[MUSIC] >> Welcome back. Joining us from England, our next Skype guest is Jeff Mostyn, chairman of the championship club AFC Bournemouth. Having been with the club since 2006, Jeff has seen it at all. Administration, which he funded personality, keeping the club financially afloat, point deductions, transfer embargoes, relegation, and now, rapid promotion. Having rebuilt the club's squad and its investment portfolio, Jeff now has Bournemouth in the best place they have been in the better part of 25 years. Jeff serves as a Vice Chairman of the FA Counsel, additionally participating on four subcommittees, the Challenge Cup, Youth, Membership and Disability committee. As Vice Chairman, Jeff helps to determine the rules, regulations and governance of the national game. Jeff takes great pride in his responsibilities, in particular, youth and disability football in the UK. He's a charismatic and intelligent person. Jeff will be giving us great insight into the regulation that agents must deal with. The relationship that agents must have with clubs, and the process that a young footballer would have to go through to reach the first team. Without any further hesitation, we now turn you over to Jeff. I know you're going to enjoy this Skype interview very much, indeed. I know I did. Thanks for being with us. Welcome back. We're proud to have with us today one of the great experts in soccer football. I'm going to call it football throughout this module, not soccer football. Jeff Mostyn. Jeff, our audience our class has your bio. Thank you so much for being with us today. We're proud and privileged to have you with us to speak to the wonderful world of football, as you've known it for so many years. Congratulations on all your accomplishments to date and thanks so much for being with us. >> It's an absolute pleasure and a privilege for me to be joining you all today. And I hope the next few minutes, or hours, depending on the link works out extremely well and knowledgeable for you all. >> Thank you so much. So we're going to start with a very basic system that you're so familiar with and that is the academy system. We're studying the trajectory of a football professional, a pre-professional. How would a pre-professional, the next Beckham if you will, that's kind of how we're tracing this come to your academy program? How are you involved with the academy program at Bournemouth and how does that play out for let's make him a 14 or 16 year old who's quite talented. Not quite Beckham, but quite talented and Bournemouth would like to sign him. How does that work from the ownership side? >> Well, just referring to Beckham, we would like to be signing him or one of his sons. They seem to be very talented at the moment. I think they are probably going to finish up with a model career rather than a soccer career. But I think within English football now, the academies and the youth system is fundamental in any team's success, and as you're you aware, this is as a consequence of financial fair play. Everybody's trying to balance the books and one way of balancing the books is to ensure that you have talent coming through the system instead of having to go into the transfer market and pay huge sums. So at Bournemouth Football Club we start off at, if you like pre-12 and 14, we have classes where children will come to the ground from the age of five but we really start to work with them contractually from the age of nine. And from the age of nine, they're able to sign a, let's just call it a contract. It's an agree, more of an agreement than a contract where we know that they're going to be with us to work themselves through to the youth development side. As you alluded to, at the age of 14. From there, they will develop through a number of teams that we have. And then find themselves within the youth setup from the Academy at the age of 14. >> Right, and not to interrupt, but how binding, you ran IMG's Academy from the legal standpoint, how binding are those agreements for someone who is underage? Do you get the parents to sign along, or guardian to make it enforceable? >> Yes, the parents are present during all our processes. Right through to the, I say the children. The kids signing a professional contract at the age of 18. That's their first professional contract. So in the early stages the parents are present. And what effectively they're doing is agreeing that we would have the ability to release the child. But the child will be bound to the football club, normally in increments of 12 months at that stage. And it just really helps us, there's an awful lot of time, and awful lot of expertise and money being put in to develop the youngsters. What we don't want is them to come and spend a couple of weeks or a couple of months with us and then go to one of our competitor professional teams. >> Right. So how do you scout, the next great nine year old? I mean, that's kind of where we started here. How do, how. How do your scouts say, okay, here's an 8-year-old that we should sign when he turns 9, so to speak? >> Well, we have an affiliation with the schools and colleges in the area, predominately in our local area. And like any good scouting system, it starts off with the sport's teachers that are in employed by the schools. They so often will give us a call to say