Transfer Deadline Day
Final negotiations, last minute changes to contractual terms, assessing the budget and tax position, dealing with agents, being as flexible in your working patterns as possible to the benefit of the club. Today is probably the most hectic single day for the off-pitch professionals working in football. The day the majority of big leagues across Europe close the ability to transfer player registrations.
What is it like?
Working at a football club has its obvious benefits:
- The glamour
- The relevance
- The excitement
- The great working environment
- Access to tickets
- Passionate people
On days such as this, when the transfer window deadline is set at 23:00 for English leagues, there will be high levels of stress across multiple departments of the club. Primarily the football department, driven by the manager, the director of football or sporting director and likely the CEO or managing director who would be involved in negotiations.
Secondly, the legal team, responsible for drafting contracts, making changes and likely responsible for registering the players. The pressure is on, time to lock yourself in a dark room and only answer calls from the specific individuals involved in this process. Time to deliver what the clubs needs – any last minute registrations.
What about the finance team? Well, there may be multiple considerations from a financial perspective:
- Changes to the transfer fee amount
- When will the fee be payable
- Contingent amounts payable to the club and or the player
- Player wages which may still be a point of negotiation
- Agent fees payable to the club or player’s agent and their classification
- The tax consequences of the whole deal
- Liquidity management
- Image rights payable where applicable
- FFP compliance including this deal alongside others that have been already agreed
The truth is, most organised clubs will have a budget, set well in advance of this day – probably before their previous year end finished. This budget will include the club’s biggest outlay – its spend on players. Most clubs cash outflow will be dominated by player related spend in the form of transfer fees and agent fees, image rights and player salaries. There are differing methods of accounting for these items which means some are included in the profit and loss when the expense is incurred, and some are spread or amortised over the life of the player contract.
If the player registration being acquired or sold was budgeted for, then this takes the pressure off somewhat, but anyone who has ever completed a budget for any purpose would likely agree that they are difficult to get 100% correct.
Your targeted player may no longer be available, you may have overpaid for other players, player registration sales that were budgeted may not be complete, cash may not be available due to a debtor not having paid an invoice…the list goes on.
One thing is for sure – from tomorrow, when the madness subsides slightly, the finance team will be able to process any last minute or unplanned changes to redraft their budget based on known transfer window activity. That is, assuming that they will do no more business with the leagues with the ability to continue registering players. Yes, that’s right – it is still possible to register players in some leagues after tonight’s deadline. The major leagues are aligned but some players will transfer after today. Check out the European Leagues Transfer Window for the deadlines across Europe.
So for all those working hard to complete the final deals across the major leagues in Europe. All the best for the rest of the day. Perhaps wind down after the window has closed with your favourite way to de-stress. Perhaps take tomorrow morning off before continuing with the mayhem and the rollercoaster of the rest of the season.
We hope you can make the deals you want to make and the finances underpinning the deals stack up!
Thanks for reading. We are here to support your off-pitch ambitions in football to promote finance education in football and share our experiences with you. We are working with Loughborough University to bring you our flagship course in football finance. For further information on what we do and who we are, visit our website.