Insights: Why is 'Release Clause' a nonsense phrase?

The Clause, like the cake, is a lie

Well, we’re back again.

Yup, from the same hand that brought you those lengthy tedious articles on how transfers work, and how much they cost, it’s time to deal wth another pet peeve of mine.

You ever read a report and hear the phrase ‘set to trigger a release clause’? Undoubtedly. The biggest secret in football is this idea is an utter sham. Most times that the phrase ‘release clause’ is used, it doesn’t actually refer to a ‘release clause’. In some of these occasions, the release clause may not even exist.

Well they do, but they are horribly misrepresented and reported. There are 3 main types of clauses that are most commonly inserted into player contracts, and each one of them has their own nuances. They can all be more or less beneficial in certain situations too.

So, once again, get yourself a nice cup of tea (other beverages are available) and bore your brain with some tedious details that will make you wish you never bothered investigating ‘release clauses’.

Debunking some common myths

Myth: You can only have 1 clause in your contract. This is false, you can have more than one of the relevant clauses baked into a single deal.

Myth: A release clause being paid ensures a transfer will happen. This is also false, as some of the test cases demonstrate.

Myth: Paying a release clause guarantees a transfer fee will be agreed. Once again, this is wrong.

Myth: Every player has a release clause. I’m not sure where this notion has come from recently, but it’s just simply patently false.

Myth: A relegation clause is always available to be invoked. Usually, they have very specific time parameters around them, most commonly the first transfer window after the relegation happens.

With those ground rules established, let’s dive straight in.

The Menu of most Common Clauses

The Termination Clause

Let’s start with the easiest and least common. Termination clauses are:

• A legal binding agreement between player and club

• This agreement states that if a transfer offer is made that meets or exceeds a certain value, the prospective selling club HAVE to accept the offer.

• Once this offer is made, the player and agent can directly negotiate with the buying club and make a decision on whether they move or not.

Termination clauses are becoming increasingly popular because they remove issues that arise with other types of clauses (more on that shortly). They are legally binding, completely watertight and the money is paid directly by one club to another club.

The Release Clause

Next, the real meat of the matter. A release clause states:

• A figure that a selling club would accept for a player in order to sell them to another club.

• However, THIS FIGURE IS NOT ALWAYS LEGALLY BINDING

• If the club is in the same country i.e. Chelsea trying to buy a player from Brentford for a random example - they are under NO OBLIGATION to accept the offer.

• The selling club can choose to block the move in this case - like Liverpool did with Suarez to Arsenal

• However, if the buying club is based outside the country - for example Chelsea triggering a release clause from a club in France - the selling club are LEGALLY OBLIGED to inform the player of the offer.

• The player is not LEGALLY OBLIGED to accept the move and can reject it.

• Release clauses can be used by selling clubs as a guide for bids in order to demand higher figures.

Consequently, ‘release clauses’ tend to be extremely high figures, designed as natural deterrents to discourage clubs to even try and bid. That’s why Real Madrid allegedly want to put a €1 billion ‘release clause’ in Vinicius Jr’s new deal.

The Buyout Clause

Oh boy. So if you were confused by the previous two, this one is a real doozy. A ‘buy-out' clause’ is:

• Legally binding between the club and the player.

• It provides a definitive fee that allows a player to buy himself out of a contract, effectively granting him the free ability to negotiate with a new club and sign a new deal with them.

• The process usually involves the player paying their buyout clsuse directly to the relevant Football Association who will then transfer the money to the relevant club.

• The player becomes a de-facto free agent before signing for their new club - which is usually a negligible period of time.

• The deal is funded by the new buying club who directly transfers the funds to the relevant player in order for them to pay their buyout.

• Buyout clauses are increasingly rare outside of certain federations such as Spain and Portugal that legally request ALL PLAYERS have one in their contract.

• In the case of Spain and Portugal, the buyout clause cost is untaxed and buying clubs outside of Iberia are required to pay 100% of the transfer free UPFRONT.

• In other nations, it is taxed and there are a number of different regulations to consider depending on the relevant federation.

One of the big reasons why buyout clauses are becoming less popular is they are increasingly becoming linked to cases of ‘tapping up’ as the club needs to contact the player to pay their clause and this may be done illegally.

The Webster Ruling

I always think of the Webster Ruling as the Bosman Ruling’s less famous sibling. Andy Webster as a result is probably the most important footballer you’ve never heard of.

The Webster Ruling is a landmark case in world football and yet, most people will have utterly no clue about it. Here is various articles and videos about it.

To cut a long story short, the Webster Ruling - also known as Article 17 allows players to break their contracts with clubs under extraordinary circumstances after three years if they are aged 28 or under, or 2 years if they are over 28 years of age, as of the start of the season.

Legally, this confirmation needs to be provided to the club within 15 days of the final competitive match of the season. Compensation is payable for invoking of Article 17, equivalent to the value of the player’s wages and bonuses in the final year.

However, once this is paid, the player then is legally free to decide to sign with any other club, assuming they have a free spot within their squad as they effectively become a free agent. This does not, however, guarantee that they can be registered in competitions with the relevant federation or international competitions before the next transfer window.

So why doesn’t this happen?

In theory, the Webster Ruling allows players to buy out their contracts within the final 12 months if they want to, however, in practise the costs involved, the possible legal ramifications i.e. accusations of other clubs tapping up players that invoke the Webster Ruling, and also the fact players would rather put in transfer requests to force moves.

But, it’s still useful to know it exists in the absolute hit-the-nuclear-button scenario.

The Final Words…

Clauses like everything else in this series(?) are extremely confusing.

You’ll find people have settled on the blanket term ‘release clause’ because they think they understand what it means.

They usually don’t and as a result, this just leads to more confusion.

As a result, unless an article specifies whether it is a termination, buyout or standard release clause, the chances are either a) it doesn’t exist or b) they simply don’t know.

Join us next time, when I continue to delve into the obnoxiously complex details of football’s inner minutiae that no one really asked for.