An inside look at football transfers: how contract negotiations work

Follow along with Reevaldo's journey at reevaldo.com

When Chelsea is trying to bring new players into the squad, of course, there is much more to it than agreeing to terms with a club over a transfer fee (which, as we've seen this summer, these negotiations can prove difficult).

Chelsea must also agree to personal terms with the player himself, and these contract negotiations are entirely separate from the transfer negotiations between the two clubs.

But what actually happens during player contract negotiations?

In the third of a four-part series focusing specifically on Reevaldo's transfer to London, we take you inside the contract negotiations between Paddington and Reevaldo.

Usually, the clubs must first agree to terms on a transfer agreement before contract negotiations between the player and the buying club can begin in earnest.

As a result, the contract negotiations are often treated by the footballing public as an afterthought. However, they are very much worth discussing. In terms of resources committed by clubs, the contract negotiations are actually significantly more important than the transfer negotiations.

Most players have agents who act on their behalf when negotiating contractual terms with their new club. However, there are some notable exceptions, including Juan Mata when he joined Chelsea from Valencia in the summer of 2011.

Also, beyond just the basic wage, there are also signing bonuses, performance-based bonuses, additional one-off payments, and potentially a separate image rights deal which can significantly add to the player's overall compensation package.

Wage spending is much larger than transfer spending

Premier League clubs spent just over £1 billion in transfer fees during the 2015/16 season, marking the first time that any league has ever spent £1 billion in transfer fees in a single season.

However, these clubs also spent over £2 billion in wages, or twice what they spent on transfer fees.

On Chelsea's summer spending

This should underscore the importance of contract negotiations and wages while also providing yet another example of why "net spend" is irrelevant to how Premier League clubs do business.

It may also help show why Chelsea haven't spent as much in transfer fees as some may have liked - Chelsea had the highest wage bill in the Premier League in 2014/15 and have also handed sizable contracts this season to Michy Batshuayi and N'Golo Kante.

Between those two, they've added over £25 million in player costs in a season where they're set to lose over £50 million in Champions League revenue.

The transfer sales of Mohamed Salah, Papy Djilobodji, Marko Marin, and Stipe Perica combined with the additional revenue from the Carabao training kit deal and Chelsea's share of the additional broadcasting revenue partially offset this loss, but losing out on £50 million is significant.

Also, on Chelsea's most recent set of books (2014/15), the club lost £23 million. Chelsea have a large, but ultimately finite budget to spend on players under UEFA's financial fair play regulations.

FFP still very much exists, there are very real sanctions that have been levied for violating FFP, and with Chelsea planning to get back into UEFA competition next season, the club will spend according to the proscribed limits.

You can read the latest entry in Reevaldo's journey here.