Football is a global marketplace and players are constantly on the move, in the process huge amounts of money is spent as various football clubs scramble for the signatures of some of the best players.
Professional players sign contracts with clubs and the duration of the contract is usually between two and five years. If a player signs a deal with a new club before the previous contract expires, the new club pays compensation to the old one. This is known as a transfer fee.
Football transfers usually happen twice a year. According to FIFA regulations two annual periods are set, during which clubs can buy or sell players, known as transfer windows. The longer transfer window falls between the end of a season and the start of a new one. While the shorter one falls mid-season, but the exact timing is set by individual countries’ football associations. In many European countries the summer transfer window closes on August 31.
For a transfer to materialize, the player, their agent, the club and their lawyers must be involved to thrash out details of salaries and bonuses. It is after these things are sorted that the player will undergo medical examinations to check if they are fit to play. If the medicals reveals previously undetected injuries, it can affect the size of the transfer fee. When a transfer deal finally happens the money is usually not paid to the player, the buying club pays the money to the selling club to secure the player’s services.Then a substantial part of the money is paid to the player’s agent and some other persons who might be involved in facilitating the deal.
The buying club will then pay the player’s wages and hope to make a profit off the player’s name and image. Image rights can be a big sticking point when negotiating contracts. Clubs generally demand the exclusive right to control how images of the player appear in advertising and publicity. But players are reluctant to give up lucrative opportunities to earn ad revenue. So all parties must strike a deal – for example, the proceeds from using the player’s image are to be split 50/50 between player and club.
Clubs make a lot of money from merchandise, so it matters a lot whose names are on the shirts they’re selling.
There are also cases of free transfer,a free transfer is when a player moves from one club to another without a transfer fee being exchanged. Free transfers usually occur when a player’s contract at a club is expiring or has expired.
Players are free to negotiate with other clubs without their old club receiving a transfer fee when there are six months left on their contract. Such a transfer is sometimes referred to as a Bosman, after the 1995 Bosman ruling.The case was an important decision on the free movement of labour and had a profound effect on the transfers of footballers – and by extension players of other professional sports – within the European Union (EU).
The decision banned restrictions on foreign EU players within national leagues and allowed players in the EU to move to another club at the end of a contract without a transfer fee being paid. The ruling was made in a consolidation of three separate legal cases, all involving Belgian player Jean-Marc Bosman:
There is also transfer request,a transfer request is a formal appeal made by a player to the club they are under contract with to facilitate a transfer to another club.If a club does not want to sell their player and repeatedly rejects transfer bids, a player may opt to issue a formal transfer request in defiance.
Transfer requests usually serve as a sort of ‘come-and-get-me’ plea and are often designed to make public a player’s dissatisfaction with their current situation.
The question now is how do football clubs generate revenues to finance these transfer deals. Burgeoning TV revenues are one of the main sources of income for football clubs.The Premier League recently agreed a three-year renewal of TV broadcasting deal with Amazon, BBC, BT and Sky. The deal is worth £4.7billion and will run from 2022 to 2025, this is the most lucrative television deal ever signed in professional football. In the UK, BT and Sky now pay the Premier League more than £10m to screen each game.
This extra spending power has filtered into higher transfer fees. Some argue that high transfer fees are bad for the game. FIFPro, the footballers’ union, called the Neymar transfer ‘anti-competitive’. “Football is ever more the domain of a select group of rich, mostly European-based clubs,” former FIFPro general secretary Theo van Seggelen claimed in a statement.
Escalating transfer fees have “helped to destroy competitive balance”, he said, because only a few top clubs – such as Manchester United, Real Madrid or Bayern Munich – can afford to buy elite players. They then dominate the leagues, whereas poorer clubs don’t.
With these kinds of huge revenues, transfer fees will keep getting bigger and top clubs will keep spending huge sums to get top players that will give them a competitive edge, and help to bring in more silverware that ultimately give the clubs more prestige and a global fanbase.