Beware of the unilateral contract extension clause - you can get “trapped” in it

Risks to the player arising from the unilateral right of the club to extend the contract

In sports contracts, a provision is increasingly appearing on the unilateral right of the club to extend the contract for another year.

At first glance, this may seem like a win-win option, especially for players who want to ensure the stability of cooperation. In reality, however, such a mechanism often works in favor of the club, limiting the ability of the player to freely plan his career and negotiate better conditions with a given club or, possibly, look for another club.

What is the option reserved for the club to extend the contract unilaterally?

Such a provision gives the club the opportunity to unilaterally extend the contract for a certain period (usually for another year/season), without the need to obtain the consent of the player. This clause can be “activated” under certain conditions, for example:

• The club must notify the player of the extension of the contract until a certain date.

• The extension is automatic if the player meets certain sporting criteria (e.g. number of matches played).

• Only the club has full discretion in deciding whether to exercise this option or not.

For a player, this can mean limiting control over his own future and leaving a key decision in the hands of the club, which leads to a state of uncertainty about the player's future.

Risks and negative effects on the athlete

1. Unable to negotiate a better contract

If a player performs well during the current contract, there may be interest from other clubs or the chance to get a better contract with the current club. However, the option of a unilateral extension blocks it from freely negotiating. The club may use this provision to keep a player on their current terms, rather than entering into negotiations with the player to offer him a higher salary.

2. Lack of control over your own career

A player who could be planning to change clubs or move to a more competitive league is somehow “trapped” in the existing contract if the club decides to extend it. This can be especially true when a player performs very well in a given season, resulting in an offer from abroad or from a better team, but the current club decides to unilaterally retain the player.

3. Possibility of “freezing” the athlete in adverse conditions

Clubs can use this clause strategically — not only to keep a player on the pitch, but also to control his market value. There may be a situation where a player is extended only so that the club can claim a high waiver amount for him in the event of a transfer. If an interested club is not found, then the player can remain in the club without prospects for development.

4. Risk of loss of market value

If a player is extended to a club that does not have a place for him in the first team, or if he does not have the right amount of minutes on the field, his market value may fall. A player, instead of leaving for a club where he could play regularly and develop, may find himself in a situation where he rarely appears on the field, which negatively affects his career.

5. Uncertainty

The unilateral extension clause primarily creates a state of uncertainty for the player both in terms of club membership and financial conditions. Unilateral prolongation may entail the maintenance of existing financial conditions. If the market changes and the standard salaries for the players of the given position increase, the player may be retained in the old, less competitive conditions. In addition, the club is not obliged to renegotiate the contract, even if the player achieves very good sports results. In addition, the player cannot undertake the search for a possible other club until the specified date, as he does not know whether the club will use the option of unilateral contract extension or not.

6. No alternative to the player

While the club has complete discretion in deciding on an extension, the player does not have the option to withdraw from the contract if the club chooses to exercise it. This can lead to a situation where the player is not satisfied with the terms of cooperation, but there is no opportunity to leave without the consent of the club.

How can a player protect himself?

In order to avoid negative consequences associated with the unilateral extension of the contract by the club, the player should pay attention to several aspects already at the stage of negotiating the contract:

• Mutual consent clause — instead of unilateral club law, it is worth negotiating a clause according to which the extension of the contract always requires the consent of both parties (e.g. by means of an annex or agreement to contact).

• Automatic salary increase in case of renewal — If a club wishes to exercise the renewal option, the player should be guaranteed a salary increase to reflect his current market value.

• Limited period for club decision — it is worth introducing a provision that the club must decide to extend the contract within a certain period of time (e.g. until the end of the first round or February 28 of the last year of the contract) so that the player has time to plan the next steps.

• Buy-out clause — if a club extends the contract, the player should be able to move to another club for a specified amount of waiver, which gives him more flexibility.

• Bonuses and additional security — additional bonuses can be negotiated, e.g. for the number of matches played or the need to play a certain number of matches or minutes allowing the club to extend the contract (the club can unilaterally extend the contract as long as it plays 80% of the matches per season, with an average of 30 minutes in each match), to avoid a situation in which the club extends the contract but does not give the player a real chance to play.

In extreme situations, it is possible to try to judicially overturn such a clause, but this is the final solution, which is expensive and can be long-lasting, and can also give rise to negative reputational consequences for the athlete.

summary

The decision to unilaterally renew the contract by the club carries serious risks for the player, limiting his freedom of negotiation, control over his career and opportunities for development. In extreme cases, it can lead to the “freezing” of the athlete in an unfavorable environment for him, without the option of leaving on better terms. Therefore, before signing the contract, it is worthwhile to carefully study this clause and, if possible, negotiate provisions that will ensure a greater balance and protection of the interests of the athlete.

📩 Do you have doubts? It is always a good idea to consult the contract with an agent or sports lawyer.

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