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The Ins and Outs of Transfers

Transfers are very seldom straightforward. Despite the view that transfer can take a few days to complete, the reality is that they can take, weeks, months and sometimes years to come together and sometimes have as many as fifty separate people working on the deal.

Deals include structured payments, additional bonuses, signing-on fees and will also have agents getting involved, as well as the approval of chairmen, directors of football, technical directors and sometimes even owners.

So, here, we will explain the different technical jargon and clauses that clubs sometimes use.


The actual cost of a player
The general headline for a player transfer is the fee that one club pays the other, however, that figure never represents the true outlay that a club must make when signing a player.

For example, Arsenal recently signed Oleksandr Zinchenko from Manchester City for a fee of £30m, with an additional £2m being payable if the club or player reaches certain criteria, for instance, if Arsenal qualifies for the Champions League at any point during Zinchenko’s initial contract length, they would need to pay the additional £2m.

Aside from that, there are other costs to be considered too. The club will need to account for a myriad of other payments that also need to be made, such as image rights, agent fees, player salary and solidarity payments.

The player’s salary will need to be accounted for as part of the initial outlay for the player. If Zinchenko is earning £100,000-a-week (his official salary has not been diclosed), that will total £5.2m-a-year. Zinchenko signed a four-year contract, which means that Arsenal are legally obligated to pay Zinchenko at least £20.8m. However, the player’s salary will be separate to a number of other clauses in the deal, such as an appearance fee (a fee received every time the player starts a match for the club), a substitute fee (a fee paid whenever the player is subbed into a match), an unused substitute fee (a fee paid if the player is on the bench but is ultimately never called upon), a goal bonus (a fee paid whenever the player scores) and many more, all of which can potentially inflate a player’s salary.

Oleksandr Zinchenko will cost Arsenal more than the reported £30m initial fee.

Equally, the club will have agent’s fees to be paying too. Zinchenko is represented by Anatoliy Patuk, who will also take a percentage of the overall transfer fee. Equally, Arsenal will have no doubt used an intermediary agent to broker the deal, who will also want a cut of the deal too.

While on the surface, Arsenal paid as much as £30m for Zinchenko, the overall cost could be inflated as high as £60m when all fees and figures have been factored into the deal.

Add-ons
Add-ons are a common addition to most modern transfers. These are effectively additional payments that the buying club is legally obligated to pay the selling club once certain criteria has been met.

Take Zinchenko again, for example. At the moment, Arsenal are only legally obligated to pay Manchester City £30m. This figure will likely be paid in instalments over the course of the player’s contract (amortisation).

However, they are also obligated to make further payments of up to £2m once certain criteria have been met. Given the size of the add-ons and Arsenal’s current state in the game, it’s likely that the add-ons will be equivalent to £1m once Zinchenko has made a certain number of appearances for the senior side and a further £1m if Arsenal qualify for the Champions League at any point in the next four years.

Arsenal’s failure to qualify for last season’s Champions League may have an impact on the bonuses the club include in deals.

Of course, the exact nature of the add-ons are unknown, however, given that they have been described as “easily achievable” they will likely be more focused on Zinchenko hitting certain milestones, rather than the club.

These add-ons will not need to be paid in one lump sum either. Arsenal can potentially pay the remaining £2m in one lump sum, assuming they are achieved, however, the club may also decide to spread the cost of those add-ons over the remainder of Zinchenko’s contract or within a specific fixed term.

Instalments
A common criticism of specific football clubs on social media and in the press, is the pejorative nickname of “Instalments FC”. The contemptuous nickname is more or less born out of the annoyance that a specific football club are unable to pay the entirety of a transfer fee in one lump sum.

The reality is that almost no football club on the planet can pay an entire transfer in one lump sum and even the select few that can understand the financial implications of doing so.

Video games like FIFA or Football Manager often give fans a false impression of how transfer deals work.

In reality, most football deals will include some form of amortisation. Amortisation is when a club decides to spread the cost of an asset (usually a player) over the course of the asset’s contract.

