Why AC Milan opted to accept a bonus-heavy deal for Reijnders with Man City

Tijjani Reijnders is on his way to Manchester City in a deal that could make him AC Milan’s most expensive ever sale, and the ‘could’ is causing debate.

On Wednesday, almost every reputable source stated that an agreement had been found between Milan and Manchester City over Reijnders, who was crowned the best midfielder in Serie A for the 2024-25 season.

However, there was then widespread panic among the fan base when The Athletic claimed that the ‘guaranteed’ fee will only be €55m, with bonuses on top. Given the leverage of a contract until 2030 and City wanting things done in time for the Club World Cup, it felt/feels low-ball to many.

Some additional clarification has arrived suggesting that the Rossoneri can expect to get a minimum of €65m from the operation, with there being €15m in potential bonuses of which €10m are regarded as very easy to achieve.

As an important disclaimer, this article is by no means an attempt to justify the final overall package nor how that compares to the actual value of the player, rather serves to answer a common question: why would Milan accept these terms, and not ask for a lot more up front?

The sell-on factor

While waiting to read the financial statements and going off the news from authoritative sources such as Gianluca Di Marzio, Matteo Moretto and David Ornstein, we can begin to hypothesise how things went.

Specifically, Matteo Moretto writes: “Tijjani Reijnders to Manchester City for €55/58m guaranteed plus bonuses. Of these bonuses, some are easier to achieve than others. The Rossoneri club can easily reach €65m in total. The total deal [fixed part + easy and difficult bonuses] comes to around €70m.”

One of the reasons to accept a lower fixed base (and therefore a bonus-heavy operation) concerns his former club AZ Alkmaar. Milan signed Reijnders from there two years ago for €20.5m plus bonuses, but they reserved a a 10% resale clause.

It is important to clarify that this means they will get 10% of the future capital gain that the Rossoneri make rather than the full amount or just the profit, and from this we can make some further calculation.

Today, in June 2025, the residual value of the midfielder sits at €12.3m on the accounts. So, the consequent capital gain generated by a sale for €55m would be €42.7m and from this figure 10% must be subtracted – therefore €4.27m – to be paid to AZ Alkmaar.

The total earned from the sale would be €50.73m (€55m minus €4.27m to AZ). Add to that the expected €10m in bonuses down the line, you get to €60.73m.

If the fixed base had been directly €70m, the capital gain generated would have been €57.7m, with €5.77m to be paid to the Dutch club in that case. Overall Milan would have got more money (€65.23m), but there would almost certainly have been less or no bonuses, which is important.

Deferring of payment

Why are the bonuses important? Well, simply put, it is a way to ensure that Milan receive some money in the 2025-26 financial year (and beyond). The €55m, due to the fact the deal will presumably be done before July 1, will go in the 2024-25 accounts and push them into a profit.

To add more detail, the lawyer Felice Raimondo – who is also a Milan fan – explains things in a post on his social media.

“Up until now our discussions have always focused on capital gains and net worth, that is, the economic management of the club. But that is not the only thing. There is another side of the coin that concerns the balance sheet, where the cash flows and all the sums that the club receives each year are recorded.

“The so-called movements on current accounts. Liquidity/cash is used for the current management of the club such as paying salaries, suppliers and any purchases etc. etc. Well, the club’s accounts in the 2025/26 season will certainly lack the proceeds from the Champions League. Around €80m between UEFA prizes and ticket sales.

“Unlike the net equity and reserves, to be used to absorb even heavy liabilities, as would be the capital gains, another financial and not ‘hard’ movement, the 80 million less are ALSO lower proceeds that will arrive in the current accounts. All of this must be provided for in some way if you want to maintain a certain level and, therefore, if you do not want to significantly reduce the cash flow.

“The payments that will arrive for the transfers of players will serve precisely this purpose: to continue to feed the cash flow and guarantee the club the liquidity necessary to operate as in previous years. Bonuses deferred over time will evidently also serve this aspect of the Rossoneri accounts.”

To try simplify that, Milan’s 2025-26 accounts are on course to suffer from a lot lower revenues due to a lack of European football. An injection of €15-20m from the bonuses linked to the Reijnders sale can help that, reducing the losses that are expecting.

The cash flow aspect refers to the fact that it is always good to have money coming into the account to be able to pay for expenses in terms of the squad costs, rather than relying on the injection of capital from the ownership. Self-sustainability, as we know, is something RedBird Capital want.

Milan have moved off the Settlement Agreement signed with UEFA meaning they are not judged solely by the same Financial Fair Play regulations as other clubs. That also means they are assessed over a three-year accounting period, and in each period aggregate losses cannot exceed €60m.

The good news for 2024-25 is that the Reijnders sale will almost certainly produce a comfortable profit. Calcio e Finanza more specifically stated that the club will end the financial year (which runs until July 1) with a profit of approximately €13-14m.

Having already determined that 2025-26 will not be as rosy, and while waiting to see about the performance next season for the knock-on into 2026-27, all guaranteed future money is very useful.

Now, above all, the challenge is to replace Tijjani and produce a more competitive team for a better on-field performance next season. After all, the true way to create a more virtuous financial cycle is by accessing revenues through prize money, not from selling stars.