Birmingham City: Finance expert discusses Jude Bellingham sell-on clause

Football finance expert Kieran Maguire has recently discussed the sell-on clause which Birmingham City have in place for ex-midfielder Jude Bellingham.

In July, Borussia Dortmund outfit completed the signing of the English midfielder for a fee which could eventually be worth over £30m to Blues (per BBC).

It was also claimed in a report by ESPN that the Midlands outfit have a sell-on clause for the 17-year-old middleman.

In March, The Athletic ran a report which claimed that Blues were ‘on the brink’ under the regime of current owners Trillion Trophy Asia in relation to financial difficulties.

So, in the latest episode of The Price of Football podcast, Maguire discussed what would happen to the sell-on clause should the Birmingham outfit go into administration.

He said: “What we are talking [about] here is what’s referred to as [a] contingent asset. A contingent asset is defined as an asset which may or may not arise at a future date [and] is dependant upon an uncertain future event.

“So, I went and did some homework on this. Now, if Birmingham City go into administration, then the sell-on clause will be one of the assets which could be sold by the administrators.

“Now, that could be sold as part of a deal to [a potential phoenix] club, in which case, the new owners would benefit [from] it. Possibly, and I think we’d have to take legal advice here, it could be sold separately.

“What quite often would happen is it could be that Borussia Dortmund – if Birmingham go into administration, which isn’t going to happen, we all hope – they might approach the administrators and say, ‘Look, there’s a 25% sell-on clause here, tell you what, we’ll give you £3m now and call it quits.’

“Then it’s up to the administrators whether or not to make that decision. So, it could be beneficial or it could be separately dealt with by the administrators, but it would be one of the assets of the football club should it go into administration.”

TIF Thoughts…

As can be seen in what the finance expert had to say, the sell-on clause for Bellingham could be resolved in a couple of ways should Birmingham hit financial difficulties.

Hopefully, for Blues supporters, that will not be an eventuality the club have to deal with. However, the report from The Athletic in March was fairly damning.