Devil’s Advocate: Milan must review their wage policy or the project will never evolve

By Oliver Fisher -

AC Milan have found themselves at a real crossroads despite the fact that they won the Scudetto last season, because some tough decisions will have to be made.

There is an abundance of discussion at the moment about what the path for the future will be under the new owners RedBird Capital and what their ambitions are for the the team, namely the level of squad that want to field and the costs they are willing to fund in order to help it grow.

The precursor to this discussion starts back in 2018, when Elliott Management took control of the club following a very aggressive period of expansion under Yonghong Li, with regards to squad costs and in particular player salaries.

Once the American fund took charge they made it clear that they wanted to clean up the accounts by trimming unnecessary costs, and the wage budget certainly has not been immune from that since.

Elliott have tightened the expenses in recent years which has created a virtuous cycle of sorts, and as part of this Milan have seen their wage budget drop from €150m gross in 2018-19 to about €100m as of last season (post the January window).

As a comparison with the teams in Italy, Napoli’s wages were €110m, Inter’s were around €130m while Juventus stood out above all at €172m gross, meaning Milan were comfortably the least of the current top four.

Looking at other league leaders around Europe, Bundesliga table-toppers Bayern had a wage bill of €192m, PSG were at €470m, Manchester City’s was €258m and finally Real Madrid paid out €401m in gross salaries for 2021-22.

The vision for the squad has been simple as part of this: a heavy emphasis on signing young players with high potential for transfer fees that are not astronomical and on relatively low wages, and the right experiences profiles such as Zlatan Ibrahimovic, Olivier Giroud, Simon Kjaer and Alessandro Florenzi came in to compliment the group with some much-needed experience.

However, Elliott Management (who are still in control until the full closure of the sale in September) and RedBird have reached an unavoidable issue that that they must now face, which is the fate of their internal salary ceiling.

MilanNews among many sources have reported that at present the maximum salary that Milan has chosen to pay its players amounts to €4.5m net per season, with the odd exception as seen through Ibrahimovic.

It seems to be quite an arbitrary figure with the aim of limiting the overall wage bill, but there is simply no getting away from the idea that such a policy becomes a limit when trying to take that next step, which is bridging the gap with Europe’s elite.

When those players who were signed because of their talent evolve into stars they expect to be paid as such, especially when their agents get wind of interest from other top clubs who are more than happy to offer the salary they want.

There is a compromise to be found somewhere of course, because smashing the wage budget wide open by keeping Gianluigi Donnarumma and wilting to the now-late Mino Raiola’s requests would have been a step too far, but then players like Hakan Calhanoglu – regardless of what you think of his ability as a player – was allowed to go to a city rival over a matter of €500k per year.

As Franck Kessie departs for pastures new in Barcelona, there is another very thorny issue that Milan must soon tackle and that is the renewal of Rafael Leao. Various reports are suggesting that Milan have offered €4.5m net per season to the Portuguese winger and his entourage – therefore consistent with the ceiling – but the requests are quite far beyond it at €6-7m depending on the sources you believe.

Milan must make a decision and answer the following question: for a player of Leao’s importance and potential, is it worth going beyond that internal limit? Logic says yes, because one scenario means the Rossoneri retain leverage and would send a statement regarding the seriousness of their project, while the other involves a potential panic sale next summer to avoid the risk of losing another player for free.

Leao is not an isolated case though, it must be said. There are other players within the squad who are due a well-earned pay rise and might otherwise begin to attract interest from abroad. Fikayo Tomori has been potentially the best centre-back in Serie A since his arrival, and Premier League clubs will be circling, so steps must be taken to show him how vital he is to the future plans.

Ismael Bennacer and Pierre Kalulu are also players that this applies to, and the same notion is also a factor when negotiating signings. To attract players and thus raise the level of the squad, sacrifices must be made as the global landscape of football accelerates more and more towards an inflation in salaries.

Milan have been good at discovering talents in the recent past, but the problem is so are many of the top European sides, and they often have more economic resources at their disposal. Sven Botman went to Newcastle United because they finally convinced him with the terms they offered, while Renato Sanches could join PSG to earn €1-1.5m more per year and Charles De Ketelaere may yet be swayed to join Leeds if they are given the chance to offer him a big pay day.

The hope is that the ownership are well aware of what the next stage of the project entails, and that will see the internal salary limit either abolished and done on a merit basis, or raised to a more reasonable level which is congruent with the ambitions of winning the Scudetto again and going further in Europe.

There are certain things that could help this too. The accounts are continuing to improve thanks to increased revenues post-Covid, but also through the renewal of agreements with PUMA and Emirates that will bring more money into the coffers. Plus, there is more prize money from the UCL, and more cash flow means greater margins to invest.

Now the ball passes to Gerry Cardinale, who has the not-so-straightforward task of boosting how competitive the squad is while balancing internal politics and trying to build while within the parameters of sustainability.

