Thursday, 4 June 2009

Transfer Deals Explained

author: Gary Jacob
source: The Times Online

date: 1 June 2009

We are wading into another hotly debated transfer season. It seems to matter little whether our team wins or loses, new players always seems necessary to keep the team fresh and the extent to which they should be brought in, the current players whose deals should be renewed, the transfer fees, player salaries, etc are questions which fans will ponder, argue and agonise over. The following article published in the Times Online outlines some of the procedures, usual practices and events related to transfer deals and player contracts.

How are players transferred?

The permitted approach is for a club to contact a rival expressing interest in their player, but in practice the first contact is with the agent or player (which could be deemed tapping-up). The agent ascertains whether his player would be interested in a move, whether personal terms are acceptable, allowing the buying club to pursue their interest with better information. An agent may be asked to find a move for his player, who is surplus to requirements at his club.

What does a player receive in a transfer?

When a player changes club, he receives a signing-on fee, which could be several hundred thousand pounds in bigger transfers, but he waives that right if he has handed in a transfer request.

How is the salary calculated?

The player’s agent will know what similar players earn, especially at the buying club, and ask for a higher salary for international players. The salary should approximately move in line with a player’s valuation. So a player who moves for £50 million, for example, will not accept £20,000 a week, the average top-flight salary. The player may receive a yearly loyalty payment, possibly in recompense for ensuring that his salary does not exceed the club’s wage structure.

How is a contract structured?

A contract will include clauses to cover many eventualities. These cover points such as bonuses for loyalty, appearances, winning, drawing, goals scored, keeping clean sheets, finishing positions, qualification for Europe and winning trophies. A promotion bonus to the top flight could be about £100,000. A win bonus could vary between £1,000 for a lower club and £9,000 at a top club.

The contract may allow the player to renegotiate his salary if a new team-mate earns more, exercise an option for a new deal when he plays a defined number of matches and include an escape clause, above which a club are forced to inform a player of a bid for him. The contract may force a player to take a cut in salary if the club are relegated. However, clubs are often unable to insert this clause because the player would decline the move.

What could delay or break a transfer?

Being unable to agree personal terms, the length of contract, problems with a medical or the player has a change of heart.

Why do players often sign a new contract after intense speculation about their future?

If the player does not move, he will seek to match his salary with the transfer valuation placed on him when he was subject to interest. The longer contract protects the player’s value for the club, but equally the player’s salary will now be higher, so he can command more in future.

Why does information leak out about transfers or contract negotiations?

Agents and clubs want to steal an advantage. An agent could want to publicise interest in his player to obtain a better deal at his present club or to alert other sides that the player is looking for a move. Clubs may want to use publicity to inform other teams of their willingness to accept an offer for a player. A manager may talk about the transfer to put pressure on his chairman to complete the deal and prevent fans blaming him for a lack of buys or a player leaving.

Do players hold all the power?

It appears so. A club must balance up offering a lengthy contract, which protects the value of the player, but could become a burden if he flops and cannot be moved on. For example, Winston Bogarde sat out his four-year contract at Chelsea, where he earned £40,000 a week, after joining in 2000.

Can players buy out their contract to move?

Some players have threatened to use Fifa’s transfer regulations unless they are allowed to move. The rules state that if the player has signed a contract when aged under 28, he is entitled to buy himself out of the contract three years after the deal was signed. Andy Webster was the first player to invoke it, at Heart of Midlothian, but the rule has yet to be tested by a top player or a leading club through fear of the consequences of a legal ruling. For example, had Frank Lampard employed the rule to move to Inter Milan last summer, he would have almost certainly faced a lengthy legal battle with Chelsea, putting his career on hold. The fear for Inter would be that should Lampard win, it could open the floodgates for players from the Italian club to follow suit.

read the full and original article here

Graphic : Anatomy of a Transfer

Read more:
An evaluation of last year's transfer summer
2007-2008: The transfer fees
Proposal to limit spending on transfers and salaries

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