How the fee for a player is determined in the Transfer Market ?

Through the course of the season football fans experience a myriad of emotions- from pure ecstasy to utter grief, from satisfaction to frustration and so much more. The football season proves to be a roller coaster ride with a gripping mix of highs and lows. No wonder most football fans get saddened as soon as the season ends. But the very mention of ‘Transfer market’ cheers them up.

Window of madness is probably the best way to describe the transfer market. Hapless sports journalists around the world start cooking up variety of rumours to fill their pages. Player X and Manager Y had dinner together and discussed a transfer, Player A does not enjoy the weather of City C and wants to move, so on and so forth. The stories and rumours floating around are aplenty. Most of them are crazy, some are downright hilarious, very few turn out to be true. Either way, the transfer market is an integral part of football and we all enjoy it. But in the midst of all the mayhem and the crazy rumours, have you ever wondered how players are valued in the transfer window? What factors determine their price when a transfer takes place? Sportwalk provides the answers.

What determines the value of a player during a Transfer market?

On the face of it, a transfer appears to be a simple business deal involving the exchange of a commodity for a certain price. The commodity in the case of a transfer being the player. But transfers are actually quite complex and a lot of factors come into play when deciding a player’s value. Here are the main factors:

1. Contractual situation:

The current contract of the player at his parent club is one if the foremost factors when determining the value of a player. The time of signing the contract and the length of the contract still remaining are the two factors that I am talking about. Buying clubs will have to pay a substantially larger amount for the player of their interest if he has further 4-5 years left on his contract. Whereas, if the player only has a year or less remaining on his contract then the selling club does not possess any real leverage when negotiating the price of the player, as the player can soon leave on a free transfer. The most high profile case of that happening was Lewandowski moving to Bayern Munich, a blow from which Dortmund have struggled to recover till date.

The contractual situation of de Gea is one of the reasons Manchester United are in a helpless position regarding his transfer, he only has a year left on his contract and if he is prevented from leaving, he may leave on a free transfer next season which! One of the reasons why Cristiano Ronaldo is so revered by United fans is because, when faced with a similar situation as de Gea now faces, Ronaldo chose to respect the wishes of Man United and Alex Ferguson by signing a new contract and staying for one more year. During that year Man United won the league with the help of his contributions. When the transfer to Madrid finally came to the negotiation table, United had the required leverage to extract from Madrid the amount of money that they valued Ronaldo at.

2. Recent form:

Performances and form of the player since the last transfer market and/or for the last two seasons or so also plays a pivotal role in the valuation of the player. Good form over the past season or so automatically adds a few million to the valuation of the player. Di Maria’s stellar season for Madrid en route to winning the La Decima easily added 15 million to his transfer fee. Similarly, if a Kevin de Bruyne or Alexis Sanchez was wanted by a club now, their transfer fee would be quite high as well due to the excellent seasons they have had.

3. Squad status of the player at his parent club:

There are 4 kinds of squad status that can be associated with any player- 1. An indispensable member of the team also called key player. 2. First team member. 3. Back up the first team. 4. Rotation option.

A team will be, for obvious reasons, highly reluctant to see one of their key players leave the club and will consequently demand a high price for him if any potential suitor does come knocking. Meanwhile, the same club may not be as rapacious if a club wants to buy one of its backup players. This is more like a thumb rule, though, as no club wants to let go one of its players cheaply irrespective of whether he is a key member of the team or a backup.

4. Talent and experience:

Using talent and experience to value a player is not as straightforward as we may think. Talent in an intangible and is very subjective, one person’s view of a player’s talent may differ slightly or highly from another person’s view. Also, many supposedly talented players have failed miserably to translate their talent into performances, like Hatem Ben Arfa. Experience, though not an intangible, as it can be measured by the amount of games played, is no guarantee of the success of a player after he moves to a new team or a new league. Nevertheless, these two factors do come into play when determining the value of a player. The highly talented players are bound to attract more attention from clubs and are therefore valued higher by their parent club when it comes to a transfer. And experience in playing in the same league, national experience etc come in very handy when clubs build their squad.

