Doing a Deal in England
Introduction
Within our latest series “How to complete a football transfer anywhere in the world”, we are delving into the unique differences in the football transfer market in each country. As well as every country having its own tax, employment and other laws to abide by, agents also need to understand a variety of different aspects such as the culture of each country, different club structures, salary and transfer budgets, the regulations of the leagues, work permit restrictions and more.
In this blog we will focus on how to complete a transfer in England, under the English Football Association regulations, of a player to the English Football League or the Premier League.
The Main Differences
The English transfer system is one of the most well documented in the football world. Every year there is media speculation, coverage and exposure of the two English transfer windows as it involves clubs that are some of the most widely supported global giants.
One of the key aspects that differs from every other football market across the world is the currency. We will explore this in more detail later but we can emphasise here that agents must appreciate they are dealing and discussing possible transfers in terms of British Pound Sterling (£) rather than Euros or Dollars.
Another unique difference of the English transfer market that also provides a great opportunity to agents is the wealth of the leagues, particularly the Premier League. Agents ought to be aware that the average salary in the English Premier League is over £3million every year. Additionally, the top clubs are able to pay significant transfer fees and will have expansive budgets, especially in the summer transfer window between seasons. Some of the top clubs in England have been known to occasionally spend upwards of £100million in a single window.
The revenue generated from TV and broadcasting rights is evenly distributed in England. This means that even the smaller clubs are financially very strong, especially in comparison with many foreign markets. Combined with lucrative sponsorship packages, it creates an affluent football market that is attractive to players and agents not just for the career opportunity but also the financial rewards.
Some clubs in the second tier and below are also financially robust. The English Championship (second tier) can often pay players above what they could earn in other well known top flights across the footballing world. England is a lucrative market that, if agents understand how to deal within, can be an attractive option for them and their clients.
The Transfer System Structure
England has two transfer windows each year. A month-long mid-season window that begins in January, and a longer window between seasons that is officially open for around 80 days from June until the beginning of September. During these times, clubs are able to register players into their squads for the rest of the season or the upcoming one.
Significantly, the reality is that the English transfer market is rarely quiet. To get a deal done, an agent will usually speak at length with clubs and their clients between transfer windows. Often a deal is agreed in principle well before the window officially opens. It is then that completion and the acts of completing medical, media duties and signing contracts takes place.
In General, football clubs in England are highly professionalised and will have transfer strategies and plans that they will stick to. Some clubs prefer to identify younger, unearthed high potential talents for good value that they believe can improve their squad and will develop and perhaps be sold for a much higher price as shrewd business for the club. Others, the bigger and wealthier clubs, will target well-known marquee talents to bring them trophies. Agents need to understand where on this spectrum their client lies and identify the most appropriate clubs. Pinpointing the right opportunities to target can make the chances of completing a successful deal far more likely for the agent and the client they’re representing.
For the clubs that compete in the higher tiers of English football, agents should identify how each club conducts their own independent transfer system. This is because they will often have a high-functioning in-house transfer department. Different clubs have different hierarchy structures for their transfer business, which can be led by a Head of Recruitment, Technical Director, Sporting Director and Director of Football. Although each title is a different variation, these roles are very similar in many ways. Other individuals such as the Chairman and Chief Scouts will be heavily involved in the club’s transfer system, which will also be overseen and scrutinised by the owner(s) of the club. The transfer team can be extensive and includes additional members such as scouts, analysts and lawyers. As an agent, identifying and knowing the right contact who has at least a ‘decision-influencing’ level of authority inside the club will enhance the likelihood of completing a deal.
Financial and Payment Details
As we touched upon above, one aspect that stands out about the English market is its financial reputation. Agents will always seek to complete a deal here as often their client will have a desire to compete and succeed in the historic and iconic English leagues, owned by some of the wealthiest owners in the game, and the monetary rewards for doing so is good for both the client and the agent themselves.
Schedule 2 is perhaps the most important document for agents looking to complete a successful and desirable deal in England. Whilst the first part of an employment contract in England is a standardised contract provided by the FA, schedule 2 is the second element of the contract which outlines every negotiable aspect for an agent. It is within this section where salaries will be agreed upon as well as the opportunity for agents to seek to include additional components such as winning, goal, clean sheet, and league position bonuses or other important elements such as a release clause. These negotiable figures are regulated and determined within schedule 2.
As mentioned, every transaction and deal is done in Pound Sterling. When striving to complete a deal, agents need to ensure they appreciate the true value of what is being offered to them and the client as it is in a unique currency with differing exchange rates. Completing a deal is difficult but completing the right deal is what is most important for the client and for the agent.
Another factor that affects this is the tax rate. Footballers are subject to income tax in England, as a member of the general public and will be obliged to pay the necessary sums to HMRC (the English tax system). The income tax is in a tiered system, increasing as a player earns more. For the top footballers, any gross salary they are paid over £125,000 is subject to a 45% income tax requirement. This needs to be accounted for when negotiating the financial terms of an employment contract and completing the deal.
