Sell-On Clause in Football: Percentages and Who Gets Paid
How a sell on clause in football pays a former club in England, why a share of the fee and a share of the profit differ so much, and when it pays nothing.
By CricketTaken EditorialPublished Transfers & Contracts25 min read
- FIFA solidarity contribution
- 5%
- Training years it covers
- Ages 12 to 23
- Sell-on from a free transfer
- Nothing
- The drafting choice
- Fee or profit
In April 2018 Exeter City, a League Two club owned by its supporters' trust, published on its website the terms of the tribunal decision that had priced Ethan Ampadu. Chelsea had signed the teenager from Exeter's academy the previous summer and the clubs could not agree what he was worth. The Professional Football Compensation Committee set a guaranteed sum, a ladder of appearance payments, and one more term that Exeter's board cared about as much as the cash: 20 per cent of any excess if Chelsea ever sold him.
That last term is a sell-on clause. It entitles a player's former club to a percentage of the money his current club receives when it sells him. Whether the percentage is taken from the whole fee or only from the profit depends entirely on the wording, and the two can produce very different sums from the same transfer. English clubs at every level use them, from Premier League academies to League Two, and a sell-on can be agreed between clubs or, as Exeter found, imposed by a tribunal.
What a sell-on clause is and who signs it
The clause is a term of the transfer agreement between two clubs. Club A sells a player to Club B. Alongside the fee, B promises that if it later transfers him to anyone else for money, it will pay A a stated share of what it gets.
Three features follow. The player is not a party, has no say and is not affected: his wages, his contract and his freedom to move are untouched. The eventual buyer, Club C, is not a party either. It pays its fee to B and owes A nothing. And the former club has no power to make the sale happen. It cannot demand that the player be sold, set his price or stop him being kept until his contract expires. FIFA's rules on third-party influence would in any case forbid a clause that tried.
What the former club holds, then, is a contingent claim against one debtor. If B sells, B owes. If B does not sell, there is no debt. It is the most passive right in football finance, and the reason it is so widely used is that it costs the buying club nothing on the day. A club that cannot or will not pay another million pounds now can almost always be persuaded to promise a fifth of a sum it may never receive.
Why former clubs are allowed to hold one
FIFA banned third-party ownership of players' economic rights in 2015, and a share of a future transfer fee is exactly the kind of interest the ban targets. The regulations carve out an exception. A club with which the player was previously registered is not a third party for these purposes, so a former club may hold a percentage where an investment fund or an agent may not. The carve-out sits in the regulations' own definition of a third party, which excludes any club the player was previously registered with. That is the legal footing for every clause on this page.
Fee or profit: the same sale, two very different cheques
Every sell-on has a percentage and a base. The percentage is the number that gets reported. The base, the thing the percentage is taken from, matters at least as much, and it comes in two standard forms.
A clause on the total fee pays the percentage on everything the selling club receives. A clause on the profit, sometimes written as the "excess" or the "net gain", pays it only on the amount by which the sale price exceeds what the selling club itself paid.
Take an example with invented figures. A club buys a player for £10 million and gives his former club a 20 per cent sell-on. It later sells him.
At a sale price of £12 million the fee-based clause pays six times what the profit-based one does. At £50 million the gap has narrowed to a quarter. And at any sale price of £10 million or below, the profit clause pays nothing at all, even though the fee clause would still deliver a seven-figure sum. The difference between the two drafts is therefore greatest where the player has done only moderately well, which is the commonest outcome there is.
Buying clubs prefer profit. Their argument is fair enough: they should not owe a share of money that merely returns their own outlay. Former clubs prefer the full fee, and when the original price was close to nothing the distinction barely matters. On an academy player who left for a token sum, 20 per cent of the profit and 20 per cent of the fee are nearly the same number.
