Tuesday, October 27, 2009

FIDE Creates Player Market

These recent rule changes (taking effect from 1 July, 2010) governing the transfer of players from one federation to another has at last placed an "official" value on players' heads. Destination federations must now pay up, a so-called "compensation fee".

For example, a GM rated 2700+ will cost €50,000; it's €30,000 for anyone rated 2600 to 2699 and €10,000 for a GM rated below 2600.

So, for Serbian GM Dejan Antic, who so desperately wants to move Down Under - the ACF will now have to fork out as much as €10,000 or roughly AUD$16,200 based on today's exchange rates.

The new rule was suggested by FIDE General Secretary Ignatius Leong and when I asked him about that, his point seemed to me perfectly valid. Said he: "Several federations have been investing in developing their players and receive nothing when players transfer. Hence, the adopting federation pays a compensation fee to the previous federation. Federations adopting players should be ready to pay both transfer fee and compensation as otherwise they benefit from other federations' long-term investment and simply takeover a "ready product".

On one level all of this makes sense. For at last we now recognise, not only the value of players, but also the investments made by their originating federations.

Imagine, just for a moment, if GM Zong Yuan Zhao suddenly decides to head for China and play for that country: to rediscover his roots, as it were. Why should the ACF not receive compensation from the Chinese? That's €10,000, thank you very much. I can just imagine the ACF boss rubbing his hands with glee!

And there lies another side effect of these new rules. By placing values on players' heads, FIDE has effectively also created a market. Now it will be possible for federations to trade players between themselves. Of course - federations being federations, busy with admin matters and politics - someone else must worry about the buying and selling. Who else should fill that gap but brokers?

With these developments, I might just consider a whole new career. After all, who's going to stop me from adding a little extra % for moving one player from fed X to fed Y?

1 comment:

Macauley said...

A very interesting idea. If you want a U.S. partner, let me know. :P

No, seriously, I wonder what the numbers on players transfers are. Is there really enough movement (liquidity) to have it constitute a market?

What do other sports do? Footballers have lucrative contracts and trade deals with teams, but do Federations get compensated when their players are hired away?