China’s ascendant role in the international transfer economy may be jeopardised by new curbs on spending implemented by the country’s FA.

The move could also have an impact on English clubs, who have received £205million in transfer fees from Chinese teams in the past five years.

China is now ranked sixth among international football spenders and has become football’s most formidable economic force outside of Europe. 

On a per transfer basis, China ranks fourth internationally ($1.309million), spending slightly more than French clubs do on foreign players.

Pelle making £15 million a year

China has become the destination for some of the highest salaries in global football, with the Brazilian midfielder Oscar earning a reputed £20 million annual salary, and even ordinary players, like the Italian forward, Graziano Pelle, reportedly commanding wages of £15 million.

However ahead of the current transfer window, China’s FA have announced major reforms aimed at making the game more sustainable, which will see wages and overall spending capped, and salaries limited to 60 per cent of turnover.

“Our clubs had too much money burned and our professional football has not been run in a sustainable way,” Chinese Football Association chairman Chen Xuyuan was quoted last month by state news agency Xinhua.

“If we don't take timely action, I fear it will collapse.”

New reforms take hold

Under the reforms new overseas recruits to the Chinese Super League are limited to earning £2.5 million after tax and teams will not be permitted to spend more than 1.1 billion yuan (£120 million) in total during 2020. Salaries must account for no more than 60 per cent of total spending.

The reforms follow a 50 per cent ‘super tax’ on transfers implemented in 2018. 

China’s current transfer window opened on 1 January but runs until 27 February.

The CFA believe that the high local salaries prevents Chinese players from moving overseas which is something they badly want to see happen

Traditionally most Chinese international business is conducted after the European window closes at the end of January, but nevertheless the transfer portal – Transfermarkt.com – had recorded no significant inbound international transfers in the first fortnight of the current window. 

According to John Duerden, a veteran Asian football journalist and founder of the Asia Media United network, the reforms are “partly a deep breath and taking stock rather than a step back.”

“There is no doubt that there has been disquiet at the amounts of money leaving the country to line the pockets of agents, players and clubs around the world,” he told offthepitch.com, but added that the reforms fitted in with broader goals from the Chinese government and the country’s FA.

Inspired by Korea

The Chinese government has clamped down on money leaving the country in general in recent years - which has been a problem for the emergent middle and wealthy classes seeking to make overseas property and business purchases – and the clampdown on football reflects that trend.

At the same time a ceiling of 10 million yuan (€1.28 million) has been placed on Chinese players' salaries is designed to incentivise Chinese players to leave their home country and play overseas, and thus develop their talent.

“The CFA believe that the high local salaries prevents Chinese players from moving overseas which is something they badly want to see happen,” says Duerden. 

“Foreign clubs are not going to pay Chinese players high salaries and players usually don’t want to take a pay cut.
 
“Koreans and Japanese can be found all over Europe and especially in Korea’s case, all over Asia too and these two countries always qualify for the World Cup.”

Dr Daniel Plumley, Senior Lecturer in Sport Business Management at Sheffield Hallam University, told offthepitch.com, “China has ambitious plans to be World Champions in the future and part of that strategy was to attract top overseas talent to play in their leagues.” 

“However, in some ways, that ended up stifling the development of their own national players and was unsustainable financially. The super tax on transfers slowed the wave of foreign recruits and I’ve a feeling that the salary cap will do the same.”

"Yin-Yang contracts"

The 2018 super tax imposed on international transfers did lead to a discernible slowdown of the amounts Chinese clubs were able to spend, as it effectively doubled their outlay on players. 

Diego Costa's proposed £64 million move to Tianjin Quanjian was an immediate casualty when it was abandoned after the fee effectively doubled to £128 milllion overnight because of the new tax.

In all walks of life in China, organisations and companies have become adept at knowing how far they can go when it comes to rules and regulations and are skilled at reading between the lines of official proclamations.

Of the country’s 25 highest ever transfer fees, just seven have taken place since 2018 (the corresponding figures elsewhere are 12 in England, 11 in Spain and 7 in Germany).

Skilled at reading between the lines

There have nevertheless been continual suggestions that clubs have worked around these regulations, using so called “yin-yang contracts”, where two contracts are issued, with one showing a smaller payment passed to the authorities and another representing the money actually paid. These are banned and have been subject to a recent crackdown in basketball, but allowances have been made for bonuses in the recent reforms, allowing clubs some leeway when it comes to paying players. 
   
