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What is a release clause in football?

06:32 GMT+3 21/12/2021
Juan Ferrando FC Goa ISL 8
A release clause is also referred to as a 'buy-out' clause...

After Antonio Habas put down his papers at ATK Mohun Bagan, the Mariners moved swiftly in appointing a new head coach in FC Goa's Juan Ferrando. The green and maroon brigade activated his release clause in the contract which is believed to be around one crore rupees, a figure that was agreed by FC Goa and Ferrando when the coach penned his contract with the Gaurs. This means that the Spanish tactician will leave Goa and join Bagan in the next couple of days.

What is a release clause?

A release clause is a set fee that a buying club can pay a selling club in order to contractually oblige them to offload a player or a coach. The fee is set while the contract is signed which can be revised at a later date upon the consent of both club and player/coach. A release clause is also known as a buy-out clause.

In Ferrando's case, there was a clause in his contract which mentioned that the coach would be free to leave Goa in the final year of the agreement if a club pays one crore as a buy-out fee.

Is it compulsory to have a release clause?

No, it is not compulsory to have a release clause in a player/coach's contract. However, on most occasions, both the club and the player/coach agree to have a release clause inserted so that it benefits both parties if the option is triggered.

In Ferrando's case, Goa are compensated financially as they receive one crore rupees. The coach, meanwhile, gets to work on a new challenge with a salary that is believed to be couple times more than what he was earning with the Gaurs.

What would've happened if Ferrando did not have a release clause?

If Ferrando and Goa had not agreed upon a release clause, ATK Mohun Bagan would have found it tough to secure the Spaniard's services. Since there is no way they could break the contract between Ferrando and Goa, the Mariners would have had to approach Goa and negotiate with them, which would've proved tough as no club likes to change coaches midway through the season unless results are taking a nosedive.

A few examples

In European football, most players have a release clause in their contract. For example, Neymar joined PSG when the Parisians paid his buy-out clause of $250 million. Meanwhile, Chelsea also paid Kepa Arrizabalaga's release clause of $92m to Athletic Club when they signed the keeper in 2018.

While in Spain, each player must have such a fee written into their deal, in France the contrary is true. In fact, it is illegal for such clauses to be included in contracts. So Kylian Mbappe does not have a release clause in his PSG contract. However, in England, this is not the case, and it is entirely upon the player/coach and the club involved if they want to insert a release clause or not.

It must also be noted that the release clause is not always binding if all the parties involved come to a mutual understanding. For example, Cristiano Ronaldo had a release clause of one billion euro during his time at Real Madrid. But the club did not stick to their demands and allowed the Portuguese to leave for around £100m to Juventus.

Madrid continue to tie down their players with exorbitant release clauses to fend off other rival clubs. Karim Benzema has a buy-out clause of £846.7M, meanwhile, Luka Modric, Brahim Diaz, and Federico Valverde have a release fee of £634.9M. Barcelona's Pedri also has a release clause amounting to £846.7M. This means during a transfer window, these players can join any other outfit in the world if the signing club agrees to pay that specified amount.