Why don't players at English clubs have buy-out clauses?

We had discussions about the taxation rules in the case of buy out clauses and I stumbled on that.

El pago de la cláusula de rescisión es una modalidad, específica del fútbol español, que tiene su origen en el artículo 16 del Real Decreto 1006/1985, que permite a un jugador liberar la relación laboral que tiene con su club de origen mediante el pago de una indemnización. Al no ser una operación de trafico mercantil, nunca está sujeta a IVA, aunque el deportista afectado sí debe pagar el IRPF (tramo impositivo de entre el 40 y el 52%)
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al ser el propio futbolista quien paga su libertad a la Liga de Fútbol Profesional -con el dinero de su futuro club-, también debe abonar el IRPFcorrespondiente al total de la operación.
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The buy out clause is a specialty of Spanish football, it originate from the article 16 of the king' decree 1006/1985, that allows a player to free himself from the working relationship that links him with his club, in exchange of the payment of a compensation. That is not a commercial transaction, and it's
not subject to VTA, but the interested player has to pay the IRPF( between 40% and 52%).

If the footballer free himself of his contract at the LFP, with the money of his future club, he will have to pay the IRPF of the transaction.
 
jojojo said:
That's more or less right. Normally Liga clubs when offered the clause figure go ahead with a normal transfer, because the formal procedure is riskier for both clubs. In particular if either club owes money to the tax office the tax man can step in as "preferred creditors" and get the money from the LFP who act as the intermediaries.

If the forced procedure is used as it was by Bayern in the Martinez case, and as we think it was by United when we bought Herrera then you need to hire a very good law firm to make sure there are no slip-ups. If a club really did give a player the money to buy out his contract, you potentially double your cost - because he might have to pay income tax on it. So it's not taken lightly.
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Quite interesting, thanks for that. Didn't know about tax office potentially getting involved, important point with a few La Liga clubs being in arrears when it comes to tax.
 
Chesterlestreet said:
Partly because of the law. It's likely that an English court would consider a Spanish style payout clause as a de facto penalty clause (because the amount specified in such clauses is not proportional to the actual damage suffered by the club if a player leaves before his contract expires) – and the latter, penalty clauses, are frowned upon and considered undesirable.

So, it's deemed risky, in short. Clubs don't want any legal hassle.
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That question exists in Spanish law as well, it's part of why the contract needed it's own law. It's believed that the principle of wages based or market value based valuations can be used, because the law says it can address replacement cost. However the possibility of a player challenging an inflated valuation is still there. The reality is the clubs try not to use clauses against each other, they're treated more like "buy it now" prices than actual legal documents. There are exceptions but they are rarities.
 
JPRouve said:
We had discussions about the taxation rules in the case of buy out clauses and I stumbled on that.




The buy out clause is a specialty of Spanish football, it originate from the article 16 of the king' decree 1006/1985, that allows a player to free himself from the working relationship that links him with his club, in exchange of the payment of a compensation. That is not a commercial transaction, and it's
not subject to VTA, but the interested player has to pay the IRPF( between 40% and 52%).

If the footballer free himself of his contract at the LFP, with the money of his future club, he will have to pay the IRPF of the transaction.
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Hmmm, there is only one case in Spanish football of a footballer being charged the income tax and he was literally "given the money" later by his new club as a signing-on fee. An error that no subsequent deal has made. There is a question mark around it because the wording of the clause is ambiguous, and the interpretation has never been tested by a court/tax tribunal.

It actually hinges on the exact wording of the contract clause and whether it's interpreted as the equivalent of a similar sounding FIFA ruling.

From me, in last year's Herrera thread.
Some of the reporters are giving out of date descriptions of how the Spanish "clausula de rescisión" works and most of them are legally inexact descriptions, including glib phrases like "Herrara pays the clause."

The reasons for this are obvious: they aren't lawyers and the law is unclear. United have lawyers and they will have assessed the risk and the best approach to the use of the forced release. They've had months to think about it and presumably we have always had it in mind when speaking to Athletic

The reason there is ambiguity is because the law itself is ambiguous. I'll leave this in Spanish because the specific interpretation of the words is critical.
El art.2.2 del Libro V dice: “La inscripción de un jugador profesional a favor de una Sociedad Anónima Deportiva o Club será cancelada por la rescisión unilateral del contrato por parte del jugador profesional. En este caso, y si estuviera previsto tal desestimiento con cláusula indemnizatoria en el contrato que dio lugar a la inscripción, se procederá a su cancelación, previo depósito en la LNFP del importe previsto en la indemnización”.

What that appears to say (and why you need specialist lawyers) is that a player can unilaterally cancel his contract. However, it then says that when his old club receives the prescribed compensation his registration can be transferred to his new club. It does not say explicitly that the player must hand over the money himself. Because of this vagueness, lawyers can step in and earn a healthy fee at this point, and then the buying club can hand over the cash on the player's behalf, without the player ever possessing it himself.