“In all walks of life in China, organisations and companies have become adept at knowing how far they can go when it comes to rules and regulations and are skilled at reading between the lines of official proclamations,” says Duerden. 

“In this case, it is unlikely to be too blatant as people have a good idea of how much top foreign talent has to be paid and if you are signing Neymar then nobody is going to believe it is all above board!”

For the first time ever, agent fees have exceeded £500 million in a calendar year. A new FIFA report, titled FIFA's Intermediaries in International Transfers 2019, shows that the spending on commissions to intermediaries has increased to $653.9 million (corresponding to a good £500 million) to date in 2019, which is 19.3 per cent more than during the whole of 2018. 

More than 17,000 transfers have been completed so far in 2019, and 3,557 of those involved at least one agent. 

Clubs in England, Italy, Germany, Portugal, Spain and France account for more than 80 per cent of all commissions paid to intermediaries worldwide. Of those, Portugal is a special case, as Portuguese clubs have spent almost half as much on commissions to agents as on the transfer fees themselves.

According to the data, clubs in Italy spent the most on intermediaries with $130.5 million, of which $101.4 million was paid by the engaging club and $29.1 million by the releasing club.

England comes in second with $103.6 million paid in commissions, which is a drop of 33 per cent compared to 2018. 

Focusing on the women's game, 242 international transfers involved at least one agent. Compared to the year before, involvement of agents has more than doubled and spending on commissions has more than tripled. 

Find the FIFA report here. 
 

The World Leagues Forum (WLF) has appointed Enrique Bonilla, the executive president of Liga MX of Mexico, as its new chairman at a recent annual meeting, which was held in Marrakesh, Morocco. 

Bonilla succeeds Christian Seifert, CEO of the Deutsche Fußball Liga (DFL), whose mandate was coming to an end. The Mexican becomes the first non-European to chair the WLF. 

According to the organisation's website, Bonilla stated after the meeting: "I am extremely honoured to have been appointed chairman of the World Leagues Forum. It is an opportunity to help develop and improve our beloved sport and to position the leagues in the football landscape." 

Seifert will remain vice chairman of the WLF, alongside Don Garber, the commissioner of Major League Soccer. 

Racism and agents on the agenda 

During the two-day event, the leagues also reiterated the need to regulate agents and gave their full support to the reform recently adopted by the FIFA Council, including a licence and a cap on fees.

Also on the agenda was the leagues' concerns regarding racism in football. In order to "fight against this inacceptable phenomenon," the leagues decided to set up a "Task Force Against Racism" to collect data from their members, identify best practice and make recommendations. 

Finally, the leagues also discussed the future of the Club World Cup and best practice regarding the development of women's football. 
 

Following the reveal that the Danish FA received a letter from a group of football agents led by Mino Raiola threatening legal action if it failed to prevent the implementation of FIFA's proposed cap on agent commissions, the FA has confirmed to offthepitch.com  that it also received a letter from the same group. 

However, the FA did not disclose the contents of the letter. 

"The FA did receive a letter but the contents of which are confidential, meaning there's nothing else to add from our perspective," the FA told offthepitch.com. 

FIFA is planning to implement a series of changes to how agents are allowed to work, which includes a cap on transfer fee commissions, a licensing system and a ban on agents representing multiple parties in a deal.

Last week, the Danish newspaper Politiken revealed a letter by the football agents Mino Raiola, Roger Wittmann and Jonathan Barnett, all representing a Swiss company by the name of Football Agents Forum, was sent to the head of the Danish FA, Jesper Moller, threatening to take legal action if the changes are not prevented

Courts decide 

In the letter sent to Moller, one of the primary advocates of the proposed changes, the agents called the proposed changes detrimental to their members and described them as restraints to free competition. 

"We do not see how these restraints to free competition to the detriment of our members that would result from the planned measures can be upheld under antitrust law.

"Therefore, we continue to hope that FIFA and you will understand the situation and refrain from implementing the proposals and that you will instead enter into an open dialog [sic] with us and all stakeholders.

"If not. The courts will have to decide about the validity and compensation for the incurred damages," the letter said. 

Read the full letter sent to Moller at the bottom of Politiken's article by clicking here.
 

A group of football agents unsatisfied with FIFA's proposed rule changes, which aim to put a cap on the exorbitant agent fees, sent a letter to the head of the Danish FA threatening to take legal action if the changes are not prevented, according to the Danish newspaper Politiken.

FIFA is planning to implement a series of changes to how agents are allowed to work, which includes a cap on transfer fee commissions, a licensing system and a ban on agents representing multiple parties in a deal.

