Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively less...

Discussion in 'The Beautiful Game' started by pc4th, Feb 11, 2007.

  1. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    HERE's another classic example of why going on a FREE TRANSFER/free agent would get the player a LOT MORE MONEY ($7 mil more each year in fact).


    http://www.sportsbusinessnews.com/_news/news_355366.php
    No winners in Matsuzaka deal

    Basically, if Matsuzaka waits one more year and plays out his contract, his market value in term of salary is around $15-17 million a year. By going on a $51 mil transfer fee, his salary is only $9 mil a year. HUGE DIFFERENCE.

    The total cost of getting Matsuzaka is $103 mil over 6 years for the Red Sox. With $51 mil in transfer fee and $52 mil in salary.

    If he is a free agent (which he is not), the Red Sox would love to pay him $16 mil a year because it would only cost them 16 x 6 = $96 mil.

    But instead, he is getting $9 mil a year instead of $16.

    ----------------
    Winner: Seibu Lions, they get $51 mil. If he goes on a free next year, they get nothing.

    Loser: Matsuzaka (the elite player). He is making $9 mil a year when he could be making $16 mil a year starting next year as a free agent.

    Indifferent: Boston Red Sox. It would cost them $103 mil either way for the 6 years. Though, by agreeing to this, they have him 1 year sooner.

    p.s. a posting fee is like a transfer fee. Red Sox is paying the Seibu Lions $51 million for the transfer of Matsuzaka.
     
  2. sidis

    sidis Member

    Jun 2, 2006
    Itaguaí-RJ - Brazil
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    tr now to compare the salaries of players from the top 40-80 teams in baseball and soccer.

    the soccer structure is greater and the money more difuse.
     
  3. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Those are hypothetical numbers with both the Yankees and Man U having the same revenue and profits. I also assume they have the same NUMBERS OF PLAYERS.

    The only difference is that the Yankees has ZERO Transfer expense and Man U has $40 mil transfer expense each year. As a result, the Yankees has $40 mil more to spend on players.

    It's you that do not understand. There are only a few elite clubs in soccer as in baseball. These elite clubs are all that should be counted because they are the ones who employ the elite (top 20-30 players of the world).

    Why would you include clubs like Wigan or Sheffield United when they don't ever compete for the top talents (top 20-30 players of the world)?

    For the last time, elite players are top 20-30 players in the world only.
    And the elite clubs are the best 9 clubs in Europe like Man U, Chelsea, Arsenal, Liverpool, Madrid, Barca, Juventus, AC Milan and Inter Milan in term of spending power.
     
  4. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    That's easy. Take the average/median salary of baseball (MLB) and compare it to the average/median salary of soccer (say Premiership or La Liga or Series A).

    However, this thread is about the ELITE SOCCER PLAYERS. And I define them as the top 20-30 soccer players in the world. Players like Henry, Ronaldinho, C. Ronaldo, Lampard, Et'o, Messi, Kaka, etc..

    The world best 35 players according to a Draft Thread back in 2004.

     
  5. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Who's almost as good as Ronaldinho? Who is Chelsea going to buy that's "almost as good"? Chelsea don't need anyone other than the very top players, and they likely need them at the right position.

    That's because they can't be purchased in American sports. You're comparing apples to oranges. If we allowed the Yankees to buy players, they would.



    I do. Its about the size of the contract and what similar players are paid in the market. A player who comes on a Bosman might get a small signing on fee, but Ballack's salary isn't any higher than Terry's or Lampard's, none of whom left on a signing fee. Football players renegotiate their deals when they're sold to new clubs. Why would they agree to negotiate a below market deal? They don't.
    And, of course, that ignores the fact that a player is entitled to a percentage of his transfer fee. Suddenly, the difference doesn't seem so great. If Ballack were earning millions more than anyone else, you'd have a point. But he's not.

    Why are the Red Sox paying Randy Ramirez anything?
     
  6. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    In that case, there's no difference. If a German club pays another club €10M, then that club can only use to pay players or buy other players. Thus, in theory, the money will have to go the players eventually, making this discussion mooot.

    Maybe. Maybe not. We don't know that.

    Oh come now. Cech was considered a good prospect, but no one would have said he's one of the three best keepers in the world. He was playing at Rennes for God's sake.