they have a talent. We will then send one of our own representatives down to evaluate that. There's one thing a member of the school staff spotting a talent. It may just be the best talent at the school, but it still may be below the quality that we require as a professional football club, and it's at that stage that we will look, evaluate, and then talk to the child and talk to his parents as to whether or not they want to come under our wing. >> And if they don't make it at the age of nine, is there a ten or 11 or 12 year old entry point, or does the pyramid start kicking in right then and there. I'm going back to tennis, the Bollettieri Tennis Academy, the Leadbetter Golf Academy. Sooner is better, but sometimes people mature in those individual sports later. How does it work in football? I think the real evaluation comes after 14 and to 16. We have the option later on to decide whether or not the individual has ever got the talent to make it as a professional footballer. What you don't want to do is to have somebody with you from the age of seven, eight, or nine, right through to 18, and then at 18 break the news that you're not good enough. It's a devastating for any young footballer not to be given professional terms. But like any football club, there are only two or three per season that are offered a professional contract with the football club. Then what happens, we have the same phenomenon here in the States across all of our major leagues, not to mention the individual sports here of course but then what happens in terms of education and training for the many are called few, are chosen. Those who don't make the professional contract that let's make it age 18. >> Okay, we have an obligation to try to help [SOUND] them as much as we possibly can. And at the end of each season in the English soccer system there is a, I'm just trying to think of the equivalent in the States, where you have your choice of the top players. So players that are released by the football club will go to soccer schools or the equivalence of soccer schools where they're on show for all the professional teams in the four divisions. So this is from the Premier League, the Championship and the First and Second divisions. And once they've been released by the clubs, it's fair game for everybody. They will go, there's normally a two week soccer school during which time all the clubs are represented by their scouts, or managers, or assistant managers. And what may not be good enough for one club may well be, good for somebody else. So there's quite a number of those that are taken on as professionals with other clubs, and the rest of course like any profession, whether it's tennis, the NFL, the MLS, unfortunately, the time has come where they, where they're not going to make it as a professional footballer and they're then have to start to use their education to look for other alternatives. >> Let's go back to that, Jeff, if we could please. >> Sure. >> So what sort of education would they have? Let's take the hypothetical 18-year-old who goes to what we would call a showcase of the couple and nobody picks him u0, so what kind of an education would he have at that point? >> We're teaching, we go through sports science MVQs, which is the equivalent of three A levels in the English education system. So they are getting the equivalent of your college education whilst they're with us. And I think that as this has become more and more prominent now in particular with the premiership clubs who have really started their own inverted commerce universities. So people will leave, at 18 they will be qualified to move on to higher education, which in the United Kingdom would potentially be a university degree. >> Great, thank you. Well let's now take the next Beckham, or almost, and he's come up through the Bournemouth Academy and you really, really want to sign him. Is he then free at age 18 to sign with a Premier League team rather than Bournemouth? >> Well, what will happen is, from the age of 16 he will have an interim contract, but basically at 18 if we're not going to offer him terms, he would have the ability to move on to somebody else. We will sit down with him and with his parents and at the age of 18, which would be his first professional contract, we would normally offer them a contract of six months or 12 months. It would be very rare, and it would need to be a very exceptional footballer that we would offer a contract in excess of 12 months at that stage. >> Okay, but do you have an equivalent of a right of first refusal, what we would say. Because you have grown him through your academy, and now he's 18. It's a fair offer, not a great offer. Is he free on the player agent side, to go shop that offer, or must he accept it? >> Well he doesn't need to accept it. And I know this is different. In the States, my understanding at the MLS is, that if he doesn't accept it, then he can't sign for anybody else. I'm sure you'll correct me if- >> Right. >> that's not right. >> Right. >> But here in the U.K., everything at the academies, it comes under the the control of what we call the Elite Player Professional Program. It's E triple P in short, so if you ever hear anybody referring to that, it's E triple P which is a lot easier to get your tongue around, and it's very early