Role of law expands in evolving football transfer market

This post was contributed by Nick Eisen, Business Engagement Reporter, Birkbeck School of Business, Economics and Informatics

Football transfer deals require greater legal input than ever before, being more complex and involving more money, parties and issues than in the past. A presentation organised by the Birkbeck Sport Business Centre (BSBC) focused on these developments.

Titled The Football Transfer Market Uncovered: An Insider’s Perspective of How Things Work in Football, the presentation took place at the British Medical Association in Tavistock Square on Monday 22 February, and was part of the BSBC’s Public Seminar Series.

The speakers were Daniel Geey, Partner, and Jonny Madill, Associate, at the Sports Group of media law firm Sheridans, a long-term supporter of the Public Seminar Series. The two lawyers offered an overview of current issues in a complicated and often-misunderstood subject, and facilitated extended and lively question-and-answer sessions, in which the presenters and audience of sports industry professionals, academics, students and public explored evolving issues.

The evening divided into four main areas: the player contract, the lawyer’s role in the transfer process, the transfer window, and key commercial issues. On another level, lawyers had also been advising on intermediary (agent) regulation.

Football-transfer-market---Sheridans

Individuals, organisations and change

In an era of big money, new markets and revenue streams, new media, increased media coverage, and globalisation for football, one general theme was reconciling individual and organisational interests (such as player and club). Another theme could be seen as the sheer pace and level of change to which lawyers and others have to adapt.

Parties requiring legal advice in a transfer include the buying and selling clubs, player, player’s agent and the leagues and federations involved. Documents that lawyers negotiate and draft include the transfer agreement, employment contract, image rights, performance-related pay, release clauses and work permit. Failure to agree any one of these could mean the failure of the entire deal.

With such multiple parties and issues, one example of a contract strikingly indicated the challenge of adapting some mid-20th century procedures to the 21st century, and showed that rapid change in one area might not always entail rapid change in another: a multimillion-euro transfer deal was framed in a contract effectively less than five pages long. Daniel Geey pointed out that it was very unlikely that any other business would handle such a valuable deal and all its component parts so briefly.

Performance-related pay

Pay is one indicator of the changing relationship between clubs and players: there has been a shift away from unvarying, guaranteed remuneration and towards variable, performance-related reward: “giving players more control over their earnings”, as Jonny Madill described it. Here, the objective is to incentivise the player to aim for team benefit rather than personal benefit. Performance analytics (explored in an earlier BSBC/OptaPro event) help in devising incentives. Some have objected to the lower guaranteed earnings. Others stress the potential to earn more through performance rewards. Further tensions have arisen when rewards have not matched expectations.

Such structures can also create anomalies; sporting success can threaten financial failure: bonuses due to players for competition success at one club (Barcelona) led it into financial difficulties in paying those bonuses. The FA allows clubs to insure against such a possibility, though insuring against negatives (such as relegation) is prohibited.

In another area, changing approaches have also threatened to increase individual players’ liabilities. In one case, a club (Chelsea) sued a player for breach of contract and compensation on his transfer fee, due to an issue of illegal drug use. The club subsequently dropped the lawsuit. Players’ representative body FIFPro has questioned why players should be held liable for transfer fees negotiated between clubs without involving the players concerned or their advisers.

Release clauses

To balance the interests of player and club, release clauses also require careful drafting, consisting, among other things, of multiple triggers specific to different contingencies (such as approaches from certain clubs, relegation or time period).

Image rights

In the UK, image rights can now be 20% of a top-level player’s earnings (limited by UK tax authorities) and a valuable endorsement tool for that player’s club. Legally agreeing how the club can use the player’s image is therefore vital. Paying such earnings to a player’s image rights company rather than to the player reduces tax liability. Here therefore, the lawyer’s role is to negotiate between club and player’s company, as well as between club and player.

Work permits

The FA has an intricate new work permit regime, with one tier for European Economic Area (EEA) players and the other for non-EEA players. Lawyers have to navigate a complex system of qualifying points dependent on what minutes a footballer has played in which league in which jurisdiction and can appeal points decisions before an Exceptions Panel – divided into two levels… The UK’s EU referendum result could change the situation again.

Transfer window

The transfer window can also pit individual players against clubs. Some see restricting periods in which players can change teams as providing clubs with some stability. Others argue this restriction conflicts with normal employment rights. FIFPro has complained to the European Commission (EC) that the transfer system is incompatible with EU law, questioning transfer fees and why players’ employment rights should be different from other employment rights (again, how this will affect the UK will depend on the result of the UK referendum on EU membership).