What "profit" is allowed to deduct
Agreeing on profit is only the start of the argument. The clause then has to say what is subtracted before the percentage is applied, and each deduction shrinks the former club's share.
| Possible deduction | Effect on the former club |
|---|---|
| The original transfer fee | The standard deduction, and the definition of a profit clause |
| Add-ons already paid to the former club | Reduces the share by money it has in any case received |
| Agents' fees paid on the sale | Can be large, and the former club cannot check them without an audit right |
| Solidarity payments and league levies | Takes several per cent off the base before the sell-on is counted |
| The cost of a past buy-out or contract renewal | Rare and aggressive: treats the buyer's wage decisions as a cost of sale |
A carefully drafted clause lists what may be deducted and stops there. A loose one says "net profit" and leaves the two finance directors to find out years later that they meant different things.
The usual sell-on clause percentage and what moves it
Ten to twenty-five per cent covers most of what is agreed between English clubs, and twenty turns up again and again: in Queens Park Rangers' clause on Raheem Sterling, in Manchester City's on Romeo Lavia, in the tribunal awards for Ethan Ampadu and Danny Ings. Nothing fixes that range. It is simply where the trade tends to settle.
The trade is against the upfront fee. A selling club offered £3 million with no sell-on or £2 million with 20 per cent is being asked to price its own confidence in the player. If it believes he will be sold for £15 million, the second offer is worth more. If it needs to pay wages this month, the first one is.
Several things push the percentage up.
- A low or nil fee. Where a club releases a youngster, or lets him join a bigger academy for a small compensation payment, the sell-on is most of what it gets. Shares well above a quarter have been reported in such cases.
- A strong seller. A Premier League academy letting a wanted teenager leave can demand more than a League One club with a cash-flow problem.
- A profit base. Former clubs accepting a clause on profit often ask for a higher percentage to compensate.
- A competitive sale. If three clubs want the player, one of them will offer the bigger share.
And a few push it down. Buyers resist anything above a quarter, because a large sell-on reduces what they will net from a later sale and so reduces what they will pay now. A club that expects to develop and resell, as many do, treats the percentage as a tax on its own business model.
The honest judgement is that the percentage is over-reported and the base under-reported. "A 20 per cent sell-on" in a headline tells a supporter very little until he knows what it is 20 per cent of.
What counts as a sale
Most disputes about sell-ons are disputes about this section of the clause. Football has many ways of moving a player that are not a simple cash transfer, and each needs its own answer.
| Event | Usual treatment | Where the difficulty lies |
|---|---|---|
| Add-ons paid after the transfer | Caught, with the share paid as each add-on is received | The former club waits years and depends on being told |
| Loan with an obligation to buy | Treated as a sale once the obligation takes effect | Whether the loan fee itself is included |
| Loan with an option to buy | A sale only if the option is exercised | Loan fees can be inflated and the purchase price kept low |
| Part-exchange or swap | Caught at the value attributed to the player | Who decides that value |
| Tribunal compensation | Depends entirely on the wording | "Transfer fee" may not cover compensation |
| Release or buyout clause paid | Depends entirely on the wording | A terminated contract is arguably not a transfer |
Add-ons and instalments
Modern fees arrive in pieces, as our guide to how football transfer fees are paid sets out. A properly drafted sell-on follows the money: the former club is paid its share of each instalment and each contingent payment as and when the selling club receives it. That means a clause triggered by one transfer can still be paying out four or five years later, when an appearance target is finally met or a trophy is won.
Loans that become purchases
Danny Ings is a useful marker. A tribunal had awarded Burnley a sell-on when he moved to Liverpool in 2015. Liverpool sent him to Southampton in 2018 on a loan carrying an obligation to buy, and the permanent transfer took effect the following summer. A clause that spoke only of "a permanent transfer" would have had to wait for that second date. One that covered "any transfer, temporary or permanent" would have reached the loan fee too.
Swaps, tribunals and terminated contracts
A swap puts a price on each player without any cash having to change hands at that price, and two clubs that both owe sell-ons have a shared interest in putting those prices low. Clauses answer this by referring to fair market value, or by naming an independent valuer.
