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Of course buy-out clauses should be allowed

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Buy-out clauses may seem to be a way for players to flaunt club loyalty, but they're not. They're rational economic incentives.

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Today on Vital Aston Villa (a site that is hardly that) there was an article that asked the question: Should buy-out clauses be allowed? You can click over and give it a read, or I can save you a bit of time. They say "no," because buy-out clauses give too much power to the players themselves rather than to the club and, as the article says, "the power and influence should always be with the club paying the wages"

That's uh. That's some interesting thinking there. The argument is poorly constructed both on the surface of what it presents and in what it implies. Let's dig into what's actually here before we start reading between the lines, though. The argument at hand has two premises: 1) buy-out clauses give all of the power to players and 2) power should be held by the clubs.

The first is patently false. Buy-out clauses are, essentially, a contract incentive. Just as a club can offer to pay £1,000 per goal to a player or reward them for making a certain number of appearances, they can offer a buy-out clause. Eventually, once the clause is in place, the player is given a considerable amount of leverage and power. At Aston Villa the current example on everyone's mind is Christian Benteke and his £32.5 million clause. If he wants to move, he certainly has the power to approach another club, convince them to pay the fee, and force Aston Villa's hand. If we ignore the fact that going to someone else and saying "pay more than £30 million for me" is hardly a position of power, this is a great position for a player to be in.

So yes, at this point the clause gives the player more power than it gives the club. But this is where we get back to incentives. Benteke signed his contract two summers ago amidst speculation that he'd be leaving Villa. He had handed in a transfer request and was heavily linked to Tottenham. Had he left, Villa didn't have many options, so they made it a priority to re-sign him. Let's assume that Benteke was worth £X at the time. He knew he could get that much value out of his contract and his agent worked to ensure that it happened. But Aston Villa either didn't have or didn't want to pay £X. So instead, they said "We'll pay you £Y, which is less than £X, but we'll incentivize the contract so that you can get full value out of it."

One of those incentives, then, was the buy-out clause. That's power! By being able to offer that clause, Villa were able to secure a discount on Benteke's services. And furthermore, it's power because the club can set a price that they think is fair. £32.5 million is a significant chunk of cash. With that money Villa should (if they spend wisely) be able to adequately replace Benteke and add some more players.

There's also an unspoken power here: the power to say "no." Benteke can ask for a clause and the club are not required to grant his request. It may have seemed as if there was no other option, but the club certainly could have used the money elsewhere. Given what we know, there is no expectation that they would have used it well, but that has no role in this argument.

So it's clear that the player does not have all the power in a buy-out clause. They have the power once that clause is in force, but that can only happen when the club agree to cede some of their power by exercising that same power. And that gets to the second premise, the idea (explicitly stated) that the club should have all of the power and influence. Why? Where else in life do we argue for the giant corporation to have power over the individual? Why do should we trust the club to hold all of the power?

Which brings us to the unspoken problems in the article. I believe that when the author states that the club should have the power, they really mean that The Club - with all of the attendant history and fandom - should have all of the power. In other words: "You don't play for some club, you play for ASTON VILLA. You should be grateful for that opportunity."

This is pretty standard thinking for football fans. "We gave you money, you should love us! You should stay here!" But try to imagine yourself in this situation. A club give you, for instance, £1 million to play for them. You're happy, you're thankful, and you say you love the club. Because of course you do! Who wouldn't love the people that give you £1 million? But then another club come along and say "We'll double that!" So what do you do? Do you leave £1 million sitting on the table because a business with whom you have had one- or two-year relationship gave you less money first? Heavens no. We'd all jump at the pay rise.

It may not be such a strictly economic decision. For instance, a player may take lower wages to play somewhere they like, somewhere they're loved, or somewhere they can actually, you know, play. But there is a calculation of benefits here. If, in your life, you had the option to stay at the job you're at or move to one that pays more and keeps you roughly as happy in all other facets of your life, you'd move. Why should we expect different from the players?

So the desire to see the club hold all of the power and influence largely comes from the desire to see loyalty, continuity, and what's best for The Club. And that's fair. We all want what's best for The Club, and in an ideal world free of economic factors, that's what we'd get. But to ask players to ignore a chance to make their lives better in what is (for most) a few-year career is both selfish and unrealistic.

It also shows a distinct lack of faith in the club (back to lowercase) to do business intelligently. And in the case of Aston Villa, that lack of faith may be fair. But it should be of no concern to the player. A well-run team can balance the comings and goings of players to put out a good product. A poorly-run team can't. Clubs are in positions of immense financial power and there is no reason that a player should give a club a break simply because their management can't do what is required of them to be successful.

Are there mitigating factors? Of course. As Jason Boyeskie pointed out on twitter, players like Fabian Delph making videos about loyalty and then possibly leaving a few months later get under our skin. We can be irritated at that and we can criticize the player (and his agent) for making a mistake. But that doesn't change the underlying equation. Anger does not mean that what a player does (or, in this case, may do) is wrong.

And there is also the factor of the money being involved being an absurd sum for many players, as Kevin Framp noted. What players on the first team of Aston Villa are making is likely enough to sustain them for life if used wisely. And yes, it's hard to sympathize with people who make piles of money. But again, that does not really change the maths here. Simply because something seems unfair does not mean that it is wrong.

The thinking that underpins the Vital Villa article is the type that is so common among fans. It ignores rational economic decisions made both by the club (and The Club) and players. No one goes into these negotiations without an awareness of what can happen, and both parties retain the ability to say "no." On balance these contracts come out even, though at any particular moment the leverage could favor one party or the other. That's not a problem, that's how contracts work.

So yes, buy-out clauses should exist. If you're bitter about them because of Benteke, remind yourself that you probably wouldn't have a Benteke to be bitter about if it weren't for that very same clause. And if you want something to complain about with Villa contracts, look at the ownership team who has agreed to those contracts and remind yourself that they could have always said "no."