Players’ agents also have a dispute about regulations. The Association of Football Agents has complained to the EC that world football governing body FIFA’s regulatory 3% cap on agent commissions constitutes price-fixing incompatible with EU law.

Jonny Madill concluded the evening by heralding ongoing and likely future issues, including that of transparency in football.

The evening was another event in the BSBC’s active strategy of engagement for all. Closing the evening, BSBC Director Sean Hamil emphasised the role of the Public Seminar Series as a forum for academia, industry and public to meet and explore important developments in sport

Image: Courtesy of richardobeirne under CC via Flickr.co

Find out more

. Reply . Category: Business Economics and Informatics, Categories . Tags: ,

How the science of analytics can raise football’s game

This post was contributed by Nick Eisen, Business Engagement Reporter, Birkbeck School of Business, Economics and Informatics

Football

Studying the data could revolutionise football’s development, according to a conference hosted by Birkbeck’s Sport Business Centre in February.

In collaboration with the Sport Business Centre, sports analytics provider OptaPro’s 2016 Analytics Forum attracted international attendance when the event was held on Wednesday 10 February at the University of London’s Senate House.

The Birkbeck Sport Business Centre had also hosted the previous two editions of the annual conference. The collaboration with Opta is part of the Centre’s mission to provide a forum for informed debate on emerging areas of best practice in sport management, of which the field of player performance analytics is one.

Winning formula: finding present indicators of future performance

Presentations showed how analytics could help to build winning teams and described research quantifying correlations between specific elements of play and performance. Recognising such correlations could help coaches, managers and others focus on elements indicating correlations with longer-term success. Some initial findings also cast doubt on pieces of received wisdom.

Attendees networking at the event

Attendees networking at the Analytics Forum in Senate House

Focusing on the Premier League, analyst Joel Salamon found like-for-like comparisons to be valuable indicators of future performance. For example, he found correlations between chances a player created early in a career and chances created later on, as with shots: like predicted like. Conversely, Salamon’s study found no significant correlation between how young a player was when first recognised as a top-level regular and subsequent success.

One of blogger Sam Jackson’s findings from his study of goalkeepers, and how they deal with crosses, suggested that the game attributes too much importance to how tall a goalkeeper is.

Speakers acknowledged that their findings were preliminary, required larger studies involving more players and teams, and could be refined to offer more sophisticated indications of future success or failure. But, the speakers argued, the studies already suggested analytics was a valuable addition to other skills in the game.

Translating research into practice, numbers into words

Dean Oliver presents at the OptaPro 2016 Analytics Forum

Dean Oliver presents at the OptaPro 2016 Analytics Forum

One question from the floor was: how could the mathematics of this research translate into a language that would win over players, coaches and others? Guest speaker Dean Oliver, renowned statistician of the US National Basketball Association (NBA), addressed this.

Citing his NBA work, Mr Oliver suggested that analytics experts adapt to the sport rather than try to teach the sport about analytics, and that analytics were an addition to existing approaches, not a replacement for them. Introducing analytics was likely to be a gradual process that would have to overcome resistance with persuasion, fostering cooperation and managing expectations by avoiding overconfident claims. Two of Mr Oliver’s key phrases were: “Relate everything to wins”, and: “Understand the existing process and where you can help”.

This Forum offered an exciting view of the contribution analytics could make to football.

With thanks to OptaPro (view tweets from conference)

Hosted by Birkbeck Sport Business Centre (on twitter and LinkedIn)

Find out more

The next School of Business, Economics and Informatics Open Evening, will be held on 14 April, 17:00-19:00

. Reply . Category: Business Economics and Informatics, Categories . Tags: ,

Pricing players: Measuring football players’ media coverage merits

This post was contributed by Nick Eisen, Business Engagement Reporter, Birkbeck School of Business, Economics and Informatics

Image under CC courtesy of Eva Rinaldi via Flickr.com

Image under CC courtesy of Eva Rinaldi via Flickr.com

Media coverage of individual footballers may be as good as – or even better than – sporting performance as a criterion for estimating those players’ monetary value in terms of the return they can bring to their teams.

This view emerged from a talk on 18 January by Dr Pedro Garcia-del-Barrio, senior lecturer in Economics and Vice-Dean at the Universitat Internacional de Catalunya (UIC Barcelona).

Titled Economic Evaluation Of Football Players Through Media Value, the talk was presented by Birkbeck’s Sport Business Centre (BSBC) and facilitated by the Department of Management’s Dr Giambattista Rossi at the British Medical Association in Tavistock Square.

