Daniel Longo Calciomercato.com reports that the proposed budget for summer picks from Gerry Cardinale and RedBird Capital – excluding the loan with purchase options and any potential sales – is €45-50 million.
This is one of the reasons for the slowdown in recent weeks due to the extension of board members’ contracts because they feel it 45 million euros is not enough to complete the team. An agreement will be reached because Maldini wants to stay, but is “unhappy” with the situation, according to Longo.
Raimondo wanted to set the record straight on the actual situation and basically made it clear that it was very unlikely that there would be a fixed amount available for new signings only due to the amount of changing positions and moving parts present, as well as a lack of knowledge about the target for the 2022-2023 budget.
“To categorically deny this crazy way of commenting on the transfer market, we must start from a promise: clubs do not think like housewives who go shopping. In the financial statements of clubs we think of the income statement and the balance sheet ” route Started.
“So there are two sides of the same coin and every club can have needs in one or both sides. The Economic Management (EC) visualizes the state of the club at a particular historical moment. Revenues and costs can lead to a deficit or a profit.
“The transfer market and in general player expenses are the main costs for each club. As you can see for Milan, based on the official figures of the last two financial statements filed, the club recorded a decrease in player expenses.
“If players’ wages were stable between one fiscal year and the following year, depreciation (ie costs payable for transfer fees) as of 6-30-21 decreased even by €30 million. Total costs decreased by a similar amount (from €387 million to €357 million) .
“Based on the data released by the media (fees and salaries), the Milan market 2020-22 was supposed to end with a large balance of depreciation and salaries and a general tendency to save. As you can see, the factors affecting the “Mercato” are many.
“Total salaries, depreciation, write-offs and loans. All this contributes to creating expenses for the players. You realize, then, that talking about the treasury or the budget is impossible except in the above terms.
The budget is related to several factors and, above all, it is evaluated given the deviations from previous years. So the availability of more consumption/wages can lead to a larger margin for purchases but this margin cannot be fixed at a fixed amount.
“The quantity, in fact, of what has been said can only be liquid, and therefore not predetermined. But not only that: the margin can also vary due to the greater availability being produced along the way (new sponsors, capital gains, etc.).
“The other side of the coin: the cash flow and therefore the club’s ability to raise money. For example, the premiums in player payments indicate this. There are clubs that may have a greater need to generate cash than other clubs.
“AC Milan has not had cash problems so far, also because the shareholders have never lacked their support. The Rossoneri club, if any, has had to deal with an economic management characterized by a large deficit between costs and revenues.
“However, more or less budget in the market depends on so many factors that it is a madness to talk about budget. It is clear that availability is affected not only by private sources (ie club revenue) but also by the owner’s ability to allow the club to run a larger deficit.
“We are talking about capital increases / shareholder loans which, beware, are not used to make the transfer market but to allow the club to be able to make up for the larger shortfall also created by expenditures on players.
“Moreover, at the moment, capital increases ‘in light of the market’ have lost their value because UEFA only tolerates capital injections within certain limits (also in the new microfinance programme) by requiring the club to spend only a certain amount Regarding player revenue (team cost rule).
“As for Milan, a few days ago I assumed there was room for maneuver on the basis of the devaluation and therefore from a self-financing perspective, clearly a partial anticipation of an image known only to the entire club.
“Based on these forecasts, and for the purpose of self-financing, if we consider judiciously the 4 year contracts (not 5), the potential margin ranges from a minimum of 60 million euros to a maximum of 120 million euros. This is because we will be able to reinvest between 15 million euros and 30 million euros in depreciation.
“However, none of us are able to determine the real room for maneuver in the 2022-23 market, so how much will we be able to invest in spending on players. This is because none of us know the trends in our balance sheet as of today and the likely end goal for 22/23 .
“In fact, the margin in the market will necessarily be affected by the operating result that the company expects to have as of 30/6/23, the club’s ability to increase revenue and the shareholder’s ability to write off X instead of Y. We know nothing of that.
“The only conceivable thing is that if there is a certain margin on consumption that can be inferred from those who have expired and from those who can leave, on salaries (numbers known only individually to the club) it will be difficult to remain stable due to Scudetto bonuses, renewals and purchases. new.
“Player spending on 22/23 is likely to be an increase compared to the 21/22 fiscal year. If we want to maintain a balance it is necessary that revenues should increase as if they were not more than expenditures. As mentioned earlier, the club’s ability to generate new revenue will be critical.
In this way, self-financing can be more ambitious because the margin and therefore the deviation from the previous year can be larger. Reducing all of this to just the phrase “We have 50 million euros to spend” makes you smile, to put it mildly.
That’s why I suggest everyone put off when you read about different budgets. The real spending power is known only by the club, and as you understand, it is based on more complex and changing calculations. Enjoy the summer and hopefully Milan will come out with a boost.”