    Gerrard. But what about purchases like Robben, Duff, Kezman, Mutu, Crespo, Tiago, etc. etc. None of these are truly world class players. You cannot assemble a fantasy XI - it does not work. See a later post for this.

    Because they're all star players and all have to play. That's why simply buying additional great players doesn't work.

    But would these players want to go to those clubs? Realistically speaking, other than Real, Barca, Chelsea, Arsenal, ManUtd, Liverpool, Bayern, Inter, Juve (in normal years) and Milan, where could Ballack have gone? And, realistically speaking, only 4 of those sides would want him. He wouldn't go anywhere else to win the CL. Maybe Valencia as well, but not on recent form.
    And while I agree, you MIGHT be able to get a bit more (not much, a bit) on the open market as a Bosman player, you have to balance it against the risk of injury in your contract season. If Ruud had been out of contract right before his injury for PSV, would United have paid £24M for him and signed him to a lucrative deal? Of course not. Oh, they might have taken a risk on him, but it'd have been well below market.

    Yes, but none of these were elite players. And van Bommel discovered what happens when clubs just buy "great players" because of the free agency system - they're useless there. In fact, the last two Bosman players to go to Barca on a Bosman have discovered this (Ezquerro being the other).
     
  7. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Or to put in their pockets. If you gave my organisation's owners more money (as its clients are, right now), they're likely to keep that money rather than spend it on my salary.

    Why would you include clubs like Wigan or Sheffield United when they don't ever compete for the top talents (top 20-30 players of the world)? [/QUOTE]

    Because its a sliding scale. Juninho played for Boro 3 times. Many younger Brazilians with promise are playing in Eastern Europe. Some arguably excellent players are playing for smaller sides because they aren't quite good enough to play for the big ones. For instance - Kevin Nolan is actually a very good player. But not better than the central midfielders the big 4 in the EPL have. Or how about Anelka at Bolton - he was world class just 4 years ago, and its his temperament rather than his talent that's the issue. That's why they count. Pascal Chimbonda, who now plays for France, played for Wigan last year!

    But most of the "elite" players play similar positions. Take a look at the "greatest of all time", etc. polls. They're mostly strikers and attacking midfielders. Showy players or players who score a lot of goals. Who's a world class RB? Hard to say. And yet those clubs need at least one RB each. Your list of world class players, taken from a draft, is funny. It seems to be well short of RBs, LBs, wingers, keepers, etc. You cannot have a side composed of 5 attacking midfielders because they're the "best" players. That's why Riquelme played for a tiny Spanish club, because you can't simply stick him next to Ronaldinho. It doesn't work like that. But it does work in baseball. You have ARod and Jeter? OK, move ARod to third. Great. How about moving Kaka to RB if Chelsea buy him? Would that work? Probably not. But for baseball, its even more basic. Pitchers - five starters per team. If you're the Yankees, you CAN afford Mussina, Johnson, Pettite, Clemens, Rivera, etc. If you're Real Madrid, you can't buy five players who play in Zidane's position. It won't work.
     
  8. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    So it is your opinion that at present, Maldini, Thuram, Vieira, Stam, Rustu, Duff, Roberto Carlos, Beckham, Raul, Vieri, van der Vaart, Davids, Nedved, van Nistelrooy, Figo, Ronaldo and Samuel are world class?

    In baseball its relatively easy to determine the value of a player - you can adjust his statistics, compensate for variables (sabermetrics does a great job of this) and predict his performance. You can't do that for football at all. Witness Sheva's struggles for Chelsea.
     
  9. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    while not an "elite" player in world terms, let's see how that pans out for Reading.

    Now, we have a choice or two. We could pay him £25,000 a week or so and hope he stays as he likes it at Reading.

    Or we could lose him and maybe have to spend £4 million on a replacement, that might not be as good.

    Or we could could offer him a three year deal, spreading that £4 million we no longer have to spend on a transfer to pay him higher wages instead - we could afford to pay him £50,000 a week instead.

    Now to Pc4th, the third option looks good for the club and the player.

