Permanent, loan, free: football transfer types explained

What is a permanent transfer?

A permanent transfer is when a club pays a fee to sign a player who is still under contract elsewhere. The player leaves the old club for good and signs a fresh contract with the new club.

A move like this is really made of separate agreements. The clubs agree a fee, and the player agrees wages and other terms with the new club. If the player says no, the move does not happen, even when the clubs have shaken hands.

The fee is rarely a single figure. Common parts include:

• A fixed fee, often paid in instalments.
• Add-ons: extra payments that fall due if the player reaches a set number of appearances or the team achieves something specific.
• A sell-on clause: a share the old club receives if the player is sold again later.
• A buy-back clause: the old club's right to re-sign the player for a fee written down in advance.

To understand how a fee takes shape, our market value guide is a good place to begin. Value and the fee actually paid are not the same thing.

How does a loan work?

On loan, a player turns out for another team for a set period while the contract stays with the parent club. When the period ends, the player goes back unless something else has been agreed.

A loan gives a young player minutes on the pitch. For the parent club it frees a squad place or eases the wage bill. The agreement usually covers these points:

• Loan fee: an amount paid by the borrowing club, though not every deal has it.
• Wage split: which club pays what share of the wages.
• Option to buy: the borrowing club's right to sign the player at the end for a fee set in advance.
• Obligation to buy: the option becomes compulsory once a certain condition is met.
• Recall clause: the parent club can ask for the player back before the period is over.

An option is a right. An obligation is a duty.

What does a free transfer mean?

A free transfer is when a player whose contract has ended joins another club without a fee. The player is a free agent, so the new club owes the old club nothing.

That does not make the move costless. A club that pays no fee can often afford to offer a larger signing-on fee or higher wages, and the agent's share is a separate item.

A player nearing the end of a contract may, where the rules allow, agree terms with the next club ahead of time. When that becomes possible depends on the country and the regulations in force. This is why clubs try to extend the contracts of players they rate before those deals run down.

What do release clauses and other terms mean?

A release clause is a fixed fee written into the contract in advance. A club that pays it can talk to the player without the current club's permission.

A few more terms come up again and again in transfer news:

• Signing-on fee: a payment made to the player when the contract is signed.
• Pre-contract: an agreement for the coming period made by a player whose deal is about to end.
• Training compensation: a share that clubs who developed a player in their youth can receive from later moves.
• Transfer window: the set periods in the calendar when clubs can register players.

In most of these talks the player has a representative alongside them. We cover that role in what does a football agent do.

How does this work in Kickhood?

Kickhood is not released yet. It is a footballer life simulator being prepared for iPhone, and what follows is the general way the game is designed to work.

When an offer arrives in the game, the type of move is stated clearly: permanent, loan or free. Each type shows its own terms. A sale can carry a sell-on share, and a loan can carry an option to buy.

The contract offer is shown item by item as well: wages, signing-on fee, bonuses, length, release clause and the role you are promised in the team. You can negotiate these items. Push too hard and the club may walk away. The items balance each other, so raising an item usually lowers another.

If your contract runs out you become a free agent and can receive free transfer offers.

For the idea behind the genre, see what is a footballer life simulator, or visit the home page.

FAQ

Is a transfer fee the same as market value?

No. Market value is an estimate, while the transfer fee is the amount the clubs actually agree. The time left on the contract, the selling club's need for money and the number of interested buyers can all pull the fee above or below the value.

Can a loan player play against their parent club?

That depends on the loan agreement and on the competition's rules. Some agreements include a clause that stops the player facing the parent club, while some competitions do not allow such clauses.

Does a player earn more on a free transfer?

Possibly, but it is not certain. A club that pays no fee may have more room in its budget for wages and a signing-on fee. On the other hand, waiting for a contract to end carries risk, because an injury or a dip in form can thin out the offers.

Can a player refuse a transfer?

Yes. Even when the clubs agree between themselves, the player still has to sign the new contract. If the player is unhappy with the terms, the city or the promised role, the move does not go through.

This article is general information, not legal or financial advice. Rules differ by country and league.