How can Real Madrid afford 'impossible' €160m Mbappe offer?
In April, Real Madrid president Florentino Perez told the world that football was dying and clubs like his could no longer survive without a European Super League, in the face of state-backed sides like Paris Saint-Germain and Manchester City.
The 74-year-old also insisted that due to the realities of the current transfer market, neither his club nor any other would be able to afford to sign Kylian Mbappe or Erling Haaland this summer.
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"It's impossible to make signings like Mbappe and Haaland, in general, not just for Real Madrid, without the Super League."
Fast-forward just over four months, and despite the failure of the Super League project, Madrid have bid €160 million ((£137m/$188m) for PSG star Mbappe, the world’s most valuable player, and could go higher still after the French club rejected the offer.
Mbappe has one year left on his contract, becoming a free agent next summer, while Madrid have suffered financially during the coronavirus pandemic, giving players wage-cuts while barely spending a penny in the transfer market.
So how can Perez afford the forward?
Madrid have planned a move like this for some time, with the president a known admirer of Mbappe for several years. The France international himself idolised Cristiano Ronaldo, and has always seen himself making the move to the Santiago Bernabeu at some point in his career.
But with Financial Fair Play rules - both Spanish and European - factoring in Madrid’s thoughts, as well as a stadium renovation to complete, Perez has shifted strategy in the transfer market. The Galactico era at Real Madrid is long gone.
Madrid’s only signing this summer thus far is David Alaba, on a free transfer. Instead, Perez has signed younger players and reserved his money for the occasional big move. By contrast, rivals Barcelona have burned up their cash on failed superstar signing after superstar signing and have a negative net worth of -€451m. Madrid’s value is €534m.
Bringing Eden Hazard to the club in 2019 for €100m (£88m/$112m) plus add-ons is the only big-money transfer Madrid have made since James Rodriguez in 2014. However, the Belgium international's subsequent failure to perform and the economic situation after the pandemic has stopped Perez making further moves, until now.
Obsessed with Mbappe, this is the player he accepts breaking the mould for.
It is also a good time to strike, with rivals Barca weak and the division shorn of its top stars. Signing Mbappe would make Madrid the team to watch in La Liga in one fell swoop. It would also send a message out to football as a whole - Madrid are still the biggest club in the world.
The club’s recent conservatism has made this dream possible. In 2016, Madrid signed Alvaro Morata for €30m from Juventus, but made €37m in sales, including Jese to PSG.
The next summer they sold Morata to Chelsea for €66m and Danilo to Man City for €30, among other moves, bringing in €132m for only €40m spent, on youngsters Theo Hernandez and Dani Ceballos.
The figures were more equal in the summer of 2018, with Madrid spending the €112m they received from Juventus for Cristiano Ronaldo on Vinicius Junior, Thibaut Courtois and Alvaro Odriozola.
Only in 2019, when they bought Hazard, Luka Jovic, Eder Militao, Ferland Mendy and Rodrygo, did Madrid spend far more than they earned, racking up costs of €300m, compared to the €130m that came flowing in for Mateo Kovacic, Marcos Llorente, Theo Hernandez, Keylor Navas and others.
They made up for it in 2020, not spending a cent on transfer fees and bringing in €100m, from Achraf Hakimi, Sergio Reguilon, Oscar Rodriguez and a host of other youth players.
This summer, the same, with €78m in from Raphael Varane, Martin Odegaard and Brahim Diaz, and no expenditure. Madrid have not paid another club for a player since the pandemic began, and raked in €178m in that time.
While Alaba arrived on a high wage, that is more than accounted for by Sergio Ramos’s departure to PSG, while Varane and Odegaard were also well-paid and have created some breathing room.
Madrid have other players they would be happy to sell this summer if they can, in Luka Jovic (€10m in wages), Mariano Diaz (€7m) and Ceballos (€3m), while ridding themselves of Gareth Bale would clear €30m off the wage bill this season.
However, the chances of that are slim as Bale will not find another club willing to pay him that, and Carlo Ancelotti has started the Wales star in the first two Liga games of the season to try and revive him.
If Madrid get Mbappe, though, he will soon find himself out of the side.
While the costs of renovating the Bernabeu are reaching towards €800m (£685m/$940m), the club has this paid for by a loan that must be repaid over 30 years, and does not impact the team’s capacity to buy Mbappe.
PSG, having just signed Lionel Messi and seen several renewal offers rejected by Mbappe, seemed like they might be open to an offer, although they were not interested in Madrid’s opening bid.
"We do not consider the bid to be enough. I am not going to confirm figures, but it is around €160m,” PSG sporting director Leoonardo said on Wednesday. "It is less than what we paid for him (€180m), but it's more than that - it's the way it's been done, disrespectfully.
"We have done everything for Mbappe to stay with us, and with a week to go we are not going to change the plan. Kylian is the centre of the project, but he is not above it.
"But if he stays or goes, it will always be on our terms. If he wants to leave he will leave, but on our terms like any other player.”
However, just because Madrid can afford Mbappe, it does not mean they are necessarily going to buy him.
Some believe Perez’s bid is a strategy that shows the player they seriously want him, while also appeasing fans who want more from their team. Able to cite PSG’s eye-watering demands, Madrid could leave the player in Paris and sign him next summer for nothing.
If that is the case, they will likely have to pay Mbappe a higher wage and signing on fee. The forward earns €18m-a-year at present, but some of PSG's renewal offers have reportedly reached as high as €60m.
Letting it go until next summer still might be the most sensible solution from Madrid’s perspective, but as we saw in 2019 with Hazard, sometimes Perez just goes out to get his man, and he has hoarded the money to do that now.
Maybe it wasn't so impossible after all.