Gabriel Jesus’ move from Manchester City to Arsenal will likely have been done in instalments.

This summer, Arsenal signed Gabriel Jesus from Manchester City for a fee of £45m. It’s extremely unlikely that Arsenal would have paid the entirety of the fee upfront. For both Arsenal and Manchester City, this can cause potential issues with Financial Fair Play (FFP) regulations, specifically for the latter, it can be useful to have a guaranteed source of income for a sold asset, rather than having the entirety of the fee now.

It is likely that Arsenal would have only paid City around £20m for the player and will then spread the remaining cost over the course of the player’s contract. If this is indeed the case, then Arsenal would be due to make a payment of £5m each year to Manchester City for the next five years.

All upfront
Of course, many teams prefer to have the entirety of a fee upfront. Generally speaking, most release clauses will have the stipulation that the entire fee is paid upfront, rather than spread over the course of a few years.

Arsenal encountered a similar situation with Thomas Partey, when they signed him from Atlético Madrid. His release clause stipulated that anyone who wished to activate the clause, had to pay £45m (€50m) in one lump sum payment, rather than instalments. Though Arsenal spent many weeks in negotiations with Atlético, they ultimately opted to trigger the clause on deadline day, meaning that Atlético received the entire fee at once.

More recently, the saga surrounding Robert Lewandowski’s move to Barcelona involved a fee paid outside of instalments.

Bayern Munich insisted that Barcelona pay the entirety of their asking price of £42m (€50m) fee upfront. This seems to have been with more of a look to the future than anything else.

Barcelona were required to pay the entirety of Robert Lewandowski’s fee upfront.

Given the recent financial issues that have so plagued Barcelona over the past year, Bayern Munich were perhaps unwilling to be locked into a payment structure with a team who may not be able to afford potential payments further down the line, or who may try to defer the payments.

Bayern took the entire fee upfront so as to avoid having to be caught out further down the line and potentially losing money further down the line.

Financial Fair Play (FFP)
UEFA Financial Fair Play (FFP) Regulations are a set of rules and regulations that prevent football clubs from spending more than they earn. Essentially, FFP was set up to ensure the long-term survival of football clubs.

Despite the existence of FFP, all football leagues operate in a similar vein. The Premier League has financial rules in place that prevent clubs from paying excessive transfer fees or salaries if they do not have the appropriate income to match the ambition.

The ruling was brought in in 2010 to help curb the unsustainable amount of debt that football clubs often ran at and which also prevented wealthy owners from giving their team a competitive advantage.

Former Arsenal manager Arsène Wenger was a big supporter of the initiative, citing the likes of Chelsea and Manchester City as being examples of what he referred to as “financial doping”, wherein both clubs had a distinct advantage over their rivals in the transfer market, as they had wealthy owners who were able to invest money into the club without restrictions.

There are penalties for not falling in-line with FFP regulations, which are:

Manchester City have already fallen afoul of FFP regulations, however, they have also settled other financial cases out of court, prevent UEFA penalising them for any financial maleficence during the specified time period.

FFP prevents clubs from owners investing too much money.

Many clubs have tried to circumvent FFP regulations by having owners inject money through a third party sponsorship deal. If, for instance, the owner of a football club wanted to invest more money into the club than they are allowed, they can invest the money through a third-party sponsorship, for which they are already an active member of the board. FFP regulations are designed to prevent this sort of thing from happening and football clubs are generally very good about hiding paper trails.

Not all debt is punished. FFP is essentially brought in to prevent clubs running unsustainable financial practices that threaten the long-term existence of the club, i.e. if a club are receiving too much funding from an owner, as such funding is unsustainable in the long-run, especially if the owner leaves or decides they no longer want to invest in the club.

Release clauses
Release clauses are less common in the Premier League than they are abroad. In La Liga, it is a legal requirement that a club inserts a release clause into a player’s contract and has been since 1985.

Essentially, a release clause is a clause in a player’s contract that imposes a legal obligation on the selling club to accept any offer that matches the clause.

Release clauses are usually required to be paid in one lump sum, though there are occasionally exceptions to this.

