There is a debate raging at the moment regarding AC Milan’s ambitions and whether the new-found financial resurgence has been congruent with an intention to raise the level of the squad.
To start this piece we must quantify exactly what is meant by an improvement in the accounts. Calcio e Finanza reported, Milan registered a €6.1m profit in 2022-23 and they are expected to close 2023-24 with a profit between €10m and €20m as the key numbers continue to trend in the right direction.
The revenues are expected to be around €435-440m, an increase of over €30m compared to last season and including over €56m in revenue from the ‘management of players’ rights’. In essence, most of that is the €52m in capital gains, mainly relating to the sale of Sandro Tonali to Newcastle.
The new contracts with PUMA and Emirates – worth around €30m per season each – came into effect, while stadium revenues were slightly down after a premature elimination from the Champions League and the lack of a Scudetto battle. Overall, though, the outlook is very positive.
The 2024-25 outlook
One way of determining how much an ownership is willing to spend on the playing staff is through the squad cost for a given season. This is calculated by adding the amortisation of players’ transfer fees and their gross salaries, while players that are sold/leave can be subtracted from the figure.
We must once again thank Calcio e Finanza for the figures, the headline being this: Milan’s squad cost has increased €20m compared to the 2023-24 campaign (+12.9%), going from approximately €155.2m to €175.1m .
The main factor that weighed on this increase were the investments made by the club on the incoming market, with higher costs of approximately €50m euros, not sufficiently compensated by the lower costs (approximately €16m recouped, without considering capital gains and loan revenues).
Compared to last season, Milan have seen 12 players leave when factoring in permanent transfers, expired contracts and players loaned out. Among those who have left the club permanently, the most significant in terms of impact on the budget are Mattia Caldara, Olivier Giroud and Simon Kjaer.
When factoring in the amortisation and the gross salary received, Caldara’s impact on the financial statements was over €9m, because it is easy to forget that he arrived for around €38m from Juventus as part of the deal that saw Leonardo Bonucci go the other way.
In addition, the Rossoneri saw two players leave permanently Daniel Maldini (to Monza, where he already played on loan last season) and Jan-Carlo Simic, who moved to Anderlecht. Added to these are all the loans, where Milan save money – at least for one season – on gross salary only.
On the transfer front, four players have arrived permanently: Strahinja Pavlovic (from RB Salzburg), Emerson Royal (from Tottenham), Youssouf Fofana (from Monaco) and Alvaro Morata (from Atletico Madrid). Roma striker Tammy Abraham join on loan.
One aspect that some fans might not consider is loan returns, with Fode Ballo-Tourè and Divock Origi the thorniest cases. The club have so far been unable to find a place for the full-back and the striker this summer with the Turkish market the last hope.
In terms of salaries (calculated using data emerging from reports and estimating the wages of the youngest players, for which no data is available), Rafael Leao leads the squad with his €5m net per season plus bonuses.
There are other caveats to consider here too, such as the fact that Morata costs the club more as he cannot benefit from the tax relief provided for by the Growth Decree, meaning his net salary is almost doubled.
Therefore, the incoming operations have inevitably impacted the cost of the Rossoneri squad and the departures of players on expiring deals in addition to the little money recouped from sales and loans have not compensated for this increase.
Despite the growth €20m from last season to this, the Rossoneri still remain behind Inter and Juventus in the squad cost rankings, two sides that – in head coach Paulo Fonseca’s words – should be title rivals.
The Nerazzurri are expected to pay out around €25m more for their squad in 2024-25, while the Bianconeri’s is €50m more after they had quite a lavish window of rebuilding under new coach Thiago Motta.
It must be stated that these are increased expenses that Milan were and are absolutely able to afford thanks to their excellent financial health. They are one of the few clubs in Serie A who don’t have to sell to buy, and that is something very positive, even if a healthy amount of player trading helps.
The Goldilocks Zone
For those not familiar with what the heading above means, the ‘Goldilocks Zone’ refers to finding a sweet spot whereby there is not too much or too little of something but just the right amount. In this case, we are talking about transfer fee expenditure.
Milan once again operated in a ‘sweet spot’ this summer in terms of the money spent per player, something that we have written at length about before and that has continued on from the Elliott Management era into the RedBird Capital tenure.
There is a good argument in favour of its success, for example the fact that it yielded the core that was in place for the Scudetto-winning campaign, with players like Mike Maignan, Fikayo Tomori (he was a bit more), Theo Hernandez, Ismael Bennacer and Sandro Tonali all arriving in the €15-25m range. Rafael Leao cost less than €30m too, until his fine repayment took it up towards €50m.
Going back even further than that, players such as Andrea Pirlo, Stephan El Shaarawy, Robinho, Clarence Seedorf, Andriy Shevchenko, Zlatan Ibrahimovic, Ronaldinho and Alessio Romagnoli came for a similar ball park figure.