Measuring ‘non-sport skills’

In his talk, Dr Garcia-del-Barrio described a footballer’s media value score as the number of news stories referring to a player expressed as a multiple of the number of news stories of the average player in a sample derived from the top 2,500 individuals in a data set of more than 5,000 players. In recent years, this data set has been selected from the top English, German, Spanish, Italian and French leagues, as well as Portugal, Netherlands, Brazil, Argentina, Mexico and teams playing in the European Championship.

According to the speaker, this method, known as MERIT (Method for Evaluation and Rating of Intangible Talent), gives an estimate of a player’s “non-sport skills”. This Merit rating could also be used to estimate a theoretical value of transfer fees for professional footballers, and could offer a basis for estimating a media value ranking of teams and leagues.

Media value can be seen as connected to sporting performance but distinct from it, and Dr Garcia-del-Barrio noted that a player’s media value is important in determining that player’s market value, because that media value could be vital in areas such as team branding, and in increasing sales of tickets, TV rights and advertising space.

Other factors affecting the calculation of transfer fees, apart from sporting performance, include contract duration, the economic status of the hiring team, the player’s age at the end of the contract and years of experience, and the player’s media value as a proportion of the team’s media value.

MERIT – advantages and shortcomings

One advantage of Merit is that it enables comparison across sports: for example, the media value of a footballer versus that of a tennis player, who could never meet in a sporting arena, but may both appear in the media arena, where their respective presences can be compared.

At the same time, different Merit values (local, regional, international, time-related and others) could be calculated for one individual. For example, the same player could have one Merit value in one country and another Merit value in a different country, where coverage of the same player could differ between the media of the two countries.

The speaker also considered Merit’s potential shortcomings, one being that it does not currently distinguish between positive and negative coverage (although what constitutes “positive” and “negative” here might perhaps require further definition).

With a wealth of graphic presentations and data, Dr Garcia-del-Barrio also illustrated how Merit valuations compared with completed transfer fees.

An attentive audience responded with some complex questions to a fascinating and demanding field of study.

Find out more

. Reply . Category: Business Economics and Informatics, Categories . Tags: , , ,

Game-changer: Sport Business Centre hosts launch of Play-Offs book

This post was contributed by Nick Eisen, Business Engagement Reporter, Birkbeck School of Business, Economics and Informatics

The Agony & The Ecstasy, A Comprehensive History Of The English Football League Play-Offs (book cover)

The Agony & The Ecstasy, A Comprehensive History Of The English Football League Play-Offs (book cover)

Birkbeck Sport Business Centre‘s public seminar series struck a more literary note in presenting the launch of author and journalist Richard Foster’s book, The Agony & The Ecstasy, A Comprehensive History Of The English Football League Play-Offs, at the British Medical Association on Monday 16 November.

As Foster explains in his book (the first to be written on the Play-Offs), the competition was introduced “as a system for deciding the last promotion slot for the three lower divisions of the Football League in the 1986/87 season”.

The richest sporting match in the world

When the competition began, it could be regarded as resembling one of its own participant underdog teams – unfancied and not expected to go far. But, as the author said, underdogs have defeated giants, providing some of the Play-Offs’ most memorable moments. Similarly, perhaps to a much greater degree, the competition itself has had an impact beyond all initial expectations.

The Play-Offs began as an interim attempt to reinvigorate a game in decline: attendances were falling and 1985 had seen several disasters, including the tragedy at Heysel Stadium, where dozens died and hundreds were injured when a wall collapsed.

In their first season, the Play-Offs received no television coverage. Now every match is televised live. In 1987 the monetary return on winning promotion to the top division was about £500,000. Now, winning is estimated to be worth more than £130 million. That figure could exceed £200 million when the 2016/2017 English Premier League television deal begins. The Football League Championship Play-Offs Final is the richest single sporting match in the world.

Room for improvement

With humour, energy and able backing from his support team, Foster communicated his expertise and passion for the Play-Offs to a large and appreciative audience, and brought to life his favourite memories from three decades of the competition.

As a staunch advocate for the Play-Offs, Foster nevertheless saw room for improvement and has acknowledged the competition’s critics, including those who have questioned its fairness as a way of deciding promotions.

An audience member also asked about the difficulties posed by the Premiership’s delayed-payments process for newly promoted clubs lacking the immediate cash resources of established rivals, and Foster pondered the possibilities of weighting payments towards poorer newcomers.

On balance, however, the author favoured the Play-Offs: his book describes the competition’s drama and spectacle re-engaging fans and clubs at a dismal time in the 1980s, and continuing to do so today.

Find out more

. Reply . Category: Business Economics and Informatics . Tags: ,