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FIFPro launches legal case to make transfer fees illegal in Europe

Tony Attwood

I do try to keep up with the murky world of Fifa and Uefa, but I must admit, sometimes I miss something.  And it seems this Christmas I missed a big one for FIFPro launched a legal challenge to the whole transfer system and I let it slip by without my noticing.

FIFPro  represents over 50 of the national players’ associations and thus speaks for more than 65,000 professional players and it has a plan to take Bosman a stage further.

The Bosman ruling, you will recall, made it impossible for clubs to demand a payment for a player when the player was at the end of his contract.  Now the idea is to stop transfer fees totally.

In one sense this may seem an extraordinary move, but it would simply put footballers on the same footing as everyone else.   If a person who is brilliant as a salesperson wants to leave his/her existing company and join mine, I simply have to make him/her an offer of salary and conditions that are better than is achieved now.  I don’t pay a transfer fee to my rival firms.  The aim is for football to be the same.

Thus, just as one of my staff who thinks I am just about the worst employer the kingdom has ever seen can get up and leave, so could a player.   Although technically an employee might have a contract that stops them leaving without three months notice, if they leave there’s nothing much I can do about it in law.  The only thing that stops people leaving without the proper notice is that it might dissuade the next person from employing them – so most people do stick by their notice agreements, unless they can buy themselves out of them.

If such a ruling did come into football, it could damage the position of smaller clubs who have relied on transfer income over the years.  But the smaller clubs in England have seen that income reduced because of the availability of cheaper players from Eastern Europe.  

What’s more clubs like Arsenal tend to take on youngsters rather than lower league players these days – as we saw yesterday with Dan Crowley.  He came in from Aston Villa aged 15 or 16 for a small compensation fee – as did Cesc from Barcelona some years before.  That’s how it goes these days.

But the change wouldn’t do much in terms of stopping the oil rich clubs buying their way to success however, since the money they are currently paying out in transfers would just go in salary.  They would attract the better players simply by offering more, and would not even have to talk transfer fees to the current contract holder.

So FIFPro if off to the European Commission, the European Court of Justice and the Human Rights courts.  The case will be argued against by agents everywhere (who would be forced to take a percentage of salary rather than a percentage of the transfer fee, which might not be so comfortable for them), and Fifa and Uefa, both of whom like to think themselves above the law.

What I can’t work out is how enforceable the four year player contract might be under such a new set of circumstances.  At the moment it seems unenforceable anyway (think of Fabregas and his long term contract which in the end meant nothing), so I guess it would be even more so.   Under the new system Barcelona might come along and say “We want Cesc and his DNA” and then Cesc says, “yes I’d like to go.”   Arsenal say “no”.   And then what?

There can’t be a transfer fee, so Arsenal can get no compensation.  So… does that mean Cesc would stay, does it mean players would want to sign only one year contracts, or does it mean there would be no term contracts (just as none of my employees have a contract with a time span in it) or does it mean that Cesc would get up and leave and Arsenal would then sue Barcelona for inducing a man to break his contract, and Cesc for breach?

I suspect the latter, which would then mean we get transfer fees back via the legal settlement for breach of contract!

That suggests to me that we would in fact need something quite different in terms of contract – maybe everyone would be on a contract where the penalty clause is set into the contract should either party want to break the contract – which would be, once again, the transfer fee!

As you can tell, I’m not a lawyer – but I am sure FIFPro have got a plan to avoid this simple change of the positioning of the transfer fee.  I just can’t work out what it is.

The one thing I do know is that the European courts think the Uefa and Fifa are dangerous and out of control organisations who believe they are superior to the law, and the courts will smack them down any chance they get.  I’m fairly certain the union of unions will win.  I just don’t know what it will mean.

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19 comments to FIFPro launches legal case to make transfer fees illegal in Europe

  • TommieGun

    First of all the European Commission getting involved against Fifa and Uefa is always a blessing.

    However:

    1. Basic / Constitutional rights such as freedom of employment, are balanced against other interests. For instance, it is common in employment contract to have a clause which prevents the employee from working for a competitor of the current employer for a certain period. Those clauses are defensible, despite limiting freedom of employment.

    2. This would mean that even though transfer fees are a limit on freedom of employment, it could be argued that in the general balance, they are the lesser evil.

    3. The probable contetion would be that transfer fees serve as a negative incentive against breach of contract. In a world without transfer fees, no club would willingly let a player leave them. It’s obvious. There is a common tort known as “inducement to break a contract”. I believe that in a world with no transfer fees, any club who would lose a player will sue the “soliciting” club pursuant to this tort. The injured club will most probably file an injunction against the transfer, which will be held until final judgement in the tort claim, which would mean that the player in contention will not be able to play for a few years.

