Feature: The Business of Football- A focus on agents and the Swans

So as the clocked ticked past 11pm on Friday 31st August, a staggering amount reaching just shy of five hundred million pounds had been spent on football players in just eight weeks, this amount matched the 2011 record, but exceeded previous years by over £100m.

The emotion and fanfare generated from such activity drives excitement and optimism with little thought to the financial implications of the football club. We all want our teams to bring talent in but at what cost or risk to the future of the club?

Clubs, agents and players finally breathe more easily knowing that the mayhem of the ‘window’ is behind them and they can get on with their jobs. The misconception in all of this is that the dirty agents are the route of all evil, the reality is that each party need to get their business completed in this period in the most efficient manner, often with little consideration for the consequences as under the surface football is a bear pit in the boardroom.

The circus of football agents is not going away anytime soon, there are over six thousand registered sharks swimming in the pool and fees are up year on year, confirming that they are taking increasing amounts out of the game.

My first paddle in this water was in the early 90’s when just over one hundred licensed agents handled a relatively small group of players at top clubs, most players had no representation as it was considered a necessity only for the big boys. Fast forward just fifteen years and every player has representation, players even have agents before leaving school in some cases.

For further perspective over half of the players in Europe’s five big leagues are represented by just eighty-three agencies worldwide. It is a relatively deep pool with narrow walls but a pool that I no longer choose to swim in.

Beneath the surface, the huge majority of player movement commences within the club boardrooms, with change being driven by the board or the manager who has different ideas for the coming season. Settled players with little desire to move on are forced to do so by tighter budgets, or by a manager who believes he may have secured a better talent.

This is nothing short of ruthless and there is little sentiment, it happens in every club and in every window, little loyalty is shown by the club or manager irrespective of what is communicated in the media through PR spin.

So, with another perspective in mind who can blame the players when what is perceived to be a more lucrative, sexier option is presented to a player? They have seen their fellow players and friends cast aside by the club which can only breed self interest, often highlighted by their agent of course who may have another agenda.

Having represented many players between a range of clubs, I do believe that football is generally clean. Agents complete a professional duty representing the business of football as the players are not qualified to do so, whilst Tony Adams famously stated that ‘I would sign any Arsenal contract put in front of me without reading it’, this isn’t the case with any player that I have ever met or represented.

Generally the challenge is to pull the player in line with reality and explain that the local Porsche garage isn’t interested in lending them the new 911 for a season, or that Adidas shouldn’t pay a league one player £5k a month to wear their equipment. It really can be that frustrating.

There is also a misconception that agents take large chunks of player earnings to fuel their own greed, some of the recent headlines of agents taking £10m are ludicrous yet the typical agent will ‘only’ secure one or two percent of the entire contract value as commission. Consider that an average agent will manage approximately fifteen players of which only three of four may secure new contracts in any season, the payouts can be sporadic and unpredictable.

Closer to home, I followed the comments relating to the departures of Bessone and Orlandi from Swansea last month with interest, supporters rejoicing at their departures without recognising the extensive work behind the scenes of the clubs and respective agents, they aren’t always bad!

Focusing further on Swansea, the upheaval through the summer could have delivered nothing less than a tidal wave across the city, however the reality is that the club has started this season in an even stronger position on and off the field coupled with an even more entertaining approach.

The board at Swansea had the foresight to prepare for potential departures in February after Redknapp was linked to the England job, with Daniel Levy directly targeting Brendan as a preferred replacement. Thankfully at that moment, the buy-out clause at Tottenham deterred the FA and Hodgson was a cheaper, not to mention safer option. When Brendan eventually departed, the club was ready!

Once again the insistence from Huw Jenkins that the incoming manager plays the tune of the club and not the reverse has proved key to the right appointment, recognising the playing style it was in fact Laudrup’s agent that initially contacted Swansea to register interest in the role. This demonstrates how far the club has traveled in attracting such an applicant after the past debacles of Kevin Cullis, Micky Adams and Alan Cork to name a few.

Laudrup…. An appointment Swansea would only have dreamt of not so long ago.

In the wider game, it is fascinating to hear differing opinions on the debt in football, football is a sport but ultimately a business and the debts are no different to other businesses. Debts are created through investments and most clubs invest out of proportion to their income. They gamble their club and supporters have no control.

At Swansea, the shares sit with real supporters who own the club plus a significant ownership lies with the supporters’ trust, who also has a representative on the board.

Any good business is run from the top, football clubs are no different. Our own club at Swansea City has had more than its fair share of highs and lows, it has been a rollercoaster of emotions being involved with a club that has on two separate occasions in a single decade hit rock bottom of the football league yet returned to top the lot.

This is a unique achievement for Swansea that creates more pride than shame but we all hope never to witness the hat trick of this record.

Across the leagues, the contrasting styles between foreign and domestic ownership throughout the leagues continue to widen the gap between profit and loss, yet not necessarily winning or losing.

Arsenal has consistently gone backwards since David Dein was ousted and the power struggle between Uzbekistani and American billionaires coincides with a halt on trophies. Meanwhile our neighbours in red up the road continue to lose £1m per month and survival rests on the degree of patience of their Malaysian owner. Similar stories exist for Hearts, QPR, Portsmouth and Birmingham, the pattern is consistent where the losses mount up until new buyers are inevitably sought.

However, there is little comparison between Manchester United and Liverpool, whose transfer of ownership to American investors was completed through leveraged buyouts, meaning the finance raised from purchasing the clubs was loaded into football clubs as debt. Both clubs now have the debt saddled against their names in the Deloitte football word of shame; however the reality is that independently they are very stable, profitable clubs in their own right with the debt existing to service their owners’ shopping basket.

Meanwhile, back in Swansea, the last thing needed is cash having received around £75m since the season ended in Elvis fashion back in May. The kitty breakdown shows £46m from Father Christmas, otherwise known as the Premier league, £22m from that charity up North called Liverpool for Brendan, his team and Joey plus £6m from money bags City. Our future is very secure.

Beyond the relief of our security and given the turbulence as fans we are ecstatic, less than £20m has been invested in new players yet the squad is undoubtedly stronger, and more exciting. A balance will surely be invested in stadium expansion before the season finishes, assuming premier league safety.

Once again the shareholders who also sit on the board are unlikely to take dividends on the profits from the football club; in fact it was only recently that the board reimbursed themselves for travel expenses! Can you imagine Ridsdale traveling the length and breadth of the country from his own pocket?

So what next for our club in this fantasy league? Financial stability is assured after this summer’s activity, the worst case of relegation would see four seasons of healthy parachute payments totaling £48m, but let’s hope that this is not required.

Given the nature of football there is a possibility of more disruption from vultures at bigger clubs, surely Laudrup will top many chairman’s wanted list if we surpass last season’s position. We can assume that the club already has contingency measures in place.

In Huw Jenkins and his board we are truly blessed that our club is in great hands, they have the complete skill set required to succeed in the business of football , experience, passion, prudence, vision, commerciality and plenty of that precious commodity called cash.

 

Written by Alec Johnson

Follow him on Twitter @71_alec

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