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How To Use ‘Variable Sell-On Clauses’ In Football Transfers After Arsenal’s Win At CAS

Footballer
Thursday, 17 February 2022 By Jason Shardlow-Wrest

As the clock ticked towards 11pm on deadline day during January’s recent transfer window, dealmakers and lawyers were no doubt furiously finalising transfer terms.

When it comes to deciding whether to cash in on players who could go on to achieve big things, savvy clubs may include a ‘sell-on clause’ in their transfer agreement to help capture any significant gain in the player’s future value. This practice has raised eyebrows at FIFA, who are concerned that ‘variable sell-on clauses’ (explained below) may breach their regulations against third party influence. Indeed, FIFA's Disciplinary Committee ruled as much in a case against Premier League team Arsenal FC, involving variable sell-on clauses in the transfer agreements of two ex-Arsenal players in 2018 (for full background to the case, please see this LawInSport article1).

Observant club lawyers, however, will have breathed a sigh of relief after Arsenal successfully appealed their case to the Court of Arbitration for Sport (CAS) last summer. This article briefly recaps FIFA’s rules on third party influence and how variable sell-on clauses work, before considering what the CAS Panel’s recently published decision in the Arsenal case (and a similar ruling involving Real Madrid) mean for the drafting of transfer agreements going forward.

Specifically, it looks at:

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Jason Shardlow-Wrest

Jason Shardlow-Wrest

Jason is an English law-qualified dispute resolution lawyer and Managing Associate at Linklaters. He has a broad practice in litigation matters, including advising domestic and international clients on complex and high value commercial and competition litigation issues. His experience in sports includes advising a number of different sporting stakeholders on wide-ranging issues, including matters of competition law, as well as the application and interpretation of broadcasting contracts in the context of COVID-19.

 

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