Arsenal had to pay all of Thomas Partey’s €50m release clause in one go.

No club is ever obliged to sell a player, so a release clause places that obligation assuming all the parameters of the course are met.

In Spain, release clauses are almost always required to be paid in full, however, the figure is not transferred to the club itself, but to the club’s league (La Liga, Segunda División etc). The money must be lodged with La Liga’s headquarters in Madrid, once the figure has been ratified by the league, it is then subsequently transferred to the club itself.

In England, release clauses are paid directly to the selling club, rather than directly to the Premier League, Championship etc. In France, release clauses are strictly prohibited. French clubs can activate release clauses, but are not allowed to add them into their player’s deals.

The most high profile example of activiating a release clause is when Paris Saint-Germain activated Neymar’s €222m release clause in his Barcelona contract.

This was a particularly unique situation to anyone new to the world of release clauses.

Neymar’s release clause had to be activated by the player himself.

As Neymar was contracted to Barcelona, the club were legally obligated to place a release clause into his contract. Of course, Barcelona decided to set the clause at €222m, a figure that they believed no one would be able to afford, at least, not without breaching FFP rules.

The stipulation in Neymar’s contract and for any other player in Spain, is that the release clause must be activated by the player, not by the buying club.

Essentially, for this transfer to go ahead, Paris Saint-Germain were required to transfer €222m to Neymar, who then paid the amount directly to La Liga, who then passed the payment onto Barcelona, as Neymar was the only one who could activate the clause.

Right of first refusal
A right of first refusal clause is a clause in which the selling club cannot sell a player to another club without first contacting the team that hold the clause.

This is a slightly less common clause in football than a release clause, but they still fairly widespread throughout the game. Real Madrid tend to include such clauses if they are unable to convince the buying club to insert a buy-back clause.

Arsenal have bought two players from Madrid in the past ten years, Mesut Özil and Martin Ødegaard, both of whom had first-refusal clauses placed into their deals. Arsenal also had the right of first refusal inserted into Cesc Fàbregas’ deal with Barcelona, though they ultimately opted against taking advantage of it.

Real Madrid have the right of first refusal on Martin Ødegaard.

The clause stipulates that if Arsenal were to receive a bid for Ødegaard (or Özil when he was at the club) that they find agreeable, Arsenal are legally obligated to inform Real Madrid of the offer and give them the chance to match it.

Of course, this clause, much the same as a release clause, ultimately, has very little bearing if the player does not wish to make the move. If, for example, Juventus were to bid for Ødegaard at a figure that Arsenal were happy to accept, then Arsenal must inform Madrid who then have the option to match, knowing that Arsenal will accept it. However, if Ødegaard does not want to join Real Madrid, then the clause means very little in the long run.

Buy-back clauses
Buy-back clauses are clauses that place a mandatory financial release clause into a player’s contract that can be activated at any time by one club.

The best example is to use Sergio Reguilón of Tottenham Hotspur. Reguilón was signed by Tottenham in 2020 from Real Madrid. Madrid were not especially keen to sell Reguilón, however, they were unable to guarantee him the game time he needed in order to develop further and the player was not keen to go out on loan again (having just the previous season on loan with Sevilla). However, Madrid were aware of Reguilón’s potential, so they insisted that a clause be inserted in the deal that allowed them to buy him back at a fixed, non-negotiable price in the future, should they wish to.

Real Madrid have a fixed buy-back clause inserted into ‘Sergio Reguilóns Tottenham contract.

Buy-back clauses are almost always higher than the initial transfer fee, ensuring that the team that has the player will make some level of profit back. The implication also being that if the club wishes to sign the player back, then they will be worth the inflated fee.

Chelsea have also begun to explore this avenue too, inserting the clauses into deals for the likes of Nathan Aké when he was sold to Bournemouth and Valentino Livramento, when he was sold to Southampton.

Generally, buy-back clauses tend to be inserted when the player cam through the club’s academy. Teams want to invest more and more in their academy set-up and allowing players to leave without giving them a fair crack at the whip in the first team is often a contentious issue for fans, especially when the player is highly-regarded, so a buy-back clause often soothes some troubled waters.