5. Age:

Younger players are generally more in demand and tend to command higher transfer fees than someone who is, say 34 or 35 and is nearing the end of his career. There are several reasons for this. Younger players are valued not only for what they are as a player right now, but also for how good a player they can develop into in the future. A player like Hakan Calhanoglu who is, at 21 already performing ever so well and has the potential to turn into a world-class player in the future. He will be valued highly be Leverkusen. Younger players also have a greater penchant for learning new tactical concepts, playing different roles and adjusting to a new club’s playing style when compared to an older player who is more rigid in his footballing ways.

6. Position of the player:

Although defence is an integral part of the game and the old adage “Attack wins games, but defence wins titles” holds true in my opinion, not many fans want to see a game full of tackles, blocks and interceptions(except the Italians perhaps). Step overs, nutmegs, dribbles, good wing play, pace, through balls and attacking goal oriented play is what brings fans to games. Consequently, the players who produce these attacking moments in a game are generally valued higher in the transfer market. This is testified by the transfer fees commanded by some of the best forwards in the game like Bale, Ronaldo, Neymar, Suarez etc as opposed to defenders who move for lesser fees. There are a few exceptions here like David Luiz, Luke Shaw, Thiago Silva.

Other factors that add up to player’s value in Transfer market

The factors described in the above section can be considered to be the 6 most pertinent factors involved when valuing a player in case of a transfer. But there are so many other nitty-gritty’s that also influence how a player is valued. I am not being eclectic and covering all the factors, ut here are a few important and commonly seen ones:

1. Buyout and Release clauses:

A buyout clause is a condition inserted into the contract totalling to a certain amount. The player, if he wishes to move to another club can buy out the remaining part of his contract at the parent club by paying the amount specified under buyout clause. The player though, does not usually pay the whole amount himself and is helped the club he is moving to.

A release clause meanwhile, is another condition in the contract which specifies a certain amount under it. The release clause is activated when a club meets the condition and makes a bid equalling or above the amount specified in the release clause. The condition is usually something like- The buying club has to be a club playing in the champions league, the buying club should have finished inside the top 5 of their league last season, etc. Release clauses are paid exclusively by the club willing to buy the player. Mario Gotze’s transfer to Bayern Munich was an example of the release clause being activated.

2. Agent fees:

Almost every player now employs an agent to manage all things related to him. These agents handle all the negotiations on the behalf of the player in case of an impending transfer. They command a fee for their services for acting as the middle man. Super agent Jorge Mendes brokers a lot of deals every transfer market and earns a substantial amount of money.

3. Negotiations:

Good negotiators like Daniel Levy at Tottenham are known to be fiercely greedy when dealing with a club that wants to buy one of Tottenham’s players and add a few million to the transfer fee with his stubbornness to lose an asset. Chelsea too has proven to be shrewd negotiators as shown by the transfer fees they have received for players like Lukaku, Schurrle, and De Bruyne.

4. Sell on fees and Loyalty Bonuses:

Sell on fee is a fee that the selling club receives when the buying sells the player to some other club in the future. A recent example of this happening was when Southampton received a fee rumored to be around 4 million when Spurs sold Bale to Madrid due to the sell on fee clause. A loyalty bonus is the fee received by the club if and when a player submits a transfer request.

These factors are by no means all-encompassing and there are a few more factors like trigger clauses, buy back clauses etc that also influence transfer fees. UEFA introducing Financial Fair Play was one of the best things to ever happen to club football as it prevents sugar daddies from injecting their own money into the club and encourages clubs to run with their own money. Post FFP clubs like Barcelona, Bayern, Manchester United and Real Madrid who make a lot of money on their own are at an advantage over clubs like Manchester City and Paris Saint-German and rightfully so. But even after FFP was introduced, transfer fees continue to be highly inflated and place the lesser affluent clubs at a disadvantage. The debate over inflated fees and FFP will be left to another day and time. Enjoy the mayhem that comes with the transfer market, folks!

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