If you go back far enough, football transfer fees didn’t exist at all.
If you go back to the 1980s and 90s they existed but were much simpler than they are today, with fees agreed and paid and the player moved on. There may have been some additional arrangements, but not many.
These days though, it’s more common to see a clause laden transfer than not, whether that be loans with obligations or options to buy, sell on clauses, buy back clauses, add on fees, or anything else.
The good thing about them is that they make transfer agreements more flexible, and they allow clubs to protect themselves and their interests when selling and buying players.
The bad thing about them is that they can be very complicated to understand from the fan’s point of view. Fans want to be more and more involved with the business of their club, they want to know the financial ins and outs not just what happens on the pitch.
Understanding all of these things will help you to do that.
Buy Back Clause
There are situations where a club believes in one of their players but isn’t able to give them the game time they could get elsewhere. When a loan isn’t a suitable solution, buy back clauses can help get the a transfer over the line.
The general idea is that after a set period of time, if the original club wants their player back, then they must pay a pre-agreed fee to the player’s new club, who are then obligated to accept the bid.
These can be structured in all sorts of ways and even be bought out of or combined with other clauses, so it can get complicated, but the fundamental idea isn’t difficult to grasp.
It helps the selling club get some cash to use elsewhere but also gives them some security if the player turns out to be a megastar, while the buying club is able to get a player they might not otherwise have been able to agree a deal for plus the possibility of big money in the future. The player will usually be happy enough as their wages will increase at the new club, and again should they be bought back.
It might be the case that a club must offer at least £x for the player in order to trigger the clause, or perhaps they just have to match another club’s bid. If it’s a set fee arrangement then this will usually be significantly higher than the fee paid by the buying club, and will often but not always have timeframe constraints – for example they can’t trigger the clause within the first 2 years. The fee may also be on a sliding scale, so the longer the clause is left the more expensive it become to buy the player back.
An interesting case of this is Jaden Philogene, an Aston Villa academy graduate who went out on loan a few times before being sold to Hull in 2023 for £5 million. He had a brilliant season, and Ipswich came in for him with an £18 million bid which was accepted. Then Villa triggered their buy back clause, matching the £18 million and thwarting Ipswich’s attempts at signing Philogene.
Not only that, but because Aston Villa also had a 30% sell on clause built into the initial sale, Hull ended up owing them about £5 million in fees from the ‘profit’ they were making, so the eventual fee was more like £13 million.
Sell On Clause
Sell on clauses are incredibly in modern football.
They serve as a way to keep immediate costs down for the buying club but give some insurance to the selling club that they aren’t regret off-loading the player too cheaply.
The basic principle is quite simple, although there are many different ways to structure a sell on clause.
The deal says that if the player’s new club sell the player on for a profit, then a certain percentage of that profit will be payable to the player’s original club.
Lots of clubs have made millions from these clauses, but Kevin De Bruyne is an excellent example of how this can work out well for everybody involved.
The Manchester City legend was at Chelsea from 2012-2014 but he wasn’t getting played, and at 23 years old felt he needed to move on. Chelsea sold him for £18 million to Wolfsburg, a German club in the Bundesliga, where he excelled. Crucially, they had something like a 25% sell on clause written into the transfer. When Manchester City shelled out £55 million to bring the Belgian back to the Premier League 18 months later, that meant an additional £10 million windfall for Chelsea.
This is especially beneficial for smaller clubs selling their young star players to bigger clubs, as if the player continues to do well and is sold on they can make a packet.
The percentage of the sell on fee payable can be anything agreed between the two clubs, but it is usually only relevant to any profit. So if a player was sold for £10 million with a 10% sell on clause and then sold for £20 million a few years later, the original club would be owed another £1 million: 10% of the £10 million profit. If they were sold on for £10 million or less the original club would get nothing.
The additional money can be paid in full or in instalments, and the sell on clause can have a time limit too, it just depends what the clubs have agreed.
Additional Fees or Add Ons
Another way to help smooth over a transfer agreement is to include additional fees, or add ons as they are more commonly known.
These state that if certain benchmarks are hit, the buying club must pay the selling club additional monies. So in other words, the selling club is saying they will sell the player for an agreed fee, but if they perform above expectations they want more money.
It’s worth it for the buying club because they will be paying what they think is a fair price for the player in the first place. If the investment turns out to be bad it won’t cost them any more, and if it turns out to be very good then they probably won’t mind paying a bit extra anyway. They can also sneakily try to control this is certain situations.
For example, if they must pay an extra £1 million should the player score more than 20 goals in the first season, they could simply stop playing them after they score their 20th goal. This would be a bit underhand and probably not make much sense, unless the team had won the league with a game in hand or something and could spare the player in question, but it does happen.
Other examples may be if the player gets an international call up, or if they make a certain number of appearances, or if the club wins some silver wear and the player has had a specific amount of involvement in the competition. It can be anything really, and the contract can list numerous different add ons.
For example, you might see a player bought for £15 million plus £5 million in add ons. Those add ons could be £2 million based on appearances, £1 million based on goals scored, and £2 million based on Champions League qualification.
Confusingly, things like sell on clauses are also sometimes referred to as add ons, but that’s not really an accurate way of describing the deal.
Loans
Young players or old expensive players
A good example is Jadon Sancho. He was bought by Manchester United from Borussia Dortmund for a huge £73 million fee plus somewhere between £250k and £300k per week in wages. However, things didn’t go well and he also fell out with the manager. United wanted him gone but no one would buy him because he wasn’t playing and his wages were too high. So they loaned him back to Dortmund who covered some of his wages, allowing Sancho to get regular game time and protect his value, before looking to move him on at the next opportunity.
That opportunity came a year later when Juventus came in for him based on his performances back in Germany. The deal was arranged as an initial loan but with an obligation to buy Sancho once the loan period was up.
This brings me on to two more contract features that are specific to loans.
Obligation to Buy
This is when a club signs a player on loan to begin with, but is obligated to buy them once the loan period is up.
They get a player for a pre-determined amount of time, often a year, with the player’s former club making up some of the wages. So they get a bit of a bargain for a year. They also have time to raise finance to buy the player until the loan period is up, so it puts less financial pressure on the receiving club in the immediate term.
Think of it as a buy now pay nothing for 12 months deal that you might agree to when buying a sofa.
Ironically, Sancho was about as much good as a sofa on the pitch for United, he spent more time sitting on one than playing too…
Option to Buy
An option rather than an obligation favours the receiving club much more than the selling club. It is a set price at which the club loaning the player can buy them once the loan period is up
During the loan the club can assess the player and make a final decision when they are better informed. It’s a try before you buy, essentially.
This is useful when a club is keen to get rid of a player or when a player is keen to leave but a permanent contract can’t be arranged yet for some reason. Maybe there isn’t time before the transfer window closes, or maybe the club in question have their hands tied for the year due to financial fair play rules.
The club doesn’t have to buy the player. They can simply send them back at the end of the loan if they are no longer interested, and all they have paid for the privilege is a portion of the player’s wages.