Journalists get 1% of transfer fees
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| Lifting the lid on journalists and transfer stories |
The public have a huge misconception over journalists, who are not like they used to be when they relied on their sources. Today, especially at Tottenham, those sources have dried up. They are no longer allowed to give out transfer information, indeed the ITK a few years ago said Daniel Levy would sack anyone found leaking it.
The result was information did dry up and remains very dry. Journalists now get their information off the Internet, particularly from abroad that they then repeat over her, be it naming the source or claiming it as their own. Most journalistic pieces now are simply opinion or repeating what is reported elsewhere.
Transfer Talk
Domestic and UEFA financial regulations prevent clubs from spending much more than they earn.
The general fan ignores this, often demanding their club spend as much as Manchester United, Chelsea or Liverpool, when if fact regulations make that impossible.
How does a club calculate player costs? If we understand that then we can judge which players provide value to their clubs and which do not.
Journalists get the financial details of about 1%, in other words, they do not the financial details of 99% of transfers, they simply guess figures. The 1% they do get will still vary depending upon which side provides them with the information, through a source they have developed over time.
Let's look at an example. A club source might give a transfer fee as the initial figure without add-ons for performance, achievements, appearances, all the bonus payments that we have recently discovered are some of the best in the Premier League at Tottenham. Spurs would still pay the selling club set fees for these pre-determined add-ons.
A selling club source might give the whole fee including add-ons, whether they are likely to be triggered or not. There were £4 of add-ons in the Eric Lamela deal and over £20 million in the Anthony Martial deal at Manchester United. If memory serves, the fee without add-ons was £38 million.
A club might give the basic salary a player earns, while an agent might give the figure including image rights and bonus payments. Again you have two entirely different figures.
Journalists over here tend to want to include all add-ons into a transfer fee and report that, while in Europe they report the basic fee, thus we get differing figures, which let's face it journalists don't check. Some of them can't even be bothered to convert euros to pounds, they just change the currency sign!
Tottenham do not leak out information, indeed a few years back Daniel Levy tightened the information being leaked out of the club.
reports from abroad are from the selling clubs or agents perspective while original reports over here are usually from a buying clubs perspective, thus the information differs.
No club has ever recouped a players transfer fee through shirt sales. A kit supplier, in our case Nike, get around the industry standard of 85-90% of shirt sales revenue.
If a club sells 300,000 shirts at £70 a time, that's revenue of £21m, however, the club only gets 10-15% of this, so £2.1m - £3.15m. The fee a manufacturer pays a club is a licensing fee, thus they keep the difference.
Net spend is completely irrelevant to big clubs when calculating player costs. Take a £35m player purchase.
Every single football club in Europe’s top eight football leagues will record a transfer fee as £8.75m in each of the next four years, not the £35m now, assuming the player has signed a 4-year contract. It would be divided over 5 years if it were a 5-year contract.
Moussa Sissoko, for instance, was £30m so divided over 5 years his amortisation (an accounting term) is £6m per year. His wages, assuming they are £90,000-per-week, come to £4.68m-a-year.
Sissoko, therefore, costs Spurs £10.68m per year. We don't know agents fees, image rights etc so they are measured in the same way to get this annual figure.
If a journalist tells you a club has a war chest of XYZ to spend then they simply don't know what they are talking about. Because of the calculation, we have just looked at 50% of any available funds are going to go on wages.
Figures of £100m and £150m have been bandied about, in reality, that is £50m to £75m available for transfer fees.
It is this annual player cost that is vital, what you need to know is how much a club has to spend on the total package.
Image rights are of massive importance. The image rights deal between the player’s image rights company and the new club he is signing for, comprises a significant part of the player’s compensation package and the overall cost to the club.
A player will get approximately an additional 20% of his wages, plus a share of the net profits the club receives from his appearance and endorsement activities for the club.
Let's use Sissoko. Now we don't know if the reported £90,000 wages include all these extras or not, I would suggest they do, but if they didn't then you are looking at an additional £18,000-a-week, taking the figure to £108,000-a-week.
You start to see how different the wage bill may actually look and the players who appear to be well underpaid may be earning a lot more than is perceived.
COYS
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