Buy Back Clauses

[The Left Back]

I am thinking this needs it's own thread as buy back clauses seem to be generating a lot of heat on various threads.

It seems like this is a relatively new concept but at the same time a central plank in our strategy to buy 18-20 year olds from top clubs.  Personally I think they will turn out to be a good thing for us, because I don't think we'd be getting these players without the clause.

Which leads me to my question.  In the history of buy back clauses have any actually been activated?  Not just with us but anywhere?  I am sure there must be but my knowledge of other clubs and leagues is not up to task.  Someone help me out..

The reason I ask is I just can't imagine City buying these players back from us, it's not the way they roll.  Take Lavia - they have Rodri and Phillips who play in that position.  Both age 26, should be good for another 4-5 years there, by which time I imagine the clause may have expired and/or Lavia has attracted attention at a fair market rate from Chelsea/Liverpool/Barcelona.

[Toadhall Saint]

A: Not that I’m aware of.

[S-Clarke]

Buy Back clauses have happened quite a bit over the years but never seem to be activated, a few which spring to mind most recently:

Douglas Luiz from Man City to Villa. City put in a buy-back clause in that one, but obviously have never got round to activating it.

Sergio Regulion had a smallish buy-back fee put into his transfer from Real Madrid to Spurs. I think it was in the remit of £25m.  never activated.

Kelechi Inanacho - City stuck a buy-back of £40m in that deal,  never been triggered either.

Marc Guehi has a buy-back in his contract with Palace.

The thing with buy back clauses is that clubs can't plan for them coming back, they have to move on without them - so even if Lavia turns into a superstar for example, if Man City don't need to fill their CM slot then they will probably not exercise it. Ditto at Chelsea, if they feel they're stocked at RB and Tino is a bit of a superstar with us, then they wouldn't really pursue it. 

I know people say these are glorified loan deals, but they're not really. These are our players, the selling clubs have an option to take them back if they want, but given the fast paced world of football and the PL they will likely baulk out their squads with more established players before these lads are even ready for that level.

Edited 1 September, 2022 by S-Clarke

[gio1saints]

Isnt it more the case that even if the mother club does not need the player s in the examples above they can still take him back if his open market value is greater than the buyback value and just tehn sell him on - or more likely negotiate a fee with us to not enforce the buy back clause? That's assuming a buyback price is set at outset of course and its not just "first refusal" on whatever price we set or a % of sell on.  

[Barsiem]

3 minutes ago, gio1saints said:

Isnt it more the case that even if the mother club does not need the player s in the examples above they can still take him back if his open market value is greater than the buyback value and just tehn sell him on - or more likely negotiate a fee with us to not enforce the buy back clause? That's assuming a buyback price is set at outset of course and its not just "first refusal" on whatever price we set or a % of sell on.  

What player would agree to that though? You’re not going to sign for your previous club and then immediately sign for another one just so your previous club can make a few quid.  

[S-Clarke]

11 minutes ago, gio1saints said:

Isnt it more the case that even if the mother club does not need the player s in the examples above they can still take him back if his open market value is greater than the buyback value and just tehn sell him on - or more likely negotiate a fee with us to not enforce the buy back clause? That's assuming a buyback price is set at outset of course and its not just "first refusal" on whatever price we set or a % of sell on.  

It's not out of the realms, but it's an incredibly unlikely situation. 

[Lord Duckhunter]

I heard or read (can’t remember which)an interview with an agent who basically said they’re an insurance policy in case the player becomes world class. Buy back clauses mean you can get the player back if you want, but just as importantly you can stop him strengthening a rival. Mo Salah & KdB spring to mind, let go by Chelsea, now world class & plying their trade with 2 of their rivals. In the extremely unlikely event that Tino or one of the others kicks on to that sort of level, going back to the selling club is already a done deal. 

[wild-saint]

You can imagine it now, city activate 4 x buy back clauses at 9pm on the 31st January leaving  us with half a team.

[beatlesaint]

I wonder if the two year wait before a club can even think of exercising the clause is a standard or minimum thing, like we have with Tino and Chelsea.

[stevegrant]

15 minutes ago, beatlesaint said:

I wonder if the two year wait before a club can even think of exercising the clause is a standard or minimum thing, like we have with Tino and Chelsea.

