Sell-on fees, generally known as sell-on clauses, have become a standard practice in the football transfer market. As confirmed by the 2025 FIFA Global Transfer Report, nearly 50% of all permanent transfers and loans now include sell-on clauses. This worldwide acceptance can be linked to the  financial security they offer the selling club to retain a percentage of the future economic value of a player they already parted with.

For example, if Club A sells a player to Club B with a 20% sell-on clause, Club A will be entitled to 20% of the profit (or total fee) if Club B eventually sells the player to Club C. This mechanism allowed Chelsea to recover four times the amount they received from Southampton for Tino Livramento when he moved to Newcastle in 2023, having inserted a 40% sell-on clause on future transfer. 

The Legal Nature of Sell-on Clauses.

The use of sell-on clauses is well accepted under Annexe 3 of the FIFA Regulations on the Status and Transfer of Players (RSTP) and recognised in Court of Arbitration for Sport (CAS) jurisprudence. Both the Regulations and plethora CAS decisions affirm that sell-on clauses are legal and commercial rational tool in football transactions. In CAS 2010/A/2098 Sevilla FC v. RC Lens, the panel described sell-on clause as a “well-known mechanism in the world of professional football designed to protect a club  transferring a player to another club against an unexpected increase, after the transfer, in the market value of the player’s services”. Through such clauses, clubs have been better equipped to manage the financial consequences of releasing talented players for minimal fees.

However, while sell-on clauses are generally accepted, the use of variable sell-on clauses raise legal concerns. Rather than fixing a single percentage across all future transfers, a variable sell-on clause adjusts the percentage depending on the destination of the player’s next transfer. A typical example would be a clause providing for a 20% sell-on fee if the player is sold to a club in Spain, but a 40% fee if he is sold to a direct rival in the English Premier League.

The argument whether such clause constitutes a breach of Article 18bis of the FIFA RSTP was examined in the recent case of Arsenal v. FIFA. 

Arsenal F.C.  v FIFA: CAS 2020/A/7417

The Arsenal v FIFA case serves as a litmus test for variable sell-on clauses in football transfer agreements. 

The Facts

On August 2, 2018, Arsenal FC signed an agreement with Greek club PAOK for the permanent transfer of Chuba Akpom. The contract included a clause stating that if PAOK transferred Akpom to a club within the UK, PAOK would pay Arsenal 40% of the transfer fee. If the transfer was to a club outside the UK, the applicable percentage would be 30%.

Two weeks later, on August 15, 2018, Arsenal signed a similar agreement with Italian club Frosinone for the transfer of Joel Campbell. That contract stipulated a 30% sell-on fee for transfers to UK clubs and 25% for transfers outside the UK.

Following an investigation, the FIFA Disciplinary Committee found that both variable clauses gave Arsenal an undue influence over the future transfer decisions of PAOK and Frosinone, constituting a breach of Article 18bis of the FIFA Regulations on the Status and Transfer of Players, which provides:

“No club shall enter into a contract which enables the counter club or counter clubs, and vice versa, or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.”

Subsequently, The FIFA Disciplinary Committee fined Arsenal CHF 40,000 (approximately £33,000) for breaching the provions. Arsenal appealed to the FIFA Appeal Committee, which was dismissed, before eventually escalating the matter to the Court of Arbitration for Sport, relying on the following grounds:

That for Article 18bis to apply, the influence must be real, material and decisive, involving a party exercising predominance or undue influence over the other party. By including a modest 5-10 percentage variable, Arsenal argued that clauses merely reflected commercial considerations and did not amount to undue influence, particularly given that the club had no control over where the players would be transferred.

 The CAS Panel upheld Arsenal’s argument and overturned the fine. The Panel concluded that the potential influence exerted by the clauses did not reach the threshold required to  potentially unduly limit the independence of the Clubs.

The Panel stated:

“There must be a threshold to pass for a potential influence to be in breach of the prohibition. That is, the potential influence has to be material, which must be assessed on a case-to-case basis.”

The panel went further:

“ A mere financial provision in a transfer contract freely negotiated between two clubs does not automatically constitute an influence prohibited under article 18bis of the Regulations, even if the said contractual provision to some extent restricts the financial freedom of the new club, as long as the influence in question is below a certain threshold based on the circumstances of each particular case.”

In reaching that conclusion, the Panel applied three criteria that now function as the litmus test for variable sell-on clauses.

First, the geographical scope of the clauses. The clauses referred to “clubs in the UK”and not to the Premier League or English leagues. The panel noted that this broad formulation did not constitute an anti-rival clause designed to prevent transfers to Arsenal’s direct competitors. 

 Second, the range of the sell-on percentage. The Panel observed that the “additional” percentage of 10 or 5 percent to a club within the UK was very modest, considering the fact that teams in UK, especially Premier League clubs, are willing to pay higher transfer fees for the right to register a player. 

Third, the player’s contractual rights. Both transfer agreements contained a clause allowing the player’s right to determine his own future transfer. The Panel noted that where the percentages to be paid, according to the geographical regions, differ only by little, the say of the player in the transfer bargain should not be underestimated.

Lesson for sports lawyers, clubs and Agents 

As the Panel stated, the question whether sell-on clause is considered a breach or violation of Article 18bis, will be determined on case-by-case basis. When negotiating and drafting transfer agreements, clubs, lawyers, and agents should bear the following principles in mind:

(i) Variable sell-on clauses are not automatically illegal. Clubs can structure sell-on percentages to vary based on the destination of the future transfer without breaching FIFA regulations, provided the variation does not create undue influence.

(ii) Materiality Matters. Before a clause can be considered a breach of Article 18bis of the FIFA RSTP, the influence must be substantial enough to genuinely impair the buying club’s independence or the integrity of competition. Where the influence is minimal, it will not be considered a prohibition. The Arsenal case suggests that a 5-10% differential tied to broad geographic categories (e.g., UK vs. non-UK) falls within acceptable boundary. 

(iii) Avoid anti-rival clauses. In the case, the Panel, in drawing a distinction between broad geographic clause (UK vs. non-UK) and narrow anti-rival provisions (e.g., higher sell-on fees for transfers to direct league competitors), recognised that if a variable clause is narrowed to a specific club or league, it risks being struck down for breaching the provions of third-party influence under the FIFA Regulations on the Status and Transfer of Players. 

(iv) The player’s interests. Article 18bis is, at its foundation, designed to protect the player’s freedom of movement and independence. Where a clause preserves the player’s right to determine his own transfer destination, rather than giving such right to the club, the risk of it breaching Article 18bis will be considered minimal. 

(v) Finally, the ruling should not be seen as a blanket rule to insert any variable clause into  a football employment contract. While the case constitutes a favourable precedent, the jurisprudence of Article 18bis is continually evolving. What falls within permissible boundary today may not be acceptable tomorrow if FIFA issues a circular adopting a revised interpretation.

Conclusion

Variable sell-on clauses are not automatically prohibited under Article 18bis of the FIFA Regulations on the Status and Transfer of Players. This principle is affirmed by the CAS decision in Arsenal v. FIFA. Clubs can negotiate sell-on percentages that vary based on the destination of future transfers, provided the variation does not create undue influence over the buying club’s independence or impairs the player’s right to chose his own destination. 

For clubs, agents, and sports lawyers engaged in the drafting of transfer agreements, careful attention to the principles set out in this article is essential. As sell-on clauses become increasingly common in the transfer market, understanding the boundaries of Article 18bis of the FIFA RSTP is sacrosanct to navigate the evolving football market.