In the 2023 summer transfer window Milan welcomed Christian Pulisic, Ruben Loftus-Cheek, Tijjani Reijnders, Noah Okafor and Samuel Chukwueze were five of 10 additions all in that Goldilocks Zone. No signing was any higher than Chukwueze at €20m plus €8m in bonuses.
This summer, it was the turn of Alvaro Morata, Strahinja Pavlovic, Emerson Royal and Youssouf Fofana to join from fees ranging between €13m (for the Spanish striker) and around €20m (for the Serbian defender).
Why do the club seemingly have such a set stance on this matter? Do the famous ‘Moneyball algorithms’ have something to do with it?
CEO Giorgio Furlani spoke alongside Tammy Abraham at his first press conference earlier in the week and a journalist asked him: “What the fans often don’t understand is why your policy is to sign players for €20m as opposed to going all-in for more of a match winner, at least on paper.”
The CEO responded: “I often say that in football people focus a great deal on price as opposed to value. Price does not necessarily equate to value.
“We believe that we have signed some good players that play our brand of football and will contribute to success for Milan, so the price tag is irrelevant in many ways.”
In addition to the cost-based analysis, there might also be an inherent fear of repeating past failures. Looking down Milan’s list of record signings on Transfermarkt, the top 10 make for grim reading.
Leao is down as €49.5m even if his initial fee was lower, then there is Bonucci at €42m, Rui Costa at €41.3m, Lucas Paqueta at €38.4m and Andrea Silva at €38m.
It gets even worse from there: Caldara at €37.7m, Charles De Ketelaere at €36.5m and Krzysztof Piatek at €35m. There is only really Rui Costa, Filippo Inzaghi (€36m) and Fikayo Tomori (€34.4m) that have been worthwhile investments, and two of those are perhaps debatable.
Still, just because there have been bad investments in the past does not mean that all will be bad in the future. When Milan recruit starting-level players so the team can aim for bigger things, the feeling is that players in the €15-20m region will not cut it.
Then there is, of course, the issue of the head coach. When the decision was made to part ways with Stefano Pioli a number of different profiles were linked and in the end Paulo Fonseca arrived on a deal worth €2.5m net per season, as per Fabrizio Romano.
Pioli and Milan ended an almost five-year relationship at the end of last season but his contract was never formally terminated, which means it continues to run and he is being paid €7.5m gross (€4m net) until June 2025.
Adding Fonseca’s €4.7m gross deal to that means a total commitment of €12.2m for the 2024-25 season on coaches past and present, therefore over €1m per month.
Might that explain the decision to go for a ‘cheaper’ option? Who knows, but for the new coach – the one supposed to take Milan to the next level, winning trophies – to be earning substantially less than the man shoved out of the door might be the most alarming display of ambition (or lack thereof).
Renewals and the future
If you are tallying points either way at this point, now is a good time to summarise: the squad costs have increased largely due to the five new signings and lack of permanent sales, but the amount of each transfer fee remained flat and the coach is now being paid quite a lot less.
This is not what Gerry Cardinale will want to read, but if Milan really want to continue their progression on the field then there is a price to pay, and it must be paid sooner rather than later. Why is that? Some important renewals are coming.
Most fans would agree that the star players in the current squad are Mike Maignan, Theo Hernandez and Leao. The crossroads approaching is that the French duo have contracts which expire in June 2026, so at the end of next season.
There are widespread reports claiming that both the goalkeeper and the left-back are wanting €8m net per season to renew, which would see them surpass the Portuguese winger to become the highest paid players in the squad. As with all negotiations, the compromise could be around what Leao gets now.
However, negotiating the renewal of Leao – signed last year, running until 2028 – was far from easy. There was a fine issue to resolve involving Lille and Sporting CP, a tough agent to deal with in Ted Dimvula, the shadow of Jorge Mendes lurking and the involvement of the player’s father.
When the dust had settled and the ink was dried, reports in the media emerged suggesting that Milan wanted to make a renewal like that the exception rather than the norm, both because of the complexity but also the sheer weight of the financial commitment (over €32m over the duration of the deal, excluding bonuses).
Not only will the Rossoneri have to convince Maignan and Theo financially and make sacrifices on that front if they are to keep them, but they will also have to demonstrate the strength and ambition of their project and that they are serious about winning now.
If they have read up to this point, they might not be too optimistic, and both are entering the prime of their careers if not currently being in them already, and with plenty of interest from clubs around Europe.
None of the aforementioned is intended to built a bulletproof argument that spending more definitely equals winning more. To the contrary, spending more means that the pressure rises to be successful and there are plenty of examples of clubs operating very well within tight constraints.
Inter are perhaps a good example of this. Due to their critical financial problems under Suning they were not able to open the chequebook and spend huge amounts, yet Beppe Marotta masterminded the art of player trading and getting smart business done early through free transfer and loan formulas.
