The hidden costs of transfers and contracts revealed
Extract from Daniel Geey's Done Deal shows the hidden world of bizarre clauses and the true cost of a contract
By Daniel Geey
Last Updated: 23/01/19 2:26pm
WhatsApp negotiations, bizarre clauses and the true cost of a transfer. Football lawyer Daniel Geey's new book Done Deal opens up the world of multi-million pound transfers.
This is an edited extract from Done Deal: An Insider's Guide to Football Contracts, Multi-Million Pound Transfers and Premier League Big Business by Daniel Geey, published by Bloomsbury Sport on Thursday, January 24. Available for pre-order now.
Deals may be finalised and photographed in the boardroom, but the nuts and bolts and the details are negotiated on WhatsApp, after mountains of emails, sometimes in the early hours of the morning and after 40 calls to your client each day.
Read reports in the press, and transfers seem straightforward: a club targets a player and the deal is finalised. Easy. In practice, the process, from identifying the talent to signing the deal, can be complex. Back in the '80s and '90s, it was quite usual for players to discuss, negotiate and sign long-term contracts with their new manager, without the involvement of agents, chief executives, directors of football or chairmen. The opposite is now true. Today it is unusual that a player in the top four divisions is unrepresented.
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The cost of a transfer
Agreeing multi-million-pound transfer fees is only part of the challenge faced by a buying club. Working with various agents is also required, in order to agree a weekly wage plus a fee for signing on, as well as loyalty and performance bonuses. The devil is in the detail.
A transfer fee is usually paid in instalments: for example 50 per cent once the transfer has been completed, 25 per cent on the first anniversary of the completed transfer, and 25 per cent on the second anniversary.
Barcelona bid for Philippe Coutinho in the summer of 2017 for a headline transfer figure of £118m. Of this, only £82m was reportedly guaranteed, and that was payable in four annual instalments. The remaining £36m fee was contingent on, for example, Barcelona winning the Champions League and the player winning the Ballon d'Or.
It is important to be aware that the headline transfer fee quoted never usually refers to the investment that a club will have to make in paying significant wages over a long-term contract. A transfer fee of £35m, coupled with a salary of £26m, means very deep pockets are required.
In large Premier League transfers, the buying club will usually pay the commission to the agent on behalf of the player. This may be five per cent of the player's basic wages, and is usually paid in instalments.
A purchasing club must pay a transfer levy equal to four per cent of the transfer fee paid to the Premier League in order for the player to register with the Premier League. The levy helps fund the premiums due under the Professional Footballers Pension Scheme.
Football player contracts
The most important aspect for a player will be his salary. Sometimes this is based on a higher basic amount and a smaller variable amount. The variable figures usually relate to the number of bonuses a club may offer…
As well as receiving an appearance fee, additional appearance bonuses can be inserted so that a player's weekly salary increases once a certain number of first team starts have been made. For example, a player's salary will increase by £1,500 per week after 25, 50, 75, 100, 125 and 150 Premier League starts. Substitutes may be paid 30 per cent of the bonus.
Ranging from a few hundred pounds in the Football League lower divisions to £10,000+ in the Premier League.
A number of clubs do not include individual achievement bonuses. The logic is that goal bonuses incentivise individual behaviour, which may conflict with team aims.
There are still many clubs that provide a bonus - £5,000 per goal, say. Some Premier League clubs are reported to pay £10k.
If the player directly assists, he may be paid £3,000 per goal assist. Assist bonuses can sometimes be as valuable as goal bonuses to particular players.
Clean Sheet Bonus
A bonus of £5,000 could be paid.
- The great bake-off : Rolf-Christel Guie-Mien reportedly asked Eintracht Frankfurt to pay for his wife's cooking classes.
- Astronomical: Sunderland inserted a provision that stopped their Swedish international footballer Stefan Schwarz from travelling into space.
- All-out war: In 2002, amid threats of military conflict in Iraq, manager Bernd Stange asked for a release clause from the Iraq Football Association in case war broke out. It subsequently did and he left.
- Ski school: Stig Inge Bjornebye was forbidden from emulating his father, an Olympic ski jumper. Liverpool refused to let him ski when back home in Norway.
- Who needs friends? When Neymar played for Barcelona, his friends were flown to Spain every two months for an all-expenses paid holiday in Barcelona - a relatively common benefit among top players.
- The non-flying Dutchman: It was reported that Arsenal legend Dennis Bergkamp, who has a fear of flying, insisted on a clause in his contract to ensure he was not forced to fly on away trips.
- Make mine a large: Neil Ruddock, a defender playing for Crystal Palace, was reported to have had a weight restriction clause inserted into his playing contract in order to maintain his waistline.
- No red boots: When Rafael van der Vaart moved to Real Betis in 2015, it was reported that he could wear boots of any colour apart from red, the colour of Betis's local rivals, Sevilla.
The idea is that if the player is at the club for the times set out in his contract, he will receive a set amount:
"If the player remains at the club they shall receive a once-only signing-on fee of £100,000 in four equal instalments of £25,000 on 1 August in 2018, 2019, 2020 and 2021."
A club will provide a bonus to incentivise its players to stay for the season ahead. For example, a player may receive loyalty payments during his contract totalling £120,000, payable in three equal instalments.
A player's basic salary could be reduced by up to 50 per cent.
Squad Bonus Pool
The squad bonus pool is an additional amount of money to be shared between the players at the end of a particular season, depending on the success of the team.
In order to reward the players who contribute the most on the pitch during the season, a points system is usually put in place.
The array of clauses, stipulations and conditions make for complex negotiations. It's fair to say that the transfer fee headlines only usually provide a small glimpse into the nuances that make up a successful transfer and player contract negotiation...
This is an extract from Done Deal: An Insider's Guide to Football Contracts, Multi-Million Pound Transfers and Premier League Big Business, by Daniel Geey, which publishes on the 24th January (Bloomsbury Sport, £16.99).