Hakan Calhanoglu was a man out of favor with fans in January and wanted him to follow Suso through the exit door. But if Milan showed a revolution post-Lockdown Hakan was the center of it all with 7 goals and 8 assists in 12 games with an involvement in almost every game we played. A suggestion at a contract renewal in June 2019 was seen as a humorous attempt by fans but fast forward to October it is seen as a very important sign of the club’s aspirations.
However as reported as by Sky, Hakan Calhanoglu has asked for a significant raise (close to 4 Million net) and Milan is scheduled to sit down with his agent, Gordon Stripic, for contract negotiations.
Hakan Calhanoglu has a contract until June 2021. However as per the free agent rules, he is allowed to speak to clubs in January 2021 and agree a pre-contract to join the club once the 2020-21 season gets over on a free. Milan, will want to avoid this situation where Hakan walks out of Milan on a bossman without bringing in any income to the coffers and Milan tasked with finding a replacement who could be as effective has Hakan is to Pioli’s plans.
Financial Impact:- Wage Impact, Amortization calculation
Financially, a 4M/season net contract would mean it will have an effect of 8M/season (4M salary+ 4M tax) to Milan’s balance sheet per year unless he stays in the club for 2 years which would then reduce the total impact to 6M/season as per the new taxation rules introduced by the government for foreign players.
Hakan Calhanoglu’s amortization per year is roughly 5.8 Million and is down to the last year of his contract. His Book value is close to 3.8M. If Milan extend his contract for 3 years then Hakan’s amortization reduces to a rough 1.2M per year.
Benefits of the Renewal
Milan are quite cornered in this situation with all the odds favouring Hakan but the player has re-iterated his desire to stay and may accept a 4M/year. 8M a year is quite an impact on Milan’s balance sheet during these tough times with corona having a huge impact on finances of all club but the benefits of renewing are two fold
- If Hakan continues his form and a big club comes calling and offer a good amount of money Milan can collect a huge sum of money given that his book value will be between 0M-3.8M (see above calculation) and it will help Milan re-invest in the market as well as have a positive impact on the balance sheet
- Reduces more amortization clearing more space for investments in the future. As shown in the above calculation, Hakan’s cost amortization (cost per year) reduces from 5.8M to 1.2M per year which frees 4.6M in squad costs waiting to be re-invested in the squad.
- If Milan cannot make it to the Champions league this season, having an ally like Hakan who forms the core of the squad will be useful so that Maldini and Co. can reinvest in more problematic areas like Right Wing.
On a personal note, while Milan have saved a total of 34.2 M in gross wages (calculated from wage sheet as listed by CalcioFinanza, see down)
Milan have added close to 16M to the wage bill with new signings. With corona squeezing our budget to every penny it’s good to see how we have added players without straining on our resources. The renewals look financially feasible and with the will of the players won’t be a thing of concern.
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