How soccer transfers work in Europe: Everything you need to know

Transfers are a big deal in soccer. Teams are always looking to buy better players to help them achieve more success. But how does it all work?

Soccer is one of the most popular sports in Europe, where it’s usually called football. In fact, the term soccer comes from the sport’s original full name: association football.

Whatever you call it, there is massive interest in not just what happens on the pitch but transfer business behind the scenes, too.

Put simply, a transfer is when a player moves from one team to another. Constantly, fans want to know which players their team might be signing. And here on TEAMtalk, transfers are our world.

Here is everything you need to know about transfers in European soccer football.

Why do soccer teams make transfers?

There are a few reasons why teams try to sign new players. The most simple is because they think a player they want to sign – called a target – can help them improve.

They might also need to sign a new player if one of their existing guys is injured. Or, if another club buys one of their players, they might need to sign a replacement.

Soccer clubs also regular change who their manager or coach is. The new manager might want their team to play in a different style and may need new players to make that happen.

Selling players is just as important as buying them. Teams can get rid of players if they need to raise money, if a player wants to leave, or if a player just hasn’t been good enough for them. Soccer can be a ruthless business!

When can soccer teams make transfers?

There are two transfer windows each year – one in the summer and one in the winter.

Unlike MLS in the USA, the seasons of most European soccer leagues run from late summer to late spring. Therefore, the longer summer transfer window in the off-season (and stretching into the first few weeks of the season) is when clubs usually do their bigger business.

The winter transfer window is shorter and usually runs through the month of January, which for most European leagues is midway through the season.

In either of these transfer windows, clubs can sign players from other teams.

The only players that teams can sign outside of the transfer windows are free agents, who are players who don’t have a club at that time.

Even though there are only two transfer windows a year, clubs are always thinking about their transfer plans and how they can improve their rosters, even when the windows aren’t open.

What types of transfers can teams make?

The most common way for clubs to sign players is by paying a transfer fee to the club they are buying them from. This type of transfer is called a permanent transfer.

The club wanting to buy the player has to make a bid to their current club, who can then accept or reject it. If the bid is accepted, the buying club then get to negotiate a contract with the player. If the player accepts the wages on offer and passes a medical examination, he then signs his contract with his new club.

It doesn’t matter how long the player has on their contract with the club they are leaving. If the price is accepted, they are sold. But usually, the less time the player has left on their contract, the more likely they might be to transfer to a new club.

Bids sometimes include an offer of bonuses (also known as add-ons) that will increase the amount of money the selling club can earn, depending on achievements. These bonuses are paid in the future and it could be because a player has played in a certain number of games, scored a certain number of goals, or won a particular trophy with his new club, who then pay extra to his old club.

Sometimes, players have release clauses in their contracts. This is a value that their club have agreed to sell at in advance. For example, if a player has a €50m release clause and a club makes a €50m bid, they can go straight to negotiating with the player. Their current team can’t stop them.

Sadly, we don’t always get to find out how much a transfer has cost. An undisclosed transfer is one where neither club reveals what the price was, and they are common, although the price is usually leaked in the media.

Another way players can change clubs is via a swap deal. These are real, but it is when two players at different clubs transfer to the opposite team as one another at the same time.

Sometimes the two players are valued equally, but sometimes one club pays a fee and gives their player to the other club in return for the more valuable player. This is called a part-exchange deal.

How do free transfers work?

As mentioned, some players don’t cost any transfer fee at all because they don’t currently have a club. These free agents are players whose contracts with their last clubs have expired (in other words, they have been released).

Clubs can sign free agents without having to pay a transfer fee. However, if the player is under 23, they often have to pay compensation to the club he has left.

Furthermore, they usually pay a signing-on fee directly to the player as part of his contract (which often happens for permanent transfers too, not just free ones) and a fee to his agent (but more on those later).

Free transfers can even be arranged while a player is still at another club. Once they enter the final six months of their contract, they can sign what is called a pre-contract agreement with another club, which means they are committing to join them when they become available on a free transfer (i.e. not immediately, but at the end of their contract).

IN DEPTH – The best former Premier League players that are currently free agents

What about loan deals?

Another type of transfer is a loan. Usually (but not always) designed for younger players, this is where a club sends a player to another team for a period of time (often a whole season or half a season) and then takes them back after.

Loan transfers mainly give players a chance to play more regularly at a different club.

Sometimes, a loan can lead to a permanent transfer if the player does well. The two clubs involved can even agree to a fixed price for the permanent transfer in advance. This either takes the form of an option to buy or an obligation to buy.

An option to buy means the club who have had the player on loan can decide if they want to buy him. An obligation to buy means they have already committed to buying him after his loan spell. This is usually done to spread out how much money a club is paying on transfers.