Tribunal compensation is a specifically English wrinkle. Where a player under 24 leaves an English club at the end of his contract for another English club, having been offered new terms, his old club is entitled to compensation, set by a tribunal if the two cannot agree. Our guide to the football transfer tribunal explains how. Whether a sell-on bites on that compensation depends on whether the clause says "transfer fee" or something broader such as "any compensation or consideration".
The last row has been tested. Seydou Keita left Sevilla for Barcelona in 2008 by way of his buyout clause, and Lens, the club that had sold him to Sevilla a year earlier, claimed its percentage. The case went to the Court of Arbitration for Sport, which, as the award is generally summarised, held that on the wording of that particular agreement a contract ended by payment of a buyout sum was not the resale the clause described. Drafters took note. A current clause is likely to catch "any sum received in connection with the player's departure", precisely so that the way a release clause works cannot be used to step round it.
The free-transfer hole
A sell-on is a share of a fee. No fee, no share.
A player who runs his contract down and leaves at its end generates nothing for his current club, and so nothing for the former one. The rules that allow this, and the January date from which he can agree to join a foreign club for the following summer, are covered in our guides to Bosman and free transfers and the pre-contract agreement.
The former club can do nothing about it. It cannot compel a sale in the last year of the contract. It cannot require the current club to offer a renewal. It has no claim on the signing-on fee the player collects from his next employer, which is often where the money that would have been a transfer fee ends up.
That is why a sell-on is better thought of as a lottery ticket than as a debt. It has an expected value and that value can be large, but several ordinary events reduce it to nil: the player is injured, or stalls, or stays for ten years and retires, or is good enough to be wanted and sensible enough to wait for free agency.
Minimum payments and other patches
Former clubs with leverage write in protections. None is universal, and all are negotiable.
- A minimum payment: a fixed sum owed if the player leaves for nothing, or for less than a stated figure.
- A share of any compensation the current club receives, which catches tribunal awards and FIFA training compensation.
- Appearance and achievement add-ons in the original deal, which pay out whether or not he is ever sold and so reduce the reliance on the sell-on.
- A time-limited buy-out right in the former club's favour, letting it convert the percentage into a fixed sum on a set date.
The third is the most common and the most sensible. A lower-league club that takes its add-ons in appearances and its sell-on as a bonus has been paid for the player's success by two independent routes.
Why lower-league and academy clubs depend on a sell-on clause
Raheem Sterling was fifteen when Liverpool took him from Queens Park Rangers' academy in February 2010. The initial payment was small, reported at about £600,000, with further sums tied to his progress. QPR, then a Championship club, also kept a sell-on reported at 20 per cent.
Five years later, in July 2015, Liverpool sold him to Manchester City for an initial £44 million with a further £5 million in possible add-ons, the highest fee paid for an English player to that point. QPR had just been relegated from the Premier League. Their share arrived as a windfall from a transfer between two other clubs, about a player who had never appeared in their first team.
- 44Initial fee City paid, in millions of pounds
- 5Possible add-ons, in millions of pounds
- 20QPR's reported share, per cent
- 8.8Twenty per cent of the initial fee, in millions of pounds
Figures as reported in July 2015. Neither club published the clause, and reports of QPR's eventual total varied by about a million pounds.
The reported totals differed, and the difference is instructive. Most accounts gave QPR about £8.8 million, which is a fifth of the initial fee. Others gave a figure about a million higher, a fifth of the whole £49 million if every add-on were paid. Two newspapers reading the same percentage arrived at two sums because they applied it to two different bases, the problem set out in the fee-or-profit section above.
The business model beneath the Championship
For clubs in Leagues One and Two, and for the few in non-league with a productive academy, the sell-on is how a player's later career gets paid for at its starting point. The economics are simple and slightly brutal. A sixteen-year-old with obvious talent will leave. Under the compensation arrangements that sit within the EPPP academy system, the fixed sums a bigger academy owes for him are modest. If he signs professional terms first and is then sold, the fee is negotiable, but the buying club has most of the bargaining power.
What the smaller club can hold out for is the percentage. It costs the buyer nothing today. It ties the selling club's reward to the outcome it believes in. And when it pays, it pays out of all proportion to anything else in the budget: a single share of a single Premier League transfer can exceed a League Two club's annual wage bill.