The Spanish LFP agreed during the Bayern/Martinez case that the clause should be interpreted as a compensation clause as described by FIFA.
If a professional is required to pay compensation, the professional and his new club shall be jointly and severally liable for its payment. The amount may be stipulated in the contract or agreed between the parties.

Which again is interpreted as meaning the club can pay the money without the player touching it.

Any lawyers/tax advisors on the board will know this is the contract law equivalent of a minefield for the club/player and a goldmine for the lawyers. As I say, actual case law (as in cases that have gone into tax arbitration or into court) is basically non-existent. So any club using it will be very wary and will probably put an insurance policy in place if the amounts involved are large.

Admittedly we're now miles away from the "why not in England" topic, but it gives the flavour of what kind of minefield those innocent sounding buyout/release clause words hide even in countries that have them as standard.
 
jojojo said:
The reality is the clubs try not to use clauses against each other, they're treated more like "buy it now" prices than actual legal documents. There are exceptions but they are rarities.
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Yes - I suppose that's the crux of it. And for that matter, the actual amounts rarely come into play when high profile players are involved. I think Fabregas, for instance, had a 200 mill buyout clause or somewhere in that region.
 
@jojojo I know I just put the theoretical rule, apparently there is a loop hole in the law 1006-art.16, if the player can't pay his future club can. The real problem is the interpretation of what his the transaction between the future club and the player, to protect himself the club must come with the player to the LFP when the player decides to buy his contract, and ideally he mustn't touch the money/check.

But like you said the clubs try to not use the clauses and just transfer the player for the value of the clause, because there is no complicated interpretations involved.
 
i highly doubt if this could be legal under the english law.

the release clause can hardly carry a value more than the amortization value of the contract itself. otherwise the contract doesn't carry the equity value represented by the both parties. you can't pay me a tiny on one side and tell me i am worthy a billion on the other. this is the typical feature of a slavery contract. any court governed by the english law can easily rule such contract void.

i believe all those so called "release clauses" in england were just installed in a very grey area. the saurez one is a good example. "liverpool would only oblique to inform saurez if there would be a club coming in for him with more than 40m" so and so. and all others are more likey just gentleman agreement between the club and the player i well believe.

don't know exactly how can this happen in spain but it's not surprising if they are expertise in slave trade as what they did for centuries. at least in england it should have abolished for over hundred years. there are few lawyers in this forum so they should have better say in this.
 
Niall said:
We could have slapped a £50 buy-out clause on De Gea and laughed all the way to the bank when Real Madrid came knocking for him (I know he hasn't left yet but you get the point).
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How would that have worked exactly Niall? Surely buy-out clauses only benefit the player?
 
Sir A1ex said:
How would that have worked exactly Niall? Surely buy-out clauses only benefit the player?
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I would have thought they benefit the club as they can demand a higher transfer fee. But if it's not backed up in the law, like it is in Spain, then maybe it's pointless.

How does it benefit the player? I suppose he can force a departure by paying his buy out clause (with the help of the buying club). That's how we got Herrera I think?
 
Niall said:
I would have thought they benefit the club as they can demand a higher transfer fee. But if it's not backed up in the law, like it is in Spain, then maybe it's pointless.

How does it benefit he player
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The player basically gets to decide if he wants to leave. So take Herrera, if he plays for Spurs and he has no deal and Manchester United comes in for him, he has no choice but to hope Levy lets him go. If he plays for Bilbao and Manchester United comes in for him, they can meet his clause and then it's up to him to decide. When negotiating new deals, players will sometimes insist on a certain amount of release clause, thus giving them the ability to get out of the deal if they play well and have big clubs in for them.
 
Niall said:
I would have thought they benefit the club as they can demand a higher transfer fee. But if it's not backed up in the law, like it is in Spain, then maybe it's pointless.

How does it benefit the player? I suppose he can force a departure by paying his buy out clause (with the help of the buying club). That's how we got Herrera I think?
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They only have the effect of setting a maximum transfer fee. Effectively our players have release clauses of infinity.

The benefit the Spanish clubs get is that they can be used to set the tone of a negotiation, and to appeal to the fans that, "we had no choice," in the event of an unpopular sale. The players like them because they give them an escape route and it's another contract element (like duration) that they can use in a negotiation, better wages for them Vs higher release clause for the club.

If I was signing for Spurs I'd want a release clause.
 
Niall said:
I would have thought they benefit the club as they can demand a higher transfer fee. But if it's not backed up in the law, like it is in Spain, then maybe it's pointless.

How does it benefit the player? I suppose he can force a departure by paying his buy out clause (with the help of the buying club). That's how we got Herrera I think?
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It's a negotiation between the club, who wants it as high as possible (to retain as much control as possible) and the player who wants it as low as possible.

Here in Porto, a common situation when a player arises from a lower league with a relatively low profile (Jackson Martínez for example): If he's successful, at some point, he'll want higher wages, which means a contract renewal. The counterpart for that is, many times, a higher release clause.

