Transfer season officially opened for business last week, and while most of us know just how crazy and chaotic “silly season” can be, there are those out there who don’t know how exactly a transfer works in the sport of football. After all, the newest fans among us haven’t actually seen Spurs sign someone for more than a year.
We always talk about transfer fees, agent fees, sign-on bonuses, etc... but what do all of these terms mean? We’re here to give you a crash course in what happens from start to finish with some examples!
What exactly is a transfer?
Quite simply, a transfer is when a football player signs for a club. That can mean moving from one club to another or it could be a player who is out of contract and officially signs for a new club.
When do these transfers take place?
The FIFA calendar dictates two periods of time that allow clubs to do their transfer business: the summer and winter. The summer window usually opens in the end of May and runs until the end of August, while the winter window is all of January. Recently, this has changed as England ends their transfers the day before the Premier League season begins, though they can still sell players to the European continent and partake in loan deals to lower divisions.
This year, England’s summer window runs from 17 May - 9 August 2019.
So a club can just call up another club and ask to buy a player?
Yes. In short, any player can be bought unless they just recently moved clubs, though they can be loaned back to the previous club as part of the transfer deal. Christian Pulisic’s deal last January involving Chelsea is such an example. Tottenham Hotspur have done this in the past with Dele Alli, who was purchased in the January window and loaned back to MK Dons for the remainder of that season.
Essentially, all players are available for purchase but clubs can refuse to do so. In the words of the Million Dollar Man Ted DiBiase: Everybody’s got a price. It just depends on if the club has the cash to do so without bankrupting the organization. Generally, the fewer years a player has left on their contract, the more susceptible they are to being sold.
How does it actually work?
When a club calls up another club to inquire about a player’s availability, there are actually two sets of negotiations going on: a club-to-club negotiation for the purchase of the player’s contract, and the terms of the player’s contract with the new club. Both have to be agreed to before the signing can be finalized. We’ll get to the contract negotiations in a second, but first let’s talk transfer bids.
Before a transfer can be finalized, first the two teams need to agree to a price for the player. If a player is up for sale there is usually an asking price. The two clubs can negotiate a fee that both parties find acceptable, but it isn’t as simple as just slapping an amount on a piece of paper and it’s over. Clubs can opt to pay a one-time fee or they can work out an installment plan, much like one would do with a loan for a car or house. A perfect example of this was the transfer of Gareth Bale. The link shows the leaked agreement in full, but here’s the general breakdown:
At the end of the 2013 season, Bale was almost certainly headed to Real Madrid. Daniel Levy and Florentino Perez worked out the deal that went until the final day of the transfer window. Levy offered Perez two choices: Either a one-time fee of £78.2m or an installment-based plan that ended up being a then-world record of £85.1m. Perez took the installment plan and paid it over the course of three seasons. There were conditions added to the transfer (more on that later) but the bulk of the deal was this fee and how it would be paid out.
Hold up a second... conditions?
Yes, and there can be numerous ones! Looking at the Bale transfer agreement again, after the fee was agreed upon, provisions were added to the agreement. One such provision was if Real Madrid transferred Bale out, they were required to pay the remaining balance in full within 14 days of the finalized deal. There were also addendums added in case Real Madrid missed a payment that added on more money, but Real never missed a payment as expected.
Levy also negotiated an option in the transfer agreement that if Real Madrid ever received an offer for Bale, the Spanish giants were required to notified Tottenham Hotspur and give them 72 hours to match whatever offer was made. Obviously, Levy knew Bale wasn’t coming back but it wasn’t a bad option to add in.
A couple of more common conditions that can be added in are sell-on clauses and buybacks. A buyback fee is exactly how it sounds: If a club isn’t entirely certain they want to sell a player and want him back, then a fee is set as an option to bring the player back even if there had been a permanent transfer. Remember Memphis Depay of Manchester United? He was more or less a bust for the Red Devils and was sold to Lyon in 2017. United opted to include a buyback clause of £35m as a safeguard, though they have opted not to activate it.
A sell-on clause is when a club picks up cash for the sale of a player they once had. If that sounds complicated, let me break it down.
Club “A” opts to sell John Doe to Club “B” for £25m. However, Club “A” believes that the player may become more valuable in the future and wants a slice of the pie in case Club “B” decides to cash in. In the agreement, they ask for a 10% sell-on clause which entitles them to a chunk of money. Three years later, John Doe is now one of the best players in the world and has outgrown the club he’s at. Club “B” comes to terms with Club “C” for a £75m transfer fee and the player moves on. Because of that sell-on clause, Club “A” gets £7.5m for doing absolutely nothing. Good business!
This actually happened with Gylfi Sigurdsson. Spurs sold the Icelandic International to Swansea City back in 2014 for £9m plus bonuses based on performance. Three years later, Sigurdsson became a target of Everton and the two clubs agreed to a transfer of about £50m. Daniel Levy had inserted a 10% sell-on clause in the initial deal, giving Spurs an extra £5m that window.
What about loans?
Loan deals are agreements between two clubs to provide a player without a permanent transfer. Spurs loan out several youth players each year and some first team players as well. Josh Onomah, Cameron Carter-Vickers, Kaziah Sterling and Shayon Harrison are all players who spent their season at another club but will return to Tottenham. Loan deals can be any amount of time from a month to two years. A fee is usually agreed upon for the loan while wages can be paid completely by the new club or a percentage can be subsidized by the parent club. The aforementioned Gareth Bale has been linked to a return to Tottenham for a loan fee of around £10m with Real offering to cover half of his wages. This rumor is more than likely bat country, but that gives you an idea of how the offer works.
What determines a player’s value?
Good question, especially in this market!
The current world record is Neymar, who moved from Barcelona to Paris Saint-Germain for £198m. Kylian Mbappe also joined PSG that year from Monaco for £116m. These are extreme examples as both players are world class talents and still have several years of their prime remaining.
Clubs can dictate what the value is for a player, but whether or not it’s a realistic fee is dictated by the market and who wants to purchase the player. Wilfried Zaha of Crystal Palace reportedly wants out of the south London club, but having signed a new contract last summer, Palace have slapped a fee of £100m for the attacker. This is likely the Eagles saying he isn’t for sale unless someone is crazy enough to pay the fee and they can get away with it. There are situations where clubs and players agree to a release clause to set a value as well.
What’s a release clause?
A release clause is a value that has been put in place, mutually agreed upon between a club and player when a contract is negotiated, that can be activated by another club without negotiation. Toby Alderweireld, for example, has a £25m release clause in his contract but it was only made available when the club option for another year to his contract was activated. This means that, unless Spurs and Alderweireld come to terms on a new contract this summer, another club can call up Levy and tell him that they will activate the release clause. By doing so, there is nothing Tottenham can do to prevent the sale if the new club and Alderweireld come to terms.
Does the player keep the same contract?
No. This is where transfers are vastly different from other sports. In American football, for example, when a trade occurs there are no new contracts. The clubs basically take on the terms of the contract once the trade is agreed upon. Clubs can come to terms with the player for a new contract, but are not required to.
In Association Football, the old contract is tossed out the window. Once the transfer fee is agreed upon, the player is now free to negotiate with the potential buyer. A medical examination is done to ensure there are no surprises with the player’s fitness or overall health to start out. If all goes well, it’s contract time. This is how player’s maximize their own value by signing these new contracts worth more money if they cannot come to terms with their current club. If the player agrees to the terms, the transfer is finalized and the player joins the new club.
The new contract is anywhere from one to six years in length and can include club options to extend. Bonuses can also be negotiated for virtually anything, such as goals, assists, clean sheets, individual awards, Champions League qualification, etc. There can also be signing bonuses for the player as well as agent fees, though the latter of the two are usually pulled from the transfer fee. 10% is a standard number, though you’ll hear about super agents like Mino Raiola demanding up to 20% of the fee. This is one of the hang-ups with Ajax defender Matthijs de Ligt’s transfer to Barcelona, on top of the wage that Raiola is demanding.
Is that it?
Basically! In short, here’s how it works without all the fill-in:
- Club A has a player that is available for sale.
- Club B calls Club A to agree on transfer fee or activate release clause.
- Club B and player come to terms on new contract.
- Clubs agree to fee; player heads to Club B.
- Player undergoes medical with Club B and passes.
- Transfer is finalized and Club B announces new player.
So there you have it! These are the basics. It can certainly all be more complicated than this, and the details can be a bit bewildering at times. Hopefully for the new football fans among us this guide can help clarify what can be a bit of a byzantine process, and for veterans of the transfer window it’s sometimes nice to have a refresher course. Also note that there is a non-zero chance I have forgotten some wild rule or transfer that would help in these examples, but this covers most regular transfers.
If you have further questions, feel free to ask in the comments!