Football transfers: an essential money-spinner for African clubs
The sale of players is an important source of income for many African clubs. But the gains are not always in line with expectations and investments made.
Salomon Kalonda, the Chief Financial Officer of TP Mazembe in the Democratic Republic of Congo (DRC), is known to be a tough businessman.
The Lubumbashi club, chaired by Moïse Katumbi, has enough financial resources to stand up to the European teams. “But we often make the same observation: most of the time, they tend to want to buy African players at too low a price,” says Kalonda. “There is also sometimes a feeling that African clubs do not know the true value of their players.”
The Ravens — a reference to the team’s black and white jersey — with a budget of roughly €8m, have already sold several players to Europe, following a well-defined strategy.
“We have a fixed selling price,” says the CFO. “But we systematically negotiate a percentage on resale, most often around 30%. Sometimes more.”
The most recent example concerns defender Christian Luyindama, whom TP Mazembe had given on loan to the Belgians of Standard Liege in 2017.
He was then transferred for €8m to Galatasaray, Istanbul, in 2019. The Congolese club pocketed €2.4m, to which must be added the undisclosed amount of the DRC player’s transfer to Belgium in 2017.
The article continues below
Get your free PDF : Top 200 banks 2018
Opportunity knocks again
Complete the form and download, for free, the highlights from The Africa Report’s Exclusive Ranking of Africa’s top 200 banks from last year. Get your free PDF by completing the following form
The principle of the percentage on resale
Thanks to the gains made during the transfers, TP Mazembe has become one of the main players on the African market.
Together with the clubs of North and South Africa, it can put a lot of money on the table to acquire a player from the continent. “The average range is from €100,000 to €500,000. But we can go further if it’s a confirmed international,” says Kalonda.
The financial precariousness of many sub-Saharan clubs often forces them to accept less than the player’s true value, and Europeans are often in a strong position to negotiate, even if Africans are increasingly imposing bonuses and percentages on resale.
For example, AS Vita Club of Kinshasa sold its international defender Ngonda Muzinga to Dijon (Ligue 1) for €300,000, but with a guarantee of 15% on the player’s future sale.
ASEC Mimosas, which is one of the African top clubs in terms of training, does not have the same budget as TP Mazembe. But the Ivorian club has quickly assimilated the current codes of the transfer market in the African-European direction.
“This money is essential for us. It should be noted that between Ivorian clubs, transfers exist, but the sums involved are very modest, maximum €3,000. Exceptionally, it may be a little more, €10,000. So, for ASEC, you have to try to sell well abroad,” explains Benoît You, the ASEC Mimosas General Manager.
A few months ago, ASEC pulled off a good financial transaction with the young Odilon Kossounou (18 years old), who sold for €350,000 last January to Hammarby (Sweden). The Scandinavian club sold him six months later to FC Brugge for €5m, and ASEC received a percentage on resale.
“Europeans will either pay a fairly low transfer, but agree to pay a percentage, in the order of 25 to 30%, in the event of resale. But if a club arrives and puts €1m on the table, the percentage will be much lower,” You explained.
Africa transfers yield too little
While some clubs can impose their conditions on Europeans, many players in African football have made the same observation.
“I will need to be told why the relationship between an African and a South American is often one to ten,” said a Senegalese football commentator, while deploring the weakness of the domestic transfer market. “Our clubs earn almost nothing by selling their players. At most, it’s €7,500, but most of the time, it’s much less.”
So the clubs are starting to do things differently. If A gives a player to B for little or nothing, A will negotiate bonuses and a percentage with B if the player is transferred abroad one or two years later.
“Fortunately, there are clubs in Africa that are financially strong enough to inject money into the continental market, and not just those in North Africa, South Africa or TP Mazembe,” says our Senegalese commentator, who cites the Guineans of Horoya AC, who “can put several tens of thousands of euros on a player”, or the Petro de Luanda Angolans, who are “able to offer €150,000 or €200,000”.
However, this is still marginal. “European clubs need to be a little more respectful. However, there are some advances. For example, the Austrians in Salzburg, who have made Africa one of their priorities, are putting the price on it. This can go up to €1.5m,” he says.
A European agent has a theory to explain why European clubs are pushing prices down in Africa. “There is often the question of the player’s real age. We will tell you that he is 19 or 20 years old, but we know that in some countries, there are frauds on civil status and that in reality, he is three or four years older.”
Another off-mark assumption, widely shared in the European spheres of football business, and which our agent echoes, is the question about “the level of the player”.
“He can be very good, but when he arrives in Europe, especially if he is a young adult, but the clubs will have to invest to complete his training. This represents an additional cost,” says the agent.
However, he acknowledges “European, Asian or North African clubs also benefit from the financial difficulties of sub-Saharan African clubs, who need liquidity, and cannot refuse an offer of €150,000 for a player who is worth perhaps two or three times as much”.
This article first appeared in Jeune Afrique.