Other times, the club wants a longer contract, because it's running down. In these times a player may cave in, but demand a lower release clause, so that coming out is easier if the right club comes knocking.

Occasionally we can set it so high as to make it irrelevant, and akin to not having one. Hulk had a 100m release clause. Cristiano Ronaldo has 1bn I think.
 
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Fellaini had one didn't he. We missed the deadline ffs and it went up. Or am I making all that up.
 
Niall said:
I would have thought they benefit the club as they can demand a higher transfer fee.
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They can't though - it's a maximum, not a minimum.

With or without a buy-out clause the club can decide whether or not to sell for less. The only difference is that with a buy-out clause they are forced to sell at a certain price, and cannot get any more money than that (unless Moyes is buying).

It benefits the player, as it ensures that if a big club who are prepared to stump up good money are in for him, his current club cannot block the move and make him stay.
 
I remember Demba Ba had a 7m buyout clause. 'Arry told all his mates in Fleet Street and Chelsea swooped in.
 
The feeling I get is that Italian and Spanish clubs / fans are more pragmatic than what you see in the UK - true Real- and Barcafans don't like their players leaving for the rival, but it happens from time to time. Luis Figo, Luis Enrique - I think even Bernd Schuster did it

In England - the idea of a United or Liverpool-player going to the opposite club is impossible. And if it hadn't been for the fact that Sol Campbell was out of contract, Spurs would never have let him go to Arsenal.

This may be a stretching it - but if every player had a release clause, the clubs wouldn't be able to control who their players were sold to, and I think that is a reason why it's not that popular in England. Heinze would have been sold to Liverpool - United could sign Sterling and there is nothing the other club could have done ebout it.
 
All those names who have/had buy out clauses in their contracts are like foreigners,maybe question should be why English players at English clubs dont have boc.For real tho,is/was there English/British player in PL with buy out clause?
 
despite you might argue economically this is indifferent from the club is to underwritie an extreme out-of-the-money option to the player for free, but this can still hardly be right an out of proportion release clause is to protect the player unless you take for granted a club can ask for unlimited money from their players.

nevertheless the term of contract is not really the problem to hinder a player from moving to another club. i'm very convinced any english players if they dare to disassociate with their current football clubs, they can buy back their contracts by paying in lieu of all remaining value the contract's worth and walk out from the club. the problem is, they cannot play for another football club unless their current club release their registrations at the different level of football associations

so the real cause of all transfer saga lies on the fa/uefa/fifa. they turn the transfers to be a money business through their registration systems.

let's say if the registration system is run on seasonal basis as most sport would adopt. when a season starts all players registration are valid until the end of the season. after each season ends all players are supposed to be free agents and all clubs need to re-registrate again by the next season. players and clubs are still able to engage into a contract between themselves. and if any party is to be in breach of the contract then this is nothing more than a normal contract dispute, the maximum claim or remedy can hardly exceed the contract itself stands.

this is ideal and should be the most civilized way to conduct the players registration business. but just like all other systems, there are their own pros and cons.

there could be some drawbacks to the small clubs like, let's say, the soton. their squad were tore up since all big clubs jumped in to take out almost all their first team players after they had produced some nice football collectively. under the current way they could manage to collect back some decent money so they can maintain their club development. so, to compensate small clubs of their good work in proper channel is also essential.

but nonetheless the soton is a rare case. this is not unfair to say 90% of transfers are conducted just like a ransom
 
In Germany it´s mainly used when a player exceeds expectations. Then the player will agree to a contract extension for higher wages while putting a release clause in the contract, so the club can benefit financially. The club could insist the player finishes the deal on his current wages, but they´d have an unhappy player and the player would leave on a free transfer eventually.
 
In Holland we got the good ol' gentlemans agreement mostly. Vermeer heard from Ajax he could go for 1m to another Eredivisie club (if he went to a different league he'd cost more), he chose rival Feyenoord and Ajax wasn't happy but still went trough with it.

Same with PSV and Memphis, PSV said if you sign a contract we will let you go for a good price next season. The 32,5m (if all add-ons are paid) will be the most expensive transfer so they've kept their word.

Sometimes it's nice to not have alot of money in your league :p
 
NL Max said:
In Holland we got the good ol' gentlemans agreement mostly. Vermeer heard from Ajax he could go for 1m to another Eredivisie club (if he went to a different league he'd cost more), he chose rival Feyenoord and Ajax wasn't happy but still went trough with it.

Same with PSV and Memphis, PSV said if you sign a contract we will let you go for a good price next season. The 32,5m (if all add-ons are paid) will be the most expensive transfer so they've kept their word.

Sometimes it's nice to not have alot of money in your league :p
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That´s nice and stupid. The player could just move to Feyenoord for a million dollars in July and then six months later Feyenoord sell him abroad with a profit and they split the money between them. :lol:
 
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