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Man Utd want to sign Champions League hero - but a Russian state-owned company would benefit
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Analysis
On 20 August, Galatasaray announced that they would be transferring a sum of €25 million to FC Lokomotiv Moscow for the arrival of Aleksey Batrakov.
In addition to this fixed transfer fee, the Turks included a striking detail in the official paperwork. Specifically, in the event of a future transfer, the Russian club are entitled to 15% of the profit made in Istanbul on the attacking midfielder.
Because the Estimated Transfer Value (ETV) of the 21-year-old Batrakov has already risen significantly in just two months, the path is cleared for a scenario in which millions of euros from the European transfer market flow back to a club closely linked to the Russian state-owned company Russian Railways.
Although Russian clubs are excluded from participating in the Champions League, Europa League, and Conference League due to the UEFA suspension, the deal involving Batrakov shows that they can still financially benefit from top European football.
While Lokomotiv Moscow were unable to showcase their greatest talent on the biggest European stage itself, the reigning Turkish champions now serve as a springboard. Any further increase in value the Russian playmaker experiences in the Super Lig and the Champions League will provide Moscow with an immediate additional capital injection upon a profitable resale.
Profit-sharing clause
During the negotiations for the transfer of Batrakov, various figures were circulating. Initially, there was talk of a 10% resale clause and possible bonuses of €4m-€5m. However, the information from the Turkish reporting platform KAP puts an end to the uncertainty: Galatasaray paid a fixed sum of €25m and agreed to a profit-sharing of 15%.
The attacking midfielder signed a five-year contract in Istanbul until 2031 and receives a guaranteed net salary of €3.25m, the club itself announced. To properly understand the financial side of the deal, the difference between a percentage of the full transfer fee and a percentage of the net transfer profit is crucial.
The agreement between Galatasaray and Lokomotiv Moscow states that the 15% is calculated only on the added value exceeding the original purchase price of €25m. Should coach Okan Buruk's team sell the midfielder for €25m euros or less in the future, the club will make no profit on paper, and Lokomotiv Moscow will therefore receive no additional amount.
Only once the selling price exceeds €25m do Lokomotiv Moscow benefit from the transfer fee. Should chairman Dursun Ozbek's club eventually sell the creative midfielder to a top European club for, let's say, €50m, Lokomotiv Moscow will not pocket €7.5m but €3.75m.
Rapid transfer value development
The fact that this amount can quickly become realistic is evident from the performance and statistics of Batrakov since his move to Turkey. When the Russian youth international arrived from the Russian Premier League in August, he had an ETV of €25.1m, an amount that corresponded almost exactly to the transfer fee paid.
After a brief adjustment period in early September, during which his ETV briefly dropped to €22.6m, his development has accelerated under coach Buruk. The most recent data from FootballTransfers shows that Batrakov's ETV has risen to €34.3m as of 1 October.
Although ETV is an algorithmic model estimate based on performance, skills and contract duration, and does not represent a guaranteed selling price, the midfielder's value on paper has already increased by €9.3m in just two months.
Should a club actually put this amount on the table, Lokomotiv Moscow could immediately pocket around 1.4m, and Galatasaray would be left with over 32.9m from the deal before deducting other costs.
The enormous rise in his ETV has everything to do with his potential. Batrakov currently possesses a Skill of 68.2 and an impressive Potential of 80.6, as per the FootballTransfers algorithm.
This gives him one of the greatest growth margins for the coming years within Galatasaray's current squad, which includes stars such as Victor Osimhen, Leroy Sane, Rafael Leao and Ilkay Gundogan.
Batrakov is now also showing why Galatasaray wanted him so badly. On Tuesday evening, he found the back of the net in the match against OSC Lille in the Champions League. A week earlier, Batrakov also scored against FC Barcelona in the billion-dollar competition.
Close ties with Russian Railways
The deal surrounding Batrakov is particularly sensitive when considering the background of the selling club. Although the contract stipulates that future profit sharing goes to FC Lokomotiv Moscow rather than directly to the Russian state treasury, the current twelfth-placed team in the RPL are not a privately funded club.
The Moscow-based side are historically and organisationally closely intertwined with Russian Railways (RZD). This national state monopoly on rail transport is described by Lokomotiv Moscow in its own communications as the main shareholder.
Barely a month before Batrakov's transfer, the top management of this state-owned company came emphatically into the sights of the European Union. On July 23, the EU adopted the 21st sanctions package against Russia, targeting 48 individuals and 170 organisations for their role in the Russian economy and warfare.
As part of that package, Oleg Belozerov, the chairman and CEO of Russian Railways, whose contract was extended by five years in March, was placed on the European sanctions list.
Due to the close administrative and financial ties between the railway company and Lokomotiv Moscow, every flow of millions towards the club ends up directly within the sphere of influence of a state-affiliated organisation.
Galatasaray's position
For clubs in the major leagues within the European Union, doing business with this type of Russian club has become very difficult following the tightened financial regulations. This is partly because the summer sanctions package also included transaction bans for 33 additional Russian credit institutions.
Man Utd, Chelsea and PSG were interested in Batrakov during his time in Moscow, and they are reportedly still keeping tabs on him. Signing him from Russia was virtually impossible for English clubs due to the sanctions regime, and it is doubtful that even bringing him in from Galatasaray would be worth the bureaucratic hassle and possible backlash.
However, the situation was completely different when Batrakov arrived in Istanbul. Turkey is not a member of the European Union, and the government in Ankara has not incorporated the European sanctions packages against Russia into its own legislation.
In its country assessment, the European Commission previously established that Turkey "consistently does not align" with its restrictive measures against Russia.
Still, the fact that transferring millions to Moscow is no longer so easy, even from Istanbul, became apparent back in August during the final stages of the negotiations.
After the talks had previously stalled temporarily, Turkish media reported just before the deal was completed that the exact payment method to Lokomotiv Moscow was the final stumbling block to completing the transfer.
Now that Batrakov is making his mark on European pitches in the Galatasaray shirt and his ETV is rising rapidly, a future top transfer from Turkey could still trigger a new flow of millions towards Moscow.
