The Agent's Best Friend
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Agents' fees, commissions data means nothing without more transparency
Every year, around this time, we get groundhog day as English clubs release the amounts they paid in agent fees. Whatever the number, it's nine figures and it feels huge. And, in unison, folks start moaning about the fact that millions have "bled out of the game" to a bunch of blood-sucking leeches (read: agents).
This year, Premier League clubs reported spending a combined $195.4m on agent fees between October 1, 2014 and September 30, 2015. That's up $22.6m from the year before. When you consider that overall transfer spend has actually declined -- according to Transfermarkt, it dipped from $1.4 billion to $1.26 billion -- it gets even more worrying. Why would agent fees increase by 13 percent when spending, a relatively reliable indicator of activity, decreased by around 10 percent?
Cue gnashing of teeth and pulling of hair as the commentariat get biblical and self-righteous on the role of agents, but maybe it's time for a reality check.
First and foremost, those commission numbers don't mean much. It's not that they're made up; it's just that without context, they're difficult to read. Commissions can be paid to intermediaries (the preferred term these days) in various ways.
Let's say I work for Ripondon Rovers (a fictional club, no need to Google it) and want to buy Carlos Kickaball from River Plate for $10m. Between my club and River Plate, we agree to pay commissions equal to 5 percent of the value of the transfer ($500,000) to the various agents and intermediaries involved. I can either pay River $10m and the middlemen $500,000 myself (in which case I'd show a spend of $500,000 in agent fees) or I can pay River $10.5m and then have them pay all the middlemen (in which case I'd be showing a big, fat zero in agent fees on that deal).
Or, indeed, anything in between. With more than half of transfer activity (by amount) involving clubs outside England, it's impossible to know how much clubs are actually paying. It could be more. It could be less.
Another factor is that this figure relates to what the clubs actually pay out in a given year, not what they commit to paying out. Commissions are often spread during the life of a player's contract, particularly when it comes to extensions. (This also makes sense: you don't want to pay Agent Andy 5 percent of Hank Hacker's five-year, $10m contract up front if you end up selling him in a year's time.)
For example, Liverpool's total agent spend was $21.5m. For all we know, it could include payments for commitments made three years ago or if they decided to "backload" commissions on deals they made this summer, the real number could be much higher next year.
In England, clubs don't actually pay agents directly. The Football Association acts as a clearinghouse for declared payments. They collect from the clubs, hang on to the money until it passes their money-laundering checks, and then pay out. These numbers reflect what goes through the FA. If a club owner has an off-shore slush fund and he's happy to pay an agent or another club owner off the books -- or as part of another deal involving, say, real estate -- the FA's clearinghouse will never know.
"I think for every pound that shows up in that list, there's maybe another 50 pence that does not," a British-based agent, speaking on condition of anonymity, said Wednesday. "It's just the way it is."
The fact of the matter is that the figures, in and of themselves, don't mean much at all. So why publish them?
In its 2013-14 Agents' Fees Report (PDF), the Football League said it "broke new ground for transparency in the football industry" and these payments should be "a matter of public record and debate." Something is better than nothing, I guess. But in truth, it's only a smidgen above lip service.
If transparency were the goal, they would itemize the payments and we would know who was paid for what deal and how much. And, in fact, we'd know how much the deal actually cost the club: none of this "undisclosed" nonsense. We might even discover that the same clubs use the same intermediaries over and over again for no obvious, discernible reason. Of course, that would mean treating fans like adults and recognizing them as stakeholders. Instead, clubs hide behind the lame excuse of "commercial confidentiality" and "competitive advantage" when, in fact, for most able-bodied agents or journalists, it only takes a couple of phone calls to get reasonably accurate numbers.
Richard Garlick, director of football administration at West Bromwich Albion, told the BBC that his club adopted a "sporting director" model to free themselves from the influence of agents. Having a guy on your payroll who knows the figures, the transfer market and the characters involved means you're not entirely dependent on agents, as many clubs are.
"We don't need agents to act for us, we can act club-to-club," Garlick said. Though, in fact, he concedes that in some deals it's inevitable while in other situations it's desirable. If you have a trusted agent working for you, you might be able to actually save yourself money -- even when you factor in commissions -- because you don't need to show your hand early.
The point is that agents serve a function and when club officials are honest, competent and accountable, there's no problem. Where you run into trouble is when clubs employ guys who don't meet all three criteria.
There's not much you can do about the first two. Dishonest people exist, it's a fact of life. So too do incompetent folks and, in fact, everybody makes mistakes. But that's where accountability comes in. When you have transparency, you're better equipped to have accountability and that allows you to spot both dishonesty and incompetence.
If that's the goal, we don't really need this half-baked meaningless junk which some are trying to pass off as "transparency." It doesn't really tell you much of anything. Instead, we need real numbers and real accountability. The folks who ultimately pay the bills -- the fans -- are, at the very least, entitled to that.