here so I still haven't had a drink, a drink is absolutely impossible. We couldn't have any dialogue on that question at all. Every year the Premier League offer the football league what is called solidarity payments. And there's always a caveat that it's called a gift, and that gift is going to change from the year 2016-17 where it becomes contractual. And it's going to be much easier for football league clubs to actually balance the books knowing that every year they're going to be getting a particular sum of money rather than going Oliver Twist style to the Premier League, cap in hand for a gift. One of the prerequisites of agreeing to the new agreement was that the E triple P program kicked in. And it effectively comes up with a matrix of how long that young lad has been with the football club, whether it's from the age of seven, eight, or nine. And that will be given a value up to the age of 18. So if another football club wants to sign that individual without having to go to tribunal, you can actually look down the matrix and it may cost somebody a million pounds, or one and a half million pounds, or a half million pounds, to take that player even if you don't want him. He will have a value as long as he is under 24. And obviously at the moment we're only talking about the academy so they're all under the age of 24. >> That's great to know. And on the E triple P then, that's the equivalent of having to pay a transfer fee as I understand it. >> Yes, yes it is. In the past, the fees were agreed between the two clubs or in most cases, not agreed between the two clubs. And then it would go before a tribunal, a football league tribunal, or a Premier League tribunal. You normally have a lawyer and two members of the football league, Premier League, or the FA who would be on the panel. You would put forward your case as to why you believe the transfer, the transfer fee was worth x. And of course the parent club would put forward a counter argument to say look, we've had him for the last ten years. He's been with us since the age of eight. We've put in an awful lot of time, an awful lot of expense, and as a consequence of that we believe the transfer fee should be y. And then it would be down to the tribunal to agree a fee. E triple P has made it a lot easier, because you know that there is a matrix and within reason that is what is going to be agreed. Each club does have the ability to appeal and still go to tribunal or to negotiate themselves outside of that matrix. So if, as Bournemouth, we're bringing through a bright young player, Baily Cargill, for instance, would be somebody to mention. He is the sort of latest star. Home only just signed professional terms with us. And he's just won his first England Under 20 cup. So we would know that even in his first contractual year, he would have a huge future value in particular because he's a left sided center back and there are very few of those of his potential in the UK now. So, if a Premier League came in for him, we would be demanding a fee way, way over and above the E triple P matrix. >> Great answer, let's just stay with that example, would Bournemouth expect to keep a player like Cargill for how long? Another year or two before then it becomes more valuable to trade to transfer him than to keep him? >> Well, it's a very good question. A couple of years ago if anybody had have knocked on the door with a checkbook, we'd have taken their money. >> [LAUGH]. >> Because in the days, in the recent past, the club have had financial issues, and therefore selling was far more important then performing. With our ambition at the moment, we don't want to sell anybody. So the question is, we would rather keep Bailey, and hopefully get promoted to Premiere League. Where he can fulfill his ambitions with ours rather than with somebody else. But that's just a personal desire. And probably in answer to the actual question, the longer that we can keep him, the more that we can develop him and the more he can mature. Then we believe that his value will automatically increase. >> Ultimately. >> Sorry. >> Yes. >> As a caveat to that. >> Yes. >> The vast majority of transfers in the United Kingdom have what we call a sell on. And that is a, I think a fundamental part of selling a young player to a Premiership club. >> Sure. >> And if I can give you an example of that, Adam Lallana. Who will probably ironically be playing against us tomorrow night in our amazing match against Liverpool. Which we're all very excited about. He was with the football club since he was 12. He then signed for Southampton. And Adam Lallana's contract, which is in the public domain so I can share it with you, was probably a fantasy of our club secretary at the time, >> [LAUGH] >> who I'm not, even to this day, is convinced that he knew what he was doing. >> [LAUGH]. >> Adam signed for Liverpool, and in round figures it was a 1,000 pounds when he joined their academy. And then another 1,000 pounds when he made half a dozen appearances. And then, 25% of any sell on fee for Adam Lallana. Well all these years later, he signs for Liverpool for nearly 30 million pounds and we were entitled to 25% of that. Now who would have thought of that when a 12 year old left his football club that he would bring in close to $5 million in transfer