Exeter City is the club most open about living this way. Being owned by its supporters, it publishes more than most, and it set out the Ampadu ruling on its website term by term: an initial net fee, a further sum for milestones already reached, five appearance payments, and 20 per cent of any excess on a future sale. Exeter's chairman said he was disappointed by the guaranteed figure. The sell-on was the part that kept the award from being a bad one.
The weakness is that such income cannot be planned. A club can go five years with nothing and then receive two shares in a summer. Sensible boards treat it as capital for the training ground or the academy, and do not build a playing budget on it.
Sell-ons held by big clubs: Manchester City and Jadon Sancho
The clause is no longer a small club's device. Jadon Sancho left Manchester City's academy in 2017, aged seventeen, without having played for the first team. Borussia Dortmund paid a fee reported at about £8 million, and City kept a sell-on reported at 15 per cent.
Sancho spent four seasons in the Bundesliga and in July 2021 joined Manchester United for £73 million. City's share was mostly reported at around £10 million. Work backwards and the base suggests itself: 15 per cent of the whole fee would have been closer to £11 million, 15 per cent of the gain above £8 million just under £10 million. That fits a clause on profit better than one on the fee, though neither club confirmed which. On either reading City earned more from Sancho leaving Dortmund than they had from his leaving Manchester, and they earned it from their nearest rivals.
That transfer is the template for how the richest English academies now operate. A club with dozens of scholars and young professionals cannot give them all a first-team career, and it has stopped trying to pick which ones will succeed. It sells widely and keeps a share of each.
| Player | Club holding the sell-on | Share as reported | Sale that triggered it | Year |
|---|---|---|---|---|
| Raheem Sterling | Queens Park Rangers | 20% | Liverpool to Manchester City | 2015 |
| Danny Ings | Burnley | 20%, set by tribunal | Liverpool to Southampton | 2019 |
| Jadon Sancho | Manchester City | 15% | Borussia Dortmund to Manchester United | 2021 |
| Romeo Lavia | Manchester City | 20% | Southampton to Chelsea | 2023 |
The reasoning has a financial-rules edge. Income from a sell-on arrives with no cost attached to it, because the player's registration left the former club's books when he was first sold. It is profit in the year it lands. A portfolio of twenty such clauses is, for a large club, a stream of occasional and unpredictable gains that nonetheless adds up.
City's sales also show the sell-on working beside an option to re-sign. In Lavia's case the option was reported not to be open yet when Chelsea came for him, and the percentage was what City collected. Our guide to the buy-back clause follows that deal from the other side.
Chains of clauses and FIFA's solidarity contribution
One transfer can pay several earlier clubs at once. It happens in two ways.
The first is stacking. A player who has moved three times may have left a percentage behind at each stop, and unless a clause was bought out along the way, each is owed by the club that granted it. Club C sells him and owes Club B. If Club B's own purchase agreement with Club A gave A a share of "all sums B receives in respect of the player, including sell-on income", B must then pass on part of what it has just been paid.
The second is the pass-through written deliberately. An academy that sells a teenager and expects him to be moved on quickly will ask for its percentage to follow the player through more than one sale. That is harder to enforce, since the second buyer never signed anything with the academy, so it is done by obliging the first buyer to pay a share of its own sell-on receipts.
- Buyer pays the feeThe buying club pays the selling club, usually in instalments, withholding the solidarity contribution where FIFA's rules apply.
- Solidarity distributedThe buying club pays the withheld share to the clubs that trained the player between the ages of 12 and 23.
- Sell-on to the previous clubThe selling club pays the agreed percentage of each instalment to the club it bought him from.
- Pass-throughIf that club owes a share of its sell-on income to an earlier club, it pays it on.
- Seller's netWhat remains is the selling club's proceeds, from which its own profit on the player is calculated.
The general order in which money from a single transfer can be divided. Whether each step applies depends on the agreements made at each earlier sale.