Every year, around this time, we get groundhog day as English clubs release the amounts they paid in agent fees. Whatever the number, it's nine figures and it feels huge. And, in unison, folks start moaning about the fact that millions have "bled out of the game" to a bunch of blood-sucking leeches (read: agents).
This year, Premier League clubs reported spending a combined $195.4m on agent fees between October 1, 2014 and September 30, 2015. That's up $22.6m from the year before. When you consider that overall transfer spend has actually declined -- according to Transfermarkt, it dipped from $1.4 billion to $1.26 billion -- it gets even more worrying. Why would agent fees increase by 13 percent when spending, a relatively reliable indicator of activity, decreased by around 10 percent?
Cue gnashing of teeth and pulling of hair as the commentariat get biblical and self-righteous on the role of agents, but maybe it's time for a reality check.
First and foremost, those commission numbers don't mean much. It's not that they're made up; it's just that without context, they're difficult to read. Commissions can be paid to intermediaries (the preferred term these days) in various ways.
Let's say I work for Ripondon Rovers (a fictional club, no need to Google it) and want to buy Carlos Kickaball from River Plate for $10m. Between my club and River Plate, we agree to pay commissions equal to 5 percent of the value of the transfer ($500,000) to the various agents and intermediaries involved. I can either pay River $10m and the middlemen $500,000 myself (in which case I'd show a spend of $500,000 in agent fees) or I can pay River $10.5m and then have them pay all the middlemen (in which case I'd be showing a big, fat zero in agent fees on that deal).
Or, indeed, anything in between. With more than half of transfer activity (by amount) involving clubs outside England, it's impossible to know how much clubs are actually paying. It could be more. It could be less.
Another factor is that this figure relates to what the clubs actually pay out in a given year, not what they commit to paying out. Commissions are often spread during the life of a player's contract, particularly when it comes to extensions. (This also makes sense: you don't want to pay Agent Andy 5 percent of Hank Hacker's five-year, $10m contract up front if you end up selling him in a year's time.)
For example, Liverpool's total agent spend was $21.5m. For all we know, it could include payments for commitments made three years ago or if they decided to "backload" commissions on deals they made this summer, the real number could be much higher next year.
In England, clubs don't actually pay agents directly. The Football Association acts as a clearinghouse for declared payments. They collect from the clubs, hang on to the money until it passes their money-laundering checks, and then pay out. These numbers reflect what goes through the FA. If a club owner has an off-shore slush fund and he's happy to pay an agent or another club owner off the books -- or as part of another deal involving, say, real estate -- the FA's clearinghouse will never know.
"I think for every pound that shows up in that list, there's maybe another 50 pence that does not," a British-based agent, speaking on condition of anonymity, said Wednesday. "It's just the way it is."
The fact of the matter is that the figures, in and of themselves, don't mean much at all. So why publish them?
In its 2013-14 Agents' Fees Report (PDF), the Football League said it "broke new ground for transparency in the football industry" and these payments should be "a matter of public record and debate." Something is better than nothing, I guess. But in truth, it's only a smidgen above lip service.
If transparency were the goal, they would itemize the payments and we would know who was paid for what deal and how much. And, in fact, we'd know how much the deal actually cost the club: none of this "undisclosed" nonsense. We might even discover that the same clubs use the same intermediaries over and over again for no obvious, discernible reason. Of course, that would mean treating fans like adults and recognizing them as stakeholders. Instead, clubs hide behind the lame excuse of "commercial confidentiality" and "competitive advantage" when, in fact, for most able-bodied agents or journalists, it only takes a couple of phone calls to get reasonably accurate numbers.
Richard Garlick, director of football administration at West Bromwich Albion, told the BBC that his club adopted a "sporting director" model to free themselves from the influence of agents. Having a guy on your payroll who knows the figures, the transfer market and the characters involved means you're not entirely dependent on agents, as many clubs are.
"We don't need agents to act for us, we can act club-to-club," Garlick said. Though, in fact, he concedes that in some deals it's inevitable while in other situations it's desirable. If you have a trusted agent working for you, you might be able to actually save yourself money -- even when you factor in commissions -- because you don't need to show your hand early.
The point is that agents serve a function and when club officials are honest, competent and accountable, there's no problem. Where you run into trouble is when clubs employ guys who don't meet all three criteria.
There's not much you can do about the first two. Dishonest people exist, it's a fact of life. So too do incompetent folks and, in fact, everybody makes mistakes. But that's where accountability comes in. When you have transparency, you're better equipped to have accountability and that allows you to spot both dishonesty and incompetence.
If that's the goal, we don't really need this half-baked meaningless junk which some are trying to pass off as "transparency." It doesn't really tell you much of anything. Instead, we need real numbers and real accountability. The folks who ultimately pay the bills -- the fans -- are, at the very least, entitled to that.
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