Transfers exposed - Behind football's big-money deal

Liverpool Football Club - General Discussion

Postby SouthCoastShankly » Tue Aug 13, 2013 3:03 pm

Transfers exposed: the factors that make and break football’s big-money deals

Gary Jacob - The Times
August 12 2013 10:08AM

In the first of a three-part series unpicking the mystery behind player transfers, in football, Gary Jacob looks at the situations involving Gareth Bale and Luis Suarez to explain some of the most perplexing aspects of the transfer market.

Football transfers have evolved from the days of managers exchanging a brown envelope at a motorway service station. A little, anyway. There are still parts of a deal that are as rudimentary and unchanged since the year dot, but other aspects are more sophisticated to meet with financial regulations and a more demanding media and fan.

Gareth Bale is pretty certain to become the world’s most expensive player this summer while Wayne Rooney and Luis Suarez have grabbed the headlines in their determination to move clubs. Behind the proposed transfers, there are tactics to shape the public image of the situation, to unsettle the player and club to force a move and to raise or reduce the transfer fee and personal terms. Cloak-and-dagger transfer deals make for mistruths, rumours and counter-rumours – transfers are big business worth more than a billion pounds.

It would make a brilliant image if Daniel Levy, the Tottenham Hotspur chairman, threw up a fistful of £50 notes after selling Bale for more than £90 million, but that kind of stuff only happens in the east end of London, Glasgow and Liverpool.

What will happen next?
Levy will want the entire fee paid in cash now, so that he can spend some of it. Clubs rarely receive the entire fee up front, even in smaller deals, and will instead negotiate a payment schedule. In many cases, half of the transfer fee is paid now with the rest paid in instalments over the period of the player’s contract. If Tottenham needed money now, they could sell their IOU agreement with Madrid to a financial company at a discount of its worth. Like any transfer, Madrid will provide bank guarantees that the debt will be repaid.

How did we get here?
After their performances last season, Bale and Suarez were bound to get attention from bigger clubs, while Rooney has attracted advances because it became clear he was unsettled at Old Trafford. Their representatives may have been approached by rival clubs or may have sounded out other teams about interest in the player. Once things begin to move, the deal can accelerate. Agents do the unseen work on behalf of the player to put pressure on clubs to buy or sell. The player can stoke the fire by making suggestive or even blunt comments. For example, he might say: “It is an honour to be linked to Madrid but I am happy here,” or simply, “I want to leave”.

Football’s rules say that a club should contact a rival team expressing interest in a player and if a fee is agreed they are allowed to discuss personal terms with him. In practice, however, things happen in reverse.

A club first makes contact with the player’s agent to ascertain whether he will move and if personal terms can be agreed. If yes, they contact the rival club to try and agree a fee. Clearly they do this so that the player and agent are aware of the situation and can apply pressure for a move.  Also it would be embarrassing for a club to agree a fee and be rejected by the player. The agent may also try to help the selling club replace his player, to help push through the move.

There may have been months of planning involved in the deal. Madrid will have had people watching Bale to know what kind of player he is. Clubs often send scouts to watch rival teams and players, if they are scheduled to play them or with a view to making an approach for a player. Sometimes, though, things are more impromptu and a club is unexpectedly offered a player and then have to look at DVDs, possibly consider him on a short trial and have to make a quicker decision. Either way, mistakes happen and the player may not turn out as expected.

Why does information leak out about a transfer 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 teams that he is looking for a move. Clubs may want to use publicity to inform others of their willingness to accept an offer for a player. Managers may talk about the transfer to put pressure on his chairman to complete the deal and prevent fans blaming him for a lack of signings or for a player leaving.

What does a player receive in a transfer?
Hopefully higher wages. When a player moves club he also receives a signing-on fee and an annual loyalty bonus, which could be several hundred thousand pounds in bigger transfers. But he waives his right to any outstanding loyalty bonuses if he moves club having handed in a transfer request. Making a transfer request is simply a statement of wanting to go but it does not guarantee a move. Real Madrid often ask players they are trying to sign to put in a transfer request because the Spanish club believe it helps their negotiation position.

How is a contract structured?
Broadly, a player’s basic wage moves in line with their valuation. His contract is likely to include additional payments for loyalty, appearances, winning, drawing, goals, clean sheets, finishing positions, qualification for Europe and winning trophies. A promotion bonus to the top flight could be around £100,000. A win bonus could vary between £1,000 for a lower club to £9,000 at a top club.

The contract may include an escape clause, covering what happens if the team is relegated or when a rival club bids in excess of a specified amount. In the case of Suarez, the clause has been written too loosely and that has caused the arguments about whether he is entitled to leave when there is a bid in excess of £40 million.

The contract may also allow a player to exercise an option for a new deal when he plays a defined number of matches, or to renegotiate his salary if a new signing is paid more. The agreement may force a player to take a cut in salary if the club is relegated, although most players successfully resist the inclusion of this clause.

What could delay or break a transfer?
This could happen if the player is unable to agree personal terms or the length of contract, if there are problems with his medical or something as simple as the club or player changing their mind. A deal can also be hijacked by a rival team. Arsenal believed that they had a verbal agreement on price with Real Madrid for Gonzalo Higuain but the goalposts may have shifted and Napoli stepped in. Marlon Harewood was driving to sign for Wigan Athletic when Aston Villa made a call and he signed for them instead.

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 valuation placed on him by his club. In exchange, a club might want a player to sign a longer contract to protect his value in the event that they need to sell him in future. A player will do this as it guarantees him a higher wage for a period and clubs interested in him will have to offer him even more money in future.

Do players hold all the power?
Increasingly. A club must balance up offering a long contract, which protects the value of the player but is a burden if he flops and cannot be sold. For example, Winston Bogarde sat out his four-year contract at Chelsea, where he earned £40,000 a week, after joining in 2000.
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