Total cost of getting star players for 3 years [top 5 for 2005,2004...]

[pc4th]

Assumptions:
#1: The contract is 3 years long.
#2: The transfer fees given by footballtransfers.co.uk is assumed to be accurate.
#3: The annual salary is estimated at around $7-10 mil.
#4: Let's use $1.80 = 1 pound (the currency exchange rate today is a bit higher $1.88 = 1 pound). Time value of money is not taken into consideration.

http://www.footballtransfers.co.uk/transfers/highestfees2005.php

Total cost of getting these players for 3 years

2005

1. $68 mil Essien ([£24.43m] $44 mil in transfer fee + $24 mil in salary for 3 years)

2. $59 mil Shaun Wright-Phillips ([ £21m] $38 mil in transfer fee + $21 mil in salary)

3. $58 mil Michael Owen ([£17m] $31 mil + $27 mil)

4. $54 mil Sergio Ramos ([£18.48m] $33 mil in transfer fee + $21 mil in salary)

5. $51 mil Robinho [£16.64m]$30 mil + $21 mil)

2004

1. $64 mil Drogbar ([£24m] $43 mil in transfer fee + $21 mil in salary for 3 years)

2. $57 mil Rooney [£20m] $36 mil + $21 mil

3. $57 mil Ricardo Carvalho [£19.85m] $36 mil in transfer fee + $21 mil in salary)

4. $57 mil Samuel Eto'o [£18.14m] $33 mil in transfer fee + $24 mil in salary]

5. $54 mil Emerson [£18.48m] $33 mil in transfer fee + $21 mil in salary]

[2003, 2002, 2001 to come if I have time]

If these players go on a free, they could get as much as $17-20 million a year in wages and signing-on fee (combined).

Take Essien for example, who cost Chelsea $68 million for 3 years. Would Chelsea be willing to pay only $60 million to get Essien for 3 years? Unless Chelsea is run by the stupidest person in the world, Chelsea would love to pay only $60 mil.

Essien, on the other hand, would get $60 million for 3 years. The deal could be structured like this to make the wage comparable to other players.

$8 mil in salary a year for 3 years AND
$36 mil in signing-on fee [spread over 3 years like a transfer fee]
Total cost: $60 mil

p.s. What I am debating for is harmful to the game I love. I don't like the Bosman ruling just as much as the next guy. However, this stuff is interesting to me and I am researching into why there are so very few star players that went on a Bosman. Sol Campbell is the first and Ballack is the second star player that took advantage of it. We fans should be thankful that for every Campbell/Ballack, there are 20 other star players that have not took advantage of the free transfer over these past 10 years. As a result, many smaller clubs are able to survive and thrive.

[pc4th]

Schevchenko: $90 million for 3 years ($57 mil in transfer fees + $33 million in salary)

ANDRIY SHEVCHENKO will travel to the World Cup a Chelsea player after the Stamford Bridge club confirmed his £30million capture last night.

The 29-year-old Ukraine striker flew into London yesterday for a medical and to conclude talks with Chelsea chiefs after announcing last week his intention to leave ACMilan.

So in a sense, Schevchenko costs more than Alex Rodriquez for 3 years. But Arod makes $25 million a year while Schevchenko at best will make around $11-12 million a year.

[scaryice]

How can you not like the Bosman ruling? Players deserve their freedom.

[pc4th]

http://www.deloitte.com/dtt/article/0,1002,sid%253D70402%2526cid%253D56148,00.html

Annual Review of Football Finance 2006

The report estimates the total outlay on all wages by the top-flight's 20 clubs in 2004-05 - the most recent figures available - went down to £785m from £811m the previous season. Players' pay fell to £559m from £583m.

Net transfer fees, although down by a quarter, were still nearly £200m.

The net transfer fees for MLB, NBA, NFL is very very small or nonexistant. For the Premiership, it's £200 million a year.

Basically, the Premiership has £785m to spend on players. It only spent £585m of that on player salary. It spent the other £200m on net transfer fees.

If on the other hand, MLB/NBA/NFL has £785m to spend on players, they are likely to spend that full amount on player salary.

Now you might see why if every players go on a free like in American sports, the Premiership would have an extra £200m. And history tells us that sports club will spend as much as they can afford to in order to get the best players to compete. Hence, on average player salary might rise by as much as 25.5% (200m/785m).

[RichardL]

How can you not like the Bosman ruling? Players deserve their freedom.
pretty much other than in Belgium, which had a restrictive beaurocratic formula for working out transfer fees of players out of contract, players were free to go - but the buying club had to pay a fee, which was usually a lot lower than the normal transfer fee.

Players who weren't offered an improved contract were automatically free agents.

I think international transfers had a maximum fee of £1 million, and back then only the top players used to play outside their own country, so that fee was small even then.

It was a good system. A three year contract actually meant a three year contract, rather than now where the players starts demanding a pay rise half way through it, or threatening to leave on a free. As clubs would always be compensated for losing players they wanted to keep, it also helped distribute cash among the clubs.

