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The mechanics behind Wayne Rooney’s ground-breaking new contract

21 May 2014 | Posted in Notes & Insights | By James Emmett | Contact the author

The mechanics behind Wayne Rooney’s ground-breaking new contract

Deserved or not, Paul Stretford is as much a magnet for controversy as he is commission. Over the course of a 27-year career managing the careers of top flight soccer players, Stretford has made millions. He has masterminded transfers that have transformed careers; his negotiating tactics have acted as rocket fuel, blasting Premier League player pay packets skywards in a relentless pursuit to extract maximum market value for his clients. From Frank Stapleton through Stan Collymore and Andy Cole to Wayne Rooney, he has managed the careers of some of English soccer’s biggest names.

It is his relationship with Rooney, however, that has precipitated some of the most turbulent times in his own professional career - soaring highs and scraping lows, not least in the saga surrounding his initial signing of Rooney in 2002, his subsequent departure, along with Rooney and his wife Coleen, from the Proactive agency he founded, and the law case that was finally settled in July 2010 with a Manchester Mercantile Court judgement that ruled that Rooney and Stretford did not owe Proactive over UK£4 million in lost commissions.

But in a rare interview in the Cheshire offices of his Triple S Sports & Entertainment agency, Stretford is basking in the glow of arguably his greatest triumph to date. In 2010, with Rooney’s future at Manchester United supposedly in the balance, the club made him the world’s highest paid player with a UK£250,000 per week, five-year deal. In February this year, Stretford helped him become the most innovatively paid player in the world as United agreed to extend that deal for a further four years.



Bound by confidentiality clauses, Stretford is unable to be as candid as he might like with the figures. From what he can reveal though, the UK£300,000 headline figure doing the rounds in the media could end up being conservative, and the deal itself could end up setting a new benchmark for playing contracts at the top end of world soccer.

Stretford is basking in the glow of arguably his greatest triumph to date

Essentially, Rooney’s new deal is split into three distinct parts. The first part is his basic salary, which, in fact, does not seem to have risen much, if at all, on what Stretford agreed for him in 2010. The second part is for his image rights. Standard practice in soccer for well over a decade, United pay Rooney, or at least a company registered in the player’s name, an annual fee to use him as part of a collective of other United players for promotional activities – either directly for the club, or for the club’s manifold sponsors. The practice has come under scrutiny in the past because it can allow players to receive more net pay from a club as income tax can be sidestepped by paying image rights to a private company.

As the star of his club, Rooney is invariably selected as part of any pool of United players required to do marketing work as and when it crops up. Thus, this part of his contract is relatively large. Though the figures might be high, the first two sections of the deal are run-of-the-mill in terms of structure as far as Premier League contracts go. It is the third tier that breaks significant new ground.


Tiers of joy 


“Tier three is basically an agreement between Manchester United FC’s sponsorship arm and Wayne Rooney’s own corporate vehicle – Stoneygate – where a joint venture has been formed between the two parties to allow Manchester United to sell all of Wayne’s individual sponsorship rights as well,” explains Stretford. “For such agreement, they have made a forward guarantee of payments. The exciting part of that is that they are recognised as one of the best sponsorship sales teams in the world, with offices in London, Hong Kong, USA, and they’re going to put committed resource behind the wholesale of Wayne Rooney throughout the period of the contract, in conjunction with Stoneygate. Stoneygate will continue to manage in terms of structure, what can be done, what can’t be done. But the actual sales arm and the resourcing of that sales arm will come through Manchester United Football Club.”
 


Across the 2012/13 season Manchester United made US$241.5 million in commercial revenues, a huge amount of that from sponsorship. A truly global strategy that has seen smaller sponsors embraced by being given regional category rights has begun to be mimicked across the sporting world. Set up by executive vice chairman Ed Woodward, Manchester United’s slick and populous London office has well and truly cracked the art of sponsorship sales. Rooney’s new deal means that, every time it pitches the likes of Aeroflot, Chevrolet, Epson, DHL, or Aon for a team deal, it can dangle a personal endorsement opportunity with Rooney alongside it. If Manchester United sell beyond the forward payments they have made to Rooney for the rights, there is upside for both club and player. Rooney could well end up earning a lot more than UK£300,000 a week over the next five years.

Room for more
 


Rooney’s personal endorsement income is believed to take his annual earnings well past the UK£20 million mark. He has long-term deals in place with Nike, Samsung, and EA Sports. It is clear there is room for more, but, as Stretford runs through Rooney’s ‘tracker’ for the year, a calendar delineating his playing, commercial, and personal commitments, fitting the extra work in will take more than a little logistical skill. “First and foremost he’s a professional footballer playing at the highest level,” explains Stretford. “To achieve the commercial parts, he has to be the best he can be in the main part. We’ve been very restrictive in terms of the number of days he can work and that in turn restricts the number of commercial partners you can bring. If I was looking after Rory McIlroy for instance and I tie up a deal in Korea and I want him to be in Korea on Wednesday to sign a contract and take a picture, within reason, provided Rory’s happy, that’s what would happen. But with Wayne you can’t do that because you’ve got training, you’ve got games, you’ve got a very long season. At all times you can’t lose sight of the fact of what it is that makes him the commercial clothes horse that he’s become.”
 


Rooney could well end up earning a lot more than UK£300,000 a week over the next five years

Nevertheless, Stretford is confident there is room in Rooney’s schedule for at least double the number of endorsements he currently has. Virtually none of the clubs, Stretford says, use the full number of days allotted to them in standard Premier League contracts for player marketing activities for the club’s benefit. “Manchester United are probably the most progressive at exploiting as much as they can out of those amount of days, and even they don’t use all that standard Premier League contracts allow you to do,” he says. Rooney’s contract sees him performing “football activities” for Manchester United every day. “He has his normal squad duties,” Stretford continues, “and then he has probably another day a week that he performs under his image rights agreement with the club as part of the three or four players selected. And then there’s probably within this contract a maximum of another two days a month that could be utilised in his own interest as part of this joint venture.”
 


Stretford is very deliberate in his use of the term ‘joint venture’ to describe the new sponsorship agreement between United and Rooney. The mechanism is a complicated one and almost certainly unique across the world of soccer. According to one prominent agent in Brazil, similar clauses are inserted into contracts in South America, but only for tax reasons. When endorsement opportunities arise, the player representatives routinely ignore the clauses. In any case, no other club in the world has the sponsorship sales department that Manchester United does.

This is an edited excerpt from the full feature interview with Triple S Sports & Entertainment managing director Paul Stretford in the June edition of SportsPro magazine.

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