Planning and execution is far more important than having a big wallet, though when it comes to players and coaches if you are only willing to spend €20m on the former and €2.5m per year on the latter, you are severely limiting the the window you are shopping in and what you can recruit.
Milan need to decide what they want to be. Do they want to be the canny operators who try to find value? If so, they might occasionally stumble upon a recipe that produces something like the 2021-22 Scudetto team, which has since been dismantled without a trophy to show since.
Do they wish to take that next step towards being back among Europe’s elite, as the owners and several connected figures have suggests? Ambition comes with cost and cost comes with risk, not exactly music to the ears of such a frugal ownership.
Cast your minds back to the title parade celebrations in May 2022 and imagine having those once a year on average. Can you really put a price on that? For the fans the answer is very obvious, but it’s not their money being spent.
milans ambition is to get top 4 and sign mid cheap players
Thus is very delicate theme.
Fine spot is also something where should be find In players ages as opposite on salaries.
Now, we don’t have any player above 30, that arrive on free transfer, for example.
And, new arrivals have bigger salaries than some of our first team players.
It should be spot where new arrival should arrive on lower salary like Tiji or now Pavlovic, compared to Emerson, Chukwueze, Origi, Etc….
As I have said before ‘value’ doesn’t win trophies. It will get you League security or perhaps too 4. Cardinale himself said he wants to return Milan to the top of football, by definition that means winning scudetto’s and champions leagues.
In recent weeks Furlani has dropped the ball and made himself evident for what he is, a businessman who knows nothing about football. However even then, surely a businessman understands that it is prudent to give your customers what they want, in this case fans, and Redbird and failing. The signings of RLC, Musah, Chukwueze, and Thiaw haven’t really worked. There’s been ‘moments’ with all of them, ut that is what you get for 15-20m, gambles, moments, players who may be in the cusp of the way down…might have a resurgence, might not. You spend more to guarantee performances!
The biggest thing we needed to invest in this past off season was getting Motta as the head coach. We could have kept almost the exact same squad and the tram would have made a major improvement.
Agreed. Smh
It seems we fall between stools here.
We don’t want to pay top dollar for proven players, ok.
But we also don’t want to pay high wages to free agents (what inter are doing).
We also don’t want to give big contracts to our current stars.
So perhaps we need to figure out what we want to do…..
Sign Dybala for free on big wages or pay a chunk for CDK?
You can’t have everything for free!
Regardless of all that, buying players who fit the system should be a given, yet that seems to be an issue too.
Perhaps when someone can explain why we got rid of Kalulu to bring in Emerson we might understand.
It’s not a sporting project mate, it’s a financial one. The BS washed with some for a while but given Furlani’s latest faux pas I think the truth is coming out.
Exactly 💯💯💯
Oliver I digress. Factor in CDK’s reported sale cost, this transfer window culminates to 38 million or so in transfer fees. The same as last season and almost all the others sonce Elliot has been here and Moneyball’s creator has been advising upper management. The core of our winning team was built by Maldini fighting or having to haggle with him and Furliani behind closed doors. He asked for more money to keep the scudetto team and they always refused and cut his budget. The Moneyball clown and Furliani are behind the exits of Kessie, Donnaruma, Tonali and Hakan. He still advises Redbird. In fact he owns shares in the Dutch club we bought Tijani from last season.
We had ample room to secure Zirkzee, Morata and every other player purchased, a month earlier than they were brought in, at the same prices. It was a terribly mismanaged window and anyone claiming Emmerson will be better than Kalulu is braindead.
It is obvious they are shooting salt at mosquitos hoping to knock a couple down.
No club that is serious about winning titles dismantles a team that wins the Scudetto one year then goes to the semi-finals of the UCL the next.
They ADD key pieces to the core. They don’t tear it apart like we have done. We had something special developing our team chemistry was insane – just needed a few more pieces – but that’s costs $$ and that was not something Redbird wanted to commit to. Now half those players and management is gone.
Says it all right there about the ambition of these owners. It’s just about PROFIT
Elliott started dismantling before too. Regardless the same people making budgetary and financial decisions are in place today. Different owner, same advisors and strategies. The minute you hear they let a player go who is the only one capable at set pieces, over 200k a year…you know there is a serious problem.
In any business, loosing your best assets always cost more and more often than not, they can’t be replaced with equivalent or better assets.
Sure, that’s why they spent €200 million. Stop making a show of yourself.
Hahahahaha!! There he is!!!
Furlani’s personal A$$ licker
Welcome back @Boulden or @UberRebirdLover
We missed you!!!!🤡🤡🤡
Stating facts doesn’t make someone a boot licker, you on the other hand are a liar, not a single point you make is valid which is why your claims are so easily refuted. All you have is cheap insults and lies. You’re an utter embarrassment.