[pc4th]

$50 million for three years John Obi Mikel: $29 million transfer + assumed salary of $7 mil a year for 3 years

Average cost: $16.6 mil per year. And this guy isn't even a star player.
Ballack is costing Chelsea around $13-14 mil per year for comparision sake.

http://sport.independent.co.uk/football/chelsea/article624146.ece

Chelsea will pay United £12m and Lyn £4m. Chelsea will pay half of both amounts now and half in 12 months' time

[leg_breaker]

pretty much other than in Belgium, which had a restrictive beaurocratic formula for working out transfer fees of players out of contract, players were free to go - but the buying club had to pay a fee, which was usually a lot lower than the normal transfer fee.

I don't see why a club who used to have a contract with a player, which is now expired, should be entitled to any transfer fee.

If you sign a contract with a player, say for £2 million a year for four years, once that four years is up, you've paid your £8 million and got your four years of service, why should there be an extra transfer fee?

Pre-Bosman it was also harder for poorer teams as they couldn't sign players cheaply on free transfers.

[RichardL]

I don't see why a club who used to have a contract with a player, which is now expired, should be entitled to any transfer fee.

If you sign a contract with a player, say for £2 million a year for four years, once that four years is up, you've paid your £8 million and got your four years of service, why should there be an extra transfer fee?

Pre-Bosman it was also harder for poorer teams as they couldn't sign players cheaply on free transfers.
yes they could. Unless players were offered an improved contract, they automatically became free agents. Usually any player dropping down at the end of their contract did so on a free transfer.

Pre-Bosman, smaller clubs had it much better as the bigger clubs couldn't tap up players as easily (or they could, but at least the smaller club would be compensated). You also didn't get players demanding a pay rise half way through their contract, threatening to leave for nothing if they didn't get it

It's been a pretty big factor in inceasing the gap between the rich and the rest.

technically, from a legal viewpoint, clubs aren't entitled to any transfer fee beyond the value of the remaining contract either, but people accept the system as it is is better than what would happen if any player challenged his right to annul his contract and move without a negotiated fee.

[pc4th]

£15 mil transfer fee + $7 mil a year = $28 mil + $21 mil = $49 mil for three year

Michael Carrick: $16.3 mil per year

--------------------------------
RECAP

2006

Shevchenko: $30 mil a year
John Obi Mikel: $16.6 mil per year
Carrick: $16.3 mil a year

2005

Essien: $22.7 mil a year
Shaun Wright-Phillips: $19.7 mil a year
Michael Owen: $19.3 mil a year
Sergio Ramos: $18 mil a year
Robinho: $17 mil a year

2004

Drogbar: $21.3 mil a year
Rooney: $19 mil a year
Carvalho: $19 mil a year
Eto'o: $19 mil a year
Emerson: $18 mil a year

[pc4th]

2006

$18.6 mil a year: Mahamadou Diarra ( £17.7m transfer + $8 mil a year salary = $56 mil total)

$18 mil a year: Zlatan Ibrahimovic (£16.75m transfer + $8 mil a year in salary = $54 mil)

[pc4th]

WE MIGHT HAVE A RECORD FOR BASEBALL (if there is a signing)

Matsuzaka: $22.5 mil a year in TOTAL COST
Transfer fee: $51.1 mil
Salary: estimating around $10 mil a year.

http://www.boston.com/sports/baseball/redsox/articles/2006/11/14/sox_511m_bid_wins_right_to_matsuzaka/?page=1

The Sox, in a record-setting reach into the Japanese market, agreed to pay Matsuzaka's team, the Seibu Lions, $51.1 million for the right to negotiate a contract with the righthanded ace. Under the deal, the Sox have 30 days to sign Matsuzaka, whose agent, Scott Boras, is expected to seek a four-year pact worth at least $40 million.

That averages out to more than $22.5 million a year, the most the Sox ever have spent on a pitcher. (Pedro Martínez earned $17.5 million in his final year, 2004.)

[pc4th]

http://www.sportsbusinessnews.com/_news/news_355366.php

When the numbers came out that Daisuke Matsuzaka had accepted a six-year, $52 million salary to sign with the Boston Red Sox, it seemed that the parties had come to a happy and satisfying agreement.

But there is an argument to be made that there are no winners in the deal. Let's look at each interested party: • The Boston Red Sox have committed $103.1 million to a contract that can only be considered a success if the player excels for the entire span

• Daisuke Matsuzaka received a contract with a value that places him near the lower end of 2006 free agent starting pitchers

• The Seibu Lions baseball team -- and the Japanese league -- lost its best and most marketable player

• Scott Boras, who initially suggested his client should be priced around $15-17 million a year, took a deal that averages about half that

As a result of not being a free agent, Matsuzaka will only get about half of what he would have been able to.

What he should have done is play out his contract (which ends in 2007) and become a free agent. The RedSoxs would be more than happy to pay him say $15 mil a year. He is costing them almost $17 mil a year right now.

Which is better? $15 mil a year
or the current $8.7 mil a year

Same with many soccer superstars. Of course, there is the risk that he will have a really bad injury before he becomes a free agent and as the result, he won't get a dime. But that risk is very small compare to the huge reward. And he could get insurance to hedge that risk.

