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From Real Madrid to Birmingham

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The most in-demand player in world football is closing in on a move to the world’s most in-demand football club for players.

Fabrizio Romano has reported that Jude Bellingham is closing in on a move to Real Madrid. Personal terms are almost agreed and negotiations are in the final stages.

It is expected that the transfer fee will be upwards of £100 million, with some quoting it as much as £140 million. The ripples of this huge windfall for Borussia Dortmund will also be felt at Birmingham City FC. Birmingham sold Jude Bellingham to Dortmund in the summer of 2020 in a deal worth £25 million plus several performance-linked bonuses. This made Bellingham the most expensive 17-year-old at the time.

Now the club, mired in Financial Fair Play concerns, is set for another windfall from that transfer. Jude Bellingham’s sell-on clause means Birmingham are set to receive a portion of the transfer fee Los Blancos pay to Borussia Dortmund.

Jude Bellingham’s sell-on clause

When a player comes through a club, that club is entitled to a percentage of the transfer fee of any moves that player makes in his career. These are called “solidarity payments”.

It is to incentivise clubs to focus on their academy and thereby promote a sustainable model of football finance. As Jude Bellingham came through the Birmingham youth academy, the club is entitled to 5% of any transfer fee involved in his transfer.

If recent reports are to be believed, the fee for Bellingham is, at the very minimum, £100 million. This means that Birmingham will definitely receive at least £5 million through Jude Bellingham’s sell-on clause.

However, as the final fee is not yet confirmed, and is only expected to rise from this number, Birmingham will most likely receive more than £5 million. In fact, if Birmingham had the foresight of adding a special sell-on clause in his transfer to Dortmund, they would receive that percentage as well, in addition to the sell-on clause through solidarity payments.

However, it is not yet clear if Birmingham City did that. For comparison, when John Stones moved from Everton to Manchester City in a deal worth £47.5 million, Barnsley, now in League One, received 15% of the transfer fee. The £7 million windfall changed the lower league club’s fortunes.

A similar scenario could happen in Birmingham. The club is facing FFP difficulties and in the worst case, could be looking at a points deduction penalty. Depending upon the reduction, they could even get relegated as they are not far ahead of the relegation spots as it is.

In such a case, the income through solidarity payments, counted as pure profit in accounting books, could become the tonic to solve their troubles.

The decision to retire a 17-year-old Bellingham’s jersey is looking more and more justified.

Vatsal Gupta
A die-hard Red Devil, who has straight up not had a good time since 2012. Lives on Korean dramas and books and can often be heard talking about armchair psychological stuff.

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