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

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  • Oliver Gürtler

Abstract

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.

Suggested Citation

  • Oliver Gürtler, 2012. "A Strategic Rationale for the Use of Sell–On Fees in European Sports," Journal of Sports Economics, , vol. 13(1), pages 76-84, February.
  • Handle: RePEc:sae:jospec:v:13:y:2012:i:1:p:76-84
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    References listed on IDEAS

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    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    3. 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, March.
    4. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    5. 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.
    6. Feess, Eberhard & Muehlheusser, Gerd, 2003. "Transfer fee regulations in European football," European Economic Review, Elsevier, vol. 47(4), pages 645-668, August.
    7. Hongbin Cai & Walter Cont, 2004. "Agency Problems and Commitment in Delegated Bargaining," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 703-729, December.
    8. John Fingleton, 2005. "Career Concerns of Bargainers," Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(1), pages 179-204, April.
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    Keywords

    sell-on fee; sports; negotiation; transfer;

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