Think that's pretty standard, tbh. The Erling Haaland one at Dortmund was for 18 months, as he was signed in the January window, but it generally ensures the buying club gets at least two seasons from the player.

[Patches O Houlihan]

4 hours ago, gio1saints said:

Isnt it more the case that even if the mother club does not need the player s in the examples above they can still take him back if his open market value is greater than the buyback value and just tehn sell him on - or more likely negotiate a fee with us to not enforce the buy back clause? That's assuming a buyback price is set at outset of course and its not just "first refusal" on whatever price we set or a % of sell on.  

The parent club would not be able to sell the player in the same window (although perhaps a loan with option to buy might be a thing?)

The buy back clause also requires the player to be willing to move and agree terms...

[ant]

At the end of the day if any given buyback is activated, the player will have had to have been pretty godly for us.

We're a selling club anyway - we'll never be able to hold world class talent for long.

Yes, it means we wouldn't see a VvD-esque fee. But 2 years of top-class service from a player and turning a profit isn't to be sniffed at.

I can see why some would tend to think that means a player's never truly ours. But they no less are than, say, Mane et al were.

[Badger]

It's an interesting market that we've tapped into. We need to make full advantage of it whilst we can as I suspect at some point The FA, UEFA, whoever will look to regulate it to prevent clubs simply being 'nursery sides' for larger clubs and abuse of this system. 

How they regulate it is open to debate, possibly only one buy back clause contract in force with a particular club.

This and the 'multi-club' model is bound to come under scrutiny at some point. 

[St Chalet]

Buy back clauses are basically insurance policies against selling an asset too cheap if it turns out to be brilliant. I suspect it allows us to buy opportunistic talent, and the slller to hedge their bets.

Win Win

[Jimmy_D]

The only way a buy back clause gets activated is if they’ve been brilliant for us, in which case we’ve been paid 30 odd million for a player to be brilliant for us for a couple of seasons. Also, unlike a loan, the player has to actually want to go back for it to be activated.

Considering the alternative is not having these players at all, and even having 4 or 5 years left on a contract hasn’t been enough to stop players leaving us before anyway, I don’t see any downsides for a club in our current position.

[St. Neil]

Isn't the most famous one Real Madrid selling Morata to Juventus for £20m activating the clause buying him back for £30m and then after a while selling him to Chelsea for £60m.

[whelk]

What happens in the Chelsea Lavia situation? I know v little about how these clauses work. Assume they can’t say buy back in January for £40m? And if someone bids much higher are we obligated to take City offer?

[verlaine1979]

I hope we have clauses to prevent City just buying them back from us and selling on in the same window. It's fine for them to have an insurance policy in case they want someone back in their squad, but not to play market arbitrage at our expense.

[Dman]

2 hours ago, whelk said:

What happens in the Chelsea Lavia situation? I know v little about how these clauses work. Assume they can’t say buy back in January for £40m? And if someone bids much higher are we obligated to take City offer?

I don’t know the ins and outs of the deal for Lavia. But as an example, if City have set a buy back of £40m, we are legally bound to accept an approach from city of 40m. We could theoretically also accept an offer from say Chelsea at £50m at the same time and let the player decide where he goes. 
 

in the case of Tino, the buy back doesn’t activate until a certain date. So we aren’t legally bound to accept anything before that date. We can still sell him before, if we want. 

[Saint_clark]

8 hours ago, verlaine1979 said:

I hope we have clauses to prevent City just buying them back from us and selling on in the same window. It's fine for them to have an insurance policy in case they want someone back in their squad, but not to play market arbitrage at our expense.

This is one of the reasons I hate that we've started to use this tactic. If Lavia is already valued at £50million by some clubs then next summer he could be £70-80million. City sign him for £40million and immediately flip him for double that, screwing us out of £40million. 

This technique is fine and dandy in theory but it's going to make us fans miserable in the long run mark my words, we'll get good players for one season it'll be like having a new team of loaned mercenaries every year. 

[revolution saint]

10 hours ago, whelk said:

What happens in the Chelsea Lavia situation? I know v little about how these clauses work. Assume they can’t say buy back in January for £40m? And if someone bids much higher are we obligated to take City offer?

Pretty sure I read that City also have a clause that gives them the opportunity to match any bid that we accept. So the buy back might not kick in till 2024 but if we choose to cash in next summer when Chelsea bid 100 million then we’re obligated to invite City to match that bid.

