Shining a light on the murky world of the 10 percenters
Money, money, money: must be funny in a rich man's world.
If the philosophical utterings of Sweden’s most famous four are to be believed, Cristiano Ronaldo must be laughing his blooming head off ahead of his impending megabucks move to Madrid.
The fans' general opinion is that this must be an agent’s field day... and on the whole they would be correct.
But many may not be clear on how exactly the whole situation will be handled and what exactly the role of the agent is.
On a deal of this magnitude the affair could well become very complicated and numerous third parties will probably have their say in how it all plays out.
One of the easiest to clear up should be the agent responsible for the handling of the player’s interests.
While Cristiano is enjoying his nights in Paris his agent Jorge Mendes will be ensuring that the financial package on the table from Madrid is not just enough money, but also that it is constructed in the correct fashion.
Ronaldo and Mendes will involve their own lawyers and accountants to make sure that the contract is constructed both to give the most financial security and to place him in the best tax position possible.
It will almost certainly include some arrangement regarding the player's commercial or image rights.
Ronaldo and Mendes clamber in a banger
Unless written into his contract at United, neither the player nor his agent will be entitled to any of the massive £80 million transfer fee.
Contrary to popular belief, the days of every player receiving 10 percent of his transfer fee are long gone.
Such 10 percent deals tend to only be included in the contracts of young players or those on (relatively) small wages.
It's actually more common in the lower leagues; unfortunately for the players, this is where transfer fees aren't that common anyway.
However, don’t feel too sorry for the Portuguese winker. He should still become one of the highest-paid players in the history of the game.
Meanwhile, his agent will earn approximately 5 percent of his playing contract... and here's another common misconception.
The agent's 5 percent is not usually paid up front, but in regular instalments over the duration of the deal.
This is done not only to make payments easier for the player (so he doesn't have to stump up in advance a slice of wages he's not yet received) but also for it to be in the agent's best interests for the player to stay.
"I've checked, Cris, and you owe me a fiver"
Basically, the more of the contract is fulfilled, the more the agent will earn.
Such fees will normally be paid by the club as part of the player’s contract, and he will be taxed accordingly.
Not so easy to clear up is whether or not any other agents will be involved in the deal.
It is possible that Madrid will have employed someone to act on their behalf in negotiating the transfer fee with Manchester United, and persuading the player and his agent to come over to Spain (I’m sure that would have proven very difficult).
However, it is in that agent's best interests for the transfer fee to be as low as possible: the greater the 'headline' figure, the less left in the pot for his share.
This agent’s fee would obviously be paid by the buying club, dependent upon if they are on a retainer or employed on a one-off basis.
On the other side, it is unlikely that Manchester United would have employed an agent to sell the FIFA World Player of the Year.
This is likely to have been handled internally by the chief executive, David Gill, and his team. And it's not as if Madrid's interest came out of left-field.
"So I get a finder's fee, right?"
However, on occasion clubs will employ agents to maximise the value of a player; such parties will normally receive a performance-related bonus dependent on what price they are able to achieve.
Whichever way the two clubs handle the situation, both will have employed their own teams of lawyers and accountants to make sure that the massive figures involved are all processed properly.
But back to the player's own agent.
One of the agent's most important roles in a deal such as this is to cut through the whole circus and ensure that, whatever happens, the player's best interests are always being represented.
Believe it or not, this is actually what we get paid for...
Read Alex Black's blogs here on FourFourTwo.com. Find out more about his clients at Football First Agency.
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