What are buyback and sell-on clauses?

Sometimes, transfer bids are a bit more complicated than just an offer of a fee.

As mentioned earlier, add-ons can contribute to the structure of a bid. But there are other factors too.

When letting a player leave, clubs can ask to have a sell-on clause. This entitles them to receive a percentage of the transfer fee when the player leaves his next club.

Another type of clause is the buyback clause, which is a pre-agreed amount that allows the club selling the player to have first refusal and be able to re-sign him in future, usually for a higher fee, from the club they are giving him to.

What’s deadline day?

As stated, teams can only sign players from other clubs while transfer windows are open.

Deadline day is the last day of a transfer window and it’s usually very busy. Teams know it’s their last chance for a few months to buy and sell players.

Sometimes they even deliberately wait until deadline day in an attempt to sign a player for a lower price.

Deadline day can also lead to teams making what’s called a panic buy, when they end up signing a player they weren’t expected to because they’re worried about not signing anyone at all!

How are transfers different in Europe to MLS?

Transfers in Europe work slightly differently to how they do in MLS.

As things stand, there’s no salary cap in the Premier League, for example, and therefore no equivalent of the Designated Player rule. It means English teams can sign plenty of talented players on lucrative contracts.

However, there are some limits on what kind of players clubs can sign. Many leagues have rules to ensure squads contain a certain number of homegrown players. Similarly, some European leagues only allow clubs to have a maximum number of players from outside the EU.

There is no equivalent of the MLS SuperDraft either, as clubs can promote players from their own academy at any time.

How much can clubs spend on transfers?

Every year, a lot of money gets spent on transfers. Many soccer clubs have mega-rich owners and the amount they spend on signings is huge.

But, no matter what they try, clubs aren’t allowed to just spend what they want. There is no official spending cap when it comes to transfers, but there are rules in place designed to prevent excessive spending.

UEFA, the governing body for European soccer, has a system called Financial Fair Play (FFP), which is complicated but in a nutshell aims to ensure teams are generating revenues and spending on transfers and contracts at a relatively balanced ratio.

Who decides what transfers happen?

A lot of work goes into transfers. Clubs appoint several staff members to help them make their decisions.

As mentioned earlier, sometimes managers can influence who their targets are.

But a lot of clubs also have sporting directors, whose jobs are even more focused on transfers.

Sporting directors won’t normally be seen in the dugout like managers at matches, but they play a big part in picking targets and negotiating transfers.

What’s the role of agents?

A lot of transfers also depend on agents. These people don’t belong to any club but instead represent players and help them make transfers.

Often, clubs get in contact with an agent to tell them they’re interested in a player they represent. But they are not buying the player from the agent – they’re trying to buy them from another club.

Agents can try to smooth over negotiations between the buying and selling clubs. If a sale happens, the agent sometimes receives a percentage of the fee as a commission.

Who are the most powerful teams in the transfer market?

The 10 clubs to have spent the most money on transfers ever, before the 2024 summer window

Naturally, the best teams want to have the best players, and the best players usually want to play for the best teams.

Successful and rich clubs are often powerful in the transfer market, trying to sign players from teams who aren’t as strong. Sometimes, though, transfers happen between clubs of a similar size, or a player might join a weaker team towards the end of their career.

The English Premier League is home to some seriously rich clubs who can pay big transfer fees to sign players. These days, even less successful clubs in the Premier League have the money to rival successful clubs in other leagues for big – if not quite elite – signings.

But mainly keep an eye out for the likes of Manchester City, Manchester United, Chelsea, Arsenal, Tottenham Hotspur and Liverpool as the clubs with money to burn – with Newcastle United becoming ones to watch recently too. Newcastle and Man City both have rich owners from the Middle East and there are American owners on the boards at Chelsea, Arsenal, Liverpool and Man Utd (the latter have also just added investment from one of Britain’s richest men).

In Europe, some of the other big spenders include Real Madrid and Barcelona in Spain’s La Liga, Paris Saint-Germain in France’s Ligue 1, Juventus in Italy’s Serie A, and Bayern Munich in Germany’s Bundesliga.

More recently in Asia, clubs in Saudi Arabia have started to spend big on world-class players like Cristiano Ronaldo too.

Oh, and if it wasn’t clear already, players are allowed to move into a different country or league as long as the clubs involved can agree deals. Some of the biggest transfers in history – such as Neymar’s world-record move from Barcelona to Paris Saint-Germain for €222m, the value of his release clause (remember those?), in 2017 – have taken players from one league to another.

Sounds interesting! So where can I find out about transfers?

You’re already here! Check out the TEAMtalk home page for the latest transfer news, rumours and done deals.