Percentage of next sale
This clause is fairly straightforward as it essentially does as advertised. The clause stipulates that the selling club are entitled to a fixed percentage of any future transfer the player has from the club they are sold to.

One of the best examples of a sell-on clause in action, is with Manchester City’s sale of Jadon Sancho.

Manchester City included a 15% sell-on clause when they sold Jadon Sancho to Borussia Dortmund.

Sancho was exceptionally highly-regarded in the Manchester City academy, but given the stacked nature of City’s team, they were unable to guarantee him the game time he craved, so decided to sell him to Borussia Dortmund for a fee of around £8m, with a 15% sell-on clause.

This meant that if Borussia Dortmund ever sold Sancho, then City were legally entitled to 15% of the overall transfer fee.

Dortmund eventually sold Sancho to Manchester United last summer for a reported fee of around £73m, meaning that Manchester City pocketed around £10m.

Percentage of profit from next sale
This clause effectively works the same as a general sell-on clause, except, in this instance, the club is only entitled to a percentage of the profits from the transfer, rather than the overall fee.

To use an example, if Liverpool were to sell Konstantinos Tsimikas to Inter Milan for £25m, but included a clause that entitled them to 20% of the profit from the next sale, then Liverpool would be owed a slice of the profit. If Inter Milan then went onto sell Tsimikas for around £45m, then Liverpool would be entitled to £4m, as the profit would stand at £20m and 20% of £20m is £4m.

These clauses are much easier to insert into deals because they very rarely end up costing as much regular sell-on clauses. Though the selling club may not wish to part with any of their profits, it’s better than the alternative of giving away a slice of the whole amount.

Ashley Cole was famously “tapped up” by Chelsea.

Speaking to players
Of course, speaking to players without the express permission of the selling club is illegal. Despite this, almost every single club who buys anyone will breach that rule somehow.

The process of speaking to a player without the permission of the selling club is referred to as “tapping up”. Famously, Chelsea “tapped up” Ashley Cole, while he was still under contract with Arsenal and who did not have permission to speak to him, resulting in fines for then-manager José Mourinho, Cole and for Chelsea (who were also represented at the meeting by Peter Kenyon, the club’s then-director). Liverpool have also run afoul of this rule, when they were deemed to have illegally approached Virgil van Dijk (then of Southampton). Southampton discovered that meetings between the player and representatives of Liverpool (including manager Jürgen Klopp). Liverpool quickly released a statement publicly apologising to Southampton and ending their interest in the player. Interestingly, both players moved to both clubs.

So how do clubs get around this?

The simple answer is by using intermediaries, or agents, if you will.

Since representatives aren’t allowed to speak to the player directly, employing a third-party representative is a much easier way of gauging interest a player may have in potentially joining.

Liverpool found themselves in hot water after “tapping up” Virgil van Dijk.

Of course, this too is not strictly legal, since the third-party intermediary is working on behalf of a club, however, things become much harder to trace back to the buying club if intermediaries are involved, especially since they would have no reason to divulge the name of who they’re working for.

In the early stages of talks, intermediaries determine just how much, if any, interest the player might have in playing for a specific club. Once the player’s interest is confirmed, discussions can then begin informally over the role of the player in the team, the financial package they can expect and speak to the player’s representatives over just how much a potential deal would be likely to cost.

Agents: A necessary evil
Of course, on the surface, football agents are generally despised by most football fans. Agents are generally tasked with getting the best deal for their clients (the players) and are therefore do not hold any sentimental regard for the club they play for.

In reality, most transfers that are completed in the modern game cannot happen with the use of agents or intermediaries.

The bigger a football club, the more ties with agents they will have. Wolves are famously close to Portuguese super-agent Jorge Mendes, while Arsenal, Chelsea and West Ham also have known ties to agents like Kia Joorabchian.

Kia Joorabchian has ties to many Premier League clubs.

