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The business of football - what do you want to know?

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Beamrider

Beamrider

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Afternoon all. I am a long-time lurker making a first post. Until recently I was working within football and I haven't posted until now as I've been wary of giving away anything that would be confidential or sensitive.

So a question for you, are there any particular aspects of how the football business works that you'd like to understand a bit more? e.g. transfers, player contracts, commercial deals etc.

I can't claim to know everything, but would be happy to provide whatever insight I can if you want to offer up some topics. This will be mainly generic rather than specific to any individuals or clubs within football. I will be happy to give some comment on how I think some of these issues will affect LFC, which will might help explain some of the club's decisions in recent years, but this will only be my speculation.

Please don't ask who I worked for or what I used to do as I won't be telling. Think of me as kind of a boring, suited version of the secret footballer, a "Scouse Rambler" if you like...
 
gene hughes said:
Transfers are so weird.
Click to expand...

I like "swap deals" the best.

"We don't want this player. Do you want him? Who do you have that you don't want, that we might want?"

I imagine it goes like that, anyway. Then Sam Allardyce drinks a pint of gravy mixed with wine.
 
This beamrider's taking his time. No wonder he doesn't work in football anymore.

Time is money, beamers! GET ON WITH IT.
 
I'm trying to post a reply here (funnily enough I had something prepared on the transfer question) but 6CM thinks I'm spamming. Any ideas on how a noob would get around this (it's a long summary and I'm trying to copy and paste rather than re-type)...
 
OK, trying to do this piecemeal. Please save any questions until I've finished.



Short version:

Transfers will be more dependent on cash than profit. Most transfer spending is spread in instalments over 3 years so every transfer will affect the year when it takes place and the next two years.

Since cash doesn't always equal profit, clubs may be able to spend in years when they've made no profit or not spend in years where they made profit. For example, with LFC, we've not started repaying the loan for the Main Stand expansion and are spending money on the training ground. We've also still got instalments to pay on some big transfers (Keita, Alisson, Van Dijk) whilst our incoming transfer money (Coutinho) will be due to dry up soon. As a result, even though we had a good season last year and made a large profit the year before (due to the Coutinho sale) we may not be flush with cash. This would explain why we didn't spend much last year.

More to follow....
 
Example transfer. Let's say a club is signing a player for a fee of £40m and the player is getting wages of £120k per week on a 5 year contract.

The basic fee will probably be split into 3 instalments of £13.3m - one payable at the time of the transfer, and then 2 further payments after 12 and 24 months.

If the transfer is from an English club, the club will also pay a levy of 4% of the total fee (£1.6m) to the FA. This is payable in full, up-front. The money paid to the FA funds its expenses and the player's pension fund. In theory, some of this could be refunded if the FA has a surplus.

For an international transfer, a different regime (solidarity) applies. The applicable percentage is up to 5% (depending on the player's age) and this is shared with the clubs responsible for the player's development. This is payable by the selling club, but it may be passed on to the buying club by way of an increased fee (e.g. they might insist on a fee of £42m, so they have £40m left after making the deductions). When you hear about small clubs getting a windfall from a big deal, it is usually due to solidarity.

More to follow...
 
Agents fees

Precise amount of an agent's fee varies wildly these days. 5 or 6 years ago the agent used to get a total fee of 5% of the player's guaranteed salary, but figures of 10%+ seem to be common now.

So in my example, if we go with 10%, the agent's fee would be 10% x £120k x 52 weeks x 5 years = £3.12m. Half of this fee is likely to be due from the player and the player will usually expect the club to pay it for him. This will bring tax implications into play which more than double the cost of the player's half of the fee - the total agent's cost could become around £5.3m.

Like the transfer fee, this will usually be split into 3 annual instalments.

So for a fee of £40m, you can add about £7m in additional costs. The payment profile for this will be:

Year 1 - £16.7m (because of the extra £1.6m levy)
Years 2 and 3 - £15.1m

Consideration of impact on LFC to follow...
 
So looking at LFC, in recent windows we've had some major spending on Keita, Alisson, Van Dijk, Salah etc. We've got cash going out on training ground, loan repayments etc.

What that means is that last summer there's a good chance we didn't have any cash to spend and that's why we had a quiet window.

This summer, some of that historic spending will run out, meaning we may have a bit of cash to splash about.
 
OK, appreciate the banter and all that. Trying to give you some insight. If you don't appreciate it that's fine. Just might help you to be able to speculate on what the club will do next from an informed viewpoint that's all.

As a lurker, I have found it quiet amusing to read all the stuff you guys speculate about. Some of it is close to the mark, a lot of it is way off.

Make of this what you will. Obviously, for a fan, passion drives our interest in football, but like it or not money talks. If you want to really understand where football is going, then this insight will help.
 
Modo said:
My thinking as well.

OK, I'll bite...

How does a team submit a transfer bid?
Like who do they call, fax, email or whatever...
Click to expand...

Honestly don't know on this one, probably a mix of all of the above. In theory, managers won't be involved, and negotiations will likely be between chief execs or directors of football if there are one. Manager's will be kept informed and consulted but won't engage in the admin. As with any business deal, you'd expect calls / meetings to negotiate and then follow-up formally in writing. The faxes are probably mostly an invention of Sky and the like - I'm sure scanned documents will be more common these days but you'd be surprised at how unsophisticated some clubs are, especially in smaller leagues. You'll be pleased to know faxes do still happen.
 
momoWASboss said:
Is there really someone at the club who goes round handing out hush money to slags who was banged by a player?
Click to expand...
I was speaking to a fellow who works in maritime law, someone he went to uni with works for the law firm that Beckham uses. Appaz he had them write him a shagging contract that he gives out to women that he wants to shag so they don't spill the beans.
 
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