Contractual Aspects of the Buy-Out Clause: the Neymar Jr case

The arrival of Brazilian prodigy Neymar Jr to PSG in the summer of 2017 is undoubtedly a historic turning point in the transfer market. Not only regarding the record sum paid by the Parisian club but also due to the manner in which this transfer was made with the fate of the payment of the buy-out clause down to FC Barcelona. Often referred to but rarely analysed from a legal point of view, the concept of a buy-out clause is complex.

Introduction

The historic transfer of Brazilian player Neymar Jr to Paris Saint-Germain is undeniably the highlight of the 2017 transfer market. Besides the classic speculations surrounding his arrival, this episode especially raised questions about its feasibility from a financial and legal point of view. Firstly, questions were raised about PSG's ability to pay the EUR 222 million amount provided for by the buy-out clause inserted in the employment contract between Neymar Jr and FC Barcelona. Secondly, the questions concerned, inter alia, the compatibility of the transfer with the UEFA Financial Fair Play Regulation but also whether a third party, assuming the State of Qatar or a related company, could pay the amount of this buy-out clause.

The interest sparked by this transfer period represents a good opportunity to carry out a legal analysis of the buy-out clause, which has been an important cause for...

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