You Gotta Pay to Play

Football is the beautiful game, but underneath it is an ugly truth: money. Money drives success, money drives scandals, money drives corrupt owners, agents, players, and more. Money has also nearly destroyed football, with transfer costs, player wages, and agent fees pushed to completely unsustainable levels. Something has to give. Yet for now, clubs that have already been financially laid bare due to the impact of COVID-19 still have to try to acquire a competitive squad this summer. This includes Milan, especially this year. Having suffered so many injuries this past season, and entering the Champions League with a young team this season, money will be a requirement for survival. In this current environment, it seems that you gotta pay to play.

Gazidis and Massara really do look a little shady

The cost of success is a controversial one. For example, back in 2012, I compared the player wages of each of the past three Scudetto-winning squads to see if there was a correlation between money and winning. Certainly all three squads had relatively high wage bills compared to the rest of Serie A, but the winners were not necessarily the highest. More recently, we have seen a club like Sassuolo, who have only even been in Serie A for eight seasons now, exceed all expectations. Yet they have finished in the top ten, as high as sixth place, for four of those eight seasons. Juventus' wage bill was almost seven times higher than theirs this season. Seven times. In fact, Juve's top player made only €4 million less than Sassuolo's entire squad.

The right recipe of stability + sustainability + young talent = success

Or you look at a team like Atalanta, who are the supermodel of a modern football club. With both footballing stability and financial sustainability, they have both the longest-serving manager and also the healthiest books in Serie A. Having spent a season in Serie B, they have been in Serie A for ten consecutive seasons this time around. Five of those seasons, they played in Europe, meaning top 7 finishes. The past three seasons they finished third in Serie A and competed in the Champions League, including playing in the quarterfinals last season against the endless money pit of a club, PSG. All of this with a wage bill that is 5.5 times smaller than Juventus, who only made it to the Round of 16 last year. Which begs the question, can you buy a Champions League trophy? If you are Juventus, then clearly not.

Speaking of Juventus, five years and four Scudetti ago, I took a look at why Juventus were so successful, at least in Serie A. Yes, money was at the heart of it, but more because of their business model and having successfully managed the impossible: building a new stadium in Italy. Having been burned in the Calciopoli scandal in 2006, they focused on rebuilding both their sporting and business sides. That worked out well for them financially until their all-consuming obsession for winning overpowered their financial sensibilities. That ultimately brought them one match away from not even qualifying for the Champions League this year, despite a wage bill of €236 million. Those are wages of nearly €100 million more than Inter's, the second place wage bill.

Forget questions about the refs, how the hell did Juve get a stadium built in Italy?

Milan's wage bill this past year was only €90 million, more than two and a half times smaller than Juventus, yet we finished ahead of them in second place. The problem is that we have a €90 million squad, actually even smaller, with the exit of Gigio Donnarumma and Calhanoglu. But we will likely be competing with the likes of Manchester City, Bayern Munich, and Chelsea straight away in the Champions League, all with much more expensive teams. Certainly, we have the Milan DNA, strengthened with Paolo Maldini now back at the club. But money will still definitely be a factor.

This mercato kicked off with an impressive move that saw the Donnarumma saga swiftly and calmly end with a masterclass move from Maldini. With a collective standing ovation from fans, football experts, and accountants around the globe, he dumped Donnarumma's €6 million in wages (he was offered €8 million to stay,) and brought in Maignan for a reported €2.5 million. Maybe a year from now we will be regretting the loss of his talent, but losing the Italian keeper's wages will never be a regret.

Our €90 million team will be hard pressed to compete with a club like this

Calhanoglu was different, as he was already playing for pennies. Given the fact that Milan waited  so long for him and do not as yet have a replacement lined up signals that they hoped he would accept their firm offer of €4 million per year, a raise from his previous €2.5 million salary. We had a great deal with him, with skills vs. cost, and it will be difficult and also likely expensive to replace him. Also difficult is that the club have set their own salary cap, which severely limits big name players with big name salaries. They are truly going to have to use every cell in their footballing and scouting brains, as well as their shrewd business skills to raise the quality of the team without raising wages too much.

The transfer market is always made up of moving pieces. In a year like this one, with the Euro championship being played right now, some of those important pieces are focused on playing with their national teams, so it is difficult to make those important moves. But Milan have already spent €43 million in transfer fees for Maignan and the purchase of Tomori. That is probably about the amount we will receive for qualifying for Champions League. Elliott's resources are basically bottomless, but there is always the question of Financial Fair Play (FFP.) We may catch a break this year, because UEFA are completely redoing FFP guidelines due to the effects of COVID-19 on the economy. But we will still have to be careful not to overspend. 

They finally worship him, now he's got to live up to their expectations

Gazidis came in and created the largest deficit ever at Milan, then doubled it last year, for which Milan were already over €340 million in the red after two years of a three year FFP evaluation. This year, it is reported that he halved last year's deficit, meaning he brought it back down to the previous largest deficit ever. But on the actual good news, sponsorships and income are up, and Milan is looking much more fiscally healthy than some of the other clubs in the diabolical Super League project. But in order to compete in both Serie A and the Champions League next season, investment is necessary.

The post-COVID market is bizarre, with many teams desperate to cover their previous poor business practices by marking up player valuations to impossible fees, while other teams are desperate to create swap deals to keep things simple. This will also be Maldini's most important transfer window to date. Everything he has endured to get the project this far hinges on keeping enough stability within the team, as well as enough quality, but also reinforcing with even more quality. All while continuing to try to keep costs down. In this era of overpriced transfers and wages, that may just prove too much. It may well be that we have to make more significant investments, because, after all, you gotta pay to play.

This post inspired by the music of NIN's "Head Like a Hole"