SK Analyse: Do longer contracts make any sense in this day and age of football?
A view of whether longer contracts make any sense in this day and age.
The transfer window is now open and happening. Players from all across the globe are changing clubs according to their needs and choices. Transfers from one club to another are no easy business as there are several complications involved. Players need to agree to wages and contract lengths.The two clubs need to agree on a transfer fee and third party fees are also a part and parcel of the entire business. Image rights of the players based on their marketing ability is another big subject matter of discussion in the player's contract.
Legal matters need to be taken into consideration to see that the rules and regulations put in by the governing body in that country are followed in the entire process. In simple words, a transfer is far more complicated than what it seems on paper. If the guidelines for a particular transfer is not followed, the club is signing the player could come under the scanner of the legal body of football, including FIFA which has enforced transfer bans on Real Madrid, Barcelona and Atletico Madrid for violating transfer rules while signing youngsters.
A big subject matter which comes into consideration is the length of the contract which the player holds at his existing club. A longer contract usually means the club will not let go of its player easily enough. It is a situation which reflects that the player had initially thought of staying at the club for quite a considerable period of time.
However, living in the age of hefty TV and sponsorship deals – clubs are getting financially healthier as they have more sources of income in general with each passing day. Clubs, in general, are trying to sign players, especially the highly rated ones on contracts that run at least four to five years with some like Real Madrid offering their new recruits six-year deals. Many of these contracts also feature hefty buyout or release clauses.
The length of contracts
Contract lengths are often beyond normal lengths just to ward off potential suitors. For example, homegrown Atletico Madrid star Saul Niguez had his previous contract at the club till 2021. He recently signed an improved contract which increased his current wages and also keeps him at the club till 2026. These contracts particularly define that the club is unwilling to sell the player and the player himself sees himself donning the jersey of the club in the years to come.
Long term contracts have got quite a number of benefits, more so from the financial aspect of the game. For example, a player especially a youngster who is unable to find much game time in the first team can go out on a loan move for a season or two and get regular minutes on the field to find form and progress in their career once again.
This can also be made applicable for players who've returned from a severe long term injury. A long term contract signifies that the club trusts the player and the player believes in the project of the club and is willing to be a part of it in the days to come.
Top clubs like Real Madrid and Barcelona are doing this on a regular basis now. They're keeping their youth academy products by signings them to long term contracts and loaning them out so that they get regular game time so that they can break into the first team when they return. If the club finds him not up to the mark, they can, of course, sell him off and make some money out of the transfer.
Another important aspect of a long term contract is the finance related to it. If a player is bound to a club by means of a long term contract and another club wants to sign him, the club can charge heavily by slapping a hefty price tag on the player far greater than his market showing its unwillingness to sell.
So even if the club sells, it may or may or may not be beneficial for the selling club from the sporting point of view – it depends on how the money earned is invested again but from the financial point of view, this is always a plus point for the short term at least. For example, North London based Tottenham Hotspur invested the money they earned from the sale of Gareth Bale to Spanish giants Real Madrid well and are reaping the benefits now from efficient long term planning.
Meanwhile German Bundesliga side Vfl Wolfsburg are still struggling to find consistency after the exit of Belgian star Kevin de Bruyne to English giants Manchester City as they could not cope up well with his departure even though they were compensated sufficiently for it.
Living in this age where things can happen very fast. Circumstances, where the player can fall out with the club and its management, can occur. In such situations, the player can be sold off to another club. Similarly, certain situations might arise where the player wants to leave because he has better offers in sporting or financial terms, the owning club can sell the player at high prices rather than let him go for cheap.
Hence we can see, that long term contracts at times carry no meaning but this is definitely the way to go to maintain stability in the club from the financial point of view as ultimately finance is what which keeps you alive in the market. Because only if money is there, a club can function well, expand and become bigger and competitive in the days to come.