[whelk]

1 hour ago, Saint_clark said:

This is one of the reasons I hate that we've started to use this tactic. If Lavia is already valued at £50million by some clubs then next summer he could be £70-80million. City sign him for £40million and immediately flip him for double that, screwing us out of £40million. 

This technique is fine and dandy in theory but it's going to make us fans miserable in the long run mark my words, we'll get good players for one season it'll be like having a new team of loaned mercenaries every year. 

Although you could look at it that we are getting promising players we wouldn’t ordinarily get,  so say Lavia goes back for £40m and then goes for £60m we stil! have £40m we wouldn’t otherwise have had regardless that lower than true new value.

[whelk]

8 hours ago, Dman said:

I don’t know the ins and outs of the deal for Lavia. But as an example, if City have set a buy back of £40m, we are legally bound to accept an approach from city of 40m. We could theoretically also accept an offer from say Chelsea at £50m at the same time and let the player decide where he goes. 
 

in the case of Tino, the buy back doesn’t activate until a certain date. So we aren’t legally bound to accept anything before that date. We can still sell him before, if we want. 

Cheers

[whelk]

25 minutes ago, revolution saint said:

Pretty sure I read that City also have a clause that gives them the opportunity to match any bid that we accept. So the buy back might not kick in till 2024 but if we choose to cash in next summer when Chelsea bid 100 million then we’re obligated to invite City to match that bid.

Thanks 

[Barsiem]

1 hour ago, Saint_clark said:

This is one of the reasons I hate that we've started to use this tactic. If Lavia is already valued at £50million by some clubs then next summer he could be £70-80million. City sign him for £40million and immediately flip him for double that, screwing us out of £40million. 

This technique is fine and dandy in theory but it's going to make us fans miserable in the long run mark my words, we'll get good players for one season it'll be like having a new team of loaned mercenaries every year. 

I’ve made this point already… but why on Earth would any player agree to this?  What’s in it for them?  City say, we’ll buy you back, give you £5m as a signing bonus, and then sell you on for £80m.  Whereas the club that is willing to pay £80m could just offer Saints £70m direct (which you have to think we’d accept if the alternative is to lose him for £40m) and the end club could give the £10m saving direct to the player.  The scenario makes no sense…. Financially it will always be better for Lavia to go straight to the end club

Only way City activate their buy back clause is if they want the player for their squad, and that tbf is a distinct possibility in a couple of years time

[VectisSaint]

On 01/09/2022 at 13:48, wild-saint said:

You can imagine it now, city activate 4 x buy back clauses at 9pm on the 31st January leaving  us with half a team.

Buy-back clauses cannot be activated before a set term that forms part of the contract. The term is based on "transfer windows", and is commonly set to 2 years (4 transfer windows). There are apparently examples of 18 months. So to allay your fears unless Saints have agreed to a ridiculously short clause (1 transfer window) there is no way City could do what you suggest. I would suggest the earliest they could do what you fear is during the Summer transfer window of 2024.

[derry]

If we have got any sense we'll not kill the goose that lays the golden egg. Just play fair with the club that sold us the talented young player for a reasonable price and co-operate with them regarding any high bid. Treat the parent club with respect so that we keep the flow going and make it plain we have no intention of taking advantage.

[Saint IQ]

Think they have become a thing since KDB and Salah left Chelsea and turned out to be world class players within a few years. Big clubs farming talent realised they have to do this as an insurance policy. 

[Warriorsaint]

On 01/09/2022 at 14:40, Lord Duckhunter said:

I heard or read (can’t remember which)an interview with an agent who basically said they’re an insurance policy in case the player becomes world class. Buy back clauses mean you can get the player back if you want, but just as importantly you can stop him strengthening a rival. Mo Salah & KdB spring to mind, let go by Chelsea, now world class & plying their trade with 2 of their rivals. In the extremely unlikely event that Tino or one of the others kicks on to that sort of level, going back to the selling club is already a done deal. 

What a reasonable point. Is this actually duckhead? Surely an imposter? 

[Mr X]

What happens if the other club activates the buy back clause but the player doesn't want to go? 

[Saint Garrett]

2 hours ago, Mr X said:

What happens if the other club activates the buy back clause but the player doesn't want to go? 

He doesn’t go. 

