What is a pre-contract agreement and when can players sign them?

One of the terms used most often when it comes to player transfers - particularly involving clubs from different countries - is a pre-contract. But what is a pre-contract, and when can a player sign one?

At the beginning of January, players across England entered the final six months of their contracts, which typically expire on June 30.

Residual payments do exist, where teams pay players their wages for an extra month after the conclusion of their contracts if they do not find a club in that time.

However, players are free to move clubs as soon as their contract expires, with training compensation needing to be factored in for players aged 24 and under, when a player signs their first professional contract with a new club that isn't the one they were trained at.

Players can, however, speak to other clubs prior to the expiry of their contract to discuss what is known as a pre-contract agreement.

What is a pre-contract agreement?

A pre-contract is an agreement made between a player and a club that finalises a move once the player's existing contract has expired.

The player can join up with their new club immediately after the expiry of their contract. On occasion, as mentioned in the example above, a tribunal can be arranged to decide on a specific fee to the player's previous club, if applicable.

A high-profile instance of this was when Liverpool signed Harvey Elliott from Fulham in 2019. The Reds agreed to sign Elliott at the age of 16, but could not agree a fee with the Cottagers.

The case went to a tribunal, and Liverpool were ordered to pay £4.3 million to Fulham, a record fee for a 16-year-old at the time. The verdict was reached in February 2021.

Liverpool were involved in another tribunal case in 2016, being ordered to pay £6.5 million, plus add-ons, to Burnley after they signed Danny Ings.

Players that can currently sign a pre-contract agreement with other clubs include PSG's Lionel Messi, Liverpool's Roberto Firmino and Real Madrid's Karim Benzema, among many others.

When can a pre-contract agreement be signed?

This answer differs depending on the clubs involved. English clubs can approach a player registered to any European club - and indeed, any club outside of England - when he enters the final six months of his contract and negotiate a pre-contract agreement.

This also applies in reverse, with non-English clubs permitted to negotiate pre-contract agreements with players registered to English clubs.

However, the rules are different when it comes to negotiations involving two English clubs. Teams can only approach a player playing in the same nation when he enters the final month of his contract, when the domestic season ends. The FA implement this to avoid a situation where a player signs a pre-contract agreement with another club mid-season, and then faces his new club in a match.