10 Aug 2016 15:37:03
ed002 could you be so kind as to let us know the true cost of pogba's transfer fee, at work the utd fans think they will get the money back from shirt sales! my guess is the real figure is more than double the official fee, I understand if you don't want to get involved in the subject as you have been bombarded on this player all summer.

{Ed002's Note - There is a very good reason that I don't wish to tell you how the fee breaks down as it would cause some issues - but it might be an apt time to explain again about the cost of transfers (excluding wages). What is paid by the buying club would typically include:

(a) Transfer fee - the big number.
(b) Any levy applied by the local FA – 5% for the EPL.
(c) Tax due on the transfer fee – typically this will be VAT (at varying rates across Europe) some or all of which should be reclaimable.
(d) Agent fees – this may be to one or more agents (as an example, Liverpool have spent £40M plus VAT on agent fees over the past three years leading to this window).
(e) Tax due on the agent fees – typically this is VAT at the local rate where the agent bills from – it is not reclaimable.
(f) Intermediary fees – this may be to one or more sponging leeches (what do you mean you have a super agent?) .
(g) Tax due on the Intermediary fees – typically this is VAT at the local rate where the Intermediary bills from – it is not reclaimable.
(h) Signing on fee to the player (possibly including non-reclaimable VAT if the player is VAT registered).
(i) Legal fees.
(j) VAT on legal fees which is reclaimable.
(k) Moving/relocation costs for the player.
(l) VAT on moving/relocation costs which is reclaimable.
(m) Paying up insurance costs to the selling club (sometimes waived).

What is paid by the selling club would typically include:

(a) If the player is under 24 and moving between different football associations, a Solidarity contribution paid to his previous clubs responsible for his training - this is 5% of the transfer fee received (apportioned 5% of the contribution for each year from the season of his 12th birthday to the season of his 15th birthday and 10% of the contribution for each season from his 16th to 23rd birthdays).
(b) If the player moves to a higher category club (all clubs being categorised 1 to 4) then Training Compensation is due for the period of age 12 to 21. Compensation is due to all clubs when the player turns from amateur to professional and thereafter only when he moves from his final training club to another club. The initial training compensation is levied at the training costs associated with Category 4 clubs. The subsequent figure is agreed between the sides or tribuneral if necessary.
(c) Any monies owed to the player if he did not request a transfer – again this is 5% of the transfer fee received.
(d) Any monies owed to the player in terms of his contract (typically outstanding owed wages (not future wages) and bonuses).
(e) Any money contractually due to a previous club as the result of a sell-on clause.

And I can assure your chums at work that shirt sales are not the answer.

The money from shirt sales goes to the manufacturer, the distributor and the retailer, who can make extra adding numbers and names to the shirts. If the club are the retailer (club shop, club website etc.) then they get the retailers cut. The manufacturer (Adidas, Umbro, Nike etc.) pay the club an amount each year which allows them to manufacture and sell the shirts using the correct logos etc.. That is how they justify the money given to the club. So if you walk in to a high street store and buy a Liverpool or Arsenal shirt - nothing goes to the club. There are a few clubs that have negotiated different deals with manufacturers (Real Madrid with Adidas and Barcelona with Nike are the two obvious examples) based upon joint reselling ventures. So the income from shirts is fixed to the £xM or whatever Adidas, Nike etc. pay the club plus a small amount for reselling through the club retail outlets (shop, web).}

1.) 11 Aug 2016
10 Aug 2016 22:43:57
Interesting read, thanks ed.

I knew there was a lot involved but didn't realise just how much.

Also I didn't realise the player receives some of the fee if he didn't request a transfer. The player wins on all fronts really. Usually earns higher wages at a new club, maybe gets a signing on fee and potentially earns some of the transfer fee. Crazy really.

2.) 11 Aug 2016
11 Aug 2016 03:21:05
thanks ed002 for such a detailed answer, I appreciate it, as you rightly say the average football fan gets confused by transfer fees, these "chums" had not even considered his wages, I promise that's the last time I mention his name and once again thank you for your time and patience.