The Length of Playing Employment Contracts in Football: The Pros and Cons 

Introduction

The 2023 international summer transfer window was once more filled with enthralling transfer sagas and developments across many different markets and leagues. Industry professionals and football fans alike will be well accustomed to reading headlines and articles explaining the latest rumours and completed transfers. One thing that is always mentioned or speculated in these announcements is the length of the contract that is signed in the particular deal. „Why are Chelsea offering such long contracts?“ for example, is a question frequently asked following two windows of fascinating signings at the club.

We will use this blog to analyse the implications of different contract lengths and suggest the advantages and disadvantages of longer versus shorter term contracts. We will also delve into the role that a player’s agent plays in ensuring the length of contract that is agreed upon will be the best possible outcome for their client.

An Overview

Perhaps the most headline-dominating narrative of the previous 2022 Summer Transfer Window was the business of Chelsea, the London-based giant, under their new owner, Todd Boehly and his consortium. The club spent almost £300m in the single window and broke a transfer record in signing Enzo Fernandez for over £100m in the January window before doing the same once again in summer by signing Moises Caicedo for a fee that may get up to £115m. However, for the purpose of this blog, the key area we will focus on is the lengths of the contracts that they were giving to their latest signings. Let’s look at the signings and their eye-catching contract lengths from the 2023 window and over the last year:

Aside from the anomalies such as Lionel Messi’s 9-year contract with Barcelona in 2005 and Saul Niguez’s contract with Atletico Madrid in 2017 for the same length, the typical ceiling maximum for a playing contract in football is 5 years. Hence, Chelsea’s new approach and strategy in awarding new signings with extended length contract deals has been labelled as perhaps a ‘trend-setter’ for the future of football and it remains to be seen whether this will catch on. Even the most talked-about transfers in the 2023 summer window such as the additions of Jude Bellingham and Arda Guler to Real Madrid are for playing contracts until 2029 (6 years) and are below the contracts up to 8 years that Chelsea have given. 

Although loan contracts will be for a period of between half a season or a full year, permanent transfers will usually be for between 3 to 5 years, perhaps including a club option for a 1-year extension. This is the traditional contract length we have become accustomed to in the professional football age, but perhaps this will shift in the ever-changing landscape of the modern game. 

The Differences Between Lengths

What is the purpose behind different contract lengths? Would it not make sense to establish a standardised contract for 3 years for all transfers? 

The football industry and the transfer of players between clubs is a fine art. It is a complex process that accounts for a vast array of factors and calculates the most appropriate solutions to different questions. Put simply, it would be impossible to set an exact period for a contract length. In different circumstances and situations, different contract lengths are more appropriate for both the player and the club they are signing with. 

Let’s look at some factors that are central to discussions around the best length of contract to offer a player from a club’s perspective. However, we will also revisit these areas when analysing the implications of different contract lengths from the agent’s and player’s point of view.

The most significant consideration to make is the age of the player. It is obvious that to offer a 5 year contract to a player that is past their prime, perhaps even in their early 30’s, would rarely make sense. As a player nears retirement, clubs will lean towards offering a shorter contract if they wish to have the player at their club until the end of their career and in such cases will offer a contract of only 1 or 2 years in length.

On the other hand, for younger players, as seen in the Chelsea examples, clubs will willingly offer longer contracts, typically up to around 5 years. This is because these are players that are seen as the future of the club and by offering a longer contract, the club hopes to keep them as part of their success for the foreseeable future and into their prime years as professional footballers. The club will dedicate extensive time into strategising and planning for the future and determining which players they would like to secure for upcoming seasons. 

Another incentive for clubs to calculate when offering contracts is the chances of losing the player to other clubs. If they are a highly talented player nearing the peak of their career, it may be difficult to prevent other clubs from making approaches. By offering longer contracts to these players and obtaining their signature is a sign of their commitment to the club and can deter other clubs from approaching the club and player seeking their transfer. A major reason for this is that once a player is engaged with a longer contract, another club wishing to sign them will have to buy them out of their current contract as well as paying the transfer fee. This means that the player may be too expensive and therefore unaffordable as a whole package for the interested club. 

Let’s refocus back on Chelsea’s strategy. We can see from the table that their lengthy contract ploy seems to be an exaggerated combination of the two factors we have mentioned here. The players that have signed long contracts with the English Club are those in the early stages of their career in their early 20’s but have already demonstrated particularly high potential to endure a successful and top class playing career. Therefore, as well as hoping to give them longer contracts to keep them until at least their peak years, Chelsea also wants to avoid losing their prize assets to other clubs. However, there is also another reason why Chelsea have decided to adopt this strategy with playing contracts; ‘financial amortisation’. 

The term ‘amortisation’ may seem a daunting economic concept but is in fact a very simple concept that has been identified as the key reason for Chelsea’s attempt to set a new trend with how playing contracts are set out. To understand ‘amortisation’, you must first understand the UEFA Financial Fair Play rules which regulates, monitors and restricts the expenditure of clubs compared to their income and generated revenue. The purpose of these regulations is to ensure a club is not living outside of its financial means and gains a particular unfair monetary advantage over its rivals. 

Amortisation, therefore, is a term used to describe the spreading of costs. In this Chelsea context, they have offered longer-than-usual contracts to players in order to redistribute the payment of their transfer fees in installations over a longer period of time. This helps them to balance the books and significantly reduces their annual losses. For example, Mykhaylo Mudryk’s 8.5 year contract means that Chelsea will pay Shakhtar Donetsk around £8m per-year (plus add-ons) over this time to eventually pay off the £70m transfer fee. The authorities that enforce Financial Fair Play rules will be presented with the annual financial reports that will only show this £8m figure against Chelsea’s books. 

