22 Mar 2015 04:54:21
Hey Ed002, I was just wondering if you could clear something up for me.
For example, say Chelsea wanted to buy Koke, and the fee was 30 million (just an example), and he had 4 years left on his contract, after we pay his fee, would we also have to pay off his remaining years on his contract to the player or team were buying him from? Or does the contract simply get scrapped and we give him a new contract?
Hope that's clear enough
Cheers!
{Ed002's Note - The contract is terminated when the transfer is processed. There is no cost to the buying club related to that. His contract with Atletico would end and his contract with Chelsea would begin. So he wouldn't lose out on wages at all.}
22 Mar 2015 08:51:15
Thankyou!
{Ed002's Note - 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 £25M 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, a Solidarity contribution paid to his previous clubs responsible for his training - this is 5% of the transfer fee received.
(b) Any monies owed to the player if he did not request a transfer – again this is 5% of the transfer fee received.
(c) Any monies owed to the player in terms of his contract (typically outstanding owed wages (not future wages) and bonuses).
22 Mar 2015 21:02:46
Good info Ed, no wonder smaller clubs struggle to sign semi decent players.
22 Mar 2015 21:53:57
Great info. Thanks again!