Even though a player doesn’t have a transfer fee, it doesn’t mean a club will get him for free.
The financial situation in the majority of the football clubs is not that good. On the other hand – the relatively small circle of top clubs is controlling the large portion of total turnover and revenue in the football industry. That is why the so called small or middle clubs need to be very efficient at dealing with their resources.
While the top clubs pay massive sums for transfer fees and top stars salaries, others need to optimize their business and find the free players. So they don’t need to pay transfer fees. But what is a free player? Does the free player really exist or is it just a myth?
If we simplify, a free player is any player whose contract has expired and can move to any club for free. This statement stands in case the player is at least 23 years old and if this contract was a professional contract. There are always exceptions to the rules. Here are some explanations.
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The training compensation
Even though a player doesn’t have a transfer fee, it doesn’t mean a club will get him for free. A player’s training and education takes place between the ages of 12 and 23. The so called training compensation shall be payable, as a general rule, up to the age of 23 for training incurred up to the age of 21, unless it is evident that a player has already terminated his training period before the age of 21. In this case, training compensation shall be payable until the end of the season in which the player reaches the age of 23, but the calculation of the amount payable shall be based on the years between the age of 12 and the age when it is established that the player actually completed his training.
Training compensation is due when:
- a player is registered for the first time as a professional;
- a professional is transferred between clubs of two different associations (whether during or at the end of his contract) before the end of the season of his 23rd birthday.
Training compensation is not due if:
- the former club terminates the player’s contract without just cause (without prejudice to the rights of the previous clubs);
- the player is transferred to a category 4 club;
- a professional requires/requests amateur status on being transferred.
The third party ownership
The third party ownership is the ownership of a player’s economic rights by third-party sources, such as football agents, sports-management agencies (Tevez and Mascherano case), families (Neymar case), or other investors. The involvement of investors in the ‘ownership’ of players is a common practice in football, particularly in Brazil and Argentina where many clubs are insolvent or financially limited. Businessmen or other investors buy shares in the economic rights of young players and often cover the costs of their training and accommodation. In return they are entitled to a percentage of a player’s future transfer fee.
The third party ownership is now prohibited in England (The Premier League took steps to outlaw third-party ownership in 2008 after Tevez and Mascherano case), United States in MLS (but, interesting, not in USL and NASL) and some other countries.
The agents need to know the exact situation regarding potential third party ownership of a certain player, before proposing this player to clubs, in order to avoid awkward situations when negotiating. An agent could end up losing his direct contact to a club or losing his good name just because the player was not sincere from the beginning.
Co-ownership is a system whereby two football clubs own the contract of a player jointly, although the player is only registered to play for one club (Adriano case owned by both Inter and Parma). It is not a universal system, but is used in some countries, including Italy, Argentina, Chile and Uruguay. This type of deal differs from third-party ownership, in that in the latter, the player’s contract is owned by a non-footballing entity, such as a management company.
For a co-ownership to be set, a player must have at least two years left in his current contract. The co-ownership deal itself will last one season — though it may be terminated early — after which the two clubs shall decide whether to renew or to terminate the deal. Should they fail to reach an agreement, the issue shall be resolved via a blind auction. In case none of the clubs submit a bid, the rights to the footballer shall remain to the club who had the actual use of the player during the season.
When a player is in co-ownership between two teams, he can still be sent on a free loan to a third side, provided that both the owning clubs agree on the move. The club which the footballer is not currently playing for is allowed to sell its half share to another club, provided that the other owning club and the player agree.
Again, the agent should be aware of all the details about the economic rights of the player, before starting the negotiations with clubs.
You can read more about the regulations on the status and transfer of players here.
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