Arsenal set to profit from sell-on clause as Everton eye deal

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Daily Cannon

·14 April 2024

Arsenal set to profit from sell-on clause as Everton eye deal

Arsenal could be set to profit from a sell-on clause in Daniel Ballard’s contract, with Everton showing an interest in the Sunderland defender.

FootballTransfers reports that Everton have a concrete interest in signing Sunderland’s Daniel Ballard in the summer as a replacement for Jarrad Branthwaite.

Everton are reportedly watching Ballard very closely, with Sunderland expected to demand around £20m for the former Arsenal defender.

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That would be good news for the Gunners, with Arsenal in line to profit from a potential transfer.

According to Football.London, the Gunners negotiated a ‘significant’ sell-on clause into Ballard’s transfer in 2022.

Though there was no official word on the exact percentage Arsenal had managed to negotiate, you’d expect to get further details on that if and when Ballard’s sale materialises.

Arsenal only brought in £2m for Ballard’s initial transfer, but it looks like they could be set to add to that total in the coming transfer windows.

Ballard has made 39 appearances for Sunderland in the Championship this season, on top of his international appearances for Northern Ireland.

The centre-back is a regular for his country, most recently starting in a friendly against Scotland during the last international break.

Understanding sell-on clauses in Premier League football

A sell-on clause is a common contractual agreement inserted into a player’s transfer agreement between two clubs. Its basic function is to ensure that the selling club receives a portion of any future transfer fee if the player moves on to another team.

How it works:

Negotiation: The selling club and buying club negotiate a percentage figure for the sell-on clause during the initial transfer. This percentage usually ranges from 5% to 20% of the future transfer fee. In some cases, it can be much higher, as in the case of Arsenal’s 50% sell-on clause that is in Marquinhos’ loan deal, should Fluminense decide to make it permanent.
Triggered clause: If the player is then sold to a third club, the previous selling club becomes entitled to the agreed percentage of the new transfer fee.
Example: If Club A sells a player to Club B for £20 million with a 10% sell-on clause, and Club B later sells that same player to Club C for £30 million, Club A would receive £3 million (10% of £30 million).

Why use sell-on clauses?

Smaller clubs: Sell-on clauses offer protection and potential financial benefits for smaller clubs selling promising young players to bigger clubs. They guarantee a future share in a player’s success if they develop and are sold for a significant profit.
Financial safety: Sell-on clauses can provide some financial security to selling clubs, allowing them to recoup more of their initial investment and reinvest those funds back into the club.
Negotiation leverage: Sell-on clauses can sometimes serve as negotiation leverage. A selling club might agree to a lower initial transfer fee in exchange for a higher sell-on percentage.

While sell-on clauses are common, they are becoming less prevalent due to recent FIFA regulations aimed at curbing third-party ownership (TPO) of players.