AC Milan’s Commercial Triumph: A Dynamic Growth Story
AC Milan’s fourth kit for the 2024-25 season, launched in mid-February, has been a defining moment in the club’s commercial journey, despite polarizing opinions. While some fans criticized the design for straying from the club’s traditional colors, the kit’s success was undeniable. Within days, it sold out, primarily to a younger demographic aged 20-29 and predominantly to international buyers, with 75% of sales coming from outside Italy. February became the best month ever for Milan’s e-commerce, surpassing the previous record set in December with the launch of the 125th anniversary shirt. This commercial boom is a testament to Milan’s strategic pivot towards a diverse and global fan base.
The Symbolic Fourth Kit and Its Impact
The fourth kit is more than just a piece of merchandise; it carries a significant message. Designed in the wake of racist incidents, its key element is the year 1963, marking both Martin Luther King’s famous speech and Milan’s first European Cup victory. This blend of historical significance and contemporary social issues is a hallmark of Milan’s collaboration with Off-White, a fashion brand known for its urban and streetwear style. This partnership, which began in 2022, exemplifies the club’s broader strategy to intersect sport, lifestyle, fashion, and culture. It’s a policy that RedBird Capital, the club’s new owners, has been steadfastly pursuing to reposition Milan as a global lifestyle brand.
RedBird Capital’s Vision and Strategy
RedBird Capital’s vision for AC Milan is clear: to transform the club into a global powerhouse at the intersection of sport, lifestyle, fashion, and culture. This strategic direction has already yielded impressive results. Milan has reclaimed its position as the Italian club with the highest turnover, generating around €400 million in revenue, excluding capital gains. A significant portion of this success is attributed to the club’s commercial efforts. Since 2018-19, the commercial department’s revenue has surged from €57 million to €143 million in 2023-24. The merchandising department, which accounts for 70% of this growth, has seen a particularly significant boost, increasing from €6 million a few years ago to €32 million last season and projected to exceed €40 million in the current financial year.
The Dynamic Leadership Behind the Success
At the helm of Milan’s commercial revolution is Valerio Rocchetti, who has been leading the department since 2020. Under his guidance, the club has taken a more proactive and innovative approach to e-commerce, including the direct management of online sales of goods since 2022. This internalization of e-commerce has been crucial in broadening the club’s reach, both in age and geography. Today, almost 55% of the club’s merchandise sales come from abroad, a clear indication of the club’s global appeal. The future plans include the opening of franchise stores, with the ambitious goal of reaching €90 million in revenues from merchandising and licensing within the next five years.
Broadening the Fan Base: A Multigenerational Approach
Milan’s commercial strategy is not just about selling merchandise; it’s about building a community. The club recognizes the importance of engaging both the traditional fan base and the younger generation. For instance, the fourth kit’s success shows that a product can resonate with a younger audience while maintaining the club’s historical significance. This multigenerational approach is crucial for broadening the catchment area and ensuring sustained growth. The club’s global vocation is further supported by the emphasis on international sales, which already accounts for nearly 55% of all purchases. As Milan expands its footprint globally, the opening of franchise stores and other strategic initiatives will play a vital role in maintaining this momentum.
Sustainable Growth and Future Prospects
The commercial boom at AC Milan is not a short-term trend but a long-term strategy aimed at sustainable growth. By increasing organic revenues, the club can generate more cash, which in turn allows for greater investment in the squad and other areas of the business. While TV rights and stadium projects are important, the commercial area offers the club greater control and the opportunity to innovate. Milan’s bold and daring approach to marketing, even at the risk of pushing the boundaries, is a testament to its commitment to staying ahead in the competitive world of sports and entertainment. As the club continues to evolve and expand, the future looks bright, with the aim of achieving a €90 million revenue target from merchandising and licensing within five years, solidifying its position as a global lifestyle brand.
