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Transfer Window Opens imminently; What will clubs do if they have to pull the cord and open the parachute in 10 months time?

The Transfer Window opens on 1 July and that time of the year when all clubs will look to strengthen their squads and extortionate amounts of money are committed by Premiership Clubs, not only in transfer fees (and invariably Agents commissions) but major investment in Premiership contracts, where the ‘average’ salary is close to £50,000 per week.

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It is that time of the season again when the newly promoted clubs to the Premiership – Bournemouth, Watford and Norwich find themselves competing for players on a new playing field in the hope that who they buy will be worth the financial risk. On the flip side Burnley, QPR and Hull find themselves gearing for life in the Championship next season. Hull (having been in the FA Cup Final only last year and tasted European football last season) and Newcastle United (who only avoided relegation on the last day of the season) are two teams at the start of the season that few would have predicted to be in a battle for survival. From the individual club’s point of view one wonders if they had pondered the “What If’s”.

Apart from Bournemouth, the other clubs mentioned have tasted life in the Premiership and the financial consequences of relegation. Often the heartache of relegation led to staff losing their jobs and players being sold off to get them off the wage bill. Where clubs ought to be concerned is how they structure their player contracts when signing players, particularly where the club are being speculative in signing new players, none more so than Bournemouth, Watford and Norwich. Standard protocol should be that the players have clauses inserted into their contracts that if they were to fall into the Championship, players would see their salaries fall by as much as 40 per cent.

It was reported at the time, that Newcastle did not insert relegation clauses into all of the five French imports who arrived at St. James’ Park in the 2013 January transfer window. Mathieu Debuchy, Yoan Gouffran, Mapou Yanga-Mbiwa, Massadio Haïdara and Moussa Sissoko cost the club a whopping £31m in transfer and agents’ fees. The new television rights deal for showing Premier League matches means that Premiership teams may receive £60m – a £14m increase in income. This only expands the financial gap between the Premier League and the Championship. With broadcast revenue accounting for around 40% of the club’s total income and each place dropped in the Premier League previously costing the club £750,000 per place, the new TV rights package has bumped this figure up to £1.5m. The problem for any team coming up from the Championship is that they have to pay over the odds to attract players with Premiership experience.

The plight of QPR demonstrates that the club’s bargaining position is not a strong one as it was reported they had to leave out relegation clauses to ensure players would sign. The financial sucker punch is that players on long term contracts and inflated wages make them difficult to move on. Perhaps the worst example of a player wishing to see out a long term well paid contract is that of Winstone Bogarde; the former Dutch international only appeared eleven times during his four-year contract with Chelsea, reportedly earning £40,000 a week during this period. The Blues even won a domestic trophy during this period triggering a bonus payment in agreement with his contract, despite Bogarde not featuring at all that season. Bogarde himself sums up the motivations of a footballer with a small window of opportunity to secure long term lucrative:

“This world is about money, so when you are offered those millions you take them. Few people will ever earn so many. I am one of the few fortunate’s who do. I may be one of the worst buys in the history of the Premiership but I don’t care.”

So there you have it, in the utopian world of Premiership football the financial bubble never bursts, but if it does…………………..!

For advice on sports contracts or contractual matters, don’t hesitate and speak to the Choix Team.

Jim Pearson

Choix Consultant

#OneChoiceOneTeam

0845-0348984

info@onechoix.com

www.onechoix.com