The detailed factors that are dictating the Swansea City summer clearout

The news yesterday that Nathan Tjoe-A-On was the latest departure from the club is highlighting not just some of our transfer mistakes of recent years but also the overriding challenges that all clubs now experience as they work to try and stay within guidelines put in place by the football authorities.

Tjoe-A-On departed after two years at the club that were pretty non-descript and the parting of company was a mutual decision with the defender still having a year left on his contract.  It follows a busy few days at the club that has seen Harry Darling join Norwich at the end of his contract and Mykola Kuharevich also depart, another signing of the summer of 2023 that did not fit into the current thinking in SA1.

It shows just what a different summer we are having within the club with transfers already made to strengthen the squad but now we are seeing a flow of departures with the likes of Jerry Yates and possibly Jay Fulton also to be leaving in the coming days/weeks.  The task of balancing books in football is a tough one for anybody especially when you consider that fans want the “wow” signing but for these things to have any chance of happening then it has to be on the back of clear-outs and the likes of Tjoe-A-on and Kuharevich were simply surplus to requirements and a spend that the club did want to continue with.

Expecially when we are driven by the stringent Profit and Sustainability (P&S) rules of the English Football League (EFL). For clubs operating in the Championship especially, managing the squad effectively, both in terms of new arrivals and departures, is paramount to avoiding severe financial penalties that can cripple aspirations.

Traditionally the close-season clear out (and these things have been widespread in football for much of this website’s existence) takes the shape of a few strategic aims

1. Squad Rationalisation: Over time, squads can become bloated with fringe players, those who haven’t performed to expectations, or individuals no longer fitting the tactical vision of the manager. A clear-out streamlines the playing staff, ensuring a more focused and manageable group.
2. Wage Bill Reduction: Football salaries are often a club’s largest expenditure. Releasing players, particularly those on high wages or with declining performance, significantly reduces the wage bill, freeing up funds for new signings or contributing to overall financial health.
3. Generating Transfer Revenue: Selling players, especially those with market value, can inject crucial capital into the club. This revenue can then be reinvested in the squad, used to cover operational costs, or, critically, help offset losses under P&S regulations.
4. Creating Space for New Talent: For clubs looking to refresh their squad with new blood, either through transfers or academy promotions, player departures are a necessary precursor.
5. Addressing Contract Situations: Players entering the final year of their contract present a dilemma. Clubs must decide whether to offer a new deal, sell them to avoid losing them for free, or allow their contract to expire. Clear-outs often involve a review of these situations.

However, the recent implementation and development of the Profit & Sustainability (P&S) guidelines were designed to promote financial stability and prevent clubs spending beyond their means.   Clubs are asked to operate within their means and maintain a maximum loss level over three years (£39m in the Championship) although there are ‘add backs’ for certain types of investment such as infrastructure or youth development.

Any breach of these rules can lead to severe sanctions which of course can include point deductions or transfer embargoes which is something that every club is keen to avoid and so the balancing act of a summer clear-out takes on a more complex approach that goes further than the points mentioned above and this is why we are seeing some of the departures that have been announced in the past few days.

1. Contractual Reviews and Negotiations:

The first port of call for any club is a thorough review of player contracts.

• Expiring Contracts: Players in the final year of their deals are often the easiest to move on, either by simply not offering an extension or by seeking a transfer fee in the summer window. Clubs must weigh the value of keeping a player for one more season against the opportunity to receive a fee. In P&S terms, allowing a player to leave for free avoids future wage costs, which directly benefits the P&S calculation. However, generating transfer income from these players is often preferred if possible.
• Long-Term Contracts and High Earners: Players on long contracts with high wages who are no longer central to the manager’s plans pose a significant challenge. Selling such players can be difficult, as their wage demands might deter potential suitors, or their transfer value might have depreciated. Clubs might resort to loaning them out, sometimes even subsidising a portion of their wages, simply to get them off the books temporarily and reduce the P&S impact.
• Mutual Terminations: In some cases, a mutual termination of a contract can be agreed upon. This involves a pay-off to the player, but it immediately removes their wage from the club’s future expenditure. While an upfront cost, it can be a financially prudent decision in the long run, particularly for high earners unlikely to attract a transfer fee.

2. Performance-Based Decisions:

While P&S is crucial, football remains a performance industry. Players who consistently underperform, regardless of their contract status, are often targeted for clear-outs.

• Underperforming Assets: Players who are simply not good enough, or whose performance has significantly declined, become liabilities. They occupy squad spaces, contribute to the wage bill, and offer little on the pitch. Moving them on is a straightforward footballing decision that also has P&S benefits.
• Tactical Fit: A change in management or tactical philosophy can render certain players redundant. A manager might prefer a different style of play that doesn’t doesn’t suit the skill set of existing players.  Management changes have been plentiful at Swansea in recent years and this will have been a factor in many decisions over the previous summers.

3. Market Value and Sales Strategy:

Generating transfer revenue from player sales is arguably the most impactful strategy for P&S compliance.

• Identifying Saleable Assets: Clubs actively identify players who have performed well and generated significant market interest. These are often younger players with high potential, or established players who have excelled in the league.
• Negotiating Optimal Fees: The goal is to secure the highest possible transfer fee. This involves shrewd negotiation, understanding the market, and sometimes even holding out for better offers. A higher sale price directly improves the club’s P&S position by increasing revenue.
• Player Trading Model: Many Championship clubs operate a “player trading” model, where they sign promising players, develop them, and then sell them on for a profit. This sustainable model is heavily reliant on effective clear-outs of these developed assets. Preston North End, for example, explicitly mentions player trading as a strategy to achieve financial sustainability.

4. Loan Deals and Temporary Departures:

For players who might still have a future at the club but need playing time, or those who are difficult to sell permanently, loan deals offer a temporary solution.

• Developmental Loans: Younger players or those returning from injury are often loaned out to gain experience and match fitness. While their wages might still be partially covered, it frees up squad space.
• Showcasing for Future Sales: A successful loan spell can increase a player’s market value, making them more attractive for a permanent sale in a subsequent transfer window.
• Wage Contribution Loans: For higher earners, loan deals, even with a club contributing to wages, still reduce the immediate financial burden and help with P&S calculations.

5. Academy Pathways and Succession Planning:

A strong academy can reduce the need for external recruitment, thus limiting transfer expenditure and wage costs.

• Promoting Youth: Successful clear-outs can open up pathways for talented academy graduates. These players typically command lower wages initially, offering a cost-effective alternative to signing established players. This investment in youth also counts as an “add-back” under P&S.
• Internal Solutions: By developing homegrown talent, clubs reduce their reliance on the transfer market, which has inherent financial risks and can quickly inflate the wage bill.

Summer clear outs used to be very much just about shedding deadwood from a squad to make way for new faces but in this new world of stringent rules we find that they are sophisticated manoeuvre dictated by those P&S rules.   These will impact every decision from letting a contract expire (in the case of Darling) to negotiating a sale as we have seen in recent years – strategic moves designed to keep clubs on a stable footing.

The ability to effectively “unburden” the squad, both financially and technically, is becoming as vital as the recruitment of new talent in the pursuit of sustainable success, particularly in the competitive landscape of the Championship.