Rugby union transfer fees: How to make them happen (part one)
This year, the English Premier League spent a record £2.2b on transfers of players. Because they are the biggest commercial league, they are able to bring in the best players.
Of the transfer fees £858m went to the top leagues of Germany, France, Italy and Spain, £836m stayed in England (but not all in the Premier League), £374m was shared between the Portuguese and Dutch top divisions with the remaining £132m going to the rest of the world.
Benfica from Portugal have made a business of buying low and selling high. Since 2001 they have made about €1.4b with a little over €500m coming in the last five years.
They are able to take players from poorer regions of the world and sell them on to the six big leagues allowing them to overcome the financial restraints of their own league.
Darwin Nunez of Liverpool (Photo by Julian Finney/Getty Images)
The transfer of David Beckham from Manchester United to Real Madrid in 2003 was one of the first deals done for commercial reasons. United at the time were too busy playing soccer to even notice.
Real sold one million shirts with Beckham’s name on it within the first year and easily recouped the €37m paid for him.
With the 2005 purchase of United they moved into the commercial arena, bringing the rest of the league with them. In 2016 with the purchase of Paul Pogba for £90m, and within one month sold £200m worth of shirts.
French rugby club owners understand business and are building an empire that is currently on par with England, the URC and Super Rugby combined.
They however only pay a few fees here and there, but this is starting to change at a snail’s pace. Because rugby players don’t currently break contracts, fees aren’t being paid. If contracts were 4-5 years this would start to change.
French clubs only care about the Top 14 with only the elite looking at Europe. This though has started to change as owners realise what being kings of Europe can do for business.
As an empire they have money men looking after the money and rugby men looking after the rugby. When you know the value of everything you can determine if something is value for money. Super Rugby is still United in 2003 and doesn’t know the value of anything.
Player 1 is Trevor Nyakane, Springbok and until last year Bulls prop. He had two years left on his contract. Racing needed a prop that was going to improve them.
They crunched the numbers and determined that buying Nyakane out of his contract was the best choice. They gave Nyakane higher wages so he was happy to move, they gave the Bulls €300k as compensation and congratulated themselves on a job well done.
Australia and New Zealand Unions in the past have been accused by fans over spending too much on elite players and not on the ones that matter.
If Super Rugby make a rule that every player must have a buyout clause the Unions will quickly discover the value of all players not just those who are good on the field. Players will be put in shop windows but the clubs will get a return.
Buyout clauses are an art. There can be a domestic transfer and international transfer fee to help players move internally and make the rich clubs pay a fair price.
They can kick in after two years or can reduce in value each year. They can be higher for more desirable players and lower for players they want to move on.
Players love transfers and so do their agents as clubs might give five percent to the player on the way out. Agents will do all the work so Clubs can just sit back and relax.
Even better, the unions can control the agents and get a kick back. No longer would players leaving be a bad thing it would allow teams to invest European money into Super Rugby, something many have called for.
If a player is good enough like Nyakane then a bean counter will get the deal done.
Player 2 is Cameron Redpath. He moved from Sale to Bath because he wanted more game time, and felt Bath was a better choice.
Sale was happy to see him leave for £150k for their loss, which Bath saw as a good investment for a promising young player. These should happen a lot more in rugby then they do. Players would probably need five-year deals but in soccer most players move after 2-3 years if not working out.
Player 3 is Beauden Barrett, the sabbatical taker. They are players who leave the club for a year, free to do whatever they want.
Sabbaticals are becoming more of a disruption for Super Rugby. With the Lions and home World Cup, Australia may be able to limit these, while New Zealand will spend 2024 and 2025 having to let players sow their wild rugby oats.
This is great for the player who can put himself out to the highest bidder leaving Super Rugby to find a replacement player.
Beauden Barrett (Photo by Mark Nolan/Getty Images)
In soccer certain players can leave for a year but the club determines the fee and the other club must meet the terms.
Every club who meets the terms can then agree personal terms with the player. When Barrett joined Suntory Sungoliath in 2021 did New Zealand get any compensation, did the Blues receive money to cover the extra costs?
Super Rugby needs to start writing sabbatical fees into their contracts, a price set and made public. After the next World Cup, someone like Caleb Clarke will be hot property.
If the New Zealand authorities put in a $300k sabbatical clause for the 24/25 season they would get 10 offers who would happily pay Clarke $500+k for the one year.
The union could then use this to increase his salary for the other two years making their overall offer more appealing.
Player 4 is Cheslin Kolbe. It is unclear how much Toulon paid Toulouse for Kolbe but it was reported at the time as €1.8m (2 years left on a €900k per season deal) and then offered him €1m per season for three seasons.
This would bring the three-year cost to €4.8m ($7m) or nearly 150% of a Super Rugby wage cap for one year. These are the players Super Rugby are breaking themselves trying to keep.
Tom Banks was offered $1.4m per season for two years.
While he is a good player, he is not the super star that Kolbe is. For years Super Rugby has tried to keep hold of these players running up massive debt.
Scotland, on the other hand, have a top wage they will pay, and players can move overseas if they want more. It is no surprise then that the Scottish Union have a lot of money and Rugby Australia do not.
By having players like Banks and Clark on five-year deals with a $1m buyout, they can at least get some return.
Cheslin Kolbe celebrates after scoring. (Photo by Shaun Botterill/Getty Images)
Kolbe has not moved to Toulon because he is a great player only. After all it is costing Toulon about $2.3m a year (50% of Super Rugby wage cap) to have him.
It is simply that someone determined that $7m over three years would be made back by the club.
Believe it or not that is what these French clubs are doing. Clarke and Banks might be taller players on the field, but off it, Kolbe is probably twice the person they are.
Sponsorships for clubs go up when the sponsor gets to have Kolbe plastered all over their advertising.
Sadly, these players are unlikely to ever reach their commercial potential via Super Rugby, and the clubs are better signing them up on five-year deals with a large buyout clause just like Benfica do.
Even if Super Rugby reaches its full potential no club can offer the same exposer to commercial partners, as a top team in the Champions Cups will do in a market at least three times the size. Internationals can only pay so many bills, and it will be the ruin of Super Rugby if it is dependent on test commercial strength only.
The Top 14 get €75m a year from the €100m a year TV deal covering just domestic club rugby in France. New Zealand sold all their rugby including internationals for €59m.
If the biggest brand in World Rugby made such a fanfare out 80 percent of what the 14 top French clubs are getting you can see how players like Kolbe are not staying in Super Rugby.
If players become assets, then there are few places in the world that will be able to create players like Super Rugby.
In Part 2, I will go into the pros and cons of making transfers happen. It may appear a bed of roses, but there are plenty thorns to cut yourself on.
Rugby – The Roar
source https://thedailyrugby.com/rugby-union-transfer-fees-how-to-make-them-happen-part-one/
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