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The transfer season is, depending on your inclination towards these sorts of things, either one of the most exciting or the most frustrating parts of the football season. All clubs naturally look to strengthen their squads when they can, which in turn has given the football media a wide berth to speculate as to which specific players clubs may be looking to bring in.
The transfer system itself seems rather straightforward – the buying club pays the selling club a “transfer fee” that the seller deems appropriate, and the player is then transferred from the seller to the buyer. In the recent past, transfer fees have risen dramatically as more money is injected into the sport. This has also been aided by the fact that that the growth of TV deals across the European leagues allow for “smaller” clubs to pay transfer fees and wages that would have been unthinkable for them even five years ago.
The transfer system itself has undergone some major changes to bring it to the situation it is in currently. Most of these changes have come about as a result of legal challenges to the system by various players or organisations, as the transfer system since its inception has always been biased in favour of the clubs.
Players’ rights have often been marginalised, and it has only been due to legal challenges by aggrieved players that there has been a gradual widening of what players are entitled to. Many media outlets have referred to this as the rise of “player power”, but in reality, these developments are actually only steps towards creating a balance between clubs’ and players’ rights.
The International Federation of Professional Footballers (commonly referred to as FIFPro), is the world’s largest representative organisation of professional footballers. It is comprised of 58 national players’ associations, and aims to provide a platform to represent the interests of professional football players.
The apparent excesses of modern football are well-documented, with talented teenagers like Martin Ødegaard earning a reported £80,000 per week. However, this wage scale is only for players at the absolute top of the pyramid. The majority of professional footballers (particularly when accounting for those who ply their trade outside of Europe’s major footballing powers, or those at the lower levels of the football pyramid), are not millionaires, nor are they likely to ever be. Many players in smaller countries often suffer from a lack of regular payment of their contractually guaranteed wages, resulting in major economic hardship.
It is in light of this that FIFPro are filing a suit with the European Commission (EC) claiming that the current transfer system violates basic European competition law. FIFPro had been in talks for several years with FIFA, UEFA, and the top European leagues looking for ways to reform the transfer system in a manner that they felt would be more representative of players and more protective of their rights.
However, these talks broke down in January of this year, leading to the lawsuit being filed. Interestingly, the EC had warned FIFA and UEFA about the issues in the transfer system back in 1998, saying it was an obstruction to players’ freedom of movement. This warning led to changes in various regulations regarding contracts and compensation between players and clubs by September 2001. Before getting into an analysis of FIFPro’s exact demands, a look at the history of the transfer system would provide some much-needed context.
Evolution of the transfer system
In 1885, the Football Association allowed for professional players being paid by their clubs for representing them. Before this, most teams were comprised entirely of amateurs, and various rules had been established to restrict professionalism. It was only after 37 clubs threatened to break away from the FA that they finally agreed to professionals being paid by clubs. The vast majority of players had other employment and only supplemented their wages by playing football.
Another facet of the game at that time was the lack of exclusivity of players. Players could agree to play one or any more games for another club. To deal with this, the FA introduced the concept of player registrations. This meant that players had to register with a club at the beginning of every season, even if it was his club in the previous season. Players could join another club in the off-season, even if their club wished to retain them. However, it became apparent that the richer and better-off clubs could easily lure players from smaller clubs to play for them.
The 1893-94 season also saw the introduction of the “retain and transfer” system, which has in turn formed the basis for the transfer system that we know today. Under this system, once a player was registered with a Football League club, they could not be registered with another club even in later seasons, without the consent of their current club.
What made this system unfair (to the player at least) was the fact that these rules applied even when the contract expired, meaning that there was no obligation on the club to play or pay the player, and he could not play for any other Football League club without a valid registration. Naturally, this led to the rise of the transfer fee, as clubs realised that they could demand some “consideration” (which is a vital part of English contract law), for the release of a player’s registration.
It is claimed that the first-ever instance of a player being exchanged for money was the case of Willie Groves, who moved from West Bromwich Albion to Aston Villa for £100 in 1893. The enforcement of a wage cap (£4 a week!) in 1901 further entrenched this system.
The first legal challenge to this was brought by the Aston Villa player Herbert Kingaby in 1912, but an “erroneous strategy” by his lawyer led to the suit being dismissed. The system remained largely unchanged until 1962, when England international George Eastham successfully sued Newcastle United for the right of players to move (and earned a move to Arsenal as a result). The English High Court held that the existing system was an unfair restraint on trade. The “retain” aspect of the system was reduced, and a tribunal for resolution disputes was set up.
