Sunday, August 1, 2010
How To Make Money Out Of Football.
(Doing it the way - Isaac Mbedzi's First Mobile Sports Academy)
FIFA wants all clubs to pay the academies or development schools or clubs, for the training of any player that becomes professional. The Training Compensation Mechanism is for costs incurred during a learning period stipulated as 12 to 21 years of a player's life. This money will be calculated depending on his age and the time he spent at his development club, and will be paid within 30 days the player is registered as a professional. The money is also payable if the professional is still under 23 years of age and is moving from a club in one association to another. His new club is responsible for paying the training compensation.
The solidarity payment is the money paid every time a professional signs a new professional contract until, again, his 23rd birthday. The club giving him a new contract is responsible for the solidarity payment, usually a 5 % that is divided according to the players age. For the time the player was between 12 and 15 years of age, the club where he was during those years will receive 0.25% for each year he was there. It will be 0.5 % for ages 16 to 23 years.
Training Compensation Calculations.
Say YOUR ACADEMY FC has player Katlego Ndex 20 years of age and has been training with you since 8 years ago, his training time with you is 8 years. If Glasgow Rangers pay USD 2.3 million for him, your training compensation within 30 days is likely to be the 8 years multiplied by a range of USD 60 000, 00 and USD 90 000, 00. Taking the maximum of USD 90 000,00, your association will be banking USD 720 000, 00 in your bank account by the end of August 2010. Cool nee!
Solidarity Mechanism Calculations.
If 2 years down the line, Katlego Ndex gets a new contract at Barcelona who pay USD 60 million for him, Glasgow Rangers will receive USD 90 000, 00 x 2, for his training years with them, and you receive a further USD 720 000, 00 for those 8 years. At this point, you will receive Solidarity Compensation. For the time he was 12 through 15, it is 3 years multiplied by 0,25 % of USD 60 million. This sets you up USD 450 000, 00. Then from his 16th birthday to the 20th, it will be 5 years. It means 5 x 0.5% x USD 60 million. You will pocket a cool USD 1.5 million plus USD 450 000, 00. USD 1.95 million is not bad money to bank in a single transaction, but you must spend years building the product.
Please take note that the player may have been here and there at different clubs or academies. The information must be available and those institutions be paid from the same portion of money depending on the number of years the player spent with them. If the stakeholders can not be traced, the national association is obliged to channel that money into development. Cross check the calculations.
If you are from my continent, you know the 'channel' into 'development' very well. Lets get off our backs and make money.