How do sell on clauses work ?

Do you get a percentage of the combined fee, or the up front price, or does it depend on the contract you wrote up at the time of sale ?

 

Whatever two sides agree too.... could be owt

 

The latter. Some are based on a percentage of fee, some are based on a percentage of profit.

 

Just about every player we sell has one. Just about every player who used to be ours, and is sold by the club who signed him from us, doesn't. That seems to be the way it works anyway.

 

Could Everton sell Stones for £2.2 million with a add on of £30 million after 10 appearances and keep all the money unless we have a contract that stipulates we get a percentage of the total fee received ?

 

Probably not, but I wonder whether a club could get away with undervaluing a player, i.e. Agree to sell him to X club for £5m and purchase a player from the same club, also at a way undervalued fee. So each club would effectively be getting a £30m player, but the 20% sell on fee becomes £1m, rather than £6m.

 

I think Blackett or McNair or maybe both might be involved in any deal done with Man Utd

 

I would imagine that each time there is a further payment, you'd get a percentage of that. Depends what is agreed though.

Swap deals would be tricky ones. You'd still get a percentage of the total consideration (i.e. any fee paid + player value) but the other player would need to be valued on a just and reasonable basis. You can't just fix the price, particularly when other parties have a vested interest.

 

No idea, except to say Mansford suggested that whoever buys Stones will end up paying the fee over a number of years and so we'd receive our percentage over a number of years.

 

A lot of the time they're incredibly complex and you end up getting a percentage of a percentage for years to come if you've been clever.

Usually that percentage is for a fee above what you sold a player for originally. So if you sell someone for £1m with a 25% sell-on clause and the next club sells them for £3m, you'll end up with 500k, ie. 25% of the £2m profit.

We sold Rickie Lambert to Bristol Rovers in 2006 for around 200k and that's been a really good deal for us. Rovers sold him for £1m, so we got a percentage of that. They stick a sell-on in when they sold him to Southampton so we get a percentage of that percentage when he goes to Liverpool.

Same with Adam Le Fondre, Will Buckley etc who if they move for a profit each time sees us benefit, this all relies on each club putting their own clause in.

 

I'm struggling with how you get a % of the sell on to Liverpool for Lambert. That's their sell on clause, you're not a party to that contract.

 

Nobody can be sure of exactly the figures involved, even the percentage, so here's a scenario in which a team would benefit from multiple deals:

Team A sell a player for 200k to Team X with a 20% sell on of anything over the fee.
Team X to Team Y for £1m bring in 20% of 800k= 160k. Team X put a 20% sell on in the deal similar to Team A.

At this stage remember that Team A have a 20% clause on ANYTHING received for a player over the initial 200k, so anything Team X receive as part of their 20% clause is included.

Team Y sell the player for £7m, so Team X receive 20% of £6m = £1.2m.

Team A receive 20% of that as part of the original deal (ANYTHING received by Team X over the initial 200k) = £240k.

So a transfer with an initial fee of 200k, brings in another 400k down the line.

Edit. Found something on the Lambert deal:
http://www.express.co.uk/sport/football/480912/Small-clubs-bank-on-Rickie-Lambert-s-Liverpool-legacy

 

Q

Never really thought about it like that. I would imagine that after 5 or 6 moves, all with sell on clauses, the accountants' fees start outweighing the money trickling in!

 

Always happy to educate.

For every Lambert, Le Fondre and Buckley, there's been a Perkins, Murray, Done, where their next move has been for less than the original fee thus ending the clause.

 

This is where the buying club needs to get savvy and put a profit/loss sell on clause in, so if the player turns out to be rubbish they can get their money back!

 

To be fair Glenn Murray was excellent at Brighton. He allowed his contract to run down and went to Palace on a free.