    Food for thought, that’s all.

  • WalterBroeckx

    I see that the ones who will win are the lawyers. As usual 😉 Damn should have studied for lawyer all those years ago 😉

  • Family Enclosure Man

    This is an interesting one. I’m no lawyer and really do not know how it would work, but I has always assumed that a world without transfer fees would imply no-term contracts -ie, a player can leave when he wants by just serving the usual notice that most of the rest of us have to in our jobs. Perhaps that is wrong, but were it to be the way things were done then it strikes me that it could actually be very damaging for players. The thing about the current system of fixed-term contracts which cannot be broken without transfer fees is that they actually protect players in vulnerable positions: when a player gets a serious long-term injury or simply loses the confidence of the manager what would prevent the clubs from paying them three months salary and terminating their contracts? With the present system at least the players know that the clubs will continue to look after them for the term of their contracts.

  • Armin

    Football is, one way or another, get in to black hole of unfairness. And measures FIFA or who ever working on are nothing than cosmetics. One way or another players are nothing than raw meat, and with or without measures they are going to stay at that level. Or maybe, yes this “law” would bring footballers higher in hierarchy and make them be less “meat”. But why should I pity someone who get paid each week at least 45.000? I guess they don’t complain about their status too.
    Somehow I believe clubs has to be protected from greedy agents and players, and of course, oil clubs.
    They should work on leveling clubs abilities somehow. Maybe introducing salary limitations. Of course maybe with right to increase salary over years, but to limit it in first 2 years.

  • Jez

    Sadly the tort system is law in England and Wales and common wealth countries that adopted these laws. Countries like France and Germany will have different law though similar in effect. Then you have jurisdiction. The eu can only create laws for eu countries so they can’t abolish transfer fees in South America or Russia for example.

    Therefore if transfer fees are abolished in Europe if arsenal want a player from river plate in Argentina they will still have to pay a transfer fee which would put Europe out if line with the rest of the world.

    I can’t see fifpro winning because it would have to be a worldwide ruling that all transfers are free otherwise it doesn’t work.

  • Robl

    Can’t a footballer walk away if they pay up the rest of their contract? ie if they have 2 years remaining and earn £50K per week, can’t they just walk away for £5.2M (104 weeks x £50K) ??

    I vaguely remember a fudge with the EU regarding players of a certain age with x time to run being able to do this?

    I suppose image rights, etc could get in the way.

    However, no one is forcing most players to sign long contracts – usually they do it to get a big long term guaranteed period of pay.

    Surely they will just agree long notice periods (i.e. 4 years) with a nominal waiver if they want to break it of X million? (handily paid by the new club?)

  • Mike T

    Robl

    Yes its called the Webster ruling and its something that I have a sneaky feeling Rooneys representatives are looking at.
    In brief I think the rules are that a player over 25 who has a year or so left of their contract can give notice that they want to walk away from their contract and in return have to pay compensation which usually equates to their wages.
    So in Rooneys case come season end he will have one year left on his contract and if his wages are £200k a week the compensation , as opposed to a transfer fee, will be about £10 million .Yes payable by the player but no doubt agents will negotiate a signing on fee that will better or at least match the level of compensation

  • Stuart

    Mike T,
    One wonders why that doesn’t happen more often then. For example, if Arsenal were after Rooney and Man U wanted £50 Million, surely it would be cheaper for us to just pay him a signing on bonus of the £10 Million you state which covers the cost of buying out his contract. There is of course the issue of tapping up but we know it goes on all the time anyway.

  • WalterBroeckx

    I think the Webster ruling only goes for players from a certain age who have not played many games and want to go to another club to save their career. I think Rooney mostly played when not injured so no real case for him to use that clause

  • Mike T

    Stuart

    Never been able to bottom that one myself other than I seem to recall that there was a suggestion that the clubs almost had an agreement not to take advantage of the ruling.

    I know the article isn’t about FFP but I found the last paragraph of Tony’s article a very telling comment and in particular to the inevitable challenges that will happen.

    Last point we, Chelsea announced our latest loss on 31/12 which was the latest filing date (6 months after the date are accounts run to 30/6) whereas Man City, their year end is 31/5 have not as yet made known their figures.

  • Mike T

    Walter

    Here is the broad outline of the Webster ruling:

    Article 17 of FIFA’s Regulations for the Status and Transfer of Players is entitled “Consequences of Terminating a Contract Without Just Cause”, and is the fifth article of Chapter IV, “Maintenance of Contractual Stability between Professionals and Clubs”. It outlines the provisions which apply if a contract is terminated without just cause, and the requirement for the party in breach to pay compensation.[9] Specifically, it states that any player who signed a contract before the age of 28 can buy himself out of the contract three years after the deal was signed. If he is 28 or older the time limit is shortened to two years.[10][11] Article 17 was introduced in December 2004, with effect from 1 July 2005

    There is another rule that if a player appears in less than 10% of first team games they too can give notice to terminate their contract.