[Badger]

IF City have buy back clauses to sign one of the players for £40m or set amount in two years, presumably the contract will also prevent Saints selling to anyone else before 2024, or do City have an option to match the bid, or exercise their option sooner ? 
 

Probably an uncertainty around this as it’s new ground, but interested if anyone knows.

[Saint Garrett]

8 minutes ago, Badger said:

IF City have buy back clauses to sign one of the players for £40m or set amount in two years, presumably the contract will also prevent Saints selling to anyone else before 2024, or do City have an option to match the bid, or exercise their option sooner ? 
 

Probably an uncertainty around this as it’s new ground, but interested if anyone knows.

I think “normally” they’ll have a first option clause too, I.e the opportunity to match any other bid outside of the agreed timeline where the buy back clause is valid.

They also have a sell on clause I think, so I’d guess if  it was outside the “buy back period” we agreed to sell for £50m, and they had a 10% sell on, they could match it and buy him for £45m. But of course these clauses aren’t standard, each one will have terms written into them. 

[Badger]

This being the case, then it would be in the clubs interest to sell on quickly before the Buy Back clause is triggered (if timed). 
 

Expect to see SR being busy most summers then

[trousers]

3 hours ago, Mr X said:

What happens if the other club activates the buy back clause but the player doesn't want to go? 

 

51 minutes ago, Saint Garrett said:

He doesn’t go. 

If the player says "no" to the buy back request, does that terminate the buy back clause there and then or can the club keep coming back with a buy back request as many times as it likes (within any designate timeframe window). In other words, do they have just one buy-back 'card' they can play (per player) or more than one?

I'm just thinking of a contrived example where we have a player that is valued at, say, £80m on the open market and a club with a £40m buy-back option.... Could we say to the player: "hey lad, say 'no' to the buy-back and we'll slip you a £10m 'reward' before selling you for £80m to this other club"...?

Edited 7 September, 2022 by trousers

[CB Fry]

7 hours ago, trousers said:

 

If the player says "no" to the buy back request, does that terminate the buy back clause there and then or can the club keep coming back with a buy back request as many times as it likes (within any designate timeframe window). In other words, do they have just one buy-back 'card' they can play (per player) or more than one?

I'm just thinking of a contrived example where we have a player that is valued at, say, £80m on the open market and a club with a £40m buy-back option.... Could we say to the player: "hey lad, say 'no' to the buy-back and we'll slip you a £10m 'reward' before selling you for £80m to this other club"...?

I think this is incredibly contrived, well done.👍

I can't see how/why another club would need to offer (say) double vs the buy back clause amount.

It works pretty much as a release amount. City know they can but back for £40m and they have that baked in. In the unlikely event the player doesn't want to go back there and wants to go to Liverpool instead, then that's the defining factor, fees don't need to come into it. Liverpool don't need to offer twice as much because the player would already be clear in where he wants to go, and interested clubs just need to hover around the release amount.

I don't think you will get bidding wars with players with very specific buy-back amounts. I just don't see any scenario where Man U and Liverpool get into a £60-80m bidding war for a player that doesn't want to go back to Man City.

If there is competition then it would be at player salary/terms level and both clubs would pay the £40m release clause amount. At every stage City will be there, ready to buy back and talk to the kid about his future. If you're thinking next summer, say, I think City will be in our players ears to complete 2 years with us and not jump off to Chelsea or Newcastle etc.

In summary we get the best part of the deal now in getting a good player for a couple of years. But a fee ceiling is pretty much locked in as far as I can see.

I've got no doubt that one of these boys may well be "worth" £80m or whatever but we ain't going to get that, we'll get what City set it at. Sure people on here will be sobbing about how unfair it is but the point is we got the player in the first place.

Edited 8 September, 2022 by CB Fry

[saint1977]

27 minutes ago, CB Fry said:

I think this is incredibly contrived, well done.👍

I can't see how/why another club would need to offer (say) double vs the buy back clause amount.

It works pretty much as a release amount. City know they can but back for £40m and they have that baked in. In the unlikely event the player doesn't want to go back there and wants to go to Liverpool instead, then that's the defining factor, fees don't need to come into it. Liverpool don't need to offer twice as much because the player would already be clear in where he wants to go, and interested clubs just need to hover around the release amount.

I don't think you will get bidding wars with players with very specific buy-back amounts. I just don't see any scenario where Man U and Liverpool get into a £60-80m bidding war for a player that doesn't want to go back to Man City.

