Business lessons from deadline day

MT looks at the highs and lows of the transfer window - and what businesses can learn from the drama.

by Kier Wiater-Carnihan
Last Updated: 09 Oct 2013

What a difference a (deadline) day makes. As Harry Redknapp's car window closed, and the transfer window with it, we were able to reflect on what the hell had actually happened. While little beyond Crystal Palace bringing Zinedine Zidane out of retirement could justify the relentless bellowing of Sky Sports News pundit Jim White, this summer's supermarket sweep turned out to be more exciting than most. Here's what you can learn from a record-breaking transfer window.

1. Don't base your strategy on hearsay.

The back pages during the transfer window tend to be dominated by rumour and guesswork. It's not unheard of for newspaper stories to be traced back to 15-year-olds posing as football agents on Twitter, such is the voracious appetite for signings among readers. However, you'd expect the clubs themselves to be a little more thorough when it came to fact-checking.

Not Arsenal, who infamously made a cheeky £40,000,001 bid for Liverpool's Luis Suarez in July, having been informed, presumably by the player's agent, that his contract stipulated any bid exceeding £40m had to be accepted. It turned out that wasn't the case. The clause only required Suarez to be informed of the bid; and indeed, so incensed were Liverpool that they angrily informed everyone else as well. Not only did this leave Arsenal looking bad (knowing intimate details of competitors’ contracts is against the rules – luckily there's no law against knowing details that don't exist), but it also left them without Suarez.

So if you hear rumours about a competitor or situation you feel you may be able to take advantage of, hold back. It's worth waiting until you know the full facts before steaming in, lest you embarrass yourself – or worse.  

2. Inside information – use it or lose it.

At least Arsenal had the excuse that they were misinformed...

Manchester United were always going to find it harder to attract players after the departure of Sir Alex Ferguson and former chief executive David Gill, but they probably didn't think it'd be this difficult. While they did eventually sign imposing Everton midfielder Marouane Fellaini for £27.5m just before the bell, it was £4m more than they needed have spent. The Belgian's £23m release clause had expired just weeks earlier, yet United waited until after that date to make a bid. What makes this even stranger is that new manager David Moyes was the man who signed Fellaini for Everton, and thus, unlike Arsenal and Suarez, knew the exact details of his contract.

Whether Fellaini was a last resort, or Moyes had mistakenly assumed he'd be able to secure his signature for less than £23m, is uncertain. What is certain is that unnecessarily paying over the odds never looks good. Using inside information to your advantage may be dubious in certain situations, but using it to your disadvantage is downright insane.

3. When trading in foreign markets, make sure you know the rules.

Indeed, Man Utd's grasp of release clauses seems somewhat suspect in general. Their other deadline day target, Athletic Bilbao's Ander Herrera, had a buy-out clause of £30.5m. Yet United repeatedly wrangled over the fee, ignoring the fact that Bilbao didn't need to settle for less as they only sign Basque players, and there aren't any replacements currently available in the region that'd require that much money.

Things then took a turn for the bizarre, with reports coming through from Spain that three men representing Manchester United had arrived at La Liga headquarters in Madrid to negotiate a buy-out. Buy-out clauses in Spain can be complicated, as the player may have to pay the fee himself if his club doesn't want to sell him. And while the buying club can theoretically pay it on the player's behalf, that could be open to challenge by tax authorities and even subjected to Spain's 50% rate of income tax.

So, Manchester United sending representatives was not a surprise in itself. Except, as it turned out, to Manchester United. They responded by claiming the men were 'imposters', despite other reports indicating the men were well-known Spanish sports lawyers. Whoever they were, Herrera remained in Bilbao. After a summer of dithering at Old Trafford, unkind observers might say the only imposters representing Man Utd are to be found in the dugout and boardroom...

There are two lessons here. One, if the deal you're negotiating is subject to complex or untested laws, don't expect it to go through quickly. Two, if there's absolutely no reason for a company to sell for less, don't expect them to sell for less.

