AC Milan banned from next season's Europa League due to Financial Fair Play breaches
AC Milan has struck a deal with UEFA to serve a one-year ban from European football for breaching the governing body's financial fair play rules, the Court of Arbitration for Sport has confirmed.
The seven-time European Champions had qualified after finishing fifth in Serie A. Roma will now take their place with Torino now entering at the qualifying stage.
The agreement means AC Milan will not take their place in next season's Europa League and UEFA will end its proceedings against the Italian club for overspending between 2016-18 - the second three-year accounting period in a row that had got them in hot water with UEFA.
Their place in the Europa League is now likely to go to Torino, who finished seventh in Serie A last season, which means their season will start with the final qualifying round for the competition's group stages on July 25.
UEFA initially gave AC Milan a two-year FFP ban last summer but the club successfully appealed against that sanction at CAS, only for the seven-time European champions to be referred to UEFA's financial watchdog again in April.
Under UEFA's rules, clubs are not allowed to make losses of more than 30million euros (£27million) over three seasons, a cap UEFA believed AC Milan breached between 2015-17 when they spent £200million on transfers, with more spending in 2018, as well.
But AC Milan managed to persuade sport's highest court that their finances would improve under the ownership of American hedge fund Elliott Management Corporation, which assumed control of the club last summer when former owner Li Yonghong missed a repayment on the loan he had taken to buy the club in 2017.
That CAS decision gave them until June 2021 to balance their books or receive an automatic one-year ban from European club football.
But April's referral for a second FFP breach could have seen the club banned from Europe for two years, which clearly forced AC Milan back to the negotiating table where they have agreed to serve a one-year ban now while they tidy up their finances under the direction of former Arsenal chief executive Ivan Gazidis.
For UEFA, the deal with Milan comes at a time when many critics have wondered if it still has the stomach to defend its FFP rules and take on big clubs that breach them, with cases against Manchester City and Paris St Germain ongoing.
Some will say this agreement is evidence UEFA is not prepared to fight, while others will see it as a good compromise that does not mean the governing body will simply lie down when threatened with lengthy legal action.
The Court of Arbitration for Sport (CAS) statement reads: “The Court of Arbitration for Sport (CAS) has issued a Consent Award embodying the agreement reached between AC Milan S.p.A and the Union of European Football Associations (UEFA) concerning breaches of the UEFA Financial Fair Play Regulations by the Italian club.
“i. The Decision rendered by the Adjudicatory Chamber of the UEFA Club Financial Control Body in the case AC-05/2018 on 20 November 2018 (i.e. decision under appeal in the CAS 2018/A/6083 matter) is set aside.
“ii. The Decision rendered by the Investigatory Chamber of the UEFA Club Financial Control Body on 10 April 2019 (i.e. decision under appeal in the CAS 2018/A/6261 matter) is set aside.
“iii. The decisions referred to under item i) and ii) above are replaced by the following order: "AC Milan is excluded from participating in the UEFA Club Competitions of the sporting season 2019/2020 as a consequence of the breach of its FFP break-even obligations during the 2015/2016/2017 and the 2016/2017/2018 monitoring periods".
“iv. The Adjudicatory Chamber of the UEFA Club Financial Control Body is invited to issue a Procedural Order, acknowledging the outcome of the present arbitration(s) and terminating the AC-01/2019 proceedings relating to the 2016/2017/2018 monitoring period, which have become moot.
"v. The costs of the proceedings CAS 2018/A/6083 and CAS 2019/A/6261 shall be borne by AC Milan.
“vi. Each Party shall bear its own costs.
“vii. The CAS Award shall be made public.”