Ken Early: Agents making the most of warped system

Mino Raiola made €49 million from Paul Pogba’s transfer due to inconsistent system

Football agent Mino Raiola made €49 million from the transfer of Paul Pogba to Manchester United. Photo: Getty Images

Football agent Mino Raiola made €49 million from the transfer of Paul Pogba to Manchester United. Photo: Getty Images

 

Try to imagine the confusing mix of emotions experienced by Mino Raiola last week when a new book, Football Leaks: The Dirty Business of Professional Football, revealed that he made an astonishing €49 million for his work on the deal that took his client Paul Pogba from Juventus to Manchester United.

No doubt Raiola was angry to see his private business become headlines around the world. He might also have felt a certain pride that everyone could finally see what a genius he was, and perhaps also a twinge of trepidation at what Pogba might think when he saw just how colossal a cut his agent had taken for himself.

Whether Pogba thinks Raiola made too much money out of the deal is between Pogba and Raiola. If their partnership continues, we can assume Pogba is okay with it. Maybe he believes that he could not have got where he is today without Raiola’s help. The skill that sets the real superagents apart is the ability to convince their players to think that way.

A more interesting question is how Raiola managed to be paid so much for “facilitating” a deal that the three parties who paid him – Manchester United, Juventus and Pogba – all wanted to happen.

Football insiders say that the futuristic sophistication of United’s world-beating commercial operation sits awkwardly alongside the old-school values of the football department

It’s important to remember that while many aspects of the football business have been rationalised and standardised, the transfer market remains largely unstructured and chaotic. Different clubs do business in different ways.

United illustrate the point better than most. As a business, they have never been stronger. Deloitte’s annual Money League reported United’s 2016 revenues at €689 million, a 32 per cent increase on 2015, enabling them to surpass Real Madrid as the world’s richest club.

Sponsorship deals

Underpinning this growth is United’s unrivalled network of sponsorship contracts, which continues to expand despite indifferent results on the field. The club employs more than 100 commercial staff who research regional markets around the world, analysing opportunities and identifying potential commercial partners – somewhat like a scouting department for sponsorship deals.

Football insiders say that the futuristic sophistication of United’s world-beating commercial operation sits awkwardly alongside the old-school values of the football department. They don’t use the analytics employed by rivals like Manchester City, Liverpool and Arsenal, and their transfer policy looks more ad hoc and agent-led – three of their last four signings were Raiola players.

But not everyone agrees that an analytics-driven transfer policy leads to better recruitment. And there are other basic questions on which there is no consensus – questions like: how should a player’s contract be structured so as to incentivise high performance? This issue was explored in a presentation at the MIT Sloan Sports Analytics Conference by the sports lawyer Ian Lynam, who has worked on transfer and contract negotiations involving several leading Premier League players, and his insights are supported by some of the evidence from Football Leaks.

Manchester United pay goal bonuses to players like Zlatan Ibrahimovic. So do Liverpool, whose forward Roberto Firmino’s contract was among the leaked documents. Firmino earns a basic wage of £68,000 (€80,000) a week, with substantial bonuses for appearances, goals and assists. He gets £25,000 (€29,000) for each of the first five goals he scores in the league or European competition. He gets £45,000 (€53,000) for each of goals six to 10, £65,000 (€77,000) for goals 11 to 15, and £85,000 (€100,000) for each goal beyond his 15th of the season.

Warped incentives

The idea is that goals are good and the club is motivating Firmino to score goals but, as Lynam points out, rewarding players for performing particular technical actions on the field opens the door to an unpredictable world of warped incentives and unintended consequences.

If Firmino has a chance to score his 16th of the season from an unpromising angle, does he pass to a teammate in a better position or does he try to grab an extra £85,000 by going for goal himself?

Neymar’s contract, which is among the leaked documents, provides an example of how Barcelona do things

In the 79th minute of Liverpool’s win at West Ham, with Liverpool leading 4-0, Divock Origi ignored the unmarked Daniel Sturridge and shot at goal from the left side of the penalty area. He missed, Sturridge complained, Origi raised an apologetic hand, no harm done.

And yet, if Liverpool had scored they would have drawn level with Manchester City on goal difference. There is still a small chance that goal difference could decide which of those two clubs qualifies for next season’s Champions League.

Manchester City employ different methods from the goal bonus structures in place at Liverpool and United. Their system is based on the one instituted by directors Ferran Soriano and Txiki Begiristain when they were running Barcelona. Neymar’s contract, which is among the leaked documents, provides an example of how Barcelona do things.

Gaming the system

Neymar doesn’t get bonuses for any specific action he might perform on the field. His bonuses are triggered by playing at least 60 per cent of Barcelona’s games and for winning titles – the league, the cup, the Champions League, the Ballon D’Or. In this way, first team regulars are rewarded for team successes, and there is no question of players gaming the system to increase their personal rewards at the expense of the team.

This is not to say that City’s system is definitely better than Liverpool’s or United’s. It is simply striking that the top clubs have such different ideas about the best way to incentivise performance. This divergence of opinion tells you that football is still an immature industry. In a mature one, the clubs would have converged on established best practice. In football there are still clever people making big mistakes, there are gross inefficiencies that have yet to be ironed out. Such uncertainty creates the space for operators like Raiola to capitalise.

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