Twice a year, the business of transfers comes around. Who goes where? For how much? For how long? While there’s much talk about the obvious questions, some other questions are not as regularly explored. How were these decisions made? What sort of discussion was held and by whom?

Most every football transfer includes four key parties: the selling club, the buying club, the player, and the agent. In the Venn diagram of malleable  self-interests for each of these parties, the center overlap is the place where a transfer happens (or doesn’t happen if a center cannot be found). These interests are certainly influenced by sponsors or other outside factors, but  these four parties are generally the most consistently influential. In theory, the process is quite simple. The buying team offers a price that the selling team agrees with. The player hashes out a wage, starting bonus, and benefits agreement with the buying team (generally through the agent). The paperwork is done, and there you have it – a transfer. But transfers are almost never this simple.

The negotiations that precede an official transfer can take days, weeks, or sometimes even months. Each party attempts to leverage the situation to best benefit themselves. For example, the selling club may be aware that the buying club is in desperate need of a certain position that the player of in. The buying club may be aware that the selling club could use the money in obtaining a different player from somewhere else, or that the player is really pushing for the transfer to happen. Every situation is unique and extremely complex. Various factors such as the player’s estimated value, the length of time left in the player’s current contract, and the player’s personal desires push and pull the conversation of transfer markets various ways. In the end it becomes a balancing act both between parties and within each party of the pros and cons of the trade.

The Clubs

The first perspective to explore is that of the clubs. In every transfer, the selling club ultimately holds the registration to the player and thus have the power of the ultimate decision. However, this “ultimate decision-making” power isn’t as useful as it may seem. External pressures such as the fan-base, player interests, and other parties linked to the player can influence decision-making, and in the end, the club’s finances dictate what transfer should and shouldn’t be made. To avoid the nightmarish complexity of the economics behind the finances of a professional football club, each transfer will be described simply as a gamble in the context of many other gambles and factors.

Both teams are gambling on the player’s future performance. The selling team must ask which is more important: the immediate influx of money across the next ‘x’ years or the possibility that the player’s performance in the time left in the contract will be worth it. The buying team must ask a similar question – will this particular player contribute to the club that is worth the expenditure across the next ‘x’ years? Generally the value rating on a player will be higher than the offered amount by the buying team, so the selling team will negotiate clauses to the transfer as a safety net of sorts. For example, the addendum of a “sell-on” clause gives the selling club a certain percentage of the player’s next transfer. Other clauses can benefit the selling club if the player does well in the future seasons. The selling club has more asking power in these clauses if the player is desired by more than one club. While there are rarely ‘bidding wars’ by buying clubs (other clubs will simply match the original buying bid), the selling club can utilize the situation for a more favorable trade.

Ultimately, the selling and buying clubs must come to an agreement for the transfer to be made with inherent risk for both teams. Only the super-rich teams can really afford to say “no” without deeply considering the risk-analysis of the transfer.

The Player

While the club holds the registration to the player and thus the rights of the player as a professional footballer, the player’s influence on decisions isn’t trivial by any means. A player can always simply refuse to sign a contract if they don’t want to be transferred. This may cause backlash by the selling team in the form of not playing the player, but most often not. Assuming the player if fine with the transfer happening and the transfer has been agreed to by both selling and buying teams, negotiations follow.

Outside of the player’s interests, there isn’t as much that goes into negotiations between the player and the buying team as there is between teams (the player isn’t necessarily running an organization balancing funds and players year-round). However, there are some key things to be discussed. The player’s salary, of course, is the biggest thing to be decided and is dependent on the player’s previous salary, the player’s performance, and the player’s estimated value overall. Other details such as the length of the contract, sign-on bonuses, sponsorship details, contract breach details, etc. are discussed as well. In these extraneous details, the player can argue for favorable aspects of the contract. For example, the player can argue for a guaranteed buy price where, if another buying team offers ‘x’ amount, the player is free to go. Other examples of things the player can argue for are set minimum play times per season with the trade-off of a contract extension (extra year) if the minimum play time is met and release from the contract if the team is relegated. These additional clauses along the core details pretty much outline the contract that must be agreed upon by both player and buying team. The only real official negotiation between the player and the selling team is the possible loyalty bonus. If the player was the one to instigate the transfer by expressing desire to change teams, there is no loyalty bonus. However, if the player expressed no such plans and is being transferred solely due to the team’s interests, the player will receive a loyalty bonus from the selling team upon completion of the transfer.

However, with all the numbers and clauses being floated and discussed, the player may not have the ability to properly negotiate on his own. More often than not, the player will hire a professional agent to do the complicated negotiating for them.

The Agent

The exact role of the agent is a bit complicated. Sometimes the agent is simply a professional, hired to represent an agent’s interests during contract negotiations with their own interests being in the pay that comes with coming to an agreement. However, agents often progress far beyond simply professional tools. Sometimes the agent acts as his/her own businessperson, seeking out players to represent in efforts of expanding their ‘business’ by lengthening the list of clients. Other times the agent will go as far as being a close friend and advisor to players, helping them navigate the in’s and out’s of the business side of professional soccer. Their roles here extend much farther than simply negotiations. The agent could represent the player in commercial sponsorship opportunities, execute personal purchases, and even care for the player’s property. Thus the role of the agent ranges dramatically: from being a simple representative for a relatively brief period of time to being a core advisor and friend ingrained in the professional footballer’s life.

All in all, the details that go into contract negotiations are complex and varied. Much more could be said, but the obscurity and intricacy that would have to be explored warrants this as a discussion for another time. The essence of the contract negotiation is encompassed by the idea of a balancing act where many things must be juggled at the same time to come to an agreement.

 

Written by John Roh