Agreements, partnerships, and the cost of big money transfers

Toronto FC have completed the two biggest deals in the club's history.  They certainly paid top dollar to make both of them happen but money is something that Maple Leaf Sports and Entertainment have a whole lot of.  The interesting part of both deals is the non-financial elements that have been included.

The combined financial commitment to the two players (salary and transfer fee) is reported to be in the $85 million range with MLS also contributing some funds towards the Bradley transfer.  That is a huge commitment for the club to make and will put them in position to lose money in the short term.  The long term gains of getting the fan base back on side and actually winning games should make up for those short term loses though.

The deal with Tottenham Hotspur for Jermain Defoe includes a few other elements beyond just the transfer of the player.  The most straight forward of the bunch being a friendly between the two clubs for this summer that will take place on July 23rd.  There is also a four-year advertising rights agreement in the deal:

As part of the transfer agreement between the two clubs, Tottenham, Toronto FC and MLSE will enter into a groundbreaking, four-year Advertising Rights Agreement. The deal will see Toronto FC and MLSE provide promotional and branding opportunities, experiential activities and advertising, broadcasting, social media and digital rights across all of MLSE's properties and media platforms. Additionally, MLSE will carry Tottenham Hotspur F.C. official merchandise at their retail outlets, as well as support the THFC Official Canadian Supporter's Club.

Including something like this in a deal is nothing new for Spurs who have struck similar deals with other clubs in the past when completing major transfers.  It is unclear just how this agreement will take shape in reality other than allowing Spurs to develop a bit more of a presence in Toronto.  It could just mean the odd advertisement for Spurs floating around and some merchandise available at places like Real Sports.  It seems unlikely that a deal like this will mean Spurs stuff popping up all over MLSE's properties for the next four years but at this point it remains quite unclear what shape the agreement will take.

The deal with AS Roma for Michael Bradley seems to be a fair bit more straight forward in the way it will work out in reality.  Again it includes friendlies and a special partnership between the two clubs.

At the same time the two clubs announced a long-term partnership that will see AS Roma play two friendlies at BMO Field over the next six years and includes a player development program for Toronto FC players at Roma's training facility.

This partnership could pay dividends for TFC in the long run as their are clear advantages to being able to send players to train with Roma.  Being able to bring in Roma players on training stints could also be useful for TFC as extra competition in training is always a good thing.  The friendlies will not sit well with some fans but they seem to be part of the cost of doing business with a club like Roma who seem intent on increasing their presence in North America which includes frequent preseason tours.

So TFC have now lined up 3 friendlies for the next six summers, have pimped out some of their massive marketing power, and set up a training partnership.  All that on top of spending a serious amount of cash on two quality players.  That just seems to be the price of doing this kind of business.

There are plenty of writers who have already pointed out the fact that Toronto FC have had to overpay to get both of these deals done and they do have a point.  Toronto have thrown everything they can at Spurs, Roma, Defoe, and Bradley to make these deals happen.  There is problem with saying that is overpaying for the players and that is simply that the club paid what they had to pay to get the deal done.  Sure, that number was more than other clubs might have had to pay to get it done but when you are looking to make a bid deal you often have to overpay.

It is interesting that rather than just backing up a truckload of cash to both clubs TFC worked other elements into the deals.  Those added elements may have saved them a few million dollars in the short term but they will also net MLSE some more money in the long term.  They will make money off the three friendlies and off the sale of Spurs gear to say nothing of what a winning team would do to their annual revenues.

The other elements of these two deals are interesting but it is unclear how they will play out in reality.  They could be partnerships that are worth barely more than the paper they are written on or they could have actual tangible effects beyond just a trio of friendlies.

It is certainly something to keep an eye on moving forward to see just how it all plays out.