Leao to be sold? Potential capital gain influenced by massive fine [Bonus Article]
I’m not really in the business of fueling transfer rumours months before the season has ended, or at least I don’t try to be, but it feels like a piece on Rafael Leao is in order. Even if we disregard the potential sale, it’s good to take stock of his value on the accounts and how Milan should approach his future.
While he hasn’t always performed at his best, more so the opposite than anything, there has inevitably been a star-power vibe around Leao in recent years. Performances like the one against Napoli away, with that lovely solo run to set up Olivier Giroud, have certainly contributed to that status. And as we all know in today’s football, the ‘flashy’ element carries a lot of weight.
That hasn’t exactly gone unnoticed by Milan either. The renewal in 2023 was one of their biggest priorities in many years, with plenty of meetings, problem-solving and patience needed to get it over the line. I will explain it later in this article, but it was essentially a very hefty cost that led to the green light, and the fact that it had nothing to do with the salary made it all the more interesting.
Anyway, with rumours now suggesting that Leao could leave in the summer, how much do Milan need to make a profit? I would normally have said to break even in these situations, but we all know that they won’t settle for that. The price tag may have been discounted a little, though, as that is actually something the Rossoneri can afford (even if it may sting). Let’s get into it!
Short Version
Milan paid just under €30m to sign Leao from Lille in the summer of 2019. Although he had impressed in France, his young age (20) and the transfer fee definitely raised some eyebrows. In the end, it was money well spent considering just how much he has helped the Rossoneri on the pitch.
To help get the contract renewal over the line in 2023, Milan agreed to pay an additional €20m to Lille to cover the fine imposed on the French side and Leao himself (read long version for explanation). His historical cost thus increased, but Lille’s 15-20% resale clause was removed in exchange.
As a result of that increase, Leao’s value on the accounts will be €11.21m this summer despite joining seven years ago (it would have been €2.4m without the increase). Nevertheless, it’s easy for Milan to register a good capital gain here, as even a €40m sale would result in a gain of around €29m.
Milan have always seen Leao as the player who, one day, will break the club’s sales record. Kaka leads the line at €67m and while a €70m sale cannot be ruled out for the No.10, it might be tough. Still, it’s not like the Rossoneri have just invested in potential (for an eventual sale) all these years; Leao has performed too.
Brass tacks on Leao’s value and costs
As always when it comes to the financial value of a player, we have to start at the beginning. Milan signed Leao from Lille in the summer of 2019 and back then, the €30m spent was seen as a rather higher figure for a player that many hadn’t even heard of (despite him scoring in Ligue 1). He was only 20 years old at the time too, so you could definitely describe it as a gamble.
Of course, while his first season was nothing to shout about (aside from the solo goal against Fiorentina), the investment paid off as he was a key player in securing the 2021-22 Scudetto. He got 14 goals and 13 assists that campaign, which is really good for a winger, and he followed that up with a brilliant 2022-23 season. As alluded to in the intro, he was essential in getting us to the Champions League semi-final.
I won’t bore you with more background on his performances, so let’s get into the heart of the matter: what is his value on the accounts? Well, the interesting thing is that his historical cost - basically the transfer fee - increased from the initial €30m to €50m in 2023. That’s the same year as the renewal, so are these two things related? Yes! It was a big contributor to the new contract being signed in the end.
