04 Nov 2020 09:58:17
Release clauses keep being raised as if triggering it is a given. Interested because I seem to remember one of the ED's indicating they mean nothing. Apologies if I got it wrong.

{Ed002's Note - Perhaps a reminder about transfer related clauses would be apt. This is a horribly complex area not least because they are written under individual national laws. They cause a great deal of misunderstanding with football supporters and the media alike.

The "buy out clause" is legally binding between a club and a player. The "buy out" is effectively what it says - a means for the player to buy himself out of the contract. As an example, if a player wishes to buy himself out of a contract, he pays the applicable FA (on behalf of the club) the amount of the "buy out" clause effectively becoming a free agent. The problem is that in most cases a player would need to obtain that money from the buying club - and this is fraught with issues regarding "tapping up" and, of course, taxation (as it can be seen as income for the player and would therefore be subject to income tax). There was a test case about the taxation issue in Spain several years ago which is why they have an exception. All players in Spain and Portugal have a clause that allows the player to buy himself out of his contract without any tax implications - the tax implications passing to the buying club - typically at 50% on top of the value of the clause for the higher profile players. This was to address a ruling from around 30 years ago allowing players a way out of their contracts. The other notable point about Spain and Portugal is that the clauses, if invoked by a non-Iberian club, need to be paid in full by the player (there are local rules that stop tax being due) but by needing to put up 100% of the money upfront would end many transfers then and there. It works differently in Iberia to elsewhere as the tax implications do not make such clauses viable in other countries, so when Arsenal purchased Thomas Party they had to provide the money to him and then he had to immediately transfer those funds to the Spanish FA – leaving Arsenal to subsequently pay the tax due on the transfer by due date. All players in Iberia must have a figure set and agreed with the club. So "buy out" clauses are very rare elsewhere. Related to this is the Webster Ruling that allows players under certain conditions to break contracts after a certain period of time (three years under 28 and two years after being 28) by paying the club the amount the club would pay the player over the remaining length of the contract. It is very rarely invoked and could easily result in a protracted legal case.

A "release clause" is far more common in that it gives a figure that the club would accept for the sale of a player to another club - but it is not legally binding except where both parties (clubs) are in the same country (for the sake of argument I should say that football Spain and Portugal count as the same country as do England and Wales) for legal purposes. These are normally unreasonably high figures (Messi at Barcelona has a €700M release clause for example) introduced to act as a deterrent for hostile bids - and even then the club could easily block a move. However, if a club in the same country does agree to match a release clause then the selling club would be obliged to ask the player if he is interested - there is no obligation on the player to make a move. For interested clubs outside of the country, the selling club may use it as a guide but are under obligation to accept a bid and may demand a higher figure – as was the case when Roberto Firmino moved from Hoffenheim to Liverpool for more than his “release clause”.

There is then the becoming popular "termination clause" which is binding between the player and the club and if met would see an offer from anywhere accepted and the player given the opportunity to make a call on a move. This overcomes the issues associated with "buy out" clauses as the money would be paid by one club to another and about the legal proximity of the buying side.

And finally, "buy back clauses". The most common way is that for a fixed period, typically two or three years, the selling club will have the opportunity to match any offer made (if the player is to be sold) by another club and buy back the player if he agrees. Rarely, clubs have the opportunity to buy a player back at a fixed price when a player is put up for sale of a two or three year period (this is what Chelsea used with a couple of players although they later negotiated a deal which gave them a percentage of the sale, as was the case with Bertrand Traoré moving from Lyon to Aston Villa). Finally there is a very uncommon variant of this where by the club have the opportunity to buy back the player at a fixed fee in year one, a different fixed fee in year two and another different fixed fee in year three if put up for sale. This was used by Barcelona when Oriol Romeu was sold to Chelsea.}

1.) 04 Nov 2020
04 Nov 2020 12:31:42
I tell you what ed002 you are one serious mush I take my hat off to you fella 👏👏👏.

2.) 04 Nov 2020
04 Nov 2020 13:31:14
ED02 regarding release clauses didn't Luis Saurez have one in the region of 40 million which Arsenal triggered but Liverpool refused to accept or did i dream that.

{Ed002's Note - It is correct that the Liverpool owners did not honour the contract.}

3.) 05 Nov 2020
05 Nov 2020 00:06:30
I doff my cap to you Ed002 for the full explanation you gave to Ducksy, good read that.

4.) 05 Nov 2020
05 Nov 2020 06:48:26
Brilliant Ed. Thank you very much. Bet dear old Jimmy H. Never thought the demons he was releasing those years ago. Gone are the days of 'I will buy the butties' wages.