Other landmark cases
The next major step in the evolution of the football transfer system was the Bosman ruling. Jean-Marc Bosman played for RFC Liège in the Belgian league. Bosman’s contract expired in 1990 and he sought a move to Dunkerque, a team in France. Dunkerque were unwilling to meet the transfer fee demanded by Liège (which was set by Belgium’s player-valuation system at the time), and the move fell through.
In the meantime, Bosman's wages were reduced by 75% as he was no longer a first-team player. Bosman felt that he had been effectively blacklisted and took his case to the European Court of Justice, citing FIFA's rules regarding football and claimed that he was being restrained in his freedom to trade.
The court held that the existing system violated the provisions of the Treaty on the functioning of the European Union, placing an unfair encumbrance on the right to free movement of workers. The effect of the Bosman ruling was that all EU players were given the right to a free transfer at the end of their contracts (provided they were moving from one EU-based club to another).
It also allowed for players to negotiate deals with other clubs in the last six months of their contract, and the move would be completed after expiry of the existing contract as a free transfer. The other major implication of this ruling was that quotas regarding team composition could not be imposed on EU nationals, as that would also violate the EU Treaty. The Bosman ruling also indirectly led to the establishment of the January transfer window.
The next major ruling was the Webster ruling, which basically allowed for players who signed a contract before the age of 28 to buy themselves out of the contract three years after the deal was signed. If it was signed after the player was 28, the time limit was reduced to two years. This ruling allowed players to simply pay off the money owed to them by the club, and they could unilaterally terminate the contract.
This ruling was heavily criticized by the European Club Organization, FIFA, and UEFA. However, the impact of this judgement was greatly reduced after the Matuzalem ruling, which basically stated that a player wishing to unilaterally terminate his contract must pay a “market valuation” of himself to the selling club if they wished to terminate their contract early.
FIFPro’s demands and how they differ from the current system
FIFPro’s major gripe with the current system is that they feel that there is too much power vested in the clubs (particularly after Matuzalem), and that the current transfer system (according to FIFPro President Phillippe Piat) “fails 99% of players around the world, it fails football as an industry and it fails the world’s most beloved game. Football’s governing bodies, clubs and leagues claim the transfer system is necessary to ensure competitive balance, whereby in fact it creates a spiral of economic and sporting imbalance, which only benefits the richest 1% of clubs and player agents.”
FIFPro also blame many issues of the modern game (such as the trafficking of underage players and restrictive or exploitative third-party ownership agreements) on the existing transfer system. Under the current system, a player may buy their contract out via the method described above. However, if a player wishes to terminate their contract due to non-payment of wages, the current system does indeed seem harsh.
Currently, a player cannot cancel their contract until 90 days of non-payment occurred. After this time period, they must approach FIFA’s Dispute Resolution Chamber. More than 90% of these matters are decided in favour of the player, but with more than 4,000 such cases annually, the decision comes months later, and often results in severe damage to the player’s career.
If a player is found guilty of a breach of contract however, they are banned from playing for 120 days and must compensate the club to the tune of their "market value". FIFPro considers this (and transfer fees) to be a tax on employment, which more or less implies that the existing system as a whole is a restraint of trade that would be illegal in any other industry in the EU.
Essentially saying that they would want the whole existing “transfer fee system” to be abolished because they call it “anti-competitive”. Arguing, it has a restrictive effect on players that would not be tolerated in any other European industry.
FIFPro are seeking four major changes to the existing system, which are as follows:
- Any player not paid by their club for more than 30 days can terminate their contract providing they have given the club at least 10 days' written notice;
- If a contract is terminated by the club without just cause or by the player for non-payment, the player should be compensated by having the contract paid out by the club;
- Any player without a contract after the process above should be able to find work immediately, without having to wait for a transfer window to open;
- These reforms should apply domestically and internationally.
Naturally, the European Clubs Association (ECA) and the Association of European Professional Football Leagues (EPFL) have refused to discuss what they consider a further reduction of their contractual rights and another concession to "player power". ECA chairman Karl-Heinz Rummenigge cited the example of the Bosman Ruling in 1995 when saying that "sometimes decisions made by courts are not for the good of the game".
However, the Bosman ruling has been uniformly welcomed by players, who were consequently given greater control over their career paths. In an industry where the players have very short careers in which they must maximize their earning potential, the freedom to choose the career path most beneficial to them is vital. Considering the way that professional footballers have been treated by clubs in the past, it is difficult to