"We do not see how these restraints to free competition to the detriment of our members that would result from the planned measures can be upheld under antitrust law. 

"Therefore, we continue to hope that FIFA and you will understand the situation and refrain from implementing the proposals and that you will instead enter into an open dialog [sic] with us and all stakeholders," the letter sent to the head of the Danish FA, Jesper Moller, said. He has been one of the primary advocates of the proposed changes. 

"If not. The courts will have to decide about the validity and compensation for the incurred damages."

The letter is signed by football agents Mino Raiola, Roger Wittmann and Jonathan Barnett, representing a Swiss company by the name of Football Agents Forum.

Part of the game

According to the newspaper, which refers to Football Leaks documents, Mino Raiola, who represents many high-profile players, such as Marco Verratti and Lorenzo Insigne, made £42.2 million when Paul Pogba transferred from Juventus to Manchester United in 2016. 

Despite the capital and influence of Raiola and his associates, Moller did not seem worried about the threat posed by the trio.

"On the contrary. When you're fighting for something, it's part of being a leader in the world of football to have the courage to make these kinds of decisions," he told the Danish newspaper. 

In the letter, the trio also promised to hold those involved in the changes personally accountable for any damages incurred.

"To the extent legally possible, we will not only seek cease and desist orders against you and file complaints for damages, we will also hold individuals involved in the efforts to implement the proposals personally liable for all incurred damages," the letter said. 

Read the full letter at the bottom of the article by clicking here.

When Gianni Infantino was elected president of FIFA in 2016, he vowed to tame the transfer market, which is worth more than £5 billion a year globally.

Now, according to the New York Times, a key committee at FIFA is set to approve a series of proposals that will reform the transfer market, mirroring Infantino's intentions. The proposals will be the subject of a committee meeting today.

Among FIFA's proposed reforms is one limiting the power of the players' agents.

From 2014 through 2018, agents earned more than £1.6 billion. In one case, the New York Times writes that Paul Pogba's agent, Mino Raiola, reportedly earned more than £35 million on Pogba's transfer to Manchester United in 2016 as he was paid by all three parties involved.

According to the New York Times, one of the FIFA proposals will make agents such as Raiola unable to act in the interest of both the buying and selling clubs in the same transaction - and agent commissions will be limited to three per cent for buying clubs and players and six per cent for selling clubs.

Another one of the proposed changes is set to be on the matter of clubs stockpiling talented players with the aim to loan them out - securing the clubs a steady stream of loan fees while keeping the players out of the hands of their rivals - with the players unlikely to ever play for the parent team.

The proposed change will limit the number of non-club-trained players older than 21 who can be sent out on loan to just eight at a time. If approved, the change will take effect with the 2021/22 season and then drop to six by the 2022/23 season, the New York Times writes.

Both Chelsea and Manchester City will be hit hard by this change, as they each currently have at least 12 players out on loan.

A FIFA spokesman declined to comment on the New York Times' report.

Football intermediaries, better known as football agents, had a very profitable summer. Throughout the summer transfer window, agents earned a massive $529.9 million in commission, according to data from FIFA TMS (transfer match system), writes Inside World Football. 

Agents keep playing a bigger part in the transfer business and their income keeps increasing right along with it. According to Inside World Football, the $529.9 million is an increase of $495.5 million on the year before - of that almost 65 per cent was paid by the engaging clubs. 

In the period covered, there were 8,746 transfers (219 more than the year before), with 63 per cent of them being for less than $1 million. 

Europe dominated the transfer market with 76 per cent of the spend coming from the five big leagues and 47 per cent of the value from just 50 transfers. 48 of the 50 most expensive transfers were also done in Europe. 

Middlesbrough, Birmingham City and most recently, Leeds United’s former owner, Massimo Cellino, have all criticised their former manager Garry Monk’s close professional relationship with his agent, James Featherstone. 

Cellino even decided to ban Featherstone from the club’s training ground and matches at Elland Road. Following harsh allegations from all three of Monk’s latest clubs, the former Swansea player has decided to make a public statement through the League Managers Association.

"I have to date kept silent in relation to the recent wholly false and unsubstantiated allegations that have been made against me and my agent, James Featherstone by my former clubs, Birmingham City, Middlesbrough, and now Massimo Cellino. In maintaining that stance I have been mindful of my ongoing duties of confidentiality," Monk says. 

"However, given the repetition of these allegations, which seek to undermine my integrity and professionalism, I feel strongly compelled to make this statement."