fee. >> Well, congratulations. That's, let you be the owner chairperson that you are, let's flip the script, but only a little bit. So you're alluding now it's about winning. And getting up into the Premier League. >> Yes. >> How do you build a team and still comply with the financial fair play requirements in so doing? >> Well, you couldn't have picked a more topical time to ask me that question. Because only yesterday, three clubs in the Championship have been embargoed because they've broken the financial fair play rules. I think probably for you and all those that are watching this, I think it'd be important just to set the scene as to what the financial fair play basis is in the United Kingdom. We have four leagues and it's very complex because we have four different sets of rules. If we start at the bottom of the pyramid, that is division two, league division two. They don't have financial fair play, but they have the equivalence of it. Which is the financial management protocol. And within that, they are only allowed to spend 50% of their turnover on player's wages. And it works, there are very few financial problems now in that division because most clubs adhere to it. Now, the difference is that in the second division you have aspirations of moving up. Everybody, with our pyramid, and this is the big difference between the MLS and all the soccer leagues in America, and the English system. We love our system, because it allows the all clubs, including ours, to fantasize, that one day we will be in the elite division. Obviously in the States it's totally different because it's the equivalent of a franchise. And you know that once you're actually in a league, you're in it as long as you can pay your way. >> Right. >> So our system is based that you're in the second division. And as we were only four years ago. And you can move your way up the league. But if you're in the second division, you're not going to spend huge sums of money on players. Because you haven't got the income. The crowds are generally low. And therefore, you're more sensible with your budget. And the same really applies in moderation in the first division. Once you get into the in to the Championship. Most people tend to run the football clubs with their hearts, rather than their heads. >> [LAUGH] >> Because suddenly their huge fantasy, the promised land is right in front of you. And you want to aspire to get into the premiership. And it costs money. >> Mm-hm. >> And when it costs money, you tend to think we only need one more player or two more players, we can now make a push. If we had another defender, another forward, we could add ten goals, we could save ten goals. And before you know where you are you're spending 2 or 3 million pounds that you may never get back. Because the one thing we know in any sport that, and I think it is in a good rule in English football anyway. Just because you have the most money doesn't actually mean that you're going to have the greatest success. Maybe slightly difference in the Premier League which we I'm sure we'll come to but certainly in the Championship. It is hard to justify that money equates to success. It definitely helps. Because like any sport if you got the best players you would believe that you have the best chance of winning. So the fundamentals are this current season, the rules are that you have to break even. Plus, you're allowed a leeway of 3 million. So it's a deviation of 3 million over breakeven in the Championship to comply with financial fair play. In addition to that you can have the owner putting in up to another 5 million. It can't be in loans. It has to be in equity. So from breakeven the maximum you're allowed by way of deviation is 8 million pounds. And this year is the first test case. In fact December just passed. This is the first test case of the Championship and we had to submit all the accounts by the first of December. And anybody that exceeded the 8 million would be embargoed. So we have three clubs that are currently embargoed as from Monday. Those are Leeds United, Nottingham Forest and Blackburn Rovers. And of course, Blackburn Rovers came down from the Premiere League with huge sums of money. Some of their players were being paid 100,000 pounds a week, and then you find that they've got a two or three year contract. So it's a license for disaster. There's just no way that you can escape that. They've now been embargoed. I'm delighted to say that contrary to what a few people thought few national articles that we would be in breach. We've actually succeeded in complying fully with the championship. And the football league's financial fair play requirements for this year. And we do have a major problem at this football club. We have the smallest ground capacity in the Championship. So that makes it even more difficult and it takes far more prudent spending to balance the books. Because we we have a crowd capacity of only 12,000. With segregation it's 11,700. We sell out every week. But as I often say, it doesn't take the brains of an archbishop to realize that when you only have a ground of 11,700 you can't compete. Competes, light for light, with club's that have stadium that hold over 30,000. Which is the vast majority of those in the championship. >> Let's, thank you for that. Let's stay with