No doubt Paolo Maldini will be applying his own pressure, because he will know better than anyone that in other to keep building, certain sacrifices must be made.

Tags AC Milan

22 Comments

  1. They don’t want it to evolve lol. BirdPoo representative clearly stated in an interview that they believe in Moneyball, getting most from least money possible. Their entire strategy it to buy cheap, use until players become too expensive and then sell. And as long as we qualify for UCL and get that beautiful UCL money they will be happy. They are no different than Elliott, probably even worse because they have even less money.

    We got another cheap, penny pinching. broke ass owner. Next scudetto in a decade or so, if we’re lucky.

  2. In my opinion, next season we need another great season, if so then I think the wage policy has to be a given if we want to keep going up in Europe

  3. The thing is that due to the Financial Not-so-Fair Play Milan needs to have a positive budget after so many negative ones.

    The first thing they must do is start making profit. That’s why the salary cap was introduced the first place. Everything points to that they finally will be able to make a profit this season and IF they actually do that, then maybe they can lift the cap as well. But that requires another successful season and going to the 2nd round in UCL.

    1. No @bb they actually don’t lol. 99 percent of teams are NOT profitable. You want a profitable team that wins nothing then become an Atalanta fan. Every club (and every business in the world for that matter) has debt. It’s about revenue. We do. It make enough because we have horrible TV rights and an old outdated stadium that we RENT lol. The spin by ownership is oh wait until we become profitable then we will spend – that’s comical. Will be ever happen. Redbird/Elliot are investment funds that have a mandate for their shareholders to make money – and NOT to win titles. Pure and simple. You cannot win in sports unfortunately without spending. That’s just the way it is. Thus far we have shown no indication these new owners will do that. As such we will be lucky to place 4th this season IMO. Embarassing. Either we want to compete with the worlds best and take that next step like Maldini said OR we will just become a feeder team selling our best players for profit and challenging for top 6 in league.

      1. Didn’t we just win the scudetto without spending?

        Although, i think we did spend last season ($28m for Tomori, $30m for Tonali, $8m for Adli, $4-5m for Messias) and i think we will spend this season. Just because we don’t spend beyond our means does not mean we don’t spend.

        Just have a bit of faith.

        Also, FYI, Tomori was not our first choice CB signing when we got him on loan from Chelsea and Tonali had a stinker of a first season with us and look how they turned out?

  4. it will take time
    remember when got f’d by Li management
    we just recovered from that
    we will get better in few years

    1. Milan had been in the doldrums of Europs elite football for years but for once there is a spark of hope and a light and the end of the tunnel

      …if we don’t take the opportunities we have right now to maintain our relevance at the top of this sport then we may get to wait for another lenghy time as we did in the past and that’s not good for anyones health.

  5. We NEED to start paying players. Everybody in the league is getting better and we stay the same. Pay Leao whatever he wants. To reach the top again we need to compete with elite clubs in every way

  6. How little work did you do to prepare for this?

    Milan offered Donna 7.5m, we offered Kessie 5.5-6.5m, he went to Barca for 6.5m plus 2m in bonuses.

    We paid Romagnoli 6m, that wasn’t Maldini’s fault, but, the points still stands.

    We paid Ibra 7m (incentive based contract) but when you talk about Leeds, you clearly did not research did you?

    Samu would have been almost the highest paid player at Leeds, whose highest player makes… 3.8m lol.

    Every time you write a “devil’s advocate” I wince at how wrong you are. I wish you did a little research rather than writing out the anxieties of a true fan (I give you that) who doesn’t know what to be worried about.

    Do some research first.

  7. Everyone knows we need a bigger budget, but the article fails to mention the elephant in the stadium. We all know that resolving the situation around San Siro would be a huge step towards competing with the financially strongest clubs long-term. We should also be better at exploiting our brand, but it’s only our 2nd year back in the top. Those who don’t remember how close we were to being stuck as a mid-table team have a very short memory.

  8. If you don’t have money to make the team more competitive and only think about your stomach business. You better sell ice cream instead. WTF Redbird

  9. Good excuse. Seems like Milan is the only team with this problem. Totally sucks for Milan to have this shitty owners in the last decade.

  10. We won the scudetto with a mediocre squad two years ahead of schedule and we’re still failing FFP by €60 million. Once the debts are cleared, the salary cap can be increased. Leao has 2 years left on his contract. We have another year to extend his deal or to cash in.

  11. Need new richest owner, look at the past, ac milan is not the team that bought young player with cheapest cost. What ac milan bought is world class player, this strategy is just the excuse of broke owner.

  12. After Redbird takeover, there is no project, any glimpse of hope gone , these are money laundry group , I can foresee Redbird selling Leao, Theo and Tonali in the near future to retrieve the money they paid

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