Transfer requests and signing-on fees in the premier league and football league

by James Severn

Signing-on fees are a well-known part of the football landscape and are a feature of many domestic and international transfers. In the football market specific rules have been created to govern how and when such payments are made and what happens when a player’s registration is transferred before the end of the playing contract.

In both the English Premier League (“EPL”) and the English Football League (“EFL”) signing-on fees must be paid in equal annual instalments over the period of the contract and the default position is that where a player is transferred before the expiry of their playing contract, the unpaid element of the signing-on fee must be paid in full by the selling Club.

This article discusses what happens to unpaid signing-on fees for players in the EPL and EFL when the registration of the player is transferred and the circumstances in which a signing on fee can be forfeited following a transfer request.

The English Premier League Rules

If a player is sold when part of the signing-on fee has not been paid, the unpaid balance must be paid to the player unless:

  • The transfer is consequent upon the player breaching the terms of his contract and the club has terminated his contract; or
  • The transfer is consequent upon the player’s written request to leave the club;

If there is a dispute as to whether the unpaid signing on fee is payable when the player is sold, either the Club or the Player can ask the Board of the Premier League to make a decision.  If either party is unhappy with the decision of the Board, there is a right of appeal to the Premier League Appeals Committee.

The English Football League Rules

Where an EFL player is transferred before the expiry of his playing contract the balance of the signing-on fee is not payable where:

  • A Player’s registration is transferred by reason of their written request; or
  • There is a proven statement in the media by the Player, or their Intermediary, to the effect that the Player wants to join another Club; or
  • The Player leaves a Club by reason of a breach by him of his contract.

If the selling club refuses to pay the remaining signing on fee because the Player made a transfer request, the Player can ask the Player Related Dispute Commission (the “PRDC”) to considers the circumstances and if the PRDC are satisfied that his request for a transfer was made on “reasonable grounds”, they may decide that the selling Club should pay the outstanding balance of the signing-on fee.

Similarly, if a club feels that the balance of the signing-on fee should not be payable they may apply to the PRDC who can decide that the payments should not be made. This is most unlikely in practice as a Club will invariably refuse to pay leaving the Player to take further steps.

Either party may appeal the decision of the PRDC to the League Appeals Committee.

Potential Difficulties?

The rules in the EPL and EFL have small but important differences and Players and Clubs must be alive to them, particularly as we approach the January transfer window.

Both the EFL and EPL rules are however somewhat uncertain when they are considered in more detail:

i) The English Premier League

The starting point in the EPL rules is that a player will forfeit the balance of the signing-on fee if they make a written transfer request and is sold as a consequence of that request. Unlike in the EFL there is no rule that allows a Club to withhold the unpaid signing-on fee if a Player or his Intermediary makes a statement to the media that he wants to move on.

It is unusual to see a Player writing a letter to a Club asking to be transferred. However, what if a Player were to make a statement, in writing, through his social media channels in which he says he would like to move? Could a Club treat this as a written transfer request and refuse to pay the balance of the signing on fee?

If a Club refuses to pay the remaining signing on fee then the player can ask the EPL Board to decide whether it should be paid. There is no guidance in the EPL rules as to how the Board should make this decision and what conduct should mean that the player forfeits his signing on fee. It is likely however that the Board will consider the conduct of each party and decide if there is a good reason to depart from the usual rule that the balance must be paid.

ii) The English Football League

In the EFL there are more circumstances in which a player can lose the unpaid signing-on fee. In addition to a written transfer request, a Player forfeits the unpaid signing on fee where they or their Intermediary makes a proven statement in the media that he wants to join another club.

This raises a number of difficult questions. What happens if someone connected to the Player (but not his Intermediary) makes a statement to the media? What is a “statement”? What is the “media”? Is social media included in the definition of “media”? Can a player say that he is unhappy at his current club without risking losing the unpaid signing on fee if he is then transferred?

None of these questions is addressed in the EFL Rules, which simply say that the PDRC must be satisfied that a transfer request was made on “reasonable grounds”. There is no guidance as to what constitutes “reasonable grounds” and decisions on all of the questions are ultimately a matter of the PDRC’s discretion.

Conclusion

Written transfer requests are uncommon in today’s market; not least because of the impact this can have on a player’s reputation and in the dressing room. As discussed above, the rules on when unpaid signing on fees should be paid following a transfer request are uncertain.

Players and their representatives looking to engineer a move must exercise caution in their dealings with clubs, the media and with social media if they are to avoid losing significant parts of the player’s signing-on fee.

Clubs should be alive to the issues raised above. Where a player has made it clear that they wish to leave, either expressly, through their conduct or via social media, they should carefully consider if the balance of the signing-on fee should be paid if the player is then transferred.

If you have any questions about this article, please contact James Severn whose details appear below.

This article is filed under:  Industry news, Press releases, Publications

About the contributor

  • James Severn Partner

    James is a sport and litigation solicitor and a partner in our Marine Commercial Litigation group. James has a broad commercial litigation and dispute resolution practice with a particular focus on shipping and insurance disputes...

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