Real Madrid’s massive bill to sign Kylian Mbappe this summer.

The Financial Complexities of Real Madrid’s Pursuit of Kylian Mbappe

Kylian Mbappe’s desire to fulfill the remaining year on his contract with Paris Saint-Germain (PSG) rather than opting for an early contract extension has become clear. The talented striker understands that, from an economic standpoint, this decision is in his best interest. Unless PSG compromises on their demands and Real Madrid presents an astronomical offer, any move to Madrid at this stage would result in financial loss, as it would require relinquishing a Qatar contract that is difficult to match.

To delve into the numbers, Mbappe currently earns a gross salary of €70 million per season (approximately €35-40 million net, considering the absence of tax benefits for foreigners). On top of this, he receives two bonuses each season: a €60 million gross signing-on bonus and another €60 million gross loyalty bonus paid at the end of the summer or winter transfer window. In total, these bonuses amount to an additional €120 million, or around €65 million net.

In summary, Mbappe earns approximately €100 million net per season, contributing to PSG’s gross earnings of around €200 million at the end of each financial year. If the player were to exercise the optional year, the French club would have to pay approximately €600 million over three years. It is understandable that the French government, led by President Macron, would support Mbappe’s continued stay, as PSG generates significant tax revenue. The club has consistently raised concerns with UEFA about the disadvantage they face in terms of player wages compared to the Spanish or English leagues.

A Challenging Transfer Scenario

If Mbappe were to agree to leave this summer, he would be forfeiting the second year of his contract, and it’s highly unlikely that Real Madrid would match his current salary demands. Moreover, as a non-free agent, he wouldn’t be eligible to receive a signing bonus, which would serve as a supplement to his salary. Last year, Madrid offered him €25 million net per season plus a transfer bonus of €130 million, but no transfer fee was involved due to his free agent status.

Consequently, it is virtually impossible for Real Madrid to pursue this transfer if Mbappe insists on not losing money, while PSG demands at least the wage investment from last season, totaling around €200 million gross, to recoup their expenses. Real Madrid would need to pay a staggering €400 million between the first season’s salary and the transfer, a scenario that is simply unfeasible.

The Sole Option: a Low-Cost Transfer and Gaining from PSG in the Future

Time is on the side of both Real Madrid and Mbappe. The only viable possibility for a transfer this summer would be if PSG eventually accepts an unusually low transfer fee. However, Qatar, known for its reluctance to yield, previously took the risk of Mbappe leaving on a free transfer but ultimately renewed his contract in May. Time works to Mbappe’s advantage, though. If the transfer were to occur just before the market closes, he would have already received two monthly payments in July and August, totaling approximately €12 million gross. If he has also earned the €60 million transfer bonus, his total earnings would reach €72 million gross.

The Contentious Letter

For now, PSG maintains that Mbappe will not depart on a free transfer and asserts that his desire to leave was evident in the letter he sent them two weeks ago. However, time is crucial for the French club, as their plans for the upcoming season greatly differ depending on whether their star player remains or not. If Mbappe were to leave this summer, PSG would have more financial flexibility to allocate the funds saved on his salary and the transfer fee received towards bolstering their squad for the future.