What do FC Barcelona legend Lionel Messi and Stoke City midfielder Nick Powell have in common?
On the face of it, not a lot, but this off season both player’s contracts will expire.
The two footballers, while worlds apart in circumstance, are both governed by their respective contractual guidelines and as such, are both staring down the barrel of expiring contracts.
As the summer fast approaches and we enter the tail-end of European football seasons, both players – as well as thousands of others – will be turning their attention to new horizons and looking at what fresh challenges await.
Of course, in many instances, these players renew with their existing clubs, extending the deal or signing a brand new one to continue their time long into the future.
But a growing trend over recent years has seen players – be it anywhere from 12 to 18 months out from the expiration of the deal – explore the market, and alongside their agent negotiate lucrative ‘pre-contract agreements’ with a new club.
Pre-Contract AgreementsEffectively, these ‘pre-contract agreements’ are handshake deals for a new ‘buying club’ to have the exclusive opportunity to offer the player a contract at the natural end of his or her current deal.
The benefits for both sides are plentiful.
The ‘buying club’ now doesn’t have to pay a transfer fee – in some case saving them millions. As a result, the player can now command an increased wage and a healthy signing on bonus as recompense for saving the club the transfer fee.
But while it looks like a win-win for all involved, it doesn’t always play out as such.
More often than not, these agreements are signed with conditions to ensure the player is both fit and healthy when joining. If these conditions aren’t met, the agreement is pulled and it could mean serious financial consequences.
The risk, therefore, is immense for the player.
They’ve, in essence, burnt bridges with their current club, agreeing not to pursue a new deal with them and to instead play out their days with an agreement for another club.
But an errant tackle or awkward landing could have serious implications on the terms of the pre-contract in place, ultimately leaving them injured or ill and without a new contract to rely on.
There are countless cautionary tales out there.
But what many of the players – and their agents – don’t know, is that this is an insurable risk.
Written against the value of their new contract – whatever it may be - players from the lower leagues to the UEFA Champions League can insure their pre-contract agreement, and in turn safeguard themselves against the serious financial risk they might face.
If, in the unfortunate event, they are injured after signing a pre-contract and before the end of the season, then the pay-out will be structured to ensure they are covered against the value of their potential contract, and as such they can rest assured that they’ll be financially supported throughout recovery.
It’s a risk that footballers often take on but need not.
Agents across the world are waking up the fact that not only can a pre-contract be lucrative for all involved, but the risk involved can be almost completely mitigated against and whether a player is turning out for Stoke on a cold Wednesday night or taking to the glittering Nou Camp for the Blaugrana, footballers need not live in fear of financial insecurity.
‘Pre-contract agreements’ have become footballer’s new ‘win-win’, but too often players can be caught short and left as losers.
Thankfully, we’re now helping make sure that never happens again.
Sport and Entertainment