  • Sammy The Snake

    If transfer fees are abolished, clubs will operate like a normal business and it’s employees. Clubs will alter their player contracts simply by reducing the base salary and adding a one-time end of service payment at the end of the contract. This way, players must honour the duration of their contracts in order to get their hands on the bonus.

    Say Roony at 200,000 per week: his salary will be reduced to 50,000 per week, and then a clause will say he will get xxx amount when he completes his 4 years of contract. The amount would be 150,000 x 52 weeks x 4 years = 31 Million.

  • robl

    Cheers MikeT, you’ve got a better memory than me!

  • Valentin

    While the Bosman ruling had a beneficial effect for middle to low level players. The new “No Transfer Fee” proposal is likely to have the exact opposite effect. Sammy is right in that Clubs will just structure contracts in such way that the basic pay will just be lower. Extra payments will then be paid based on percentage of games played (actually played for at least 20 minutes, not just on the substitute bench), length of the stay at the club.
    You already see that kind of contract at conference level. Most contract are less than 2 years contracts with bonus in case of promotion and an option by the club to extend by 1 year.
    Top players will receive huge salaries. Maybe even from sponsors to stay at one club. Adidas would pay Messi more to stay at Barcelona or at least a club that they sponsor. Now, even lower league players still attract endorsements. However, Jim smith who may change clubs every years, and may be kicked out if injured would not be such an interesting proposition. Especially if he does not have a lot of twitter followers.
    The only beneficial aspect I could see of that proposal is that after a couple of years, lower premiership and championship clubs will suddenly behave in a more reasonable and business oriented way. No more hugely inflated 5 years contracts for mediocre players that sink a relegated club toward the abysses. Pompey, Leeds, Coventry, Bradford style. We could even see a fall in the cost of attending football games.

  • nicky

    The FIFPro move raises two points which interest me:
    1.I welcome the chance of the perfidious European Commission getting its comeuppance.
    2. I like the idea of agents having to negotiate their ill-gotten gains from players’ wages rather than transfer fees.

  • insideright

    The last time I listened to a legal expert discuss matters relating to transfers he said that agents get no cut of a transfer fee – only the salary really matters and, maybe, a ‘finders fee’.

  • nicky

    @insideright,
    I’m going by what Tony said in his post above.
    Anything that hits these leeches in their pockets is fine with me.

  • Valentin

    Signing on fees, finders fee, arrangement fees are quite often directly paid to agents. Unless the agents had been mandated by the clubs, technically those fees are illegals. However with the exception of France and Germany, most countries let the infraction slide.
    If there isn’t a law that ban agents to be paid from both sides, then that kind of situation is really open to conflict of interests. Are you working for the benefit of your client or your own benefit? Moreover, why should they getting paid twice (by the player and the club, sometimes both clubs), to do their job? If their is such restriction for lawyers, estate agents (at least in the U.S., in the UK estate are still cow-boys), why not for agents.
    Here are some examples of bad agents.
    The agents of Bafé Gomis, the Lyon player are getting a very bad réputation. Twice, they scuppers deal, because their slice of the transfer fees was too small. As a question of principle, Newcastle are now refusing to negotiate with them.
    Kaba Diawara had an agent who was paid by a percentage of his transfer fee, so Kaba was changing clubs every years, sometime twice per season. Sometimes, you just wonder what could have been with him.
    However, I must admit at lower league level, agents can be underpaid for the amount of work they put in. They also have to deal with chairmen and directors who really should not be involved in football. Clueless does not even cover the level of incompetence. Still some agents are just greedy, incompetent bastards. Sucking money out of small clubs and abusing naive youngsters.
    The players union and the FA should have a template for contracts. I mean one understandable by normal people, and not the legalese brick that they currently have. Part of every players formation should also include a minimum of training on that.

  • Micheal Ram

    I dont think EU will pass any law against transfer fees. Players are humans, I can understand that but the very organisation ( the club, the board, the manager, the teammates, the fans and even the groundkeeper) that provides the platform for a player’s success are consist of humans too. If a person pays hundreds of thousands to be educated in a university and then have the option to do whatever he/she wants with their life, its justified. Guess not much different with football. Maybe there should be a football iuniversity if the players want to be treated like common employees. Or maybe clubs should only play players from their own club universities and get rid of transfers entirely. Maybe this way football can prosper equal globally. Will wash away greedy players, greedy agents, greedy clubs and greedy FICK FUFA. Haha. Dont think this will work either in this corrupted world.