Back in April 2011, HoopsHype reported that Rudy Fernandez sent a termination letter to Andy Miller of ASM Sports and Spanish agency U1st Agency.  At the time, it was only known that Fernandez was signing with Spanish agent David Carro of Hoops Fair Play.  Soon thereafter, Fernandez also signed with Arn Tellem of Wasserman Media Group, which provided him with a strong international agent and a prominent agent within the United States.

Fernandez, a 6’6 shooting guard/small forward, is currently signed to the Dallas Mavericks, but is playing with Real Madrid while the NBA and NBPA try to come to an agreement on a new collective bargaining agreement.  Raul Barrigon recently got a hold of Fernandez and asked him quite a few questions about his role with Real Madrid and the Mavericks, but the following Q&A caught my attention:

Why did you change agents?

Rudy Fernandez: I was not in contact very often with Andy Miller. My agents in Spain handled my day-to-day stuff. I was very happy with Gerard Darnes, Jordi Vila, Nuria Martinez. They were very important for me during my career. But I felt I needed something else… Then there was the issue with the fines, which I didn’t like… Also some other things happened that I didn’t like. Also in order to change my image I needed this. Now I’m with Arn Tellem, Jose Ortiz and David Carro. Pau [Gasol] and Marc [Gasol] said very good things about Tellem and I’m happy about this change.

Rudy Fernandez Happy About His Change To Arn Tellem from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Lionel Messi joined FC Barcelona at the age of 13, where he lit up opponents and scored his way to a massive contract with the premiere squad, eventually earning a starting job.  On Sept. 18^th, Messi chalked up a new deal with the club and never wants to leave, stated the official Barcelona website.  The luminary striker and celebrated Argentinean national player will be under a new contract with the club until 2016. The club has yet to disclose any official amount of money that the new contract is worth, but under his previous contract, this stud was being paid between $10 – $12 million dollars annually. Some Spanish press are projecting that Messi will earn between $15 – $18 million dollars per year with his new contract.

Buyout clauses are common in sports negotiations and contracts.  Buyout clauses are used if a player or team decide to dissolve the contract and relationship at any point during contracted years. It is similar to making a premarital agreement in order to protect both parties involved. For soccer players in Europe, especially with young guns, these clauses are very important considering the amount of attention these players will receive from other clubs during their tenure under contract. The buyout allows a team to purchase a player or buyout their contract for a specific price. In Messi’s situation he had a buyout clause of $220 million dollars in his previous contract. However, turning 22 years old and just reaching his prime, the Argentinean has a new buyout clause of $367 million dollars for his next 6 years.  Seems a bit pricey to pay for a player, but after seeing Real Madrid and Manchester City spend a couple hundred million dollars it may be realistic and necessary.

To put things into perspective, Messi is considered one of the best players in the entire world, if not THE best. Fellow soccer player Cristiano Ronaldo is also considered one of the world’s top performers and set a new record in terms of a buyout clause. Chairman of Real Madrid, Florentino Perez, wanted to protect their new star from any oil sheiks that had him on their mind. Ronaldo and Real Madrid agreed upon a $1,000,000,000 Euro buyout clause earlier this summer, making Ronaldo the first ever billion euro player; his previous buyout was worth $200,000,000 euro. If a team were to buy Ronaldo, they would essentially pay the salaries of the other 66 players under contract with Real Madrid. Now that is some serious dough!

Messi Situation is Anything but Messy from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Real Madrid Sign Referee from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Ronaldo – £80 million

Kaka – £56 million

Benzema – £30 million

Albiol – £12 million

Manchester City Summer Purchases

Santa-Cruz – £18 million

Tevez- £25 million

Adebayor – £25 million

Barry – £12 million

These are the transfers that have knocked the wind out of the summer transfer window in European soccer. In an economic climate where the world is saving and not spending, Real Madrid and Manchester City have continued to fulfill their reputations as big spenders, and have accordingly purchased the best available talent on the market. No other clubs could compete – the likes of Chelsea and Manchester United (normally high fliers in the market themselves) have had eerily quiet summers with limited transfer activity and it must be partly due to the acquisitions made by City and Madrid.

Manchester City have sourced their funds from Billionaire owners Abu Dhabi United Group. Real Madrid are a different kettle of fish. Madrid should have been made insolvent countless times over the years due to the fact that they tend to spend money that they do not actually have. However, with the King of Spain as a huge supporter (‘Real’ means ‘Royal’), they have had their debts written off by banks who do not dare bankrupt the King’s club.

In either case, these are teams who seemingly have unlimited spending power, without consequence. This is becoming a major concern to the football fan in Europe. How can their team compete or make big signings when the big-guns of Madrid and City continue to dominate a market that was anticipating a deflation of transfer fees, as opposed to the inflation that has actually materialised?

Has the time finally come for the governing bodies to impose transfer expenditure caps? The concept of salary caps has been a much discussed topic in the media and online blogs, and the general conclusion is that they are illegal and very difficult to incorporate – EU law protects individuals against mechanisms that impose restrictions preventing a worker from realising his earning potential. Would a restriction on a club’s ability to spend be capable of circumventing the grasp of EU law however?

Perhaps the governing bodies could come up with a reasonable limit (£20 million?) that a club may spend in a given summer. Maybe it could be £20 million plus whatever revenue that comes from the sale of any pre-existing players of the squad. The restriction could be as simple as one that forbids any club spending money that is not disposable income – my previous post on Southampton FC highlights quite clearly how disastrous the consequences can be for clubs that do not spend within their means. Any measure brought forward that is in the interest of sport might be capable of successful implementation.

In any case, the expenditure of City and Madrid has distorted the market and does not reflect the current state of economic affairs. Is it an overreaction to suggest that something need be done in response to this? Some might be of the view that there is nothing that can realistically be done to stop or regulate the way clubs spend money on transfers. The solution could be simple – clubs should rename themselves ‘Real’….

The Real World Of Soccer from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules