Soccer player movement in the transfer window is one of the most anticipated phases in the sport. Each club’s supporters get to see which addition will go into the club and the players that will be cut.
In the top European leagues, there are two transfer windows. The main one being the summer transfer window from June to around the end of August and the short winter window in January.
Moving players from one club is not a straightforward process. There is usually some paperwork and procedures to be followed to ensure that each transfer is legitimate.
Additionally, there is that matter of financial fair play that was introduced in the 2010-2011season in Europe with the aim of setting a cap on what clubs can spend based on their income. It was also a way of mitigating the situation for smaller clubs who are also competing for talent in the transfer windows.
On an individual level, soccer players sign contracts that are legally binding to the respective soccer clubs for the duration stipulated on the contracts.
In those contracts, there are a lot of clauses that may be inserted to govern compensation, expectations in terms of the role the player will play within the setup and general rules of engagements.
One of those clauses is called the release clause. We shall learn more about the release clause and its implications to a soccer player.
- How does a release clause work in soccer?
- Is a release clause good or bad?
- Who benefits from a release clause?
- Can a club reject a release clause?
- Should I have a release clause?
- Why are release clauses so high?
How does a release clause work in soccer?
First, let us understand what a release clause is. It is basically a clause inserted in a player’s contract that gives permission to make a move on a player during the transfer window. The catch is that the pursuing club must pay the amount quoted in the release clause in order to sign the player.
Sometimes, the release clause is seen as a blocker for potential clubs. They are normally set at a very high figure that does not reflect the true market value of the club.
During first contracts
There are academy players who step up to the first team picture every season. According to most associations, the players are required to be under contract when they play first team soccer from the age of 17.
Release clauses can be slotted into that first contract based on the trajectory they predict on the player in question. This is a way to drive up the value of the player in the event the parent club will need to sell him or her in the future.
As this is the first contract, expectations are low on how the young talent will develop. Therefore, the club stands to sell at a price higher than its valuation outside the release clause.
The downside is if they agree to sell the player just to get them off their books and the player goes on to be a top talent like Jadon Sancho did after leaving Manchester City in 2017.
During contract renewal
Player contracts always have the duration of the engagement in them. This can work in favor or against the parent club depending on what stage the soccer player is at in the existing contract.
A parent club will have more negotiation power for a player who has a few years left on the contract as opposed to a year or less than a year.
What this means is that even with a very high release clause, they stand to lose the said player at a significantly lower fee when compared to the release clause if the player has little time left until the expiry of the contract.
When the club goes into negotiations of the contract with a player or his/her agent, then they can set a release clause to deter other clubs or ensure they get a significant fee if they have to sell a player.
One of the main pros of inserting a release clause during contract renewal is that the parent club is guaranteed the extended services of the player for the duration of the contract. On the flip side, if the player gets injured, then the club is obligated to pay their wages until the contract expires.
During transfer negotiations
When buying a player, there are normally negotiations between the buying club and selling club. These negotiations also happen sometimes with the involvement of agents.
It is in this stage that a buying club agrees to pay the agreed transfer fee and they could insert a release clause. For example, a team can pay 10 million dollars for a player and set a release clause of 60 million dollars.
Any future potential suitors will be compelled to pay the release clause stated. The problem and con come in if the player’s value market appreciates to the point that it eclipses the release clause. In this case, the selling club will feel shortchanged.
During loan spells
Sometimes clubs agree on loan deals for players with the option of buying the players at the expiry of the loan deal or at the end of the season.
In this case, the club receiving the player can set up a pre-contract agreement to pay a certain amount and insert a release clause at that point and time. So when it comes to the full purchase, they will work with the stipulated terms.
A con for this particular situation can arise if the player gets injured long-term or does not live up to expectations when the deal is made permanent. This means that the club has committed to buy and pay a player whose performance goes on to dips.
Is a release clause good or bad?
The simple answer to this is that it depends on the circumstances and the parties involved. Release clauses can be favorable to clubs in certain moments while a total nightmare in other cases. It could be good for the following reasons:
- Guarantees a profit
Setting release clauses help soccer clubs who are selling to make profits. First, the release clauses are always way higher than the price they bought the player with or their market valuation at the time.
