It sounds simple enough: a release clause of £50m is written into a player’s contract.
Club A makes a bid of £50m so club B just have to accept it, right? Not quite. As Tottenham Hotspur and Morgan Gibbs-White are finding out, sometimes the devil is in the detail.
It needs to be. The i Paper spoke to multiple recruitment sources with extensive experience in the Premier League and they all believe that release clauses have become an increasingly integral part of the transfer market.
Already this summer, Liam Delap and Dean Huijsen had their pick of clubs because of “brilliantly negotiated” release clauses. They are a blueprint that agents are expected to follow.
Almost every contract renewal negotiation now involves a discussion about putting one in any new deal – and clubs and agents are getting much savvier about how they work.
Indeed, specialist lawyers are now being drafted in to avoid the sort of controversy and delays that have hampered the Gibbs-White deal.
Why are release clauses put into player contracts – and why have they become more commonplace?
A few reasons. The first – more common in countries like Portugal and Spain than England – is for branding purposes.
When a young player starts to produce eye-catching displays, their club will often reward them with a new deal that includes an astronomical release clause that is totally unrealistic.
While the chances of it ever being met are close to zero, it creates buzz and headlines around a player – highlighting their potential.
In England it is more about ensuring players – in the word of one director of football – don’t become “imprisoned” by their club.
“Release clauses are becoming more common in player and manager contracts and that’s being driven by profitability and sustainability rules [PSR] being such a big influence on the transfer market now,” explains Tom Keane, partner at Brandsmiths and former head of football negotiations at Manchester United.
“If you have a player who is a big asset but doesn’t have a release clause, the way football contracts work is they are fixed-term contracts, so if a rival club wants to buy them out of that it’s up to the selling club to decide whether they want to.
“The player and agent can put pressure on but ultimately if the club don’t want to sell, they don’t have to.
“The release clause balances the power between player and club. It allows them, at an advanced point, to discuss a future exit on terms everyone will be happy with.
“They make a lot of sense now, because clubs are less willing to pay big fees or overspend, because in the PSR era there are penalties for doing so.
“So it’s become more important for players and agents to have pre-defined exit routes and that’s what release clauses do for them.”
So they are all about player power, then? Not quite. Clubs can benefit too by using them to attract a calibre of player who wouldn’t normally join them.
Huijsen signed for Bournemouth partly because a very reasonable release clause – £50m exclusive of solidarity payments, paid over three instalments across 18 months – was inserted into his deal.
It was clearly defined and one source said talks with Real Madrid lasted “all of 10 minutes” when they decided to bid.
And then there’s the unspoken way clubs benefit – “grey areas”. That’s when a release clause is inserted in a contract without getting into the specifics.
So it might be that the clause says a player can leave for £60m. But if the payment schedule isn’t included in the clause, the selling club still has leverage.
They can demand the fee up front, for example, which renders the whole thing pointless as few clubs could afford that from a PSR perspective.
“We love it when an agent is perhaps a bit naive and doesn’t do their homework in that way,” one Premier League source says.
“That’s less common now that English football is waking up to the importance of clauses, but it does still happen.”
How are release clauses structured?
To the layman, it looks like the key number is the actual release fee, but insiders say that only matters if you get three other things right.
Firstly you need to “nail” the payment structure. So is that fee paid over two years, three years or five years?
If the fee can be paid over a longer period, it makes a player much, much more attractive, because in the PSR era, stretching payments is key to ensuring you stay within the loss limits.
Secondly, you need to tackle confidentiality. Because Premier League contracts are confidential, so is the release clause in it.
A way round that is to make it clear in the contract that agents are allowed to notify clubs of the existence of the clause.
If that isn’t in place, things can get messy, with potentially the agent, player and buying club all in breach of the contract.
When that happens, it becomes an expensive and timely process to resolve it – effectively rendering the whole release clause pointless.
Thirdly, timing is key. It is almost never the case that the clauses are open-ended. Most have a deadline – mid-July is a common one – and that is because it gives selling clubs certainty over whether they have to replace a player.
Omari Hutchinson’s Ipswich Town clause – which expired this week after Brentford attempted to broker a deal – is one example of that.
Bespoke clauses also exist, eliminating certain clubs that aren’t allowed to trigger it to prevent players moving between rivals for Champions League places, for example. Naming specific rivals that aren’t allowed to trigger it is fine.
And The i Paper has been told of one overseas club that specifies that only the player himself is allowed to trigger the clause.
So a buying club effectively needs to give the player the money to do it, creating a layer of bureaucracy that works in the overseas club’s favour.
It is no wonder lawyers are becoming increasingly involved.
“If you have an agent who doesn’t understand the legal specifics and financial rules around football, you can end up with a release clause which, on the face of it, is useful for your player, but if the terms of that release clause are unworkable for a club, it’s essentially worthless,” Keane says.
“So the terms are massively important. If it’s a £60m payment within 14 days of the transfer, then there is not a club on the planet who would want to bank that sum as a PSR liability in a single accounting period.
“The specific terms of the release clause are what makes it a useful mechanism. You have the top-line figure, which is important, the payment terms, the timing and the confidentiality.
“That’s why we as lawyers have become more involved, because to be effective, they need to be properly drafted, and unless the agent is also a lawyer, it is something – especially at the top end of the game – that requires professional and specialist input.”
Why have some deals, such as the one for Gibbs-White, become so complicated?
Nottingham Forest have accused Tottenham of tapping up Gibbs-White before the £60m clause was triggered, delaying the deal while they appeal to the Premier League to investigate.
That has perplexed some in the game, who admit it is a fairly open secret that agent-to-club contact usually precedes a move.
“It’s a huge waste of time if you trigger it and the player isn’t bothered,” says one source.
One club official told The i Paper that they believe the Gibbs-White situation will eventually be resolved.
“Without knowing the ins and outs, it looks as if it’s an attempt by Forest to get more money out of the deal,” they surmised.
Could it become part of the Alexander Isak conversation soon?
Isak is a good example of contract talks where a release clause would benefit all parties.
This summer, with three years left on his deal, Newcastle United hold all the cards. Whether Isak is keen on moving or not, they have been able to repel Liverpool’s interest even as the Reds propose a British-record fee.
Newcastle plan to open contract talks and will offer a huge spike in wages. But just as important to Isak will be having more power over his future.
One source believes a release clause that “suits both parties” is almost inevitable.
“They did it with Bruno Guimaraes, so I think they’d do it with Isak. Without it, there’s no motivation for him to sign anything,” the executive says.
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Newcastle might propose a high release figure – say £100-120m, which is hefty for a player with two years left on his deal – but allow generous payment terms.
While a release clause would make Isak’s departure virtually inevitable next summer, it also gives Newcastle much-needed certainty over how much they’ll be banking. In the PSR era, that’s vital.
A word of warning, though. Newcastle put a £100m release clause in Guimaraes’s five-year deal more than a year ago thinking it would solve their PSR worries in a stroke. When they surprisingly had no takers, it left them scrambling for a solution.
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