By Tony Attwood
The story goes like this. Premier Club wants a player who we are going to call Smithy, which of course is not his real name, and my apologies to any players called Smithy. Now Smithy is generally accepted in the market to be valued at, let’s say £40m Smithy currently plays for League One Club.
So it is obvious, Premier Club pays League One Club £40m and in return they get Smithy. Except for one thing.
Everyone knows that transfer prices are going up and up all the time, and so if Smithy really does deliver the goods in the Premier League he could quickly become worth far more than £40 Premier Club has just paid Little Club.
Little Club thus has a huge dilemma. They have mega debts and know they can’t hold on to Smithy, but they also know that all things considered he could be worth twice as much next year as he is this year.
So an extra clause is put in the contract which says, if Premier Club sells Smithy on within the next five years (and of course I am just taking these numbers as examples, it could be any number of years inserted in the contract) then half the amount they get for him above the £40m they paid for him, goes to Little Club.
To put this in cash terms…
a) Premier Club pays Little Club £40m for Smithy
b) Two years later Mega Spanish Club comes along and offers £100m for Smithy. Premier Club agrees knowing that in another two years Smithy will be at the end of his contract with the Premier Club and can leave for nothing. So now the deal kicks in. and the news is that Premier Club has sold Smithy to a Spanish club after just two years.
So Premier Club has made £60m profit on the deal, and under their original deal with Little Club half of that goes back to Little Club: Little Club ges another £30m. And of course that £30m is in addition to the £40m originally got for Smithy. In effect Little Club has cleared its debts and can now contemplate rebuilding one of its stands. It’s one problem is that it now has to pay tax on that profit, so it quickly starts spending the money to reduce their level of profit.
These add-on contracts can exist in all types of business where the value of a person or an item can increase in the short term and where there can be desperate buyers. And indeed deals like this can be the salvation of smaller clubs who find themselves sitting on big talent. As we see, the Little Club made £70m in this deal – and that might be a once in 20 years achievement, and keep the club afloat.
Now it is very rare for the media to get hold of and print details of a contract and this for two big reasons. First anyone working in football who is considered to be revealing contractual details will be in breach of his own personal contract. He will be sacked and is unlikely ever to be able to find another job in football. Clubs are of course rivals on the pitch, but when it comes to survival, smaller clubs all face the same issues, and they all know they are using the same techniques to survive. There is no benefit in revealing the activities of another club to the media or the Revenue.
Second the big clubs involved in such a deal never reveal details. because if they did they know they would never be able to get themselves involved in such a contract arrangement again. All contracts have huge penalty clause triggered if details are revealed – but actually getting such a payment invariably involves a court case and proving who said what to whom can be difficult.
What the media of course glory in is the basics that the club reveals: having paid a certain amount for a player and then sold him for more. That is enough for today’s tale, and the media’s view is that most football supporters are not interested in, or cannot follow the complexities of sell-on clauses.
And that’s not all that is hidden, for there is one other issue lurking within, and that is the agent. Of course most agents are decent, hard working people doing the best for their clients, but it is always possible for an agent to take commission on the sell-on part of the deal, if he or she was involved in setting that clause up. Even if it is just an extra 2% that can still keep an agent in fine wine for another year.
But there is still more, for agents live on reputation, and where lower league club players are seen to move on to greater things, part of the glory in that is reflected on the agent, so agents can become known for not just the first deal but also subsequent deals.
One of the issues that fuels all this is the belief that there are, lurking in Leagues One and Two, players who could flourish in the Premier League if only they got the right training. So stories circulate alongside lower league club agents telling top clubs that another Premier League club has already offered £x million for a particular player and others are circulating…
In such situations tales are invented and most stories about who is moving where and for how much are fanciful. In fact for several years Untold tracked every rumour we could find in the national media of players that Arsenal were looking to sell. We did it over two summer windows and for each on we found 97% of those transfers rumoured on line, actually never happened.
Now many correspondents have wondered if such fantasies are just invented to fill up website and newspaper space. And the answer is yes some are – but only up to a point. They are also there as lower league clubs ceaselessly try to hype up the value of players on their books while throwing the Inland Revenue off the track. Yes sometimes an £80m player does go for £80m, only that money won’t be paid all at once. And most likely it becomes dependent on the player’s subsequent performance – although that bit of the deal seems never to make the headlines.
In fact it is almost all fantasy – who is leaving, who is going where, and how much for. By and large it is fairy stories and in the midst of all this clubs that don’t buy the player they are tipped to be getting are portrayed as failures, others are seen to have paid too much, while other clubs are seen as being completely incapable of selling players that (according to the media) they don’t want.
It is indeed a funny old game. And no one seems to say, “If the journalists are this good at spotting talent, and knowing how much a player is worth, why are they not working for football clubs?” Is anyone defrauding anyone else over transfers? Who knows.
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