In the latter case, people, particularly Arsenal and Everton fans, wonder why the club continues to work with Joorabchian, despite no visible benefit to the relationship on the club’s part.

The reality of the situation is that Arsenal’s relationship with Joorabchian is the same as any club would have with an agent. They simply cannot afford to burn bridges.

While Joorabchian, Mendes and the late Mino Raiola often negotiated deals for their clients, the relationship a club has with them can be equally advantageous.

Arsenal fans may point to their being virtually no upsides to their connection to Joorabchian, however, there is evidence to the contrary. Joorabchian was one of the main intermediaries who brokered the club’s deal for Martin Ødegaard last summer. Real Madrid were loathe to sell the player, especially without a buy-back clause being inserted into his contract, however, Joorabchian managed to convince them to take a lower deal than they would have liked and to accept a different clause (right of first-refusal), rather than an outright buy-back clause. He also managed to persuade Willian to forgo any money the club owed him when he cancelled his contract. Of course, the argument could be made that Arsenal were in this situation because of Joorabchian, but the point still stands.

Jorge Mendes has very close ties to Wolverhampton Wanderers.

Equally, Wolves’ relationship with Mendes has allowed them to sign talented Portuguese players, players they would not normally be in the running for. In fact, both João Moutinho and Rúben Neves were highly-desired players around Europe at the time, however, Mendes’ close personal relationship with Wolves’ former general manager Andrea Butti and former sporting director Kevin Thelwell.

Relationships with agents are never going to be viewed with rose-tinted glasses by most fans, but the reality is that clubs cannot continue to do business without them.

Bosman ruling
The Bosman ruling allows players to move to another football club, either domestically or abroad, at the end of their contract without their club recieving a fee for the player.

The ruling is named after Belgian footballer Jean-Marc Bosman, who invoked Article 17 of FIFA rulings in order to move clubs. Bosman was subject to a bid from USL Dunkerque while a player at RFC Liège, however, Dunkerque considered Liège’s valuation too high and Liège, therefore, refused to release Bosman from his contract.

As a result of the move falling apart, Bosman found his wages slashed by up to 70% and was no longer selected for first-team matches, leading to Bosman sueeing the club for restraint of trade.

Previously, Transfer Tribunals would resolve fee issues between clubs, ensuring that the team received some form of compensation, while clubs abroad often refused to release the player from their contract regardless.

Jean-Marc Bosman, the Bosman ruling’s namesake.

The Bosman ruling stipulates that players are allowed to agree pre-contract agreements with foreign clubs in the final six months of their deals. If the player wishes to move within their own country, they will need to wait for the third Saturday of May to have passed.

Bosman transfers are usually referred to as “free transfers”, owing to the absence of a transfer fee. Some teams can still be owed small, nominal fees to pay as compensation.

Fees for younger players moving for free
Players leaving at the end of their deals do not always necessarily move for free. Players under the age of 24 will likely generate some form of compensation that is decided on by a transfer committee.

According to the English Football League (EFL)’s regulations:

The overall fee is then decided on by the Professional Football Compensation Committee (PFCC).

Liverpool ended up paying over £10m for Danny Ings.

One of the best examples of this ruling coming into effect, was when Liverpool signed Danny Ings from Burnley.

Ings, at the time, was under the age of 24 at the time of the transfer, meaning that Burnley, were owed a developmental fee.

Eventually, the PFCC ruled on the fees that Liverpool were required to pay Burnley for the signing:

As Liverpool sold Ings to Southampton some three years later for a reported fee of around £20m, including add-ons, meaning that Southampton were entitled to £4m. All in all, Liverpool ended up potentially paying over £10m for the player, despite him technically being considered a free transfer.

Other clubs are not quite so lucky. Crystal Palace signed West Bromwich Albion defender Nathan Ferguson, but were only required to pay £900,000 in compensation, despite West Brom hoping to recieve between £5m and £10m.

Webster ruling
The Webster ruling is a test case in football in which allows players under the age of 28 to unilaterally walk away from their contract after a fixed period (generally three years, two years if the player is over 28) of time has elapsed, regardless of how long the contract is.

