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What Is A Release Clause In Soccer (And How Do They Work)?

What Is A Release Clause In Soccer (And How Do They Work)?

Due to factors such as the rise of super agents and the huge growth of player wages, the transfer market has changed immensely in the last couple of decades. Fees for players have soared, with Premier League clubs spending a staggering £2.36 billion during the 2023 summer transfer window, and even loan deals drawing in whopping sums in the transfer market. As the landscape has changed, the details of individual player contracts have become increasingly important. 

One contract detail that is regularly mentioned during discussions about potential big-money moves is the transfer release clause. It's likely that you've heard pundits or journalists talking about release clauses — but what exactly are they?

In this article, we'll explain what a release clause in soccer is, and we'll guide you briefly through the crucial role that contracts and negotiations play within the sport. In order to flesh out your understanding of this side of the game, we'll start by addressing the people who tend to be behind this kind of transfer dealing: the agents.

What Is A Football Agent?

Football agents are employed by professional footballers to look after all their needs and requirements off the pitch. Their list of duties can vary, but generally speaking it will involve negotiating contracts to maximise player earnings, advancing the commercial profile of a player and pushing for lucrative sponsorship deals, offering advice regarding personal matters, and providing guidance on a player's financial concerns, for example advising them on smart long-term investments.

Any successful football agent needs to have an array of skills. In order to ensure players sign the right deal with the right club, agents need to have both good judgement and strong negotiation skills, with an ability to strike up positive relationships with people across the industry. In order to do this, interpersonal and communication skills are a key facet of the role, and a wide contact network is super useful.

Crucially, football agents must also have a strong understanding of the legal system and great business knowledge, as a big part of their job comes down to drawing up contracts and completing complex paperwork that will benefit their clients. This brings us to our next concern.

The Role Of Contracts In Football

As football fans, we often hear stories about the ins and outs of certain transfer dealings at the top of the game. There are various terms that supporters have become accustomed to using, and most footy fanatics understand the importance of contracts when it comes to tying a player down to a club and allowing them to advance their career.

The basic premise of a player contract in football is simple: a contract is an agreement between a player and a club that states the terms of their employment, just like an employment contract for an ordinary job.

However, due to the huge wages professional footballers earn — it's estimated that the Premier League's highest-paid player is Kevin De Bruyne, who reportedly receives a jaw-dropping £400,000 per week — the stakes are much higher, and elite-level player contracts can be extremely long and complex as a result.

It may sound strange, but technically speaking, contracts are all about dictating the length of time that a club owns a player for. For the length of the agreed contract, a player cannot leave a team unless another club makes a transfer offer. This binding legal agreement helps protect the club's finances, and given that they will likely have spent a huge amount of money acquiring a player, these agreements are necessary.

What Is In A Player Contract?

A number of terms can be agreed within a football contract. Firstly, the club and player will set out terms of payment, with most players being paid on a monthly basis, despite the fact that footballers' wages are usually reported as a weekly fee. On top of the standard salary, player contracts will often usually include a range of bonus fees.

Different clubs will offer different bonuses; sometimes, there might be a promotion or survival bonus, or else an additional fee that reflects league position or European qualification. Goalkeepers and strikers may have a clean sheet bonus written into their contract, while a striker may have a goal bonus that ensures they receive extra cash if they end up contributing heavily in terms of scoring.

To incentivise strong team performances, league points bonuses are also used, and are apparently preferred to individual player performance bonuses by many clubs. For the biggest, richest clubs, ambitious players and their agents may also look for a "Matching Highest Earner" clause that guarantees them equal wages to any high-profile new signing.

Signing-on fees for players and agents will also be negotiated within contract talks, as will any potential loyalty bonuses (this is a bit more rare, with PSG's payment of Kylian Mbappe's remarkable £52m loyalty bonus over the summer being a pretty unique situation).

Elsewhere, it's also common to see sell-on clauses implemented in contracts to ensure that if a club sells a player who then moves on to a third club for a substantial profit, they will receive a percentage of that secondary fee as a reward for their role in the development of the player.

Essentially, there's a huge amount of room for maneuver with every single player contract negotiation, and different agents will look for different things.

What Is A Release Clause?

Release clauses are less common in football contracts than details such as sign-on fees or bonuses relating to league standings or Champions League qualification. However, they are still a fairly established part of the game.

A release clause is a clause in a player's contract that sets out a pre-determined transfer fee and states that a club is automatically required to accept an initial offer for a player if the buying club makes an offer of that exact value.

As soon as the minimum amount stated in the release clause is met, the player in question will be entitled to enter transfer negotiations. In this case, there's no obligation to buy, but a club cannot stand in the way of one of their players speaking to another club if a release clause has been triggered.

While players aren't signed due to a release clause being triggered on a regular basis, it has happened on a few high-profile occasions. In the summer of 2023, Liverpool bought World Cup-winning Argentina midfielder Alexis Mac Allister from Brighton & Hove Albion by triggering a release clause believed to be £35 million, which was agreed when he signed a new deal with the Seagulls last October. In January, Chelsea activated fellow Argentine Enzo Fernandez's £105 million release clause to bring the star midfielder from Benfica to the Premier League.

These examples show how it can be within a player's best interests to set up a release clause in a contract, because it can offer the opportunity for them to move to a bigger club without the buyer club being put off by having to pay a huge transfer fee.

What Is A Buyout Clause?

Many people believe that a release clause and a buyout clause are the exact same thing; however, that is not the case.

A buyout clause requires the player to effectively buy themselves out of their own contract; this is done by the buying club transferring the agreed fee to the player, who then transfers this sum of money onto their current club. 

It's a very common clause within most Spanish football contracts, designed to essentially dissuade buyer clubs from trying to acquire players by attaching a huge fee around their necks. Usually, the buyout fee will be set at an extremely high figure that's far above the transfer market value of the player. Not only does this show that a club has no intention of selling a key asset, it also increases loyalty from the player's point of view.

In 2023, there are a few top players that reportedly have buyout clauses in their current contracts. Manchester City's star striker Erling Haaland reportedly has a buyout clause worth €200m in his current contract that will come into play in the summer of 2024, allowing any club willing to pay that fee to enter into negotiations at this point. Meanwhile, a huge number of La Liga talents such as Pedri, Vinicius Jnr. and Ronald Araujo are said to have substantial buyout clauses written into their contracts.

What Is A Buy Back Clause?

Buy-back clauses are a contract detail used by clubs who expect the player they are selling to improve in value, and thus want to give themselves the option of re-signing that player in the future.

For example, when former Chelsea striker Tammy Abraham made his £34million move to Roma in the summer of 2021, the contract included a buy back clause stating that Chelsea could bring the England international back to Stamford Bridge in the summer of 2023 for double that fee, £68 million. Eventually, the Blues chose not to activate the buy back clause, but the option was there.

Effectively, this is all about protecting financial assets; if a rich club develops a young talent and then sells them on, they may be full of regret if the player goes on to achieve great success, and a buy back clause will allow them to re-sign said player for a reduced fee. It's a strategy that only the top clubs can afford to follow, although even then, it's not used commonly in football.

How To Become A Football Agent

If you'd like to learn more about the role that contracts play in professional football, the best place to start is our article on  how to become a football agent. This practical guide contains information about all the skills and qualifications needed to be a top agent, and the role that soccer agents play in the global game.