Part 1: Sales and Wages saved
Earlier with Sevilla mathematically qualified for Uefa Champions League 2020-21 edition it had a financial implication towards Milan’s coffers. Sevilla are now obligated to redeem Suso for €23 million + Bonuses which would come up to €24 Million Given that Milan purchased Suso for €1 Million Milan make a profit of €23 Million on the player. Positive impact on the balance sheet and money to be reinvested for the transfer market.
We take a stock of the possible sales and wages saved from the possible outgoing player movement in the mercato
Please note:- 1. These are estimates based on rumours and option to buy clauses. It may not be completely accurate. 2. Due to the corona pandemic uefa will judge clubs for the period of July 2019 to June 2021
Player sales
As discussed earlier Milan make revenue of €24 Million from the sale of Suso.
In the winter market Milan had sold off Piatek for €28M to Hertha Berlin. As cited by Sky sports Milan had brought Piatek for 35M in 2019 and gave him a contract until 2023. His book value when he was sold is €27M
Milan also loaned Caldara to Atalanta in the winter for a loan with option to buy for €15 Million which Atalanta seem keen to trigger. If Atalanta trigger his loan in 2021 his book value will be €14.4M and Milan can make a profit of 0.6M
Another player on the transfer list is Uruguay left back Diego Laxalt. Interest from Russia and Italy has been shown for the player. His book value is currently €7.4M. If Milan sell him at €7M then they incurr a minimal loss
Youth Academy product Calabria will be moved on for pure capital gain since his acquisition cost is 0. I think Milan can estimate his value at around €10M.
Another sale we can expect is of Paqueta. His Book value is €25 Million and if Milan sell him for €25 Million it maybe a good deal for them.
Another sure departee is Ricardo Rodriguez. With him coming down to the final year of his contract his book value is only €3.75 M and if Milan manage to sell him for €5M as per the option in his loan deal with PSV Milan make €1.25M profit in the books.
Andre Silva and Rebic looks to be a straight swap deal. But in terms of accounting it will not be counted as zero. Silva whose book value is €15M will be swapped with Rebic. Both clubs value their players at €25M. Which means that Milan will make roundabout €10M profit from his sale.
Krunic who has been recently linked with Torino has a book value of €6.4M If Milan can sell him for €7M then we make a profit of €0.6M
Musacchio has a book value of €4.5M and is on the last year of his contract. With his injury it looks extremely unlikely that he will be able to be sold
Duarte looks like the candidate who could leave. His book value is €8M. But there is no news of him leaving yet.
Add this to the player sales of cutrone and Thiago Djalo which is a combined €28M.
Total revenue for the club at these estimate values = Piatek (28)+ Suso (24)+ Caldara (15)+ Laxalt (7)+ Calabria (10)+ Rodriguez (5)+ Silva (25) + Paqueta (25) + Krunic (7) = 146M revenue.
The total profit from these sales = 75M
Wages saved
Wages saved is not a direct income for the club. It is a mere estimation of the money the club saves with either players leaving the club or Contracts expiring.
In italy the wages reported are those after tax. However for the clubs accounts the club pays the salary to the play and the tax to the government which is a direct cost to the club. It is called gross wage. Tax in Italy is 50%.
Reference used for calculating wages: https://www.rossoneriblog.com/2019/09/10/milan-2019-2020-players-salary-chart/
Formula to calculate the wages saved
Wage of the player x 2 x (no: of years left if the player is sold) = wages saved
Suso = 3.5 x 2 x 2 = 14M
Piatek = 1.75 x 2x 3 = 10.5
Paqueta = 1.75 x 2 x 3 = 7.5
Caldara = 2.2M x 2 x 2 = 8.8 +2.2= 11M (left in January)
Calabria = 2M x 2 x 2 = 8M
Biglia = 3.5 x 2 = 7M
Borini= 2.5 ( he left in January)
Reina = 3 x 2 = 6M
Rodriguez = 2.1 x 2 = 4.2M
Laxalt = €1.8 x 2 x 2 = 3.6M
Bonaventura = €2M x 2 = 4M
Giampaolo= 2M x 1= 2M
Total Wages saved = €80.3M
2. Europa League
Milan in the 2018/19 season played in the Europa League and was knocked out in the group stages. In the 2017/18 season Milan went till the round of 16. Now taking into account these figures they earned we can draw an estimate as to how much Milan can earn if they qualify next season.
2017/18 season = 14M (prize money) + 7M (ticket sales) = 21M
2018/19 season = 15M (prize money) + 4M (ticket sales) = 19M.
However Milan had to pay €6M as fine for its FFP breach and hence its revenue got cut short.
With corona virus rampant it is not clear as to whether crowds will be allowed inside the stadium and clubs can cash in on ticket sales but Milan can expect a minimum of €15M in its eatimated revenue next season if they qualify for Europa League.
If the rumours are true and Milan are giving Pioli a budget of €80M+ 50% of player sales we recokon he can look upto a budget of €140-150M warchest to spend next season.
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