Making moves
Market is changing in face of record spending
There were eyebrows raised in parts of North London this week. Not because Danny Rose had been Googling Tottenham Hotspur’s transfer targets nor at Harry Kane’s failure to score against Newcastle United, instead it was the news that the former Spurs midfielder Paulinho had moved to Barcelona.
Rightly or wrongly, the consensus is that the Brazilian was a flop at White Hart Lane and many wrote him off further still when he left for Guangzhou Evergrande and the Chinese Super League (CSL).
A player moving from the CSL to one of the best teams in the world has generated a lot of opinion, conspiracy and conjecture – doubly so because he has been deemed a “failure” in the “best league in the world.” But there is one thing that is undeniably interesting about the deal: Paulinho apparently contributed 7.5 million euros ($8.8 million) his own money to ensure that the release clause was met.
Paying the difference
Release clauses are usually set at a level where too good for the selling club to turn down meets more than the buying club would like to pay. In Paulinho’s case that was 40 million euros and that was more than Barcelona were willing to pay for him. The solution was him paying the difference. Win-win-win: Paulinho gets to play at the Nou Camp, Barca get the player and the Chinese champions get the fee they deemed him worth.
It’s not the first deal this summer where a player has paid his buyout clause; it’s not even the first involving Barcelona or a Brazilian. Neymar’s move to Paris Saint-Germain for a world-record 222 million euros took the headlines for more than doubling the previous transfer record and the surprise that any club could afford to meet what was meant to be a prohibitive release clause.
It turns out that no club did. Barcelona stated that it was Neymar’s legal representatives who “made the payment of 222 million euros in the player’s name, with regards to the unilateral termination of the contract that united both parties.” Neymar may have had a helping hand from his new employers but it will go down as him buying himself out of his contract and we’re likely to see more of that, particularly in Spain where most contracts include a release clause.
Financial controls
Right now we’re still in the midst of a transfer boom but the landscape is changing. TV money, particularly for the clubs in England’s Premier League, and owners that are richer than Croesus keep driving fees upward and smashing transfer records but the specter of UEFA’s Financial Fair Play (FFP) lurks in the background. The rules were introduced in 2013 to ensure that clubs operated within their means rather than in debt and while this is a noble measure, in practice they have so far proved rather toothless.
Among this summer’s biggest spenders are Manchester City and – if they put Neymar through the books – PSG. Both have been hit by FFP fines before, in 2014, and given that neither is done spending this summer both are likely to be investigated next summer. PSG will be asked to explain how they can afford Neymar and it will be interesting how the club’s accountants report the deal. But even if they are found guilty of wrongdoing by UEFA, there will be plenty of incremental slaps on the wrist before they are banned from registering players for the Champions League or are kicked out of the competition entirely.
Stability
Even with all the money flying around the game, not all clubs are willing to spend like the owners of City and PSG. Many want to operate within their means and ensure a stable financial footing but what does that mean for the transfer market? It is 22 years this season since the Bosman ruling rocked soccer to its foundations and put power back in the hands of the players. Named after Belgian player Jean-Marc Bosman, the European Court of Justice ruled that he and other players rather than their clubs could decide where they would play once they reach the end of their contract. It revolutionized soccer as players moved for free and clubs diverted what would have been their transfer fee toward their wages. Clubs soon realized that they were better off selling the player before they entered the final year of their contract, when they became free to talk to other clubs, which in turn meant tying players to longer contracts in order to control the point at which they left. There are signs that perhaps this is also changing. Take Alexis Sanchez at Arsenal, a player who has been the subject of transfer speculation this summer. He is one of 108 Premier League players who will be out of contract next summer but Arsenal are keeping rather than selling him.
Changing attitudes
Arsenal clearly need Sanchez for this season and manager Arsene Wenger has acknowledged that it is a gamble to let him see out the final year of his contract at the Emirates, not knowing if he will sign a new deal, but one he is willing to take. Is this a glimpse into the future where clubs will allow their best players to run down their contracts? The financial reward for the player is clear but there are also clear benefits for the club.
For one, they get the player and they know exactly for how long. In the case of Sanchez, him on the pitch for Arsenal this season is worth more than the money he would recoup in the bank or having to identify, negotiate the purchase of and integrate a replacement into the squad with the season underway. Truth be told, there are not many players of the Chilean’s caliber and a replacement would necessitate breaking the club’s transfer record for the second time this summer.
It’s clear that the current boom is unsustainable and the market will correct itself – maybe it already is. Whether that means players buying themselves out of their contracts, contributing to their own transfer fees or everyone happily holding one another to the full terms of a contract before shaking hands as the player departs on a free, times are changing.