Like the Bosman ruling before it, the Webster case is named after a former footballer.

Andy Webster, the namesake of the Webster ruling.

The ruling is named after Andy Webster, a defender who played for Heart of Midlothian (Hearts) in Scotland. Webster ran into issues with Hearts’ owner Vladimir Romanov after he refused to extend his contract with the club. As a result, he was omitted from the playing squad for the remainder of the 2005/06 season.

The ruling effectively allows players to buy themselves out of their own contract.

Overall, the ruling is seldom taken advantage of in football, especially since agents, football clubs and lawyers will have written specific clauses into a player’s contract to make the idea of invoking the ruling untenable.

Despite this, the ruling can be effective in the case of pay disputes or if a player finds themselves unable to play for the senior side.

The Webster ruling means that the club the player leaves is owed some form of compensation. To bring the example back to the titular Webster, the player was valued at around £5m by Hearts, however, three years of Webster’s initial contract had already elapsed, meaning he was outside of FIFA’s “protected period”. This meant that any compensation that Hearts were owed would be based mainly on the outstanding balance of Webster’s salary.

The ruling has received more attention than usual over the past 12 months because of the protracted saga involving Harry Kane and Tottenham.

Harry Kane was encouraged by many to use the Webster ruling to his advantage.

Kane was the subject of multiple bids from Manchester City during last season’s summer transfer window, yet, despite rumours of a “gentleman’s agreement” between Kane, his agent and Tottenham Chairman Daniel Levy, many believed that Kane would invoke the ruling to force a move.

Unlike Webster, Kane’s use of the ruling would have likely cost millions of pounds in compensation compared to the relatively small £600,000 Webster was forced to pay.

Of course, Manchester City could have picked up the tab for Kane, but the impact on all sides would have likely caused greater fall out.

For Kane, there was no real sense in doing so. Turning his back on Tottenham, a team that he has been with since aged 12 and who could potentially cost the club in excess of £100m, would not have been a good look for him and would have resulted in a protracted legal debate that Kane would have been ill-prepared for.

Matuzalém famously bought himself out of his contract with Shakhtar Donetsk.

There is also the potential that Tottenham could have sued Kane for tortious interference and inducement.

Another high-profile example of the Webster ruling was when Brazilian midfielder Matuzalém terminated his contract with Shakhtar Donetsk in order to join Real Zaragoza. The European Club Association took issue with the ruling, especially after that Zaragoza were forced to compensate Shakhtar for Matuzalém’s deal.

FIFA Transfer Matching System (FIFA TMS)
The FIFA Transfer Matching System (FIFA TMS) is an online platform in which player transfers are recorded and has been a mandatory part of football transfers since October 2010.

The TMS allows or greater transparency in transfers across the board. In order for the TMS to process a transfer, both the buying club and the selling club have to enter matching details into the system. If one club enters a detail that is not matched by the other team, then the TMS will not approve the deal.

Once the deal has been approved, a transfer certificate is produced, in the case of players moving internationally, an International Transfer Certificate (ITC) is produced.

Ultimately, the TMS has two specific variants:

All in all, clubs need to enter over 30 different documents to the system, which will include contract details, player profiles, agent details, fee structure and the currency that the deal will be carried out in. Documents must be in either English, French, German or Spanish.

Transfer levy
Transfer levies are sometimes referred to as “additional costs” or “bonuses”. For example, all transfers include a mandatory 4% contribution that is paid into the Professional Footballers’ Pension Scheme (PFPS).

For example, when Manchester City signed Kalvin Phillips from Leeds United for a reported fee of £45m, they were also required to make an additional payment of £1.8m to cover the levy, which is placed in the PFPS.

Kalvin Phillips’ move to Manchester City, resulted in £1.8m being paid into the PFPS.

Other levys may be add-ons or bonuses that are activated when certain clauses are met. As stated above, these can be anything from appearance bonuses, figures attached to qualification for the UEFA Champions League or anything else.

Training compensation, solidarity payments and image rights payments are also considered to be levies.