the guaranteed contract concept, which is huge here in America's three major leagues and the NHL as well up in Canada. So these are multi year guaranteed agreements once you enter into them, if you can't get rid of the player, you're stuck with those contracts. >> 100%. And what we tried to build into contracts that it builds in the lower two divisions, so division one and division two. Most of the clubs in those divisions have a promotion and a relegation clause. So we have this ourselves. And if we just take an average it's probably somewhere between 15 and 25%. So from the first division to the championship, our players would get up to 25% more. And if we go back down they will get 25% less. They're all clubs that have extreme but half the wages. But, from a prudent accounting point of view that actually makes sense. Because if you think of the huge parachute payments that come from the premiere ship down to predominantly the championship it is the premiere ship divides the those kinds of parachute payments to protect their family. The premiere ship is a family, people call it a league, they want the same 20 clubs in it,. They don't want the irritation of smaller clubs like Borman coming in there and how are we going to be competing with Manchester United? How are we going to be competing with Liverpool? Well hopefully we'll demonstrate that tomorrow night by beating them. >> [LAUGH] >> But, and that would be fantastic for everybody here. But I understand, when you look at Manchester City, you look at Manchester United, and you look at Liverpool and Tottenham. How can we ever compete? Well, financially it is impossible. So, if the clubs from the premiere league are relegated to the football league. They are given their share of the television money which is up to 70 million in parachute payments over a period of four years. So, for instance, last year we were playing teams that had an income, cause call a parachute payment whatever you want, it is income of over 30 million before a ball was kicked. And how are we expected to compete with those clubs? So it's not a very fair playing field. And we tried to change the rules. They are being relaxed from the 2016, 17, where the parachute payment that are paid to clubs coming into the championship will be reduced from four years to three years. And if you only get promoted into the premiership and only retain your status for one year, then you will only get two years parachute payments. So, it enables you to budget when you have your contracts, the rationale is that if premiership clubs had a rumination clause in their contracts, there wouldn't be a need for parachute payments. The parachute payments are only there to sustain huge wages of clubs coming down from the Premiere League to the Championship. >> Let's stay with these guaranteed payments, another great answer and thanks for that. So now, a player becomes disabled, becomes injured, we're dealing with this in the National Football League. It's called the Not For Long league Job. Because you can be cut really for no reason or any reason. Right? >> Yes. >> And or conduct detrimental, in the case of domestic violence. A team and, or the league can do what they've done to Adrian Peterson over here. What about that kind of off-field misbehavior? Could that be a reason for not continuing to pay the guaranteed payments and or disability injury? How does that work in the context of these guaranteed payments? >> No, the guaranteed payments are guaranteed. Unfortunately, so come what may, the player will be paid his contract. Now, the defining line would be medically. If it is proven that medically he's no longer able to play and fulfill his contract then the player's insurance will cover that. Player insurance is mandatory throughout the four divisions. So in the in the sad event that a player would lose his potential of a livelihood then the insurance company would pay up the residual parts of that player's contract. >> Okay? And that wouldn't count against your financial fair play amounts. >> No. >> Okay, that goes off the books. >> No, he would be taken out. He would literally be taken out as soon as it's diagnosed that he is effectively no longer on the payroll, then he would be taken out. There is also a sort of an allowance within the financial fair play to appeal. So, if there are special circumstances and ironically Blackburn had an issue where one of their players Samba was earning over a 100,000 pounds a week. They wanted special dispensation to take him out of their pay because he was injured. And therefore you're having a huge deficit for a player that's not even included in the squad. And then it would be up to a panel to decide whether that was allowable or not. The panel do not look very favorably on premiership sides that come down with huge wages and don't play that player in their squad. They do not believe that it is a reason to exclude him from financial fair play. And I have to say, as a director of the football league and I'm on the FA Council that I totally go along with that. You can't have your cake and eat it. You can't have a squad of 30 or 40 top players. In other words, we'll sign him. So nobody else can sign him, even though he's not going to play and then be expected to exclude him from your financial returns. [MUSIC]
