The transfer window is in full swing and clubs are doing their best to sign their top targets. The transfer window is the only thing that keeps the fans excited and gets them through this non-football period.
But how exactly a transfer deal happens is not known to most of the fans and there are a couple of myths regarding the same. Today, we take a look as to how transfer deals work in reality and also look at a few of the myths.
How do transfers work?
In any proposed deal, there are three key negotiations that take place – the negotiation between the buying and the selling club over the transfer fees, between the buying club and the player regarding his personal terms and between the buying club and the player's agent.
Technically, the selling club must first give permission to the buying club to go ahead and talk to the player regarding the move. But in reality, the buying club starts talking to the concerned player before receiving the green light from the selling club, which can lead to accusations of tapping up. This is what happened between Liverpool and Southampton regarding Virgil Van Dijk.
Many negotiations also happen through Whatsapp! Yes, you read that right, Whatsapp plays a key role in many of the transfers and why not. There are many advantages of negotiating through the app – everyone has a phone on hand, it’s easier than email, you can call anyone from any part of the world and the best part, you don’t have to change your contact details when you move to a new club.
This makes it easier for everyone to contact the player without having to go through the hassle of getting the new club’s contact information.
Do clubs recoup transfer fees from shirt sales?
This is a very common myth that has been going around for decades. To make it clear, it is not true. Kit deals are licensing deals and not sponsorship deals. The licensing deals help the kit manufacturers use the club’s brand to sell apparel. Clubs receive an annual fee – Chelsea received £60m from Nike, Manchester United received £75m from Adidas – and then around 15% of the revenue the kit manufacturer generates from shirt sales.
One might think that signing a star player would lead to selling of many new shirts. There is no doubt that signing a new player would lead to an upturn in the number of shirts sold, but more often, the case is that people who were already planning to buy a shirt, would opt for a jersey with the new player’s name on the back rather than the old one.
The kit deal is probably the most lucrative deal a club can sign. The manufacturers don’t pay the club just to have their logo on the shirt, rather, they make an investment that would yield them good returns. Example – Adidas CEO Herbert Hainer has projected that Adidas will earn £1.5 billion in the 10-year deal with Manchester United.
What if clubs start manufacturing their own shirts?
Now, you may wonder why clubs do not manufacture their own shirts and keep all the profits for themselves? It sounds easy – manufacture and sell. That’s easier said than done. Clubs don’t have the global distribution network to manufacture, ship and sell thousands of shirts every year.
They don’t have the same resources as Adidas and Nike. Why? Because they are football clubs and not kit manufacturers. To understand it better – Nike has earned almost £7 billion in just 3 months (March-May 2017), more than what Chelsea have earned in their 112-year history.
Many clubs even outsource logistics to their online shops, which is a very small operation when compared to manufacturing, distributing and marketing kits on a global scale.
What are Multiple Representation Agreements?
Let us understand this with a help of an example. Remember when it was reported that Mino Raiola acted on behalf of Pogba, Juventus and Manchester United in the Frenchman’s record breaking transfer. This is exactly what Multiple Representation Agreement is – agents act on behalf of multiple parties to make the deal happen.
This is commonly practised in the Premier League. Sure, there is a conflict of interest, but it is completely legal.
In the Lukaku agreement, Raiola acted on behalf of Lukaku with the buying club and also had a separate agreement with the buying club to act on their behalf with Everton.
The process to secure FA approval for double and triple representation agreements is simple and straightforward.
How does a release clause work?
The release clause is the agreement fee which the buying club has to pay to the selling club. But many times, even after meeting the agreement fee, the player is not sold. You may wonder why?
Well, there are two types of release clauses – actual release clauses and “good faith” release clauses.
In an actual release clause, the player will be sold to the club that meets the terms and conditions specified in the clause. Terms and conditions vary, but clubs structure it in such a way so as to prevent a direct competitor from activating the clause. Portuguese clubs generally set the release clause for direct rivals at double or even triple the amount set for other clubs.
A “good faith” clause is basically of no use as it merely obliges the selling club to consider the bid from the interested club and enter negotiations.