Image rights for the top players transferring to England is a key component of contracts and financial negotiations for agents in the market. This is particularly common for the top players in the Premier League. Agents need to be aware that in England, a portion of the negotiated salary can be paid directly through a player’s image rights company. This is overseen by HMRC and currently permits a maximum of 20% of the remuneration value of an employment contract to be paid the the ‘company’ set up to hold the player’s image rights.
Significantly, England differs from other football markets in that all financial details will be quoted as a ‘gross’ value. Agents will negotiate a gross deal rather than net, unlike the global markets they may be used to working in. It is not unheard of for foreign agents to make big mistakes by confusing net and gross payments due to this unfamiliarity.
Player employment contracts in England will usually consist of a similar structure, regardless of the club you are dealing with, as the FA provides a standardised template that clubs use. However, additional financial terms such as bonuses, image rights agreements, sell-on clauses, and agent commissions, will be added and altered to each contract. When completing a deal in England, agents should outsource specialist legal advice from an expert in English contractual and employment laws to ensure that everything within the contracts is legally sound and that there will be no surprises or disappointments for them and their clients.
VISA Requirements
England is part of the United Kingdom, which has recently left the European Union during BREXIT. As a result, rules and regulations regarding the transfer of foreign players into the league have changed. A foreign player hoping to play in England is subject to Governing Body Endorsement criteria and, more recently, ESC Player criteria. As an agent, it is important to be able to accurately judge whether your client satisfies the GBE or ESC criteria and if the club is able to register another ESC player. More information on this can be found in our blog.
This area is vital as VISA requirements are integral to the English transfer system and the purchase of foreign players by clubs. An agent can undermine their professionalism to clubs if they offer players who cannot be granted a VISA to play in England or the club have already maximised their ESC player capacity.
Additional points to note
Football is an integral part of English culture and society. There are many good level football clubs spread across the small country and even teams in the 6th tier of English football will have a community behind it and boast healthy attendances at home games. Therefore, when completing a deal for a client in England, agents must also note the significance of the fans of the club for how successful their client may be here.
English fans are very passionate and generally have a voice and opinion which is appreciated and considered by the football clubs. It is no surprise therefore that some of the most successful foreign players that have moved to England are those that have engaged brilliantly with the fanbase. To complete a deal in England, agents need to encourage their client to interact with the fans and present themselves in an authentic manner, to gain the support of the fans. The backing and recognition of fans can, perhaps surprisingly, influence whether a potentially tentative deal for a player gets completed or not.
This leads me on to the next additional point for completing a deal in England… the media. The English media is infamous and its coverage of football players can often reinforce this perception.
When a player is rumoured with a transfer to an English club, the media will begin to investigate the player and an array of different articles will begin to appear on various multimedia platforms. Misinformation and controversial stories about a client in the English press can have an effect on whether a deal is completed. The agent needs to not only ensure that press coverage of their client is positive, but it also helps to have good contacts with journalists in the region. Clubs pay attention to what is written and published within the media and positive stories can make a client more appealing to a club and help move the deal one step closer to a desirable conclusion.
Something which can help a client and the agent in regards to the media, and for English football in general, is simply possessing a good grasp of the English language. The language is the most commonly spoken in the world and this remains the case in football. Particularly for an agent seeking to do a deal in the country, speaking English is an absolute necessity or it can make negotiations and discussions extremely difficult. Furthermore, clients and players should be encouraged and supported in learning English from the earliest stage possible during their youth and the beginning of their careers. If the client is able to speak English well, this can add to their appeal to clubs in England and will not be an obstacle to overcome in any potential deal. Once the player has moved to England, adapting to the new league will be particularly difficult if English is hard for the player to understand. Fluency in the language will increase the chances of success both for the agent in completing the deal as well as for the player in adapting to and thriving within the new environment.
In England, an international agent trying to complete a deal for a client here from a foreign country may encounter several agencies that are involved in a large proportion of business transactions in English football. This is something to be aware of as agents can consider partnering with these agencies to find the best opportunity for their client and also in understanding that some clubs have a large cohort of players represented by the same agency which may bring in additional factors to completing a deal. For agents, simply understanding the transfer market will help with deals in England but also understanding the agent landscape can be an important advantage.
Summary
In summary, as with many global football markets, there are many factories that influence the chances of a potential deal being successfully completed. The more knowledge and expertise an agent has of the region, the more likely it is that they will understand the best steps to take to complete a deal.
Finally, it is worth mentioning here that there are many agents based in England and so, to avoid mistakes and enhance their chances of a deal, foreign agents will often partner with local agents, or at least a lawyer, in England. They will generally have a better understanding of the intricate details of the market and benefit the agent and their client.
Don’t forget we are also running an online course providing the perfect preparation for how to pass the FIFA football agent exam on the 12th August. You can register for the course by clicking here. Alternatively, for readers based in Germany, we are also conducting an in-person event in Frankfurt on the 2nd September which you can register for by clicking here.