Italian football club AC Milan has been in news because its financial struggles as its current owner, Chinese businessman Li Yonghong, is unable to pay his dues to investment firm Elliott Management. The firm lent him money while signing the deal for A.C. Milan. Reportedly, due to his poor financial situation, Li planned to settle the debt with bitcoin, but the attempt failed.
Elliott Management Declines Bitcoin Offer
Last year, Yonghong was appointed AC Milan's chairman after the club was purchased by Rossoneri Sport Investment Luxembourg, a company he owns. During the purchase, it was reported that the Elliott Management Corporation funded around £300 million and Li has to repay the debt, with interest, before the last quarter of 2018.
Per Football Italia, Li has until April 4 to contribute with €10 million, or Elliot will take the club's ownership. To initially ease the pressure, Li proposed paying back the loan using Bitcoin through a crypto payments service firm. The offer was declined by the hedge fund firm.
As reported by Calciomercato, Li’s financial executives and AC Milan CEO Marco Fassone are in talks with Merrill Lynch - Bank of America's brokerage arm - to loan Li funds he can use to pay up the debt. Last month, Li’s financial stability came under the spotlight as he filed for bankruptcy. A Chinese court declared Li’s industrial company Jie Ande bankrupt, and revoked its trading license. Just a week before,
AC Milan's Future Hanging In The Balance
It is unclear if the broke Chinese businessman has a large enough amount of Bitcoin to pay the loan. Given his Bitcoin offer was declined, Li has two options. The first one may see Elliott Management agree to inject the required capital, but demand control over the club. The second option may see the American investment firm completely take over the club as Li and his company aren't able to pay up the loan. Additionally, Rossoneri Sport Investment Luxembourg would be defaulting and could face legal action.
Moreover, as football expert Gabriele Marcotti pointed out, if he does have bitcoin to pay his debt, he could just sell the cryptocurrency for fiat.
Not a scandal, just nonsense as it’s explained in the story. Bitcoin is no more of an investment than any other currency. It’s simply more volatile. But, I repeat, if he owns Bitcoin he can use it to pay off debt. Still don’t see how you “refinance with Bitcoin”— Gabriele Marcotti (@Marcotti) March 26, 2018
This is not the first time the sport is associated with cryptocurrencies. Last year, Former Brazilian football stars Ronaldinho and Roberto Carlos endorsed the SportyFi project, which plans to develop a decentralized sports investment ecosystem. Moreover, the London Football Exchange revealed it plans to launch its own cryptocurrency, aiming to democratize football via blockchain.