Deal sheets
Deal sheets are transfer documents in the Premier League that are for exclusive use after 21:00pm (GMT) on transfer deadline day.

As transfer deadlines approach, a specific transfer may be close to being done, but still not quite at the crucial stages, meaning the clubs involved in the deal need an extension to the deadline.

An example of a deal sheet for the January 2022 transfer window.

Deal sheets ordinarily allow for a two hour extension in which the clubs can submit the relevant paperwork for a transfer. Deal sheets are usually for exclusive use among domestic clubs, as international transfers will still need to meet the TMS deadline, which is usually midnight.

The Court of Arbitration for Sport (CAS)
The Court of Arbitration for Sport (CAS) is an international body that settles disputes in sport. As the name suggests, it’s not just football who use the CAS for arbitration purposes, rugby, golf, tennis, F1 and many other sports will refer complicated issues to the CAS for arbitration.

The CAS has received more attention in recent years, owing to some of the rulings they have had to preside over.

Football is not the only sport to use the CAS.

The CAS was at the heart of the recent UEFA ruling against Manchester City, in which the club were banned from European competitions for two years and issued a fine of €30m for breaching FFP regulations.

In this case, the CAS ruled in favour of Manchester City, overturning their ban from European competitions and reducing their fine from €30m to €10m.

The recent banning of Michel Platini from UEFA was also handled by the CAS who reduced his initial six-year ban from all football-related activity down to four.

Michel Platini’s recent ban from UEFA was handled by the CAS.

Transfers are often arbitrated through the CAS in the cases of compensation. However, they have also been used to invoke transfer bans on teams. In 2017, Atlético Madrid were banned from signing players for two transfer windows for the signing of minors, as were Chelsea in 2019, the former was upheld by the CAS, while the latter was reduced.

Player processing
When a club signs a player, they need to be registered before they can play. For Premier League registration, clubs are required to send all transfer-related documents to the Premier League.

The documents that need to be lodged with the Premier League are:

With transfer deadline day, clubs are required to tell the Premier League if they plan to register any more players, so that the league’s Football Operations and Regulatory departments are prepared for them.

Cesc Fàbregas is considered “homegrown” as he was educated in Arsenal’s youth system.

Homegrown players
There are actually two specific types of the Homegrown Player Rule (HPR). The version that is enforced by UEFA and the version that is enforced by the English Premier League.

The two rules are relatively similar but with a few differences.

UEFA’s version of the HPR is that on top of the maximum 25 player list that a club can register, club must have at least eight designated players that have been trained by clubs from the same national league and four of these must have come from the club’s own youth system.

The rule within the Premier League was brought in to develop players from an earlier age and to nurture homegrown talent.

The Premier League ruling essentially stipulates that clubs can have a maximum of 17 non-homegrown players in each club squad, with a maximum size of the squad being 25, meaning that a club must have at least eight homegrown players within their squad.

Paul Pogba was considered a homegrown player owing to his time spent with Manchester United in his first stint with the club.

Recently, former FA Chairman Greg Dyke has proposed increasing the minimum homegrown quota from eight to twelve, with two having come through the club’s youth system and tightening the rules as to who counts as homegrown and who doesn’t.

It is common for people to misunderstand the idea of a “homegrown player”. Homegrown players are not necessarily nationals of the country they play in. In order to qualify for homegrown status, a player must have been registered with an English club for a minimum of three years before the age of twenty-one.

There have been a number of players over the years who still technically qualify as homegrown, despite not being from either England or Wales, such as Cesc Fàbregas, Paul Pogba, Victor Moses, Héctor Bellerín, Victor Moses and William Saliba.

Training compensation
Training compensation is money that is paid to the clubs that trained a player between the ages of 12 and 23. These are fees that specifically paid every time the player transfers until the season of their 23rd birthday.

The amount of compensation that a club is due, depends on the category the club falls into.

UEFA stipulates training compensation as:

ConfederationCat. 1Cat. 2Cat. 3Cat. 4
UEFA€90,000€60,000€30,000€10,000

Training compensation is paid regardless of whether or not the player joined for free or not. The only times that a team is not required to pay training compensation is if the player transfers to the lowest category of club (category 4), the player regains their amateur status or if they player’s contract was terminated without just cause.

