The Unseen Financial Security Measures Behind Modern Premier League Transfers
The clauses that can make or break clubs
The football transfer market is almost an entire sport of its own, with so much going on behind the scenes before we eventually see multimillion pound signings take to the pitch.
While modern coaches are coming up with increasingly complex game plans and set-piece routines to try to squeeze even the smallest extra percentage out of games, there is also plenty of ingenuity at board level that helps clubs get the best deals and keeps them financially competitive.
A deal between two clubs is rarely as straightforward as it can sound - no one is just turning up with a bag of cash and coming away with a player. Here’s a look at some of the interesting clauses that can be crucial for the survival of smaller clubs in particular as they look to compete with financial juggernauts like Manchester City and PSG…
Lengthy contracts
Something Chelsea in particular have been good at is signing players on lengthy contracts so as to spread their often considerable transfer fees over a longer period of time, as we’ve seen with the likes of Cole Palmer and Enzo Fernandez joining on contracts as long as eight years, rather than the usual four or five.
This is not necessarily widely known among many football fans, but if a club signs a player for £100m on a five-year contract, that amounts to them spending £20m a year on that player, but if you in theory gave them a ten-year contract, it would only be £10m a year.
This means the Blues can avoid committing to spending too much straight away, and can help keep them on the right side of Financial Fair Play regulations.
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Sell-on clause
It was recently reported that if Bayern Munich sell Michael Olise for a big fee this summer, his former club Crystal Palace could land themselves as much as £26m.
So, while Eagles fans will no doubt have been gutted to see this top talent leaving them, there’s still potential for his world class performances to keep earning them significant money, with his old club insisting on receiving 15% of any future sale made by Bayern.
Other notable examples of sell-on clauses that were received include £4m to Birmingham City when Borussia Dortmund sold Jude Bellingham to Real Madrid, £8m to QPR when Liverpool sold Raheem Sterling to Manchester City, and £10m to Chelsea when Kevin De Bruyne moved to City from Wolfsburg.
Buy-back clause
This is something Real Madrid have utilised particularly well, with exciting young talents like Nico Paz and Jacobo Ramon, both at Como, having cheap buy-back clauses in their contracts that put Los Blancos completely in control of their futures.
We’ve also seen some of these in the Premier League, with Chelsea often inserting buy-back clauses when they let promising young players go, while Manchester City had one with Douglas Luiz when he joined Aston Villa and Manchester United had one with Alvaro Carreras when letting him leave for Benfica.
These can be huge for clubs if they’re worried about losing a young player whose value might increase in years to come, as it allows them the chance to re-sign them for below market value, either as a low-cost way to strengthen their squad, or ahead of selling them on again for a significant profit.
Loan first, buy later
Occasionally clubs will also make use of the loan market even if they very much intend to sign the players in question permanently.
Two good recent examples of this come from Arsenal, who brought in David Raya on loan from Brentford with an obligation to buy - there was never any realistic expectation that he would go back to his parent club, and the same was true with Piero Hincapie, who joined on loan from Bayer Leverkusen this season, but whose move is already set to become permanent in the summer.
For accounting purposes, this is important, as it allows Arsenal to push those costs further down the line and to avoid compromising PSR regulations by spending too much on permanent transfers in one window. It also doesn’t really hurt the selling clubs as they know they’re guaranteed a fee for these players eventually, even if it won’t come straight away.
In fact, you could even argue that it benefits Brentford and Leverkusen to do a deal of this nature sooner, because it means that fee is already agreed a year in advance, rather than when those players would be closer to being out of contract, with their valuation therefore going down.