MILAN (Reuters) - European soccer has banned Italy's AC Milan from next season's Europa League competition because of its uncertain finances, even as sources said a second U.S. sporting tycoon had expressed interest in taking over the club.
UEFA announced the ban on Wednesday after an investigation under its Financial Fair Play (FFP) regulations, in particular the break-even requirement. It said AC Milan had not provided sufficient evidence of its financial stability.
The ban further complicates the future of the club, whose Chinese owner Li Yonghong is considering an offer for a majority stake in AC Milan from cable television billionaire Rocco Commisso, sources familiar with the matter said.
Commisso, owner of North American soccer team New York Cosmos, has bid for 70 percent of AC Milan, said a source familiar with the offer. The source did not disclose the offer price.
Commisso's bid follows a public expression of interest last week from the Ricketts family, owner of Major League baseball team Chicago Cubs. The Ricketts said in a statement it would be long-term investors in AC Milan.
As bidders circle, Li is trying to solve his own funding problem so that he can improve his negotiating position in any sale process, the sources said, adding that he was likely to try to solve the funding issue before making any decision on a bid.
Last week, Li failed to make a 32 million euro (£28.2 million) payment to AC Milan, the final part of 120 million euros he had committed to pay the club as part of his agreement to buy it from former Italian prime minister Silvio Berlusconi.
After Li failed to make the final payment, U.S. investment fund Elliott, which helped fund his 740 million euro acquisition of the club last year, stepped in and paid it instead.
If Li cannot repay Elliott by July 6, the fund manager could gain full ownership of the club which has won what is now the European Champions League seven times, the sources said.
"Commisso made a bid and it's still there but it seems Li is trying to buy time," said a source familiar with the bid.
Elliott gave Li a 180 million euro loan last year to complete the purchase of the Serie A club, which is trying to emerge from years of losses with a turnaround plan. Elliott also directly lent AC Milan 128 million euros.
AC Milan has qualified for next season's Europa League, so the ban by European football's governing body UEFA will stop it from playing in that competition. It is the heaviest sanction yet for a FFP breach on a club from one of Europe's top five leagues.
"The club is excluded from participating in the next UEFA club competition for which it would otherwise qualify in the next two seasons (i.e. one competition in 2018/19 or 2019/20, subject to qualification)," UEFA said in a statement.
Under UEFA regulations, any European football club spending more than its generated revenue faces possible sanctions, including, in certain circumstances, a ban from playing.
UEFA rejected a plea from AC Milan in December to waive the rules after Li bought the club last year from Italian holding company Fininvest, in turn owned by the Berlusconi family.
AC Milan said in a statement on Wednesday that it would ask the Court of Arbitration for Sport in Lausanne, Switzerland to review UEFA's ban.
(Additional reporting by Simon Evans; Editing by Ken Ferris, Mark Bendeich and David Stamp)