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A Strategic Rationale for the Use of Sell–On Fees in European Sports

  • Oliver Gürtler


    (Department of Economics, University of Cologne, Cologne, Germany)

In European team sports, contracts that govern the transfer of a player from one club to another often contain a clause specifying a sell-on fee. Such clause ensures that the selling club profits from a future transfer of the player. This article gives possible explanations for the use of sell-on fees. Besides rather obvious explanations based on risk considerations and wealth constraints, the article shows that a sell-on fee could be used for strategic reasons. In particular, the clubs may agree on a sell-on fee since it affects the behavior of the buying club in future transfer negotiations in a favorable way.

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Article provided by in its journal Journal of Sports Economics.

Volume (Year): 13 (2012)
Issue (Month): 1 (February)
Pages: 76-84

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Handle: RePEc:sae:jospec:v:13:y:2012:i:1:p:76-84
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  1. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
  2. John Fingleton, 2005. "Career Concerns of Bargainers," Journal of Law, Economics and Organization, Oxford University Press, vol. 21(1), pages 179-204, April.
  3. Feess, Eberhard & Muehlheusser, Gerd, 2002. "Transfer Fee Regulations in European Football," IZA Discussion Papers 423, Institute for the Study of Labor (IZA).
  4. Patrick W. Schmitz, 2006. "Information Gathering, Transaction Costs, and the Property Rights Approach," American Economic Review, American Economic Association, vol. 96(1), pages 422-434, March.
  5. Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Hongbin Cai & Walter Cont, 2000. "Agency Problems and Commitment in Delegated Bargaining," Econometric Society World Congress 2000 Contributed Papers 1270, Econometric Society.
  8. Eberhard Feess & Gerd Muehlheusser, 2003. "The Impact of Transfer Fees on Professional Sports: An Analysis of the New Transfer System for European Football," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 139-154, 03.
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