Milan Prosecutors Close Sale Probe Despite Elliott's Undisclosed 5% Stake

Milan Public Prosecutors are moving to close a sprawling investigation into the 2022 sale of AC Milan, despite acknowledging that Elliott Management handled its ongoing financial ties to the storied football club with what authorities describe as "opaque" disclosure practices. The decision brings a partial resolution to a case that exposed multiple anomalies in the €1.2 billion transfer from the US hedge fund to RedBird Capital Partners—and revealed a previously undisclosed 5% stake Elliott quietly retained even after repeatedly denying any continued ownership.

Why This Matters

• Elliott Management maintained a 5% equity interest in Milan after the 2022 sale, only disclosed in a December 31, 2025 client memo—contradicting public statements to Italian Football Federation (FIGC).

• Prosecutors Giovanni Polizzi and Giovanna Cavalleri found 9 anomalies but concluded none crossed the threshold for criminal charges such as embezzlement or obstruction.

• Giorgio Furlani (current CEO) and Ivan Gazidis (former CEO) were both under scrutiny, alongside two foreign Elliott-affiliated managers, but will face no charges.

• The probe centered on whether the sale was genuine or merely a façade allowing Elliott to retain control behind RedBird's front.

The Hidden 5% and the Unraveling Story

The most striking revelation surfaced not from regulatory filings or courtroom testimony, but from an internal Elliott client communication dated December 31, 2025. According to documents reviewed by prosecutors and first reported by Corriere della Sera, Elliott disclosed to its own investors that it held what the firm described as a "warrant-like participation in approximately 5% of the club equity"—a stake that was never mentioned to Italian football authorities, despite repeated assurances to the contrary.

This admission directly contradicts statements Elliott made to the Italian Football Federation since the August 31, 2022 handover to RedBird. At the time, Elliott publicly exited as owner but extended a vendor loan of roughly €550 million at 7% annual interest to facilitate the deal. The arrangement allowed Elliott representatives—Gordon Singer and Dominic Mitchell—to retain board seats at Milan, where key executives including CEO Giorgio Furlani and club president Paolo Scaroni had originally been appointed during Elliott's ownership tenure.

Elliott finally severed all financial ties in January 2026, when RedBird refinanced the vendor loan through Comvest Credit Partners and Manulife Investment Management, triggering Singer and Mitchell's departure from the board on January 30. Yet the prosecutors' filing makes clear that for the entire 2022–2025 period, Elliott's degree of involvement remained murky to outsiders—and to regulators.

What the Prosecutors Found

Prosecutors Polizzi and Cavalleri outlined 9 separate irregularities in their request for dismissal, yet concluded that none justified criminal prosecution. Their assessment, while critical, stops short of alleging deliberate fraud. The investigation examined:

• Whether the RedBird acquisition was a sham designed to disguise continued Elliott control.

• Whether club executives obstructed FIGC oversight by misrepresenting ownership.

• Whether minority shareholders were unlawfully frozen out of the sale process.

A May 13, 2025 mutual legal assistance request to New York authorities sought to trace the origin of RedBird's funds and determine if Elliott money flowed through intermediary entities to maintain de facto control. That inquiry, prosecutors now say, found no evidence that Elliott or the Singer family covertly controlled Milan through RedBird's financing structure.

Still, the language in the dismissal filing is pointed. Authorities described Elliott's disclosure practices as "opaque" and acknowledged that the hedge fund deliberately kept minority investors in the dark about negotiations that had been underway since December 2021—months before the official sale announcement.

The Minority Shareholder Dispute

The investigation originated from a formal complaint filed by attorney Roberto Zingari on behalf of Salvatore Cerchione and Gianluca D'Avanzo, the principals of Blue Skye Financial Partners. Blue Skye held a 4.27% stake in Project RedBlack, the Luxembourg holding vehicle that controlled Milan during Elliott's tenure.

Cerchione and D'Avanzo accused Elliott of conducting closed-door sale negotiations without proper notice, violating partnership statutes, and releasing a pledge on shares in breach of their shareholder agreement. They also argued the club's true market value was closer to €700 million, not the €1.2 billion sale price, implying Elliott inflated the valuation to maximize its exit.

The Milan Prosecutor's Office agreed that Blue Skye was "deliberately kept in the dark" about the deal's progress and identified what it termed a "civil offense" in how the share pledge was handled. However, prosecutors ruled this fell short of the "wrongful conversion of possession" required to sustain a charge of misappropriation (appropriazione indebita).

Blue Skye's multi-jurisdictional legal campaign—spanning Milan, Luxembourg, and New York—has so far yielded little success. Italian courts dismissed multiple emergency motions and ordered Blue Skye to pay legal costs. Elliott, in turn, filed counter-complaints in Luxembourg alleging extortion, blackmail, and fraudulent misrepresentation, though one such filing was recently rejected for lack of specificity and is expected to be refiled.

What This Means for Italian Football Governance

The dismissal request underscores persistent transparency gaps in how elite football clubs change hands, particularly when complex financing structures and offshore holding companies are involved. Italian football has no shortage of ownership controversies—ranging from the collapsed Suning-Inter saga to ongoing disputes over the San Siro stadium sale process, which is also under investigation by Milan prosecutors for alleged bid-rigging.

For FIGC, the case raises uncomfortable questions about its ability to monitor beneficial ownership in real time. Elliott's 5% interest—whether structured as equity, warrants, or a hybrid instrument—was material enough to warrant disclosure under most corporate governance standards. Yet it took a leaked client memo, not regulatory filing, to bring it to light.

The investigation's closure also offers a degree of operational clarity for AC Milan, which has seen continuity in its executive leadership even as ownership transitioned. Furlani, who joined Elliott in 2010 and served as a portfolio manager before becoming Milan's chief financial strategist in 2018, assumed the CEO role in November 2022. Scaroni, a veteran executive with no direct Elliott ties, has remained president since 2018.

The Broader Implications for Cross-Border Deals

The Milan sale exemplifies how vendor financing arrangements can blur lines between seller and buyer, especially when the outgoing owner retains board representation and senior management remains unchanged. RedBird's reliance on Elliott's loan—roughly 46% of the purchase price—meant the hedge fund maintained significant leverage over the club's fortunes until the 2026 refinancing.

Such arrangements are common in private equity and sports finance, where buyers often lack sufficient liquid capital to close mega-deals outright. Yet they can create conflicts of interest and complicate regulatory oversight, particularly in jurisdictions like Italy where football governance intersects with both civil and criminal law.

The fact that Elliott's 5% stake remained undisclosed for more than three years—only surfacing after the loan was repaid—suggests existing disclosure regimes may be ill-equipped to handle sophisticated financial instruments that don't neatly fit traditional equity or debt categories.

What Happens Next

With the prosecutor's dismissal request now filed, the investigating judge will review the case and decide whether to formally archive it or order further investigation. Given the detailed findings and the absence of criminal intent, closure appears likely.

For Blue Skye, the path forward is civil litigation, where the "civil offense" prosecutors identified may offer some footing for damages claims. Whether those efforts succeed in Italian or Luxembourgish courts remains uncertain.

For Milan fans and Italian football stakeholders, the episode serves as a reminder that ownership structures in modern football often involve layers of debt, equity, and hybrid instruments that defy easy categorization—and that transparency, even when legally mandated, is not always forthcoming until the final whistle has blown.