    The problem is that if we do that then every other player and their agent will come in demanding that they deserve to be put in the say pay bracket as Sidwell. If we don't increase their pay then the squad will be unhappy and divided. If we do increase their pay then we'll end up paying out far more in wages that we'd have saved by not paying that transfer fee.

    There is no incentive at all for clubs to offer extra high wages to star players, and clubs who use such "extra" money to pay higher wages would be slitting their own throats financially.

    If there's more money available it will be spread across the board, just as every single other hike in income has been. There's no reason at all to think that because the "extra" comes from not having to pay a fee then it'd be any different.

    If chelsea signed Ronaldinho on a free and offered him £250,000 a week becuase they didn't pay a fee, then every single one of chelsea's other top players would now want to be on £200,000+ a week to bring them into line as well. Some people don't seem able to grasp that detail.
     
  10. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    To be fair, the US doesn't have this concept. The idea of players being paid more than others on the same team seems to be fairly well entrenched.
     
  11. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    There’s been a slight misunderstanding, I didn’t mean ailton, kovac, van bomell and saviola (or sidvell) when I mentioned 4 top players that have let their contracts run out and profited from that. I was referring to the 4 I previously mentioned, mcmanaman, Campell, Ballack and beckham .
     
  12. ugaaccountant

    ugaaccountant New Member

    Oct 26, 2003
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Agreed, it's a cultural thing. If transfer fees were abolished, wages across the board would go up just like in american sports. The world class stars make outrageous sums and the mediocre players who may be a slight upgrade over your current guy still make alot due to multiple bidders in an open market.
     
  13. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    No, that wouldn't happen, because MLB has far more parity in terms of wealth than football clubs do, and baseball players are a far more commoditized product.
     
  14. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    McManaman wasn't that big, Beckham's money is coming from the sponsors (MLS is only paying him 4 mil per year) and Campbell and Ballack wouldn't have gotten much more had they taken their slice of a giant transfer fee. All they did was screw their clubs, nothing more.
     
  15. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    But his contract certainly was , especially back then.


    The deal would most likely not happen if he wasn’t out of contract.

    Ballack became the highest paid player in the world according to some reports . He is not the best player in the world, probably not among the top 10.

    Something similar was the case with Cambell.
     
  16. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    It will go to the players, but it will go to the average players at medium size clubs. Transfer fees move money from the top to the bottom. If C. Ronaldo played out his contract at sporting, they would have less money for salaries while United would have more.






    He was also the Czech international keeper. Rennes were either lucky or smart to pick him up while he was unknown.


    And Chelsea were close to signing Gerard , except he changed his mind at the last moment.

    Who were the better wingers 2-3 years ago than Robben and duff ?


    Kezman , mutu and crespo were signed in the first summer of romans reign, when Chelsea weren’t as attractive as today. Those were the best players you could get at the time.


    I disagree. Everyone is benchable



    That’s another advantage of being a free agent. You get to play for a club that probably wouldn’t have been willing to pay a transfer fee for you.

    Van bomel wanted to play for barca even if it meant missing out on a bit of money.
    He wanted his shot at the big time. After not playing as much as he would want he decided he gave it his best shot and was time to move on.
     
  17. leg_breaker

    leg_breaker Member

    Dec 23, 2005
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    I doubt he would have commanded a very high transfer fee. Not at that age.
     
  18. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    He has made Real the club with the highest income in the world. I actually like him as a player but that was his primary value to them.
     
  19. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    But they didn't get a slice of what would have been an enormous transfer payment. And Ballack's contract appears to be in range with what Chelsea's other big players are making. There's no confirmation he's earning more than the other players at all.
    I believe Campbell made a bit more initially, but that was a sign-on bonus (I'm not an Arsenal fan, so anyone should feel free to correct me). Which, again, is likely similar to a percentage of his transfer.
     
  20. RichardL

    RichardL BigSoccer Supporter

    May 2, 2001
    Berkshire
    Club:
    Reading FC
    Nat'l Team:
    England
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    exactly, which is why pc4th's whole idea is flawed. If you had the "european" mindset towards player salaries over there then the difference in wages between the average guy and the stars would be much flatter there too, transfer fees or not.

    If we had the US attitude here, then the top stars would earn disproportionately more than the rest, even with transfer fees.