If there is competition then it would be at player salary/terms level and both clubs would pay the £40m release clause amount. At every stage City will be there, ready to buy back and talk to the kid about his future. If you're thinking next summer, say, I think City will be in our players ears to complete 2 years with us and not jump off to Chelsea or Newcastle etc.

In summary we get the best part of the deal now in getting a good player for a couple of years. But a fee ceiling is pretty much locked in as far as I can see.

I've got no doubt that one of these boys may well be "worth" £80m or whatever but we ain't going to get that, we'll get what City set it at. Sure people on here will be sobbing about how unfair it is but the point is we got the player in the first place.

I think the whole SR model is about turning frequent £20-30m player trading profits every couple of years. Some buys won’t turn out at their maximum potential for various reasons (as with all players, major injuries, mental health and development) but at the level of up and coming elite players they are in the market for they believe more will have the mental and physical attributes to succeed given greater exposure to full PL football. They’ve also arrived at the time when the academy is starting to look as if it will bear some serious fruit for the first time since JWP/Chambers/Shaw era. 

That revives the FFP headroom that we lost under Reed with the Juve/Lazio wages and no return, keeps the wages headroom to perhaps one major contract extension for players who come in and do well but slower burn than Lavia or ABK look like they’ll be. Given the way the PL has gone with City/Chelsea and co, it’s a perfectly reasonable strategy and just enjoy watching these players in an SFC shirt whilst we can.

Its not new - some of comments on here about when Krueger said the club were proud to see Bale and Mane thriving in the CL final were daft - but SR is putting more initial investment behind it until the £15/20/25/30m profits become more frequent and we move back to mainly self-sustaining. Crunch will be if either the club get sucked into trouble this season (wage bill will be reduced though as the younger players will be on medium level salaries at best and wage bill to turnover has been reduced by Semmens over last 3 years tbf since Les left) or a batch of younger buys mostly doesn’t work out. Either scenario might require a fresh injection of funds but I guess SR might be able to if necessary.

Whichever way, it’s miles better than 2017-21.

[trousers]

1 hour ago, CB Fry said:

I think this is incredibly contrived, well done.👍

Cheers! #missionaccomplished 

[skintsaint]

2 hours ago, CB Fry said:

If there is competition then it would be at player salary/terms level and both clubs would pay the £40m release clause amount.

About a week after we received allegedly a 50m offer 😄

[Saint86]

I think there has been a couple of examples historically where they've been activated, but for the life of me I can't remember them. 

I would say its very likely lavia's will be activated. City don't like old players, and in 3-4 years time he'll be some player, whilst city's existing CM's are approaching their 30's.

[Behind Enemy Lines]

Haven’t we now got the right man to go out and bring this talent to us before the big boys sign them, then sell to us with a buy back clause?

We’ve shown we will play them now, so that will help recruit them directly, first. 
 

Do I need to add ‘to be fair’ to this post to make it valid, as that seems the case here recently? 😂 

[goodymatt]

I think we just have to accept that buy back clauses are required to access the talent locked down at City and Chelsea’s huge academies. In many cases I don’t think the buy back clauses will be actioned, Lavia looks like he will develop into a player good enough for City (which from 4.5 games and at 18, is rather impressive!). 

The more of these players we bring in and develop the more we should see improvements on the pitch (if their development goes to plan - not all will of course), the more attractive we are to the next ones. I think Lavia may end up going for under market value but I’d say he’s  going to be the next flagship example of why coming to Saints is a great option for young players. This in turn should hopefully increase our opportunities in the market to attract young talent. We had heavily relied on Joe Shields’ contacts this window

We are going to be in a position where we are making good money on top quality young players, giving us funds to improve the squad and over time hopefully be at a level where the next tier down from the best ones might actually stay. Another good point raised above is that Joe Shields may help us get some of these players earlier going forward and that would then remove the buy back transfer sale ceiling. Buy back is just a necessary vehicle atm.

In summary we have the right guy in place to identify talent to get the most out of our model, which truly does look sustainable. Surprisingly we are already seeing development of players ahead of schedule. Lavia and ABK look well ahead of my initial expectations, for example. It’s quite exciting and much preferred to the recent years model of limiting transfer funds to average players we overpay and can’t shift for nominal fees. We just need to stay up this season to keep the momentum going in the right direction.