Healing transfer market pumps agent fees back up

Agents are the gatekeepers to almost any transaction in the football industry, taking millions from clubs in commission on player salary and transaction fees. In 2015 FIFA proposed a recommended cap on agent commission intended for both players and clubs, while simultaneously deregulating the market. 

After four years, and clubs’ spending on agent commission more than doubling from $297 million to $654 million (FIFA TMS), FIFA acknowledged the need for serious reforms to regain control.

Since 2019, FIFA has been exploring different regulatory measures to impose on agents to ensure a larger chunk of the money stays within the football ecosystem, recently proposing concrete hard caps on agent commission which are expected to be implemented later this year. Last year the CEO of Bayern Munich, Oliver Kahn, deemed Alaba’s agent Pini Zahavi “disconnected from reality”, following failed negotiations with the Austrian defender. 

With many football associations having published the latest club spending on agents, we have taken a closer look at the figures. 

Our analysis reveal that clubs in Europe paid approximately €2.6 billion in agent fees in the last three years, showing little effect of the pandemic. And that does not even include Spanish clubs, while we are yet to receive fees paid in DFL and LFP for the latest fiscal year.

A ‘V-shaped’ tendency

In 2020, the total spending on agent commission was $496 million according to FIFA , having seen a significant drop of 24 per cent which was almost entirely attributable to the fall in transfer fees paid of 23.9 per cent amid the initial Covid-19 outbreak, and therefore not because of a change in sentiment favouring agents getting a smaller piece of the pie. 

So it is no surprise that as the footballing industry heals financially, the total amounts paid out to agents are once again on the rise. The Premier League’s most recent agent fees distribution was almost identical to the overall total of the year before, showing no covid-related effects. 

What really defines whether agent fees are shown to have effectively risen in 2021 is whether the associations disclose the fees on a seasonal or calendar-year basis. The main driver for the decline in agent fees was the summer window in 2020. 

The top English tier is still by far the biggest income stream for agencies, paying far more than the other Big Five leagues.

Manchester City saw a significant rise in agent fees from €34 million to €41.3 million for the current season, of which the majority likely stems from the signing of Jack Grealish, since the club hadn’t been very busy on the transfer market apart from that.

The biggest year-on-year rise was Inter Milan, who went from €9 million in 2020 to a whopping €27.5 million in 2021, certainly due to the big sales of Achraf Hakimi and Romelu Lukaku in the summer.

In addition, it is also worth noting that big movements in the totals for Eredivisie are mainly is due to Ajax’s transfer activities. In 2020 for instance, Ajax paid €33.8 million in agent fees, equivalent to more than two thirds of the total agent fees paid in Eredivisie. 

There was only a slight difference between figures for Ajax and those for Manchester United and Manchester City 

Proportionally, the biggest clubs do not pay the most in agent fees

When looking at agent fees as a proportion of clubs’ turnover, the average share of agent fees paid was 5.8 per cent of turnover in 2021. However, the ten clubs with the highest ratios all exceeded 10 per cent, with current Serie B club Parma Calcio right at the top, paying out 26.7 per cent of their turnover. 

That is hardly a surprise when looking at the club’s spending in 2020/21, signing players for more than €100 million, according to Transfermarkt.

The Danish side AaB - Aalborg BK - are in second place, as the club spent approximately 21 per cent of their income on agent-related expenses in 2021.

According to media reports in Denmark, a big slice of the club’s total agent fees of 1.8 million was for the transfer of Jores Okore to Chinese Changchun Yatai, allegedly paying around 62 per cent of the sale income to the agent facilitating the transfer. 

Other clubs, such Brentford and Ajax, probably feature due to a significant proportion of their total income being driven by player sales, with the sides effectively paying more in agent fees with this business model. 

Brentford’s intermediary bill increased from €2.9 million to €4.1 million following their promotion to the Premier League.

That increase may seem modest compared to that of Watford, who also got promoted back to the Premier League in 2021/22 - although the North London side now seems likely to go down again. 

The club went from paying just €2.4 million in 2020/21 to just below €15 million in their first season back, the highest outside the Big Six in England. Compared to investing €43 million and selling for €13 million according to Transfermarkt, the total agent fees seem rather excessive.

Newcastle were expected to be the main driving force in the recently-concluded winter transfer window, with observers assuming the spending power of their new Saudi owners would be put on display to get the club back out of the relegation zone.

And they did not disappoint, investing around €100 million in Bruno Guimarães, Chris Wood, Kieren Trippier, and Dan Burn. 

Coming on the back of years of fan unhappiness about the lack of investments made by Mike Ashley, it is rather surprising that Newcastle’s agent fees dropped from €12.8 million to €9.1 million.