Oliver is on fire haha another great article, thanks!
“and with plenty of interest from clubs around Europe.”
Are we still going to pretend that there is plenty of interest from other clubs around Europe in players like Theo, Bennacer, Leao?
Theo wanted to leave, no team made an offer.
Milan wanted to sell Bennacer all summer, no offer except for a loan from Marseille in the 11th hour of the window.
Wasn’t there a report that Mendes was offering Leao around this summer, no offer.
When it comes to Theo and Maignan renewals, we need to think about the present and the future, not about what they were 2,3 years ago.
Theo wants 8 mil. In what world? Is he improving or getting worse? Over the last 2+ years he has been hot and cold, mostly cold. For 8 mil a season not only you should be playing at a high level most of the time but I also need you to be a leader. Theo proved again vs Lazio that he isn’t a leader. Clowns still think that he didn’t do anything wrong. With Calabria not playing, when Theo entered the game he was the captain of the team and during a cooling break, a time out, instead of being in the huddle with his teammates, he was on the other side of the pitch with his other butthurt buddy. Not a leader.
Theo’s game is solely based on his athleticism. The older he gets that athleticism will start to go away and will start to get injured. 5 mil plus bonuses and a contract extension till ’27 is the most they should offer. If he doesn’t like it, he can leave in January.
Mike Maignan also regressed in the last 2 years. On top of that he is Injury prone. 8 million? No chance. Juventus had to pay their high paid GK to leave so they can sign a GK who will give them the same performances for a 1/5 of the cost. Mike is a very good GK, but he is playing the least important position on the pitch and the easiest to replace. Also, because we have been too busy criticizing the fullbacks or the defenders, we aren’t talking enough how most of the goals Milan have given up this season were scored from 5 meters away or croses passing that area. That suppose to be the GK no fly zone. He should be either deflecting or gathering those balls, especially since he is the only one allowed to use hands.
The comparisons with Inter.
Inter paid players who after their pay raise elevated their game. Almost none of the players that Milan gave raises to have elevated their games. They have gotten worse.
Lautaro just got 9mil. Not only he is a great leader and example for the rest of their ream but he is also top 5 player in the world and objectively the frontrunner for the Ballon Dor this season. He got that money after being the undeniably best player in the league.
Juve and Napoli overpaid in salary for both Vlahovic and Osimhen. Contracts that even Chelsea and PSG didn’t want to match.
If you give player a salary that he doesn’t play up to, you can’t get rid of him. Look at Origi and Bennacer.
Are Maignan and Theo performances over the last 2 years worthy of the money they want? Hell NO.
5 mil plus bonuses. Or you can leave. Everyone is replaceable as long they don’t leave for free like Hakan, Kessie, Donnarumma and Romagnoli.
Maignan and Theo are arguably Top 5 in their positions in the world. While I don’t disagree that their contributions on the field should reflect that, at the same time I bet they find it hard to stay motivated playing for a salary below their market value, on a team that needs to show them their ambition and project to want to stay and be a part of, AND a coach that can elevate their success…
Two way street. Always.
X I concur to your criticism but saying Osimhen was over paid is a big lie, the fact he had a fallout with the club due to the club inability to manage their social media isn’t his fault or made his a bad guy, Osimhen is far better than all Milan strikes in the past 8 years.
“However, fans are growing tired of winning the ‘Accounts Scudetto’”
Based on what? Comments by fools on this website? €200 million has been invested in the squad. That much investment should be enough to win the league. The premise of your article is flawed, you’re focusing on the finances, when the scouting, coaching and technical limitations of the players is the issue.
You are wrong we didn’t spend 200 million. They spent 76 million in 2 years, after calculating outgoing transfers. Juve spent 61 including their outgoing transfers this season alone. 28 million the prior year.
We made profit up to 30 million euros over last 2 seasons. With FFP regulations, you can spend 60 million more than you earned over 3 years. Meaning we had 90 million euros more to invest without penalties since Redbird took over. We are clear of all sanctions so there was no excuse this summer not to land better, more established players. We had money to do it comfortably. Our revenues are up to 400 to 430 millions euros.
38 million is barely 10 percent, our wages and transfer fees total to way less than half of our income. There is a lack of ambition
No, they spent €200 million. Real Madrid, Chelsea and Man City have taken in over €400 million in player sales in recent years. Net spend is irrelevant. There’s also over €25 million spent on Futuro. Your claims about a lack of ambition are nonsense, nor do you understand finances. Spending more would be negligent. Getting out of debt only to get back in would be stupid.
LOLOLOLOLOLO
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You’re an idiot. They sold players and put that money back into buying players.
They made a mess of it and know it. Furlani says we look for value!!! Where’s the value in selling Kalulu for 13 mil and buying Emerson for 16 mil.
That clown has to go ….