Fees (transfer, loan and sell-on) in Association Football ⚽️
What is a transfer fee?
Where a player who is still under contract with one club moves on a permanent basis (or is “transferred”, as we say in football) to another club, the new club is usually expected to pay a fee known as a “transfer fee”.
There are fixed fees and conditional fees.
A fixed fee is a predetermined set figure that is agreed between the parties and is paid either as a lump sum or in instalments. Whereas a conditional fee is an amount that will fall due where certain conditions are met; for instance if the player scores a certain number of goals or makes a certain number of appearances.
In a transfer package, we could have a total transfer fee amounting to €20m, of which –
€18m is fixed and
€2m is conditional (as below) 👇🏾
€1,000,000 when the player makes a senior appearance for his national team
€500,000 when the player makes 20 appearances
€500,000 when the player scores 20 goals (if an attacker)
When may a transfer fee not be paid?
🎯A player whose contract expires with his club and it is not renewed is classed as a “free player” and may leave the club to join a new club without the need for the new club to pay a transfer fee (but it may still need to pay training compensation).
🎯In many transfers from African teams to Europe, the transfer fee is waived, in exchange for a “sell-on” fee (see below). Waiving the transfer fee reduces the risk for “buying” clubs and also allows them access to players they may not have been able to afford. It also allows players to progress their careers and enjoy new challenges in new leagues.
Please note that where transfer fees are to be paid in instalments, solidarity mechanism payments will most likely also be paid in instalments. See links below for my previous articles on the solidarity mechanism:
Part 1
https://lnkd.in/e6APageY
Part 2
https://lnkd.in/e_S7jG-d
What is a loan fee?
This is where the “selling” club receives a fee for the temporary transfer and registration of its player with another club. Loanee clubs are entitled to receive training compensation and solidarity contributions.
What is a sell-on fee?
This is where a “selling” club retains a stake in the player’s future value. So for instance where Club A has transferred a player to Club B without receiving a transfer fee, it may request 30% of the transfer fee when the player is transferred to Club C. So, if Club C pays €1m to Club B, then Club A receives €300k 👏🏽.
Anything else to add? Please feel free to comment below 😊👇🏾
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