Solidarity is separate, and does not replace a sell-on
FIFA's solidarity contribution is often mistaken for a kind of statutory sell-on. It is a different mechanism with a different purpose, and a former club can be owed both.
Under the Regulations on the Status and Transfer of Players, when a professional moves during his contract in a transfer with an international dimension, 5 per cent of the fee is set aside for the clubs that trained him. It is divided by the seasons he spent with each between his 12th and 23rd birthdays, with the early years weighted at half the rate of the later ones. The full treatment is in our guide to solidarity payments in English football.
The contrasts with a sell-on are sharp. Solidarity is fixed by regulation and cannot be negotiated away. It is owed to every training club, including ones that released the player for nothing and never signed a transfer agreement. It comes out of the buyer's payment, not the seller's proceeds. And it does not apply to a purely domestic transfer of a player trained only within the same association, which is why an all-English move between two English clubs for an English-trained player produces a sell-on but no solidarity payment.
- Selling club keeps22.5million pounds
- Sell-on to the former club6million pounds
- Solidarity to training clubs1.5million pounds
Invented figures for a sale abroad with a 20 per cent sell-on on the total fee and the full 5 per cent solidarity contribution. Whether solidarity is deducted before the sell-on is counted depends on the clause.
Show the numbers
| Item | Value |
|---|---|
| Selling club keeps | 22.5million pounds |
| Sell-on to the former club | 6million pounds |
| Solidarity to training clubs | 1.5million pounds |
A club that both trained and sold a player can appear twice in that bar. Benfica's sale of Enzo Fernandez to Chelsea in 2023 is a much-reported case of the layers at work: River Plate, who had sold him to Lisbon months earlier, were reported to have kept a 25 per cent interest in his next sale, and as the club that trained him they were due solidarity as well.
Buying out a sell-on
A club that owes 20 per cent of its best player's future fee has an obvious interest in owing nothing. The route is a buy-out: a lump sum paid to the former club now, in exchange for cancelling the clause.
The timing is rarely accidental. Buy-outs tend to be proposed when the current club can see a large sale coming and the former club cannot, or cannot be sure. The current club knows who has enquired, what the player wants and how many years are left on his contract. The former club is frequently working from the newspapers.
How the sum is arrived at
Both sides are valuing the same uncertain thing. The former club's share is worth the percentage, multiplied by the expected fee, multiplied by the likelihood that a fee-paying sale happens at all, and reduced for the wait. A 20 per cent clause on a player who might fetch £25 million, with perhaps an even chance of being sold before his contract runs out, is not worth £5 million today. It is worth something nearer half that, and less again once the delay and the risk of injury are priced in.
The current club will offer below that figure. The former club will ask above it. Where they meet depends mostly on who needs the money.
Why the former club sometimes takes it
Certainty has a value of its own, and for a club with a hole in this season's budget it can be worth more than the arithmetic says. Three reasons recur. Cash now may keep the club solvent or let it sign someone in the present window. The player's contract may be running down, raising the chance of a free transfer and a share of nothing. And a bird in the hand removes the dependence on another club's honesty about what it later receives.
The cautionary tale usually told is Southampton's. Gareth Bale left for Tottenham Hotspur in 2007 in a deal built on an initial fee and substantial contingent payments. A year later Southampton, in serious financial difficulty, were widely reported to have accepted an early lump sum from Tottenham in place of what was still contingent, a settlement generally said to have included their share of any future sale. The figures have been reported differently and are not repeated here. In 2013 Bale joined Real Madrid for a fee then described as a world record, and Southampton were reported to have received no part of it.
It would be too easy to call that a blunder. Southampton's parent company went into administration in 2009. A club in that position values money at a rate no spreadsheet captures.
Where disputes come from
The current club controls every fact the former club needs. It decides whether to sell, to whom, for how much and in what form, and it reports the result. Most clubs behave properly. The clause still has to assume that one day somebody will not.
Three patterns account for most arguments.
A sale at a suspiciously low price. A player is transferred for well under his evident value to a club connected to the seller by ownership or by a wider arrangement, and the real consideration turns up elsewhere. The percentage is applied to the small number.
