23 Apr 2020 00:53:40
Hi Ed002,

Hope you're keeping well in these crazy times!

Regarding Diego Carlos buyout clause, I've read it's approx £65mill. I've never been able to understand if this clause is based for those teams in the same league or any country around the world.
If you can please shed some light on this?

And, what price do you think someone like Liverpool could get the job done as the price is quite excessive.

Much appreciated
TommyT.

{Ed002's Note - Perhaps a reminder about transfer related clauses would be apt. This is a horribly complex area not least because they are written under individual national laws. They cause a great deal of misunderstanding with football supporters and the media alike.

The "buy out clause" is legally binding between a club and a player. The "buy out" is effectively what it says - a means for the player to buy himself out of the contract. As an example, if a player wishes to buy himself out of a contract, he pays the applicable FA (on behalf of the club) the amount of the "buy out" clause effectively becoming a free agent. The problem is that in most cases a player would need to obtain that money from the buying club - and this is fraught with issues regarding "tapping up" and, of course, taxation (as it can be seen as income for the player and would therefore be subject to income tax). There was a test case about the taxation issue in Spain about seven years ago which is why they have an exception. All players in Spain and Portugal have a clause that allows the player to buy himself out of his contract without tax implications. This was to address a ruling from around 30 years ago allowing players a way out of their contracts. The other notable point about Spain and Portugal is that the clauses, if invoked by a non Iberian club, need to be paid in full by the player (there are local rules that stop tax being due) but by needing to put up 100% of the money upfront would end many transfers then and there. It works differently in Iberia to elsewhere as the tax implications do not make such clauses viable in other countries. All players in Iberia must have a figure set and agreed with the club. So "buy out" clauses are very rare elsewhere. Related to this is the Webster Ruling but I don't intend to go in to that now.

A "release clause" is far more common in that it gives a figure that the club would accept for the sale of a player to another club - but it is not legally binding except where both parties (clubs) are in the same country (for the sake of argument I should say that football Spain and Portugal count as the same country as do England and Wales) for legal purposes. These are normally unreasonably high figures (Messi at Barcelona for example) introduced to act as a deterrent for hostile bids - and even then the club could easily block a move. However, if a club in the same country does agree to match a release clause then the selling club would be obliged to ask the player if he is interested - there is no obligation on the player to make a move. For interested clubs outside of the country, the selling club may use it as a guide but are under obligation to accept a bid and may demand a higher figure.

There is then the becoming popular "termination clause" which is binding between the player and the club and if met would see an offer from anywhere accepted and the player given the opportunity to make a call on a move. This overcomes the issues associated with "buy out" clauses as the money would be paid by one club to another and about the legal proximity of the buying side.

As for Diego Carlos, if LIverpool wish to proceed they will need to pay €75M in a single payment or negotiate with his club if they want a lower fee.}

1.) 24 Apr 2020
24 Apr 2020 07:26:20
Thanks Ed excellent answer. So regarding the Arsenal/ Suarez situation, how much power does the player have in that situation, can the club just refuse and that is the end of it?

{Ed002's Note - The situation with Arsenal was that with Suarez desperate to leave the previous summer Liverpool had agreed that if any offer over £40M was made then Suarez would be allowed to move if he wanted to. This was not a buy out or release clause but what is now becoming more popular – a termination clause. At the time, the expectation was that Real Madrid would step in (which was what Suarez then wanted) with an offer but it was far too low for Liverpool to accept. Arsenal made the offer of £40M plus £1 as Guardiola was unsure whether it was “£40M and above” or “over £40M” – there was nothing wrong with that. At the time, as this was seemingly the only way out of Liverpool, Suarez was willing to accept this as a stepping stone to one of the major Spanish clubs, but the Liverpool board failed to honour the contract and blocked the move. Suarez's agents took legal advice and were set to argue that Arsenal matched the clause that allowed to leave and that they should allow the player to discuss the transfer with Arsenal as soon as is possible. They would then look to leverage this legal position to stop Liverpool blocking the transfer and were willing to use the £2M then due the player as an incentive in order to facilitate the transfer. Suarez would have moved to Arsenal given the opportunity and this is when he started his campaign against the club regarding broken promises etc.. That summer, Liverpool agreed that he would be able to leave the following summer, regardless – this was done to avoid any potential legal battle. By the following summer Barcelona were interested and that suited Suarez – better than Madrid he tells the Catalan media when they ask. If the matter had of gone to court there would be no doubt the move could have been forced. An appeal would have perhaps been considered by Liverpool but that would have potentially dragged on long enough to stop Suarez playing for anyone until it was resolved – and that could have had disastrous consequences for Liverpool.

2.) 24 Apr 2020
24 Apr 2020 12:51:12
Thanks Ed002, much appreciated.

{Ed002's Note - You are welcome.}