When a club comes to buy these players by activating their release clauses, then it means the selling club will make some profit when the sale is sanctioned and finalized.
- Cement a player’s stay
With release clauses, they help in boosting the chances of a player seeing out his or her contract at the club. This is because clubs may not be in a position to buy the player at that rate stipulated in the clause.
In the process of running down a contract, the player in question will stay at the club, thus giving them more time to look for alternatives or renegotiation for new terms with the player.
- Can invoke a player’s loyalty
Setting a high release clause may send a message to players that you highly value their presence at the club. Some players value gestures by the club that show they treasure them.
Modern soccer players in particular want to feel loved by the club. Gone are the days where there are hardcore players like Manchester United legend Roy Keane who would go about their business on the pitch without the need for side shows.
Release clauses may prove to be pivotal in cementing a player’s allegiance to a club.
On the flip side, release cause could be bad in the following instances:
- Rise in player’s value
A club may buy a player for 5 million dollars and set a release clause of 20 million dollars. After one season, the said player could see their stock rise even to the tune of 50 million dollars due to their performances and contribution to the team.
This means that a potential suitor may swoop in to pay the release clause as is in order to secure the services of the player. The parent club will therefore potentially lose a whopping 30 million dollars based on the market value at the time of selling.
- May lead to drop in attitude
Setting a release clause may prove to be a stumbling block with a player. If the release clause was too high, clubs may not afford it. If the parent club plays hardball, as it is within their rights, then it can cause a problem with a player who may wish to leave the club.
He or she may see this as a ploy to make them stay at the club against their desires. It is not uncommon to see players in such situations fail to turn up for training sessions or perform poorly in matches.
- May force a club to settle
A club may be compelled to sell because they set a very high and unrealistic release clause. They may hold on to their player for a few years but have to sell at an extreme loss or lose the player for free because other clubs could not afford them when the agreed contract was ripe.
Who benefits from a release clause?
For most parts, it is the club with the ownership of the players that benefit from release clauses. They have control of setting the transfer fee should they wish to sell. They have the power to hold on to a player for the duration of their agreed contracts.
Agents, on the other hand, could benefit from release clauses. If the timing is right then they get a higher fee from the sale made by the parent club depending on what they agreed with their clients.
Can a club reject a release clause?
Unlike a buyout clause, clubs still have the power to determine if they get to let a player go or not. Essentially, a release clause is a figure set in which clubs would be willing to sell a player at that price.
However, it is not a guarantee that the said club will sell the player even if the release clause is met. This case is made even stronger if a player still has some years left in his or her current club.
Should I have a release clause?
Well, it is not up to the players to decide but the clubs doing the transfer business or the club that owns the player. The most important moment for a player is understanding their role within the team, the club’s vision for success and the compensation package.
Release clauses can tie you to a club especially if the figure set is too high which will discourage other clubs from making a move.
Secondly, it could be a career hurdle if you had ambitions of moving to other clubs at certain points. Remember, soccer is a short career and the body does not get any younger.
Why are release clauses so high?
Setting release clauses too high is a purposeful tactic to help soccer clubs make a profit in the event that they have to sell a player.
Clubs competing for the signature of a player will be discouraged from making a move for the player if the current club has no desire to sell.
It is a common practice for soccer clubs to do it and falls within the acceptable registration protocols.
Release clauses will continue being incorporated in player contracts as it stands to benefit soccer clubs that have players registered in their fold.
Clubs will remain with the power to quote whatever figure they deem fit in terms of release clauses because at the end of the day, they want to make a profit should they be compelled to sell.
It is not a must for release clauses to be present in every contract. What is more important is for players to get into agreements with clubs that they can fulfill and match what they envision for their careers.
Hi there, I’m Jay.
The Pitch is Ours is a new beginning for me and a stepping stone to prepare before retiring from the professional soccer team. Soccer is everything in my life! My friends and I have created this blog with all our enthusiasm, passion, and understanding after years of playing pro soccer. Hope you will enjoy it!