This article was published in SportsPro on 21 August 2017
Who said money can’t buy you love?
When any business pays for any asset – and, make no mistake, Neymar is an asset in many senses of the word – the paperwork is sure to follow and it is no different in football where the amounts involved are getting larger every year. There had been steady increases every few years in the fees that the top clubs were prepared to pay for the best footballers – but Neymar’s transfer from Barcelona to Paris Saint-Germain has, by all accounts, more than doubled the £89 million fee that Manchester United reportedly paid Juventus for Paul Pogba in the 2016/2017 transfer window.
There is, and always will be, a fair amount of admin related to transfers as footballers are transferred from one club to another. If they move to a club in a different country an international clearance will be required from the national association that governs the league that the player is departing and, once that is in hand, the player will be able to register as a professional footballer with their new club.
Professional footballers are, of course, employed by their clubs and, in addition to the international clearance, players will need to satisfy the legal requirements that would allow them to take up employment in the same way as any other employee in the country concerned, whether by way of work permit or otherwise.
By far and away the most heavily negotiated – and reported upon – agreements in a transfer are the agreement between the buying club and the selling club and the agreement between the buying club and its new player.
In theory, it is the agreement between the two clubs that starts the process and, without it, the whole deal comes tumbling down. But in reality, a lot may go on in the background to make sure that the transfer goes ahead. The clubs will, in their agreement, obviously settle on the fee to be paid and the payment terms but the selling club may also negotiate a sell-on fee so that if the player is transferred to another club in the future, the original selling club will share in that transfer fee. In certain cases, the clubs will agree that the selling club will have the option to buy back the player at a point in the future for an agreed fee.
While it is certainly the transfer fee that generates the headlines, players’ wages should not be ignored. Footballers receive weekly wages that make people with normal jobs wince. And with all of the money in football these days it is not just the top players that are earning those wages or the top clubs that are paying them!
In the leading European leagues – commonly listed as the Premier League in England and Wales, La Liga in Spain, Serie A in Italy, the Bundesliga in Germany and Ligue 1 in France – many clubs are paying close to two thirds of their revenues on players’ wages, leading some commentators to suggest that the current level of spending is unsustainable.
Whether it is sustainable or not, with that amount of money being paid, players – and their agents, who are now called intermediaries – often spend a considerable amount of time dealing with those payments. Much of the player contracts are in standard form and are set by the leagues’ governing bodies and deal with matters such as training and playing in matches, injuries, insurance and disciplinary procedures.
It is incentives, bonuses and image rights arrangements that are typically the focus of attention in the lead-up to signature. While team bonuses are generally non-negotiable, incentives and image rights arrangements are not one size fits all, and it is here that the intermediaries, club finance directors and the lawyers put the finishing touches to the arrangements.
And to add to the considerable stack of papers already in place, intermediaries are in fact not permitted to act for a player or a club in any transfer unless an agreement confirming the terms of their representation – whether they represent the club or player, or both – is in place.
There is no doubt that a lot of time is spent – and a lot of paperwork generated – behind the scenes to ensure that any transfer goes through successfully.
Alan Wetterhahn, alongside James Earl, led the multi-disciplinary team that advised Alvaro Morata in his move from Real Madrid to Chelsea earlier in the 2017/2018 transfer window.
James Earl, Partner, Fladgate LLP (firstname.lastname@example.org)
Alan Wetterhahn, Partner, Fladgate LLP (email@example.com)