Let's talk about player movement.
The heart of player movement in soccer is the transfer. In the United States, player movements between teams evolved into a swap of assets - I trade my third baseman for your pitcher. When out of contract, players become free agents who can move freely between teams.
In soccer, player movement evolved into a series of cash transactions for players. I want to sign your midfielder, so I'll give your team money for the right. Until recently there has been very little limit on the amount of money that is allowed to change hands, and so it is much easier for players to move between teams.
How a transfer works
Let's imagine that my team, Jason's Journeymen, want a player on your team, the Georgia Generics. We're interested in Johnny Footballer, who is under contract with your team for the next two years at $1 million a year.
We call up your team and ask what you want for Johnny. This is the first part of the transfer - haggling over the cost. We agree that Johnny is worth $1 million. That means that in exchange for releasing the rights to Johnny, my team will pay the Generics $1 million, to do with as they please. The Generics of course can refuse my transfer offer and insist on keeping Johnny.
Now that the two teams have agreed, though, the Journeyman have to convince Johnny to come play for them. In American sports you'll sometimes hear about players getting a no-trade clause in their contract, which prevents their team from sending them elsewhere against their will. In soccer, all players effectively have this clause. The reason for this is because in a transfer, a player's team is essentially dissolving their contract so that they may sign with the team buying them. However, the only reason the buying team will pay the money is if the player joins them; if not, then the transfer will fall through, and the player will stay at their original team. Generally a team will only start entering transfer negotiations once they know the player involved is willing to leave; however, once in awhile you'll see an agreed upon transfer fall through because the player refuses to move.
So the Journeymen now have to negotiate with Johnny. Unlike in American sports, where a player's contract is traded with him, in soccer a transfer means that the player has to agree to a new contract with the buying club. Johnny's agent decides that Johnny is due for a raise, and would like some long-term stability, so he asks for $2 million a year and four years on his new contract, The Journeymen agree to terms.
At this point, the transfer is almost complete. The Georgia Generics tear up Johnny's old contract. Jason's Journeymen pay the Generics the agreed upon fee of $1 million, and sign Johnny to a new contract at $2 million a year for four years. Johnny leaves the Generics and joins the Journeymen.
The Transfer Window
So, we can see from the above how a team pays for new players. The one other rule to know about is called the transfer window. Players may only leave one team and join another during the transfer window. There are two set out every year, and the specific dates vary from country to country. Generally the first and primary window opens in June, after the end of the season, and closes sometime in September, during the first month or so of the next season. There is also a month long winter transfer window That is usually open for the month of January or so. Transfers can be negotiated and agreed upon between windows, but a player may only move to a new club during the window.
Free agency
A couple of points on free agency in soccer:
- If a player reaches the end of his contract and signs with a new team, this is called a free transfer, as the player leaves the old club and joins the new one without any money passing hands between clubs. Sometimes you'll hear the phrase "The team signed player x on a free." It's referring to this.
- Interestingly, players are allowed to begin negotiations with new clubs during the last six months of their old contracts, rather than having to wait until the end of the season. Thus you'll sometimes hear of players announcing their summer move in February or March.
Buyout clauses
One last point about transfers. When a player signs a new contract with a club they will sometimes have a buyout clause inserted. What this means is that if another club wishes to buy them and offers a transfer of at least a value equal to the buyout class, the player's team MUST accept the offer and allow negotiations with the player. Normally a club can refuse a transfer if they don't want to sell, but in the case of the buyout they have to go through.
Remember that the player can still refuse, so it's not a guarantee he will move; but it makes it a lot easier to get someone.
What does this mean for the sport?
Big money clubs dominate soccer far more than similar big money clubs do in most American sports, because money is the heart of player movement. It is much easier for a very wealth club like Real Madrid, for example, to go out and buy a superb young player than it is for the Yankees to do so. American sports have restrictions on the movement of players that makes it hard for a money advantage to manifest anywhere but free agency; however, by the time they reach free agency most players are either at or past their peak. In soccer, if a rich team wants a young player they can buy that player, sometimes without even the consent of that players club in the case of a buyout. It also makes it easier for players to force moves because player movement itself is so much easier.
It also means that owners, more so than in American sports, can engineer transactions merely for the perceived financial benefit. In theory, when a team sells a player that money that comes back in should be used to then buy new players as replacements, or for salaries, etc. In practice many owners simply pocket all or some of the money as profit. American sports at least try to have provisions to force owners to spend on their teams, but there are no such rules in soccer, which can be very frustrating as the fans of a club. Conversely, teams can also overspend on players and risk financial ruin because there is nothing to stop them.
In recent years, the European footballing federation (UEFA) has instituted rules banning clubs from spending more than they take in as profit on salaries and transfers. In theory this means that clubs need to be careful about buying, or when buying have to sell a similar amount. In practice the rules have been in place for a limited amount of time, so no one is quite sure what the effect will be.
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