A swap that undervalues him. Two players are exchanged with a low value on each. If both clubs owe sell-ons, both benefit.
A fee restructured. Money that would have been transfer fee is relabelled as a loan fee, a friendly-match guarantee, a payment for a different player, or add-ons framed so that the clause arguably does not reach them.
The drafting answers have become standard in well-advised deals:
- a wide definition of the base, covering all consideration in cash or in kind received in connection with the player's departure;
- a fair-market-value term for swaps and for sales to related clubs, with an independent expert to decide if the clubs disagree;
- a duty to notify the former club of any transfer within a set number of days and to supply the transfer agreement;
- an audit right, allowing the former club's accountants to inspect the relevant records;
- an express obligation of good faith, so that a structure designed to defeat the clause is itself a breach.
Between two English clubs a dispute goes to arbitration under the leagues' and the FA's rules. Where the clubs are in different countries it goes to FIFA's Football Tribunal, with an appeal to the Court of Arbitration for Sport. These cases are slow, and the sums are often smaller than the legal costs would justify, which is one more reason a former club will sometimes settle for a buy-out.
There is also a limit on how hard a former club may protect itself. A clause that raised the percentage if the player were sold to a named rival, or required the former club's consent to any sale, would hand it influence over another club's transfer decisions. FIFA's rules on third-party influence prohibit that, and the same line is drawn for buy-back options.
How a sell-on clause appears in the accounts
For the former club, it barely appears at all. Accounting standards do not allow an asset to be recorded for income that depends on an uncertain future event outside the club's control. A sell-on is the textbook case. It is a contingent asset: possibly mentioned in a note if a receipt looks probable, and otherwise invisible until the day the player is sold.
When that day comes, the income is recognised at once. Nothing is set against it, since the registration left the books at the original sale. For a club measured against the limits described in our guide to the Championship financial rules, a sell-on receipt is as clean a profit as exists.
Profit and cash then part company. The income is booked when the sale that triggers the clause completes, but the money follows the instalment schedule of that sale, because the former club is paid its share of each instalment as the selling club receives it. A former club can report the whole gain in one financial year and collect it across the next three or four, which is worth remembering when a small club announces a windfall and then signs nobody.
For the club that owes the percentage, the clause is a contingent liability until a sale is agreed. Then it becomes a cost of that sale. The amount due to the former club is deducted from the proceeds, alongside agents' fees and levies, before the profit on disposal is struck. A club that sells a player for £30 million with a 20 per cent fee-based clause outstanding has, for accounting purposes, sold him for £24 million.
Supporters rarely see any of these numbers, for reasons that are structural and not sinister. Published accounts report one aggregate figure for profit on the disposal of player registrations, covering every sale in the year. Contingent liabilities appear as a single total for all add-ons and sell-ons the club might one day owe. The transfer agreement itself is confidential. What reaches the public is the percentage, usually from an agent or from the former club's local paper, and seldom the base.
Sell-on against buy-back and release clause
All three are regularly described as things "in a player's contract". Only one of them is.
| Clause | Document it appears in | Who benefits | What it delivers |
|---|---|---|---|
| Sell-on | Transfer agreement between two clubs | The former club | Money, if and when he is sold |
| Buy-back | Transfer agreement between two clubs | The former club | The chance to re-sign him at an agreed price |
| Matching right | Transfer agreement between two clubs | The former club | The chance to equal an offer another club has had accepted |
| Release clause | The player's own employment contract | The player | A price at which his club has to let him leave |
A sell-on is the only one of the four that never moves the player. It pays money to a club that is otherwise a bystander. A buy-back and a matching right put the former club back in the market for him. A release clause gives the player himself a fixed exit, which any club can use.
They combine freely. An academy graduate can be sold with a percentage and an option to repurchase, and can then sign a contract at his new club containing a figure at which he may leave. Should that figure be met, the former club's share becomes payable on it, provided the sell-on was drafted widely enough to catch it.
Further guides to contracts, fees and registration are gathered on the England hub, with wider coverage of the game in our football section.