4. A friendly relationship doesn't mean a reliable one

Gareth Bale's long-awaited £86m move to Real Madrid makes the Welshman the most expensive player of all time, and any fee that big will always have knock-on effects. Many suspect that Spurs chairman Daniel Levy, a notoriously shrewd operator, stalled the deal until September 2nd solely to stop rivals Arsenal signing any Real Madrid players who might suddenly find themselves surplus to requirements, especially before last Sunday's North London derby.

It didn't work. Not only did Arsenal beat Spurs 1-0 even without reinforcements, but they then went and more than doubled the club's transfer record by signing Germany international Mesut Özil for £42.4m (described as 'the German Messi' by one former coach). The story currently doing the rounds in the Spanish press is that Levy called Real Madrid president Florentino Perez on deadline day and furiously demanded the transfer be halted, citing the 'special partnership' between Madrid and Spurs that was announced after Madrid signed Luka Modric from Spurs in 2012.

It was to no avail. Apparently Perez politely informed him that the Özil deal was already almost completed, and Levy was left to reflect that not only had he lost a world class player (admittedly for a ludicrous fee), but by doing so he'd indirectly strengthened his closest rivals. The lesson is, no matter how friendly you are with other companies, don't forget that ultimately everyone's looking out for their own best interests. Should they conflict with yours – expect to be shafted.

5. Always replace employees before you lose them.

It wasn't all bad for Levy. Stalling the Bale deal also allowed Tottenham to find replacements before losing him rather than after, allowing new players time to be bedded in and also potentially keeping costs down a little – when you have £85m in the bank, other teams are unlikely to offer you a discount.

Everton did the same, albeit over a much shorter time span. Before letting Fellaini leave at the eleventh hour, they signed James McCarthy from Wigan for £13m and snagged Romelu Lukaku and Gareth Barry on loan, all on deadline day. They knew how essential it is to replace key staff before they leave, otherwise you'll be left floundering when they do.

6. Moving companies? Take key staff with you.

There were plenty of familiar sights on deadline day, not least player Peter Odemwingie speeding down the motorway in a desperate attempt to escape West Brom (this time he actually got his wish, securing a £2.5m move to Cardiff City). And it wouldn't be transfer deadline day without Harry ‘I'm not a wheeler-dealer’ Redknapp being interviewed through his car window by a roving Sky Sports reporter. The QPR boss left it late this year, appearing only just before the window closed after a busy day's wheeling and dealing, securing the purchases of Benoît Assou-Ekotto and Tom Carroll from former club Tottenham Hotspur as well as old favourite Niko Kranjcar from Dynamo Kiev.

'Redknapp has signed Niko Kranjcar so many times that if he remembers to pay with his Niko Kranjcar loyalty card he'll get a free Niko Kranjcar,' was the joke doing the rounds on Twitter. But why not? Kranjcar and Assou-Ekotto would've been quality signings for many Premier League sides, never mind a Championship one. If you've developed a strong relationship with former employees, use it to your advantage. They may be willing to turn down attractive opportunities elsewhere if they'd prefer to stick with you.

7. Make hay while the sun shines.

Deloitte Sports Business Group have confirmed that 2008's Premier League spending record has been shattered by a cool £130m this summer. The reason? Broadcasting rights to the Premier League have rocketed this year, with the current deal worth around £2bn more over the next three years than the last one. As such, the impetus to avoid relegation is stronger than ever, which is why nine different Premier League teams broke their transfer records over the summer. The fact that many of those teams are ones expected to finish nearer the bottom of the table – Hull, Cardiff City, Crystal Palace, Southampton, Norwich City – show just how vital it is to remain in the top division right now. If your industry is likely to become awash with cash in the near future, then do likewise and make sure you're well equipped to take best advantage.

 

One team that doesn't seem to have taken that advice is Newcastle United, who ended the window having only acquired 16-year-old midfielder Olivier Kemen for £350k and QPR's Loic Remy on loan, although they did at least retain much-coveted French midfielder Yohan Cabaye (or 'Yohan Kebab' as director of football Joe Kinnear mistakenly called him). When Kinnear was surprisingly appointed as director of football in June, he boasted about being able to 'pick up the phone at any time of the day and speak to Arsene Wenger, [or] any manager in the league'. We can only assume he lost his phone book.

Again, two lessons here. One: don't make public promises you can't keep. Two: don't hire Joe Kinnear. 

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