[RichardL]

http://www.sportsbusinessnews.com/_news/news_355366.php



As a result of not being a free agent, Matsuzaka will only get about half of what he would have been able to.

What he should have done is play out his contract (which ends in 2007) and become a free agent. The RedSoxs would be more than happy to pay him say $15 mil a year. He is costing them almost $17 mil a year right now.

Which is better? $15 mil a year
or the current $8.7 mil a year

Same with many soccer superstars. Of course, there is the risk that he will have a really bad injury before he becomes a free agent and as the result, he won't get a dime. But that risk is very small compare to the huge reward. And he could get insurance to hedge that risk.
does a transfer fee contribute towards the amount a team can pay before having to pay the "luxury tax"?

I don't know the luxury tax threshold, or Boston's salary level, or the luxury tax rate, but if that extra $40 million or so you are proposing they pay to save money is hit by a tax of over 25%, then they'd actually be worse off.


And besides, they also get to get him straight away, rather than wait a year, and without having to enter a bidding war for his services.

[pc4th]

Someone also did an analysis of how much it would cost PER YEAR to get Hargreaves.

http://www.unitedrant.co.uk/archives/2007/02/reassessing_glazer.html

The real costs are transfer fees and wages. If United buys a £20 million player on a five year contract, providing the club has the cash in the bank, it will be shown in the accounts as a £4 million a year expense. But as United don't have the cash, thanks to Mr G, the interest costs on borrowing the money racks up another £1.4 million a year!!! Assuming Hargreaves or whomever is on an £80000 per week contract, that's another £4 million a year. So Mr H, for example, is going to cost the club £9.4 million a year for the next five years.

£4 million a year in transfer expense + £4 million a year in salary.

Total cost: 8 mil pounds or almost $16 million a year.

[pc4th]

does a transfer fee contribute towards the amount a team can pay before having to pay the "luxury tax"?

I don't know the luxury tax threshold, or Boston's salary level, or the luxury tax rate, but if that extra $40 million or so you are proposing they pay to save money is hit by a tax of over 25%, then they'd actually be worse off.


And besides, they also get to get him straight away, rather than wait a year, and without having to enter a bidding war for his services.

Boston could care less. They could pay him $17 mil a year for 6 years or pay him $9 mil a year for 6 years + $51 mil to the Japanese team. They are indifferent between the two options.

However, I am advocating from the player's perspective.

He could be earning $17 mil a year but instead is earning only $9 mil a year. If all the major soccer stars go on free transfers, their wages would increase from $10 mil to at least $15 mil a year. Why? Because the like of Chelsea, Madrid, Man U, AC Milan, Juventus, Barcelona would have ZERO TRANSFER EXPENSE (in other words, they would have an extra $30-40 mil a year lying around, most of which will be used to attract star players in term of increase wages).

Of course, fans wouldn't like it.

[RichardL]

time to re-stock on the tablets

[pc4th]

From the latest update of Deloitte's "Football Money League", the twenty clubs with the highest revenues in Europe in the 2005-06 season.

Rank 05-06 (Rank 04-05) Club Revenue 05-06 Revenue 04-05

1 (1) Real Madrid €292.2m €275.7m

2 (6) Barcelona 259.1 207.9

3 (4) Juventus 251.2 229.4

4 (2) Man United 242.6 246.4

5 (3) Milan 238.7 234.0

6 (5) Chelsea 221.0 220.8

7 (9) Inter 206.6 177.2

8 (7) Bayern M 204.7 189.5

9 (10) Arsenal 192.4 171.3

10 (8) Liverpool 176 181.2

11 (15) Lyon 127.7 92.9

12 (11) Roma 127 131.8

13 (12) Newcastle 124.3 128.9

14 (14) Schalke 04 122.9 97.4

15 (13) Tottenham 107.2 104.5

16 (n/a) Hamburg 101.8 74.9

17 (17) Man City 89.4 90.1

18 (n/a) Rangers 88.5 81.6

19 (n/a) West Ham 86.9 47.1

20 (n/a) Benfica 85.1 63.4


The top 10 teams generate WAY WAY MORE REVENUE than the top 10 baseball teams. YET, in baseball, the elite players get paid A LOT MORE. The top players in baseball get around $18-22 mil a year but the top soccer players get only $10-11 mil in soccer. I wonder why? Maybe in baseball, the transfer fee expense is ZERO and in soccer there is a $40 million transfer fee expense each year.

[superdave]

The top 10 teams generate WAY WAY MORE REVENUE than the top 10 baseball teams.
You sure about that? "WAY WAY" means whatever you want it to mean, I guess, but I especially call shenanigans on that.

YET, in baseball, the elite players get paid A LOT MORE. The top players in baseball get around $18-22 mil a year but the top soccer players get only $10-11 mil in soccer. I wonder why?
I suspect one key is the prevalence of public stadia in the US.

Maybe in baseball, the transfer fee expense is ZERO and in soccer there is a $40 million transfer fee expense each year.

This makes no sense. Because in baseball, a team already owns its prospects. In soccer, ManU gets Michael Carrick from Tottenham and RVN from PSV and Rooney from Everton. So you're already off track right there.