Costs of Maignan's new deal highlight just how important star renewals are

"The financials of Mike Maignan's renewal have highlighted just how important it is to renew your star players, rather than going out and signing new ones. Contract renewals have been a hot topic, and a sensitive one as well, at Milan since the departures of Gigio Donnarumma and Hakan Calhanoglu. Indeed, many were worried that Mike Maignan was heading for the same fate after the stalled renewal talks."

"Maignan's renewal will come into effect in July, when the previous deal will expire, and the new salary will cost Milan at least €6.55m gross per year. The Growth Decree does a lot of the heavy lifting here, as that salary would normally cost €9.25m gross per year. While the tax relief is no longer available, scrapped to promote Italian players, it still applies in Maignan's case as it can be extended for five years after the initial five years are up. That is as long as the person in question has a family or residence in the country."

"However, it's not just the Growth Decree that makes a difference here. Since Milan and Maignan will let the old deal run out before the new one kicks in, that means the Rossoneri will amortise the last portion of his €16.4m transfer fee back in 2021. Subsequently, Milan will no longer pay an annual amortisation for Maignan; only the gross salary. It just goes to show how important it is for clubs like the Rossoneri to renew their stars, rather than starting from scratch amortisation-wise with a new signing."

Mike Maignan agreed a renewal reportedly worth €5m plus €2m in annual bonuses. The new contract takes effect in July and will cost AC Milan at least €6.55m gross per year. The Growth Decree reduces that cost from an expected €9.25m gross by providing tax relief that can be extended under residency or family conditions. Letting the previous deal run out allowed Milan to amortise the final portion of his €16.4m transfer fee back in 2021. As a result, Milan will no longer record an annual amortisation charge for Maignan and will only incur his gross salary. Renewals therefore avoid fresh amortisation costs that accompany new signings.

Read at SempreMilan