The Football Business Column: The Money that Goes to Agents, Technology and Stadiums

football agents

The Money that goes to Agents

We can’t go anywhere in football without hearing about the money side of the game, such is the prevalence of commerce, sponsorships and brand partnerships, and the importance of financial might and ambition. So when it was announced this summer that the Premier League spent a record £630 million in the transfer window, no one really batted an eye.

It couldn’t have come as a big surprise though, given the enormous TV deals that were secured by the Premier League with broadcasters Sky and BT Sport. After all, the number of big signings and the amount of big money being flown around this summer—not least that mind-boggling world record deal for Gareth Bale—showed that money has become less and less of an object to Premier League clubs. (Crystal Palace paid £8.5 million for a League One player, Dwight Gayle from Peterborough.) It turns out, though, that it’s not just the Premier League, and it’s not just the signing fees.

As we saw from the Neymar megadeal to Barcelona, there are (too) many parties involved in a transfer deal. There are “investors”, “stakeholders”, agreements to play friendlies, first-option commitments and, of course, agents. And when your dad happens to be your agent and you happen to be Neymar, your family can suddenly become €40 million richer.

But it’s not just in conjunction with the biggest names in football that agent fees are considerable. The Football League released a report last week on agent fees at the Championship, League One and League Two levels, and the results were quite staggering. In the 2012/13 Championship season, 23 clubs (Blackpool excepted) paid a total of over £18.5 million in agent fees for 431 agent-involved deals, meaning that, on average, each club spent over £800,000 in payments to agents and each deal cost £43,000.

And that’s just at the Championship level. We await (dread) the official numbers affiliated with the Premier League for more discussion (depression). We haven’t even asked the all-important question yet: Are agents even worth it? (Blackburn Rovers spent over £3.5 million in agent fees—which is more than enough for a quality Championship-level player—and ended the season closer to relegation.)

The Money that goes to Technology

When we talk about money in the Premier League, the topic inevitably focuses on the lack of it spent on youth development and as such the promotion of homegrown talent, which adversely affects the performance of the English national team. And we all know the history of underachievement of said English national team in international tournaments, specifically in penalty shootouts, quite unlike their Premier League counterparts.

Fear not: Money can also be a solution there! Need to provide players with a simulated match environment? With a realistic atmosphere like a World Cup Finals penalty shootout? No problem. Engineering company BAE Systems are currently working with UK Sport, “the UK’s high performance sports agency,” to produce virtual reality simulators for Olympians and Paralympians to better prepare them for real-life tournament scenarios, and according to this Guardian report, this technology could be on its way to football as well.

And why not? Given the amount of money devoted to the mental and physical side of football these days—there’s also the sports science side, which has led to the spawning of many a sports science department at major football clubs, as well as the data analysis side—it’s only natural to see money being thrown at technology that can give teams and players that slight extra chance of success.

But is it really that smooth-sailing? Will virtual reality be able to compare to a real-world penalty shootout environment where everything is at stake? Unless BAE add a feature that projects a virtual reality of burning effigies in the penalty takers’ minds, it might not be enough…

The Money that goes to Stadiums

As ever, England isn’t the only country with huge financial burdens in football. Let’s cross the Atlantic for a moment and look at Major League Soccer, where DC United’s proposed new stadium has attracted criticism for its fee.

$300 million is the sum in question for the Buzzard Point, Washington DC location, and while there are obvious benefits to fans of the club and league, the mooted amount has been met with significant criticism from the DC Fiscal Policy Institute, who will have had the current economic climate in mind.

It’s not only in the US where public spending on stadiums have attracted scorn. The 2013 Confederations Cup this summer was marred by public rioting and protesting in Brazil throughout the tournament, against the Brazilian government’s extravagant expenditure on stadiums for next summer’s World Cup and 2016’s Olympics. A total of almost $17 billion is estimated to be spent in conjunction with these two events, and well, there could be a variety of things that this money could be used on otherwise.

But even that is a drop in the ocean compared to Qatar (or should that be a grain of sand in the desert?), who will be spending a whopping £134 billion on their controversial 2022 World Cup tournament, the Middle East’s first ever. How’s that for stadium spending?

 

This piece was part of my new biweekly column for SWOL.co, in which I discuss some of the latest news, trends and developments on the business side of football—everything including marketing, strategy, technology and finance.

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