Eli5: Transfer fee in football

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How does transfer fee work in league football? How does this relate to player’s salaries and what does it mean to go on a loan to another club?

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Regarding transfer fees and salaries, the transfer fee is paid to the club with the player’s rights and not to the player — exception there is that many player contracts include a loyalty bonus where the player gets a percentage of the transfer fee if he meets certain criteria (generally plays for a certain number of years and doesn’t make a formal transfer request). There’s no direct relationship between transfer fee and salary, but an agent would use a large transfer fee as evidence of how valuable a player is and how much he should be paid as a salary.

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