    You also have to factor in that it's much rarer here for an average team to have a genuine star player or two, unless they've come up through the youth ranks. You don't get Wayne Rooney or Thierry Henry playing for Blackburn.
     
  21. nicephoras

    nicephoras A very stable genius

    Fucklechester Rangers
    Jul 22, 2001
    Eastern Seaboard of Yo! Semite
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    A large part of that, I think, is that football is much harder to quanitfy. A RB for ManUtd gets paid more than one for, say, Blackburn, but how do you tell how much better he is? There's no "market" for RB, because there are various leagues, countries, systems, etc. Whereas in the US, especially baseball, you can figure out fairly quickly how good players are by sheer numbers.
     
  22. StarStopper

    StarStopper Member

    Oct 30, 2006
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les


    Actually, there were no losers in this deal.
    You're assuming that:

    1. Matsuzaka is a "typical" free agent moving from one MLB franchise to another and thus should be compensated as such. He's actually a rookie now, much the same as Ichoro was, and at $9 million per year, would be one of the highest, if not the highest paid rookies.

    You're assuming that:

    2. Matsuzaka didn't have the option of turning the deal down and waiting to become a free agent.

    You're assuming that:

    3. Boston or any other prospective team would still be interested when Matsuzaka becomes a free agent. (Boston could fill the vacancy with another player or no longer pursue him if he had a bad season or was injured thus depreciating his market value.)

    You're assuming that:

    4. Scott Boras and his client didn't consider the three previously mentioned points and decide that now would be his best opportunity to make the move.

    You're assuming that:

    5. Boston is indifferent because it paid approximately the same amount over the duration of his contract, transfer fee or no fee. However, you're not considering that third parties such as the Yankees, could have inflated his market value by bidding on Matsuzaka upon his free agency. So instead of paying $51 million in transfer fee and $52 million in salary. They likely could have paid $20-$22 million over 6 years. Thats a difference of $30 million!!!

    If you're the Boston Red Sox, you're very thrilled if Matsuzaka lives up to his potential because you've got him for a bargain.

    If you're Matsuzaka, you're very happy because now you're being compensated at $9 million per year, well above the average rookie pay grade.

    If you're the Seibu Lions, you've just pocketed $51 million so you're more than happy.

    The same analogy can be applied to football. So by your own analogy, you have indirectly proven why transfer fees work for all parties involved. ;)
     
  23. dreamer

    dreamer Member

    Aug 4, 2004
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les


    In the US, soccer can't compare to basketball and baseball in popularity and the overall size of the market.
     
  24. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    The loser is clearly Matsuzaka. If the Red Sox is willing to spend $101 mil on him for 6 years this year, it is safe to assume that they will be willing to spend about the same amount on him next year (assume he isn't injured). The risk of injury is more than made up with the benfit of getting $7 million more a year.

    He could have make $16 mil a year if he has waited 1 more year and become a free agent. Instead, he is making $9 mil a year.

    His only benefit is that he got to play in MLB one year sooner.

    As for Rookie stuff, oh please. He is not a rookie. If he is a rookie, why is the Red Sox willing to spend $101 million on him for 6 years.

    Why he signed the deal? Who know! Maybe he wants the Seibu Lions to get the $51 mil. Maybe he wants to play in MLB NOW instead of next year.

    If you're Matsuzaka, which options would you choose?

    A. $16 mil a year (but you have to wait one more year to play in MLB and assume the risk of a career ending injury---he could insure himself against such injury relatively cheap.)

    B. or $9 mil a year (and play in MLB now)

    I have no idea why he chose Option B. But if I am him, I would definately become a free agent and make $16 mil a year instead of $9 mil a year.
     
  25. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: Is transfer fee expense 1 of the big reasons why elite soccer players are earning relatively les

    Haha. No. I refered to 2004 as an example of who the top 30 players are.
    I don't know who the top 30 players as of TODAY. I don't follow European football that closely. But I know that Henry, Cristiano Ronaldo, Ronaldinho, Messi, Lampard are 5 of the top 30 players TODAY.

    The value of a player is what the BUYER perceive him to be. Granted, in baseball, it might be easier to put a value in a player. Just because it is easier to value a player like Henry, Cristiano Ronaldo than an elite baseball players, it doesn't mean the whole point is moot.
     

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