As AC Milan looks to overcome record financial losses and its worst league start in eight decades, the club's strategy for returning to the top of world soccer is focused on investing in youth, according to chief executive Ivan Gazidis.

The Rossoneri on Monday reported a deficit of 145.9 million euros ($161.2 million) - the worst in the club's history - from its first season under the ownership of American hedge fund Elliott Management.

The situation on the pitch is bleak as well, as Milan's worst start in 81 years saw the dismissal of coach Marco Giampaolo less than four months into his tenure. He was replaced by Stefano Pioli last month.

Milan has fallen a long way since the heady days of the late 1980s and early '90s when it was one of the most feared teams in Europe, winning six Serie A titles and three European Cups.

It hasn't even played in the Champions League since the 2013-14 season and Sunday's loss to Roma - its fifth in nine matches - left it 12th in Serie A, just three points above the relegation zone.

At a shareholders' meeting on Monday, Gazidis said the club plans to turn things around by focusing on youth.

"We have a clear strategy," said the former Arsenal CEO.

"It is to invest in younger players whose best years are ahead of them and who can develop with us into top-class players. We now have the youngest team in the league.

"While this is an important part of the strategy, it does not preclude investing also in experienced leaders who can help guide our young players as they grow and develop."

Elliott took control of Milan last year after the club's former Chinese-led consortium missed a deadline to repay part of a loan worth more than 300 million euros ($350 million) that it had used to purchase the club from former Italian prime minister Silvio Berlusconi for $800 million in April 2017.

Although Milan is a seven-time European champion, its finances have taken a hit during a six-year failure to qualify for the Champions League.

The club was banned from this season's Europa League because of UEFA financial fair play (FFP) breaches.

"Because of the inherited losses of the club, we brought to a close historical FFP breaches by accepting a ban from the Europa League, which was especially painful for a club with the European history of Milan," Gazidis said.

"We know we will have to bring the club into line with FFP, while at the same time improving our on-field performance. This requires us to bring costs under control, while improving the team over time, a task which is not easy or simple."

Gazidis said the club is working on increasing Milan's commercial capabilities by ramping up its investment in the digital world and building a commercial team to increase merchandise revenue and secure more sponsorship.

"I believe in the importance and the beauty of this project, to restore Milan as a progressive beacon of football around the world," Gazidis said.

"I'm not foolish enough to think that it will be quick or easy, and I don't believe that any of you are either. I understand the doubts, I know that there have been false dawns before and that patience is difficult."

Milan has accumulated some 500 million euros of losses over the past six seasons, during which time it has been absent from the money-spinning Champions League.

Owners hope the construction of a new stadium in conjunction with neighbor Inter can help ease Milan's financial woes. The two have long shared their current home, San Siro stadium.

The Milanese council has given both clubs the green light to proceed with the new arena, although mayor Giuseppe Sala this week described the project as "unacceptable".

"Now the real discussion starts with the clubs. I believe that they are aware of the fact that the project they have proposed to us was one too much in their favor," Sala told Italian media outlet ANSA.

"There are so many aspects to it and if we are to come to an agreement, we will do so by working on several aspects.

"We must revise this proposal a little more in favor of the city council."

Milan chairman Paolo Scaroni claimed the new stadium would "raise revenues substantially".

"All the top European clubs bring in stadium receipts topping 100 million euros. For AC Milan and Inter they reach about 34 million," said Scaroni.

"This difference risks being the reason the clubs don't put in the showing they ought to in Europe," he added.

Milan won the last of its European titles in 2007 - three years before Inter won its third and most recent crown.

If the stadium deal does not come off then "there is a plan B, still with Inter", said Scaroni without elaborating.

He added that the search to increase sponsorship was underway but "if we are losing games then it's more difficult".

Unlike the club's late-1980s zenith when the likes of Dutch trio Marco van Basten, Ruud Gulllit and Frank Rijkaard were at the top of their game, this season the Rossoneri are mired in mid-table.

Milan will hope to get more points on the board against lowly Spal on Thursday night before facing a tough test at home to sixth-place Lazio on Sunday.

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