Scott Brown’s injury-enforced absence from the team in recent weeks has at least taken heat of his contract situation but that will change in January, when he is back in the team and available to sign a pre-contract agreement. Neil Lennon reports that Celtic have met Scott’s terms but have declined to meet his agent’s demand.
Agent’s often have exclusive representation agreements with players which guarantee the agent a cut of any contract signed when the agreement is active. 5% of a four or five year contract for a top-earning Celtic player could easily reach £300k, or £360k including vat. This is a lot of money for the player to pay out of his after-tax income so what commonly happens is the agent uses his exclusive deal with the player to negotiate a pay-off from the club instead of acting for the player. Unlike the player, a club can reclaim vat and pays before, not after tax, so the same money going to the agent costs the combined player/club less.
It’s often the case, however, that the agent’s fee paid by the club has little resemblance to the percentage the agent would get representing the player. While a player has an exclusive deal with an agent, a buying club has three deals to agree: the selling club’s fee, the player’s wages and the agent’s fee.
Big agent fees don’t necessarily mean bad business for the buyer, as the agent may well have made a deal achievable at a purchase price which would not have been otherwise possible, but clubs are typically more reticent when it comes to paying agents to renew contracts for their existing players. One (then) SPL chairman told me he had a flat £500 tariff for such deals.
Artur Boruc concluded his last contract with Celtic without an agent. At the time he explained that he would need an agent if he was moving club but didn’t need one to negotiate a predetermined level on the Celtic pay structure. This would have saved Celtic money and might have earned Artur an extra bonus.
Scott Brown is not in this situation. If he is offered a contract of around £6m over five years, after 50% tax and 12% (?) national insurance (which Celtic and staff pay…), his take home pay from the contract will be considerably less. 5% of the contract could end up looking like 14% of take home pay after vat is added.
Celtic will also be alert to the dangers of precedent. If a player’s ‘advisor’ can get a significant pay-day out of a contract renewal there is no incentive for the player to conclude a deal with Celtic without an advisor, indeed, there is incentive to get one involved.
I’ve no information whatsoever on what is going on with Scott’s contract but the portents don’t look promising.
A couple of years ago we spoke about the excellent Why England Lose and its predecessor, Moneyball. Two books that sought to explain how to find value in football and baseball respectively. The Brad Pitt movie, Moneyball, based on the events analysed in the book, is now out. Not sure making a drama out of statistics is wise but I’ll need to check it out.