3 August, 2023 - 02:44 pm
Daniel is a sports lawyer at London law firm Sheridans. He has written two books on the sports and entertainment industries. He has been involved in numerous of the biggest deals in European football and during this interview we asked him questions on the broad subject of football deals.
This interview will definitely be of attention to those who wish to go down the path of football as a lawyer.
How did you get within the sports industry?
I started out in the legal industry as a food, car part and financial services lawyer. I gradually developed my legal skills in the football industry by reading cases, writing blogs about the legal aspects of football and building relationships with people from across clubs, leagues and player and commercial agencies. These experiences enabled me to develop my expertise, show players especially that I have the skills to help them in their negotiations with clubs and hopefully get the deals over the line!
I actually wrote a book on the practical steps to achieving your dream career called ‘Build the Invisible’ which has been out for a few months! Its basic premise is that if you make small, incremental changes to your routine you can build your knowledge base and develop strong relationships. These steps (with various other techniques set out in the book) will help build your invisible foundations, leading to a successful and fulfilling career.
Could you please give us details regarding how players image rights works?
A player’s image rights usually relate to their ‘off-field’ commercial activities which will include their boot deals with Adidas, Nike or Puma as well as ambassador deals with brands like Beats, Oakley or Pepsi. It’s imperative to many players to maximise their on-field and off-field earning capacity due to their potential short playing career especially at the elite level of the game.
The player is always at the centre. They have to be happy to join or leave a particular club. With the Bosman ruling, the highest profile players retain a strong bargaining position due to the player being able to elect to leave the club when their contract expires.
When this potentially happens with the top players in world football like Mbappe, the stakes become higher because the economic consequences for PSG and the player are so significant. The player will want to retain control over their future while a club wants to maximise the value of their asset (by selling the player for the maximum amount). These opposing position will then naturally conflict when both parties want different outcomes.
How does the transfer work step by step
In my book Done Deal, I devote three chapters to setting out the nuances of a transfer but in short, there are a number of required parties; the player, agent, and clubs. Each will have a negotiation position and each will likely need to make compromises to get a deal over the line. Usually that will involve the buying and selling club agreeing a transfer fee including how much of the fee will be paid up front or in instalments as well as how much of the fee is guaranteed and how much is performance related (i.e. only payable if the winning club say qualifies for the champions league or wins their domestic league or cups).
There is then also the agreement between the player and the buying club that is orchestrated by the agent. This will certainly include playing contract bonus provisions, release clauses and the commissions that may be paid to the agent.
Throughout the process, the negotiations will intertwine; sometimes the selling club will not give permission to the buying club to speak to the player until a transfer fee has been agreed; sometimes the player’s agent will intervene in the transfer negotiations between buying and selling club to try and find a solution; and the player’s agent will need to negotiate with the selling club to work out what may be owed to the player depending on whether the player is pushing for a move or the club is pushing the player to leave.
As you know, Kylian Mbappe’s saga is a big topic: – how would a deal like this play out: knowing PSG want to bench him if he does not leave all season?
This is a real outlier situation involving the biggest names in world football. The player wishes to honour his contract; the club requires the player to extend his deal otherwise they wish to recoup their transfer and wage outlay after paying Monaco $194m in 2017. Add into the mix the world-record Saudi offer, the player’s reported refusal, the reported potential loan deals which would allow PSG to recoup some transfer monies and remove the player from their wage bill for the coming season and the constant of Real’s interest (reportedly not possible to happen).
The conundrum for the club is any deal is very unlikely to go ahead without the buy-in of the player and his representatives. Mbappe under the FIFA rules will be entitled to sign a pre-contract with a new club on 1 January 2024 meaning that in 5 months, a club can avoid paying a large transfer fee. The player’s interests are also protected by the footballing committee. All the participants know this which makes the final month of the window a fascinating insight into the world of high stakes football transfers.
Regarding transfer fee’s what are the possible structures: add-ons, instalments?
There are plenty of options. The main elements concern what is guaranteed (i.e. will be paid no matter what) versus conditional (paid if a particular event happens). The conditional payments can be team and player dependent. For example, only if the player plays in 60% of the buying club’s matches and the team qualifies for next season’s UCL, then the buying club will pay €5m on each occasion that occurs. The transfer agreement may also include a sell-on clause meaning that if the buying club then sells on the player, the original selling club will receive say 20% of the transfer fee. It my however be more nuanced because the drafting of the contract may mean that the original selling club only receives 20% over say €10m or 20% over what the buying club originally paid the selling club.
Probably the most important is the instalment payments. Sometimes clubs will accept a lower overall amount if more of the payment will be paid upfront. For example, €75m with €35m up front may be more attractive than €80m with €20m up front. Usually, however, all of these points are part of a larger negotiation and are not negotiated in isolation. Each is a dynamic moving part which moves the overall commercials of a negotiation.
Daniel has recently released a book which goes into further detail regarding the work done within football, transfers and legal advices: https://www.amazon.co.uk/dp/1803137215?linkCode=ssc&tag=onamzdani0ec6-21&creativeASIN=1803137215&asc_item-id=amzn1.ideas.1DJHCOCIAEB5P&ref_=aip_sf_list_spv_ons_mixed_m_asinhttps://www.amazon.co.uk/dp/1803137215?linkCode=ssc&tag=onamzdani0ec6-21&creativeASIN=1803137215&asc_item-id=amzn1.ideas.1DJHCOCIAEB5P&ref_=aip_sf_list_spv_ons_mixed_m_asin
Thank you for reading, Madrid Xtra team.
Cover image: (Photo By Eóin Noonan/Sportsfile for Web Summit via Getty Images)