief executive, Ivan Gazidis, will depart the club after 10 years in order to join AC Milan as their new CEO, starting from the coming December.
There are many reasons for Gazidis to be considered the greatest signing in two years for AC Milan even though players such as Gonzalo Higuain and Leonardo Bonucci and staff members such as Paolo Maldini and Leonardo arrived at the San Siro during the aforementioned period.
Gazidis' contribution to Arsenal's economic growth
The Greek-South African contributed immeasurably to Arsenal's growth as a club in economic terms. During his 10-year spell at London, Gazidis has launched a number of high-quality projects which made the club enormously profitable. In fact, in the 2016-17 season, the English club reached a turnover of £422.8millions, with a group profit before tax of £44.6millions, for the first time in their history, according to the club's official website. In the year prior to Gazidis's arrival, Arsenal recorded a turnover of £223million. An increase of 87%.
Moreover, Gazidis had a great role in Arsenal's increasing revenues from shirt sponsorships over the years. When he took up duties as the Gunners' CEO, the club was in agreement with the Fly Emirates to be their primary sponsor for an annual fee of £5.5 million.
This year, Arsenal is about to earn £40 million from the deal with Emirates as a part of the £200 million agreement which the two parties signed last February. As a result of this deal, Arsenal joined Chelsea in the second place for shirt sponsor value in the Premier League, only behind Manchester United.
During Gazidis' spell at the club, Arsenal's revenues were increased dramatically. In the 2007-8 season, the Gunners earned £31.3millions as commercial revenues while in the 2016-17 season, their commercial revenues reached £117.2millions. An increase of over 170%.
Last but not least, according to Brand Finance, last season, Arsenal had a brand value of £736millions while in 2009, the club's brand value was estimated a little over £330millions.
His role at Milan
The priority of Milan's new owners, Elliott Management, is to proceed to a financial reassessment of the company in order to comply to UEFA's Financial Fair Play economic parameters. The Italian club is in fact in breach of UEFA FFP rules and although Milan's ban from European competitions was eventually overturned, the Rossoneri were referred to Adjudicatory Chamber of the CFCB and are currently waiting for their penalty.
Thus, Gazidis will be enlisted to help materialize a strategy that will reassure UEFA that the club has a viable plan to become profitable in the next couple of years. The club's new CEO arguably increases the chances of a favourable ruling due to the fact he is a member of the European Club Association (ECA) governing body.
The Italian club expects to hear from UEFA in the coming days and according to Gazzetta Dello Sport, Milan aims to reach, at last, a 'voluntary agreement' with the committee after their first apply last December was rejected. In case their application for a voluntary agreement is rejected again, the Italian club will seek for a second time a 'settlement agreement' with UEFA after their first endeavour hit a wall last May.
A 'settlement agreement' with UEFA will mean that, although the club will face some considerable sanctions, a deal with the Union with regards to the breaking of the FFP rules will be finally reached.
That is where Gazidis' role lies. As the Italian Gazzetta Dello Sport argues, Gazidis will have three roles in his new club: a financial, a commercial and of course, a sporting. The newly appointed Milan CEO will aim to bring to the club profitable deals with regards to sponsorships, partnerships and brand development. According to calciomercato.com, Milan at the moment is missing at least 7 to 8 major sponsors.
During the last 10 years, Milan has been left behind as far as commercial gains are concerned and the South African must turn the tide and increase the club's turnover.
In fact, last year, the Italian giants fell out of the world's top 20 clubs, according to Deloitte, in terms of revenues, for the first time in their history. During the last season, the Rossoneri reported revenues of €191.7 million, which put them in the 22nd position in the world clubs ranking.
Moreover, according to Forbes, as per June 2018, Milan's brand value was estimated at €520millions, a record-low since 2010. Furthermore, for the third season in a row, the Italian club recorded a negative operating income.
Gazidis is widely known as a 'magician of the accounts' and Milan has hit the jackpot with his signing. His vast experience and his proven marketing and commercial successes at Arsenal point to that. After all, Gazidis will become the highest paid CEO in the Serie A and one of the highest in Europe (per the Guardian, his wages as AC Milan CEO will be around €6,75 million per year while Juventus' Beppe Marotta earns €2.7 million annually).
There is no denial that Leonardo's arrival is a huge boost for AC Milan's transfer market, already evidenced by the signings of Gonzalo Higuain and Mattia Caldara. Moreover, the return of the legendary Paolo Maldini will have an enormous impact both off and on the pitch. However, to put it as simple as it can get, Milan need money and a viable plan to earn them. And there is no better man for the job than Ivan Gazidis.
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