Silvio Berlusconi is selling of his beloved AC Milan to Chinese investors for over €400m. I cynically wonder whether this is just another ploy to get money out of China and more evidence of money looking to buy any assets which seem to have relative value. AC Milan looks like it might.
History would tell us that football clubs can have big franchise value. Man United (MANU US) is listed on the NYSE with a market cap of US$2.6bn. It made GBP395mn ($514mn) last year in revenue losing a touch under GBP1mn in net earnings. Man United trades on around 4x revenue. AC Milan made around $240mn last year. On the same multiple as Man United, the effective market value of AC Milan would be closer to €850m although stripping out debt of €280m still leaves it looking relatively cheap for the Chinese.