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04 Nov 2014 17:34:00
Hi ed, just a quick one if you had time? I saw a while back you posted a couple of times the different fees that were involved for completing a transfer of a player between clubs, this was very informative and shows just how complicated these things actually are.

My question is ( not asking for any figures or specific amounts ), if a club is interested in signing a player, who does that club contact first? Does the buying club contact the proposed selling club and enquire? or do they approach the agent and see if the player is interested in the move?
Thanks very much!

{Ed002's Note - A good question Molly and one where I can give you a pretty decent answer I hope. It starts like most in football with "it depends".

Way back in history, many transfers were the subject of phone calls between fur coat wearing and cigar smoking chairmen and managers with deals being done almost without reference to the players themselves. Deals were signed at motorway service stations and players would be given a rail ticket and the address of their digs up north, together with some change for a bag of chips. A few at a higher-level still operate this way and some managers still favour the direct involvement and the phone (Harry Redknapp for one). But in near all cases this is now history.

For many, many years buying clubs would typically approach and informally ask an agent (a) if the player is going to be available, and (b) would the player consider a move to the club. There may also be some broad discussion on the sort of deal that would be offered. If the answer is yes, it is then necessary for the club )possibly with the agent) to approach the player's club to ask if they would be willing to sell and if they would grant permission to speak to a player's agent on a formal basis and possibly even the player about actually making a move. This will typically involve either broadly (through an offer) or actually agreeing a fee with the player's club and responsibility for any significant costs (agents fees etc.). Once this has happened the club will be able to speak to the player's agent and perhaps the player himself to look at the package that will be involved and the contract itself. In some cases the clubs will agree the transfer which the buyer negotiates with the agent and then with the seller. This is what occasionally results in the press or whoever saying "terms could not be agreed". Much also depends in such cases on the way certain clubs do business. Certain continental clubs (particularly in Italy) who will drag these things out. However, this remains the most common methodology.

In recent years we have seen selling clubs making an agent aware that a player will be available and asking them to broker a deal wherever they can. This leads to agents (and representatives and hangers on) making unsolicited approaches to clubs to see if they would be interested in their players ("you want Mario Balotelli Mr Ashley?).

Keep in mind that many players are looked at and discussed at a high-level with agents and clubs; a subset of those have an offer placed; a subset of those involve discussions with the player's club; a subset of those involve discussions over terms, and; a subset of those go ahead.

As a quick refresher, transfer fees, what is paid by the buying club would typically include:

(a) Transfer fee - the big number.
(b) Any levy applied by the local FA – 5% for the EPL.
(c) Tax due on the transfer fee – typically this will be VAT (at varying rates across Europe) some or all of which should be reclaimable.
(d) Agent fees – this may be to one or more agents (as an example, Liverpool have spent £25M plus VAT on agent fees over the past three years leading to this window).
(e) Tax due on the agent fees – typically this is VAT at the local rate where the agent bills from – it is not reclaimable.
(f) Intermediary fees – this may be to one or more sponging leeches (what do you mean you have a super agent?) .
(g) Tax due on the Intermediary fees – typically this is VAT at the local rate where the Intermediary bills from – it is not reclaimable.
(h) Signing on fee to the player (possibly including non-reclaimable VAT if the player is VAT registered).
(i) Legal fees.
(j) VAT on legal fees which is reclaimable.
(k) Moving/relocation costs for the player.
(l) VAT on moving/relocation costs which is reclaimable.
(m) Paying up insurance costs to the selling club (sometimes waived).

What is paid by the selling club would typically include:

(a) If the player is under 24, a Solidarity contribution paid to his previous clubs responsible for his training - this is 5% of the transfer fee received.
(b) Any monies owed to the player if he did not request a transfer – again this is 5% of the transfer fee received.
(c) Any monies owed to the player in terms of his contract (typically outstanding owed wages (not future wages) and bonuses).

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