The Agent’s Role in Understanding the Player’s Perspective

As is the case with all of the services that agents should provide to their clients, everything should be carried out with the best interests of the client at the core. When considering and discussing playing contracts with a client, agents need to ensure that they are fully informed as to the implications of different contract lengths for their careers. Factors such as financial and playing security, opportunity to move on, and free agency will be taken into account. In this section we can consider the pros and cons of different contract lengths that agents will analyse with their clients. This is best shown in a table to compare:

As we can see from these tables, there are social, sporting, and financial factors to consider when evaluating the benefits of a playing contract for a client as their agent. The worst outcome for an agent is to encourage a client to sign a contract which will be detrimental for their career. It is not something that can be decided quickly. Contract lengths require extensive research and calculation to prevent a negative long-term outcome. It is far from an easy decision and communication with clients needs to be very clear to understand where priorities lie. There is a fine margin between balancing the security of a client’s career whilst also avoiding restricting the possibilities and opportunities that may come if the client thrives at their current club. 

Case Study: Harry Kane

In 2018, multi-time Premier League Golden Boot winner and national team captain, Harry Kane, had some of the biggest giants in European football vying for his signature.  Tottenham Hotspur were demanding a particularly high transfer fee as his contract in place at the time was already until 2022 but their biggest priority was to get Harry Kane to commit to Spurs and sign a contract extension with the club and help them improve on their consecutive Champions League place finishes in the previous three Premier League seasons. Harry Kane was almost 25 at the time and he had almost any option that could afford him, available to him.

The majority of football fans expected that after contributing so much to the club in his career so far, now was the time for him to move on to a club where he felt he could win trophies and experience a whole new level of success as he entered his peak years. Perhaps surprisingly, a month before his 25th birthday, Kane re-signed with Spurs on a 6-year £200,000-per-week deal keeping him at the club until at least 2024. This meant that the possibility of moving to another club in the next few seasons became highly unlikely as the overall financial package would be beyond the means of many clubs and unwise business for those that could afford it. 

For the club it was exactly what they wanted at the time. They had secured the elite services of one of the best strikers in the world for the next few seasons spanning across his prime years and Kane has not failed to disappoint, averaging over 20 goals per season since. However, in this summer window, Kane, a year away from being a free agent and Spurs losing him for nothing aged still only 31, was a hot topic once more. Bayern Munich quickly emerged as a relentless pursuer; carrying out extensive negotiations with Spurs for the transfer of Kane and eventually securing his services for over €100m. 

It was not simple to get this deal over the line and after weeks of speculation it seemed at one point that Kane may even continue as a Spurs player. As was the case in 2018, the difficulty was due to the fact that the London club were initially very reluctant to let Kane leave below their asking price. As we mentioned for the age factor that clubs must consider, it was perhaps going to be the case that at his age, Spurs or whichever club signed Kane would most likely aim to offer a shorter contract than the 6-year agreement he signed in 2018. Kane may have 2-3 years left at the very top of his performance and interested clubs may have been cautious in offering a longer contract as he reaches the twilight period of his career. Perhaps part of what appealed so much about his eventual move to the German giants, Bayern Munich, could be due to the fact they were still offering a lengthier contract. Kane signed a 4-year deal until 2027 as well as a reported buy-back or ‘first-refusal’ option being included in the contract meaning he could one day make a fairytale swansong return to Spurs. 

We can also speculate about Harry Kane’s perspective and feelings, and how they differed between 2018 and in 2023. Ultimately, the player has to be content with the contract they are signing and as mentioned in the previous section, they have their own incentives and motives for signing different playing contracts. Back in 2018, whilst the opportunity to play abroad or at some of the most decorated clubs in the football world may have been appealing, there were particular factors that may have convinced Kane to sign a new contract at Spurs. 

Spurs were offering Kane a particularly long contract, 6 years in total. This demonstrated to Kane that the club he adored, had dedicated a significant portion of his life too, and which he had had enormous success at, considered him an integral part of their plans for the next 6 seasons. They were also offering a lucrative financial package of £200,000-per-week. For Kane, this meant playing security at a club he was already familiar with within a league he knew he could perform well in, as well as an attractive financial and social proposition for him and his family to remain in their London home. This extended contract length offered by Spurs may have convinced Harry and his brother and agent, Charlie, to remain at Spurs.

For 2023 however, perhaps Kane’s mindset was different as he was aware more than anyone that his career was now more limited in time. Since re-signing in 2018, Spurs have still not won any trophies despite Kane’s heroic individual efforts. They were also unlikely to offer him a similarly longer contract renewal due to his age. Therefore, at that stage, it was more likely that Kane was more willing to capitalise on other opportunities for shorter-term contracts at successful clubs either this summer or once he becomes a free agent at the end of the 2023/24 season. As it transpired, the offer of a new adventure with the German champions and hope of Champions League glory, as well as a generous 4-year deal proved too good to refuse.

Summary

To summarise, the length of playing contracts are a central part of any negotiation between players, their agents, and the clubs involved in either a transfer or a contract extension. Many different factors are considered and vary in importance from the perspective of the clubs or the players. This blog has hopefully helped your understanding of how different parties see different implications of the length of a playing contract. It is clear that the significance of contract length cannot be underestimated and can positively or negatively affect the career of a player as well as benefitting or damaging the future of a club.