Tiran Gunawardena

how football transfers actually work: the player - agent relationship

Tiran Gunawardena
how football transfers actually work: the player - agent relationship

Inside Reevaldo's transfer: Part 4

The sports law team at Mills & Reeve have been involved in countless international transfer negotiations and have sat on both sides of the table, we thought it might be useful to show how a typical deal gets done, from start to finish. Don't miss the footnotes --> 1 <-- which contain links to useful documents as well as additional insights on industry practice.

This is the final post in our four-part series taking you inside the transfer and contract negotiations between Paddington United, Maracanã, and Reevaldo. However, we have lots more content coming up as we continue to follow Reevaldo's journey throughout his career!

So far, we’ve seen Reevaldo’s agent Jaco Moreno take an extremely active role in this deal. But where is Reevaldo himself in all of this?

In this post, we examine the nature of the player - agent relationship, and particularly during transfer and contract negotiations.

Dual representation

As discussed earlier in this series, Moreno acted for Paddington in their transfer negotiations with Maracanã while also acting for Reevaldo in his contract negotiations with Paddington.

There is an inherent conflict of interest that exists when an agent acts for both the buying club on the transfer negotiations and the player on the contract negotiations.

However, these dual representation agreements happen all the time. In fact, if you take a look at the most recent list of Premier League transfers and the agents involved in each deal, you will see just how common dual representation actually is.

The club, player and agent will be in compliance with the FA’s Regulations on Working with Intermediaries as long as:

  • the intermediary has a pre-existing representation contract with the player lodged with The FA,
  • both the club and the player are aware of the conflict of interest,
  • both the club and the player are aware of the full particulars of the proposed dual representation,2
  • both the club and the player are given the opportunity to seek independent legal advice,7
  • both the club and the player consent to dual representation in writing, and
  • the relevant paperwork is submitted to The FA.

One of the most important documents that must be submitted to The FA is the tripartite representation contract.3

Representing minor players

Moreno has been representing Reevaldo since he was fifteen years old, but he has not yet been paid any fees for his services.

Under both FIFA's and The FA's Regulations on Working with Intermediaries, players and clubs are prohibited from making any payments to intermediaries if the player involved is under the age of eighteen.4

Additionally, under both The FA and FIFA intermediaries regulations, Moreno was required to have Reevaldo's parents sign the first representation contract they entered into together, as Reevaldo was sixteen (His parents did, in fact, sign the contract).5

Representation contract

In order to act on this deal, even though Moreno was already registered as an intermediary with the CBF (the Brazilian FA), he also needed to register with The FA and lodge his representation contract with Reevaldo with The FA.

Moreno and Reevaldo entered into a new representation contract last month and over the next two years, Moreno will need to continue to prove to his client that he is doing a great job of representing his interests, otherwise Reevaldo may decide to sign with another agent once their representation contract expires in the summer of 2018.

The length of representation contracts between players and intermediaries is capped by The FA at a maximum of two years.6

Contract length

Reevaldo wanted to sign a three-year deal, but Moreno knew that Paddington would not make such a significant investment unless Reevaldo signed a five-year deal.

Moreno convinced Reevaldo to accept this longer-term contract if he could persuade the club to include a release clause if the right transfer offer came in. Moreno explained that this was a sensitive matter as he didn't want Paddington to doubt Reevaldo's commitment to his new club. Reevaldo accepted Moreno's advice.

Wage negotiations

Initially, Reevaldo asked Moreno to try and push for a basic wage of £35,000 per week, which Moreno thought Paddington would agree to immediately.

After Moreno suggested that they begin negotiations by asking for £50,000 a week, Reevaldo expressed his surprise that he would be in line for such a big salary. After some confusion, the player and his agent realised that they were on different pages.

Reevaldo was asking for £35,000 per week in net wages while Moreno thought Reevaldo was asking for the sum in gross wages, as is the standard in the UK.

In order for Reevaldo to net £35,000 per week, Paddington would have to pay him over £65,000 per week gross, which was far too much for Moreno to even suggest to the club.

After Moreno explained the wage differences, the UK tax issues, and the fact that he was about to become one of the highest-paid eighteen-year-olds in football, Reevaldo agreed to accept the best offer Moreno was able to negotiate with Paddington: a basic gross weekly wage of £40,000.

Signing-on fee, performance bonuses and other benefits

Moreno was able to negotiate bonuses for Reevaldo as well, including a signing-on bonus of £1 million and performance and appearance-related bonuses. The signing bonus alone sees Reevaldo earn the equivalent of an additional £3,850 per week, so even though Reevaldo’s basic wage is “only” £40,000, he will be earning the at least the equivalent of £43,850 gross in his first season with Paddington United.

Reevaldo also asked Moreno to try and negotiate a stipend of £3,000 per month to cover his housing costs, as Central London is much more expensive than Rio de Janeiro. He also wanted twelve first-class round trip tickets per year from Rio to London for his family to use to visit him. Moreno had to explain that while these perks are sometimes granted to star players, all of Reevaldo’s housing and travel costs are already built in to his hefty wage packet and there was no chance Paddington would agree to all of these additional costs.

However, after discussing the matter between themselves, it was agreed that Moreno would ask Paddington for a one-time payment of £25,000 to help cover Reevaldo’s housing and relocation costs. Paddington countered with £5,000, and eventually the parties agreed to £2,000 per month for the first four months of the contract to help with Reevaldo’s housing costs and up to an additional £8,000 to help cover Reevaldo’s relocation costs, provided receipts could be produced.

This concludes our four-part series focusing on how Reevaldo, who was playing for Maracanã in Rio de Janeiro a few weeks ago, has now found himself at a Premier League club in London. We’ve attempted to (quite literally!) illustrate how a transfer is completed, from start to finish, while also highlighting key issues that must be addressed before any deal can be completed.

Our next post will focus on Paddington and Reevaldo's efforts to secure a UK work permit, which will be necessary before Reevaldo can actually play competitive matches for Paddington.

  1. Pretty cool, right?

  2. Including the full amount of the fees paid to the agent.

  3. The FA allows the parties to create their own bespoke tripartite representation contracts and add additional clauses and terms, which we are often asked to do by clients. However, all of the obligatory terms contained in the FA Standard Tripartite Representation Contract must also be included in any bespoke contract.

  4. See, Article 7(8) of FIFA's Regulations on Working with Intermediaries. See also, Section C.10 of The FA's Regulations on Working with Intermediaries.

  5. See, Article 5(2) of FIFA's Regulations on Working with Intermediaries. See also, Section B.9 of The FA's Regulations on Working with Intermediaries.

  6. See, Section B.10 of The FA's Regulations on Working with Intermediaries.

  7. Or, advice from the Professional Footballers Association (PFA) in the player's case.