How the transfer market works.

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The world of football is filled with a lot of activity on and off the pitch. Most of people's focus is always on the pitch as it is where the entertainment lays. Outside the pitch one major activity that involves players and club is the Transfer of players from one team to another. Valuation is placed on the player by the selling club but only happens when the player is in contract with the selling club. Since the player is still in contract, the buying club will pay the selling club a compensation fee otherwise known as the transfer fee for terminating the player's contract with the selling club. 

An out of contract player can leave the club as a free agent witnessed by the free transfers of Sergio Aguero and Memphis depay to Barcelona and Gini Wijnaldum & Sergio Ramos to PSG. However, some of these free transfers come at a cost of huge weekly wages and huge bonuses. After the transfer is done, the player will then change their registration details to being registered with the buying club, medical check is done on the player, official signing of contract by the player in their new club and finally official unveiling is done. 

Big clubs make some of the most outrageous payments to acquire the services of certain players whose valuation is high. Big money moves include Neymar and Mbappe to PSG, Hazard to Real Madrid, Pogba, Sancho and Maguire to Manchester United, Coutinho, Griezmann and Dembele to Barcelona and many more. These are ranked as some of the most expensive transfer deals in the European football market. 2019 was however the year that did set the records for money spent on transfer totaling to $7.35 billion investment on transfers. 

Player Valuation 

Different factors are considered while valuating a player's worth before the transfer is done and which include the player's perceived quality, the length of their current contract to determine how much to be paid as compensation fee, the player's potential worth and the current commercial value. 

When transfers Happen. 

FIFA has given two periods through which transfers will be made across Europe and which are called the transfer windows. The period are summer window from 1st July to 31st August and winter window from 1st January to 31st January. However most of the transfers take place on the deadline day which is witnessed by a lot of activities between two clubs.

How transfers happen.

Just like in business transfer happens after two parties have agreed on terms of sale. The same applies in football, an interested club approaches the club having its target under contract and negotiate a deal that is struck between the two teams and payment proceeds. The transfer fee is paid to the selling club and some percentage is taken up by their agents in service of facilitating the transfer and representing the player. Negotiations take place and the two clubs agree on how to pay the transfer fee. The selling club may decide that the payment to be made with a principle amount then add-ons come in later on or may decide that the club pays the whole amount at once. It depends on how they carry out their negotiations. 

Signing of the Contract 

A contract is signed between the club and player and which includes salaries, bonuses, competitive bonuses and clauses. The clauses include the release clause which is a pre-agreed amount that another club can bid for a player and the selling club is obliged to accept the offer. The amount vary according to the player's quality and a good example would be the $ 265 million release clause on Neymar at FC Barcelona that PSG triggered to acquire the services of Neymar. The "match the highest earner clause" is common on the elite players like Messi or Ronaldo in which if their club signs a player and the new player's salary is higher than the player whose contract has the match the highest earner clause, the club is obliged to increase the player's salary to that of the new highest earner. A player whose contract has the relegation clause can leave the club if the club faces relegation. 

In conclusion, the whole transfer is a system in which elite players get to play in different countries and a lot whole of money is spent. However, paid transfer only took up only 14% of the world transfers in 2016. The markets are moving and the amount spent on transfers increasing and which bring the non-competitive aspect of football. Big teams are spending heavily on transfer and which act to the disadvantage of smaller clubs.