Middlesbrough leaks

Following Monk’s sacking at Birmingham City, where the club’s chief executive, Xuandong Ren, said Monk’s close relationship with Featherstone led directly to his sacking, it was revealed that Middlesbrough were reviewing every transfer made during Monk’s six-month tenure at Boro. 

Monk and Featherstone have both denied any wrongdoing and Monk is now deeply disappointed that confidential correspondence between him and Middlesbrough have been leaked. 

"False and unfounded allegations against myself and my agent have seemingly been leaked to the media relating to my time at Middlesbrough. Precisely the same allegations were put to us by the club over a year ago. At that time I responded immediately through my lawyers with supporting evidence, clearly demonstrating that neither I nor my agent were guilty of any wrongdoing whatsoever. At the time it was obvious to me why these unfounded accusations were made, and it is equally clear to me why someone is now trying to resurrect these matters. Because of my ongoing contractual and legal obligations, I am restricted from expanding on this any further." 

Former Leeds United owner Massimo Cellino has joined the choir of Garry Monk’s former employers criticising the manager’s close professional relationship with his agent, James Featherstone.

During his three-year tenure from 2014 to 2017 at Leeds, the Italian even decided to ban Featherstone from the club’s training ground and matches at Elland Road, reports The Times.  

"After two or three months I kicked him out of the club because I didn’t like the way he worked," Cellino said. 

"I never allowed Featherstone near the club. I told Monk he was a coach, and the players belonged to the club. I never let Monk get involved with transfers because every player he wanted to sign he wanted to do through Featherstone."

Cellino, who was given an 18-month ban by the FA in 2016 for breaching agent regulations, was so keen to keep Featherstone out of Leeds United, he even spent days reviewing the club’s CCTV footage to make sure Monk wasn’t sneaking the intermediary in through the back entrance. 

Middlesbrough are considering legal action

Cellino’s allegations come in the wake of Monk’s firing at Birmingham City, where the chief executive, Xuandong Ren, said Monk’s close relationship with Featherstone led directly to his sacking. 

"Garry wanted his agent involved in every single deal, which is not something we were comfortable with," Ren said at the time. 

Another former employer of Garry Monk, Middlesbrough, are considering taking legal action against the former Swansea player for passing on confidential information to his agent, which in the end led to inflated transfer fees, thus increasing Featherstone’s commission, reports The Times. 

Monk managed to spend £50 million despite only lasting six months at Middlesbrough, signing 15 players. Though, according to the FA, Featherstone was only directly involved in one deal during Monk’s time at Boro.

Monk and Featherstone have both denied any wrongdoing. 
 

It’s been a year and a half since Garry Monk was fired after a six-month tenure in charge of Middlesbrough, but after his dismissal at Birmingham City on Wednesday, it has been revealed that Boro are examining Monk’s brief period at the club, reports The Daily Mail.

Birmingham’s chief executive, Xuandong Ren, claimed Monk was fired from The Blues due to a dispute over use of his own agent, James Featherstone, in the club’s transfer deals. 

Garry wanted his agent involved in every single deal, which is not something we were comfortable with"

"Everything changed when the transfer embargo was lifted. Garry wanted his agent involved in every single deal, which is not something we were comfortable with," Ren told The Times after the sacking. 

Data published by the FA shows Featherstone was involved in nine of the 18 transfers done by Birmingham after Monk’s arrival. A similar conflict was the reason for Monk’s departure at Boro, according to The Daily Mail.

£50 million in six months

According to the FA, Featherstone was only directly involved in one deal during Monk’s time at Boro, which brought Cyrus Christie from Derby to Middlesbrough. In that case, Featherstone was registered as a representative for the selling club, but the club still find it necessary to investigate the remaining transfers. 

Monk managed to spend £50 million despite only lasting six months at Middlesbrough, signing 15 players. The £15 million transfer of Britt Assombalonga and £9 million transfer of Martin Braithwaite being the most significant. 

Despite the fallouts with both Birmingham City and Middlesbrough, there has been no suggestion of any wrongdoing by either Monk or Featherstone, and the latter claims he is not rattled by the examination. 

"The club were always and still are fully aware of all transfer activity, therefore I am confident of the outcome of any investigation," he told The Daily Mail. 

Monk lasted a year and four months as Birmingham’s manager, averaging 1.31 points per match. 

View Agent Fees for all the clubs in the Premier League and the Championship in the Off The Pitch Database.