Signing on fees and wages. I'm a bit confused.

[shaqTHFC]

I've always wondered about things like signing on fees and paying the selling club to subsidize some of a players wages.

Do the signing on fees/subsidies amount to the same money as the wage money we save?

If so why not just pay the wage if we're paying the same in the end anyway or is it done to not make other players want higher wages?

 

[Azrael]

I reckon it is as you say, to maintain a wage ceiling.

It doesn't necessarily amount to a direct reflection of the wage saving though.

I suppose it's down to what the player sees as a good deal. For instance, a player might get 50% of his loss on wages in the signing on and overall make less money. But, conversely, might sign on, play really well, and have top clubs who come in and buy out his contract early, in which case the player returns to his higher wage but has pocketed himself a sum that, ultimately, turned out to be more that his wage loss.

I can see several potential advantages.

 

[thenickh]

Are the signing on fees actually paid in the lump sum right away? (doubtful imo). If so though, it would be a bit more attractive even if you were losing out on a bit in the long-term.

 

[Donki]

The money used for signing players (transfer fees and signing on fees), comes from a different budgeting pot, accounting wise, than salary costs, well thats the way i see it anyway. A company has to be able to budget it's in goings and out goings in order to survive, really any household these days have to and its easier to have a budget for running costs and then one for bigger purchases.

So if we have a certain amount set out for wages each week in order to break even or make a profit at the end of a season Levy, sensibly, doesn't wan to go over that. In the same way there is a certain budget for actually buying player or new facilities. So if we subsidise a player with a larger signing on fee instead of a higher salary I would say that would come off any predetermined transfer budget.

Again this is only my assumption but it seems to fit. The problems arise when a player is maybe demanding a high signing on fee before any extra money is added on top to make up his salary, you are potentially adding millions on to any transfer on top of the transfer fee.

Now I have been thinking about this since Thursday when the Ade story really heat up, I really don't see what the hold up with this transfer is, either City pays the extra cash to make up his salary or he takes a pay cut or the loan won't happen. Unless..... We are actually trying to sign Ade permanently and we are negotiating his full pay contract, again my assumption but is worth thinking about.