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Tuesday, July 16, 2013
How Academies can make cash: Victor Wanyama’s sale to Southampton
By Grant Russell
(Victor Wanyama (right) departed Celtic for Southampton in a record Scottish sale. Pic: SNS Group)
Celtic received a Scottish record transfer fee for the sale of Victor Wanyama to Southampton, raking in a reported £12.5m for the midfielder.
Not all of that amount, however, is destined for Neil Lennon’s transfer kitty to replace the Kenyan, with various parties laying claim to the money.
Wanyama’s former clubs in Kenya are all claiming a share for training the 22-year-old during his formative years. The administrators of Beerschot AC, the Belgian side from which he joined Celtic, are also entitled to various cuts.
Which club is due what amount and how much will Celtic ultimately end up with? We’ve taken a look at the rulebooks to carve up the cash.
FIFA training compensation and solidarity mechanism
Under the regulations of world football’s governing body, if a player moves for a transfer fee prior to the expiry of his contract, five per cent of that amount must be deducted to be distributed amongst the teams who contributed to his development.
Sides who trained a player between the ages of 12 and 23 are entitled to a percentage outlined by FIFA. This payment is known as the solidarity contribution.
As the transfer of Wanyama was for a reported fee of £12.5m, the retained amount to be paid out in solidarity payments is £625,000.
It is the responsibility of the player’s new club to make the solidarity payment within 30 days of registration.
Separate from the solidarity mechanism, training compensation is also payable to a player’s former club every time he moves to another team until the end of the season in which his 23rd birthday falls.
As Wanyama is 22, his former clubs are due compensation for their contribution to his training and development. Each FA has a set amount per year, agreed with FIFA, as to how much their clubs are due. Again, the onus falls on Southampton to make this payment.
For Celtic there is no uncertainty over how much money they will receive for the sale of Victor Wanyama with regards to claims made by other clubs for compensation.
The amounts due in both training compensation and solidarity payments are set figures. It is down to the appropriate FAs to determine how the money should be split.
Wanyama was registered with three clubs between his 12th and 17th birthdays in his homeland.
Under the solidarity mechanism, 40% of the total solidarity payment is due to clubs, meaning £250,000 will go to the Football Kenya Federation to distribute amongst the sides which lay claim to money.
Any future transfer of the player would see a further 2% of the total transfer fee paid to Football Kenya Federation for distribution.
In terms of training compensation, Kenyan clubs are also entitled to £1,330 for each year they had the player.
Four clubs are all claiming to have trained the player between the ages of 12 and 17. Country Bus, AFC Leopards, Nairobi City Stars and JMJ Soccer Academy have all indicated they would make an application for part of the payment.
The club(s) which trained Wanyama between the 2002/03 and 2005/06 seasons stand to receive £31,250 per season in solidarity payment, plus £1,330 each year in training compensation.
The club(s) which had the player registered in the 2006/07 and 2007/08 seasons are in line to claim £62,500 per season through the solidarity mechanism, plus £1,330 each year in training compensation.
Wanyama was registered with one club in Belgium, the now defunct Beerschot AC.
Under the terms of the solidarity mechanism, the Royal Belgian FA is entitled to lay claim to £187,500 on behalf of the club.
Any future transfer of the player would see a further 1.5% of the total transfer fee paid to the Royal Belgian FA for distribution.
Beerschot AC went out of business this year, although a phoenix club has emerged in their place.
The new team may be entitled to claim for the money but, regardless, the Royal Belgian FA are entitled to the cash and could retain it themselves to put back into youth development in the country.
In terms of training compensation, the Royal Belgian FA can claim £156,000. Again, if the new Beerschot AC fail in their claim to the cash, the money will still be due to the Royal Belgian FA.
Money due to Beerschot AC/Royal Belgian FA: £343,500.
Celtic also had an agreement to pay a percentage of any future transfer to Beerschot AC. The exact amount of that clause has been varied considerably across various reports, ranging from 5% to 10%.
Money due to Beerschot AC/administrators: Between £625,000 and £1,250,000.
Although £625,000 of the transfer fee has been set aside for solidarity payments, Celtic have not had to factor the loss of the full amount.
Circa £125,000 of that amount is retained by Celtic for having trained the player in the seasons both his 21st and 22nd birthdays fell.
Any future transfer of the player would see a further 1% of the total transfer fee paid to the Scottish FA for distribution.
As a net figure, Celtic should receive between £10,586,020 and £11,211,020 from the sale of Victor Wanyama, less any unknown fees to agents etc. The variation in numbers is because of the uncertainty over the size of add-on clause to Beerschot AC.
Southampton also stand to benefit through the solidarity mechanism through any future transfer of Wanyama.
On top of any fee or add-ons they agree themselves, the Saints will be entitled to 0.5% of the sum of all of the player’s future transfers.
Distribution of £12,500,000
Football Kenya Federation: £257,980 - To be distributed between Country Bus, AFC Leopards, Nairobi City Stars and JMJ Soccer Academy.
Royal Belgian FA: £343,500
Beerschot sell-on clause: £625,000 to £1,250,000
Celtic: £10,586,020 to £11,211,020 - Net transfer fee: £10,461,020 to £11,086,020 - Solidarity mechanism refund: £125,000
Southampton: £62,500 of solidarity payment retained