Buy-out Clauses in Professional Football Player Contracts: Questions of Legality and Integrity

Abstract

The sporting industry is one of the most lucrative in the world. With growing social and media interest in sport, the values and salaries of professional players continue to increase exponentially, and fierce competition within individual sports makes the process of negotiating player contracts critically important. The inclusion in contemporary times of what are known as ‘buyout clauses’ in professional sporting contracts raises questions of both legality and integrity, both of which this article will explore in the context of Association Football (Soccer). Such clauses permit a player or another club to pay a stipulated sum in the contract and effectively terminate the agreement, irrespective of its stipulated duration. From a legal perspective, buyout clauses can potentially be classified as liquidated damages clauses or penalties – which may render them unenforceable – further muddying the regulatory framework in which such clauses operate in a sporting context. More broadly, buyout clauses challenge the very integrity of sport and the rationale underpinning sporting player contracts in the way they foster player disloyalty, promote competition monopoly, undermine the purpose of longer-term player contracts and over-commercialise sport. This article will argue that buyout clauses not only sit uncomfortably with the law of contract and the rules of football but challenge the very integrity of the sport itself.