Loan With Obligation To Buy In Football (Explained)

Last updated on August 2nd, 2022

In football, teams engage in transfers to improve their squad by signing top players from other teams.

As a football fan, you may have come across deals tagged as loans with an obligation to buy. This is a common type of transfer deal in football today, but it may still confuse some of you!

Here’s what you need to know about this type of football transfer:

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What does a loan with an obligation to buy mean?

A loan with an obligation to buy is only one of three ways a loan deal can be structured. It can be a simple loan deal that sees a player return to his parent club at the end of the loan period, a loan with a buy option, or a loan with an obligation to buy. 

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A loan with an obligation to buy refers to a deal whose permanent status is deferred over some time depending on the agreement between both parties. In the case of such a deal, the purchasing club and the selling club have both short-term and long-term options.

In the short term, the player is expected to feature on loan for some time, after which the player must be signed permanently. 

Specific clauses are sometimes inserted into the contract when structuring a loan with an obligation to buy. When inserted, these clauses are what mainly determine if the deal eventually goes through or not.

In the deal agreed for Dejan Kulusevski between Tottenham Hotspur and Juventus in January 2022, for example, the London club has an obligation to buy the winger depending on appearances and if they secure the Champions League football.

Another example is the deal between Atletico Madrid and FC Barcelona with regards to Antoine Griezmann. The Frenchman is on loan at the Wanda Metropolitano, and the loan must be made permanent if he plays up to half of Atletico Madrid’s games this season. 

Why do clubs sign players on a loan deal with an obligation to buy? 

When a club chooses to sign a player on a loan deal with an obligation to buy included, it means that the club is willing to commit to buying such a player after some time. This can be done for a variety of reasons, including the following:

#1 Financial Fair Play regulations

UEFA introduced Financial Fair Play rules to curb unchecked and excessive spending by clubs in the transfer market. This put a cap on the amount of money clubs were permitted to spend in every transfer window, and clubs were required to adjust to this development.

As a result, teams tailored their spending in ways that would not see them fall foul of the FFP regulations.

One of such ways was to sign players on loan deals with an obligation to buy. 

Paris Saint-Germain used this method to complete the signing of Kylian Mbappe from AS Monaco. The club had signed Neymar in the same summer for around €222 million and had not yet balanced their books before commencing their pursuit of the whiz Mbappe.

The Frenchman signed for the club on a season-long loan deal with an obligation to be made permanent and joined the Paris-based club permanently after one year.

#2 Availability of funds

Normally, football clubs have varying purchasing powers in the transfer market. This means that they have different transfer budgets which they can spend on new players.

As a result of possible budget limitations, clubs may be forced to sign players on an initial loan deal with a view to signing them permanently at a later date. 

Italian giants Juventus signed midfielder Manuel Locatelli using this method. The midfielder joined the club on an initial two-year loan which will be made permanent for around €35 million.

Similarly, Inter Milan signed Argentine forward Joaquin Correa from Lazio on a one-year loan deal with an obligation to buy for €30 million. 

Signing a player on loan with an obligation to buy gives the buying club the ability to secure the player they wish to sign without worrying about their fees immediately. Also, a club may be unwilling to immediately add a player’s salary to their books due to their financial status.

Due to this, clubs may negotiate for a loan with an obligation to buy so that the selling club and the buying club will split the player’s wages during the duration of the loan.

Notable examples of loan deals with the obligation to buy included

Many high-profile transfers occur as loan deals with an obligation to buy. Here are a few notable examples of such transfer deals.

#1 Robin Gosens (Atalanta to Inter Milan)

German wing-back Robin Gosens completed a move from Atalanta to Inter Milan, both in Serie A, in January 2022. The wing-back joined the Italian champions on an initial loan which will be made permanent after one season, for around €30 million.

#2 Jens Petter Hauge (AC Milan to Eintracht Frankfurt)

Norwegian winger Jens Petter Hauge moved from AC Milan to German outfit Eintracht Frankfurt on an initial 12-month loan with an obligation to buy for €12 million.

The player has already signed his contract until 2026 with the German club.

#3 Cristian Romero (Atalanta to Tottenham Hotspur)

Argentine defender Cristian Romero joined Tottenham Hotspur from Atalanta in the summer of 2021 on a loan deal with an obligation to buy for €55 million. 

You can find out how reliable Fabrizio Romano is in this analysis here.

#4 Antoine Griezmann (FC Barcelona to Atletico Madrid)

After going through a rough spell at Camp Nou following his move to Barcelona, Antoine Griezmann was re-signed by Atletico Madrid on loan with an obligation to sign him permanently if some conditions are met.

#5 Matteo Guendouzi (Arsenal to Olympique Marseille)

Young French midfielder Matteo Guendouzi completed a permanent move to Olympique Marseille from Arsenal after an initial loan move. His move became permanent after the club triggered the clause to activate the “obligation to buy” condition.

You can find out more about why players go on loan here.

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