Favourable labour laws mean footballers and agents dictate terms and even big clubs have become mere vessels for transporting the income of football to players.
World at their feet
This spring I visited Boudewijn Zenden in Marseille, the club where he happened to be playing at the time (for a top footballer today, a spell at a club is a bit like a holiday in a five-star hotel: you stay until it stops being pleasant). That evening the former Dutch international drove me in his black sports car along the motorway to the station at 150kmph.
The pink southern French sun sank slowly over the green southern hills, until the car's interior was lit up only by Zenden's green eyes. As he drove, he mused about his next club. "We're talking about adventure," he said. "It could be that I sign on here, it could be that I get an offer from Germany or Italy, where I've never played before. Maybe that would suddenly attract, to play a couple of years at Fiorentina, another fantastic club." Or he might go to his "home club", PSV Eindhoven in Holland, where he still knows the married couple who had run the club canteen forever.
That summer Zenden's contract expired. He shopped around various clubs in several countries, including Marseille itself, turning them all down or not agreeing terms, until this autumn, a few matches into the season, he popped up at Sunderland. Zenden is not at the peak of his profession anymore. He is 33, no longer plays for Holland, and when we talked was frequently a reserve at Marseille. Yet he could choose his club like a discerning luxury shopper choosing just the right Gucci handbag.
He was doing the picking. The clubs had to woo him. Admittedly he had a free transfer this summer, which helped, but really what he was expressing that evening was the new freedom of the footballer. Never have players had such power in the transfer market before. We talk about a club "buying" a player from another club. Really what tends to happen at the higher end of the market is that a player decides where he wants to go, and then the clubs do a deal. Cristiano Ronaldo's move to Real Madrid this summer was a high-profile example, and the only surprise is that Manchester United held on to him for so long.
Clubs have become mere vessels for transporting the income of football to players. And the top player's power - and income - is only going to increase. It never used to be like this. Footballers spent their careers under all sorts of restraints, it was the club alone that decided whether players could move or not. For instance, in 1938, when Stanley Matthews was the best footballer in England, he asked his little club Stoke for a transfer.
"I had it in my head that the Stoke directors would grant my request," wrote Matthews in his autobiography. "Not for the first or last time in my life, I was proved wrong. Mr Booth [Stoke's chairman] told me in no uncertain terms, I was staying." Thousands of fans attended a protest against Matthews's potential move, and in the end Matthews buckled under the pressure and stayed. Then the Second World War intervened, and by the time he finally left, for Blackpool in 1947, he was already 32.
In England until 1961 there was not much point in moving, because the maximum wage - about the same as a skilled worker earned - was the same at every club. In addition, well into the 1980s, there were severe restraints on transfers across borders. Clubs were allowed to sign few foreign players. The upshot was that for decades, players were chattels of clubs. Then they started to gain freedom. Borders gradually opened, and crucially, in 1995, the European Court of Justice issued the Bosman ruling: now a player was free to go where he liked when his contract expired. No longer could a club demand a fee for an out-of-contract player.
Now the market in footballers is probably the fairest labour market, as the sports economist Stefan Szymanski and I argue in our book Soccernomics. Players' salaries almost by themselves explain which clubs win and which lose. Szymanski studied the spending of 40 English clubs between 1978 and 1997, and found that their spending on salaries explained 92 per cent of their variation in league position. In the 1998-2007 period, spending on salaries by clubs in the Premier League and Championship still explained 89 per cent of that variation. In other words, Manchester United win the league because they can pay the highest player salaries. West Bromwich Albion get relegated because they pay the lowest. The best players are at the richest clubs.
It is such a transparent market. When a player plays well, everyone can see it - not just managers or scouts but most of the fans in the stadium and the millions watching on TV. Footballers do their job in public every week, in front of untold numbers of judges, and so they earn what they deserve. Nick Hornby writes in Fever Pitch, his memoir of being an Arsenal fan: "One of the great things about sport is its cruel clarity; there is no such thing, for example, as a bad 100 metre runner, or a hopeless centre-half who got lucky; in sport, you get found out. Nor is there such a thing as an unknown genius striker starving in a garret somewhere."
Sometimes a player does get paid less than he is worth, or more than he is worth, but that imbalance lasts only a few months. If the player is overpaid, the club will get rid of him as soon as they can, or when his contract expires, and then he will find himself earning less. And if he is being underpaid - a young player who has suddenly come good, for instance - then his club will have to raise his wages or he will make sure he moves.
The consequence is that the biggest slice of money that football makes gets handed over to the best players. Clubs understand that players have all the power in football - and therefore almost all the money. A Chelsea official complained to me recently: "We have a very good business - if you leave out our players' salaries." If a top player firmly decides to move to another club, even if he still has a contract with years left to run, he will get that move. If the club where he is contracted insists on trying to keep him, he can go on a sort of strike: play at 90 per cent, infect his teammates with his bad attitude, tell the media that he wants to leave.
Then, after a few troubled months, the club will be forced to sell him, generally below his peak price. Nobody wants that. So when a top player wants to leave, and another club want him, the deal is done. This model of player choice omits only one element: agents. You could argue that power in the game today resides not so much with the best players as with their agents. The player has usually left school in his mid teens, and has been accustomed to leaving all financial choices to his entourage. He relies on the agent to tell him what to do. Often a transfer is more in the agent's interest than in the player's. Szymanski and I document in our book how often transfers go wrong. When Szymanski analysed the accounts of those 40 English clubs between 1978 and 1997, he found that their outlay on transfers explained only 16 per cent of their total variation in league position. In other words, transfers add very little value - usually because the player flops.
Agents almost always want transfers. They know how precarious their player's career is, and they want to make money out of it now. When the player moves, his salary usually rises, and so the agent's cut rises too. Then there are signing-on fees, and sometimes a present from the club to the agent. So a transfer is an agent's bonanza. As long as players do not understand money, agents will rule the football business.
Of course this model of power for player and agents only works for the best players. For the grey masses, life at the end of a contract is like being a factory worker at a time of high unemployment. You just hope someone will give you a job. Vast numbers of players are pushed out of football while still in their prime: they're 25 or 28, earning more than rookies yet not performing commensurately, and so they're doomed. As a South African football agent told me years ago: "If you're Patrick Vieira, you have a free transfer. If you're an average player, you're just unemployed."
For the players at the top, these are happy days and likely to get even happier. In 2008 the Court of Arbitration in Sport, in the Swiss town of Lausanne, made a ruling that could eclipse the importance of Bosman: the Webster ruling. Named after Scottish footballer Andy Webster, and based on article 17 of Fifa's transfer regulations, the ruling throws out much of the historic transfer system. It says that if a player has served more than three years of his contract, his club can ask a fee of no more than the remaining salary due to him. So if he has two more years on his contract, and a salary of ?1 million per year, his transfer fee can't be more than ?2 million (Dh10.3m). Michael Gerlinger, director of legal affairs at Bayern Munich, says agents often use article 17 to threaten clubs. The idea is if the club does not give the player what he wants, he will use article 17 to walk away - or to force a transfer at a cut price to another club.
As yet the Webster ruling has barely been tested. Hardly any players have seriously tried to use it, and most clubs have preferred to pay the traditional rate even for players who have served three years or more of their contracts. That is why Real Madrid paid ?94m for Ronaldo, for instance. But everyone in football finance has the ruling in their heads. Some version of Webster is likely to become the future. Then clubs will make less money on transfers - and the players' slice will become commensurately bigger.