To use an example, Borussia Dortmund recently signed Karim Adeyemi from Red Bull Salzburg in Germany. The player is 20 years of age (at the time of writing). In that time, SpVgg Unterhaching and Red Bull Salzburg trained Adeyemi between the ages of 12 and 23.

SpVgg Unterhaching and RB Salzburg will receive training compensation from any deal that Karim Adeyemi completes until he turns 23.

The exact categories of the clubs are not made public, so assuming that Unterhaching are ranked in UEFA category 3, while RB Salzburg are in UEFA category 1, then Borussia Dortmund are required to pay Unterhaching €30,000 in training compensation and RB Salzburg are due an additional €90,000 on top of the transfer fee.

Solidarity payments
Solidarity payments are payments that are made to the clubs that have trained the player between the ages of 12 and 23.

Though often confused with training compensation, the two fees are actually different and easier to work out.

Generally, this means that 5% of the overall transfer fee of a player is then divided between the clubs that trained the player. Every year that the player is below the age of 23, a further 0.5% is deducted from the 5%.

Chelsea will receive 5% of any transfer fee for Jamal Musiala in solidarity payments.

For example, Jamal Musiala at Bayern Munich is 19-years-old (at the time of writing) and has been trained between the ages of 12 and 23 for seven years. Musiala was also in the academies of TSV Lehnerz and Southampton, however, he was not at the minimum age of 12 while in their academies, meaning they are not due any compensation.

This would mean that if Bayern Munich were to sell Musiala for £50m to Liverpool, then Chelsea would be owed compensation for the deal. As Muslia is 19 years-old, Chelsea would not be entitled to the full 5% of the deal, as they would instead receive only 2.5% of the deal, meaning that of the overall £50m fee, Chelsea would be entitled to £1.25m in solidarity payments.

In this scenario, Chelsea will always be due 5% or less of Musalia’s future fees in solidarity payments.

Solidarity payments are usually only required when players are transferring abroad, however, some national associations still require that clubs receive payments in the case of domestic transfers too.

To use another example, Serge Gnabry, also of Bayern Munich, was trained by two teams between the ages of 12 and 23 – VfB Stuttgart and Arsenal.

Were Bayern to sell Gnabry to, say Paris Saint-Germain for £60m, then £3m would then be evenly split between Stuttgart and Arsenal, totalling £1.5m each in solidarity payments.

VfB Stuttgart and Arsenal will both receive 2.5% of any future fee for Serge Gnabry.

As only Stuttgart and Arsenal held the player’s rergistration from ages 12 to 23, this would mean that TSV Weissach, TSF Ditzingen, GSV Hemmingen, SpVgg Feuerbach and Stuttgarter Kickers, all of whom are credited as being part of his youth development, would not be due any compensation, as the player was under the age of 12 when he was with them.

Get on up, like a fax machine
The classic story of the fax machine breaking down has been debunked a fair few times by now.

There are many transfers that the story is attributed to, however, the main one is David de Gea’s failed move from Manchester United to Real Madrid, a deal that would have also seen Keylor Navas move in the other direction.

While the story is often used as being the “straw that broke the camel’s back” and restricted teams from using fax machine in transfer negotiations, the reality is far more boring.

David de Gea’s proposed move to Real Madrid broke down at the 11th hour.

It’s not really known for certain if The deal really did collapse because of a faulty fax machine, but its a story that has been well-told over the course of transfer history.

The issue was centered around neither club receiving the appropriate documentation in time and neither club entering the relevant details of the transfer into the TMS in time. By the time that both clubs were prepared to complete the deal, the deadline for international transfer had passed by two minutes and both de Gea and Navas stayed put.

As for the latter part of the story, fax machines can still be used in transfers if football clubs prefer, but this is less and less common, especially since there are a myriad of software programmes that can authenticate and provide signatures without the need for it to be physically signed.

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