Under UEFA regulations, any club spending more than the revenue it generates faces possible sanctions, including, in certain circumstances, a ban from competitions run by UEFA, Reuters reported.
UEFA said that Milan would be banned from taking part “in the next UEFA club competition for which it would otherwise qualify in the two seasons 2022/23 and 2023/24” if the club was not break-even compliant by June 30, 2021.
UEFA also said that Milan’s squad would in any case be restricted to 21 players in European competition for the next two seasons, assuming it qualified, and that it would withhold €12 million ($13.5 million) of its revenue from this season’s Europa League.
The seven-time European champion was originally banned from European football this season by UEFA for failing to comply with the rules but won an appeal at the Court of Arbitration for Sport.
As a result, it was able to enter the second-tier Europa League where it was eliminated in the group stage.
Milan was barred in June after UEFA ruled that it not complied with the breakeven rules, adding the club had failed to provide sufficient evidence of its financial stability.
US hedge fund Elliott Management subsequently took control of the indebted club from Chinese businessman Li Yonghong and promised to inject €50 million to help stabilize its finances.
CAS overturned the ban in July, saying the club’s finances had improved after the ownership change.
Milan was once regarded as one of Europe’s great clubs but its fortunes have taken a dip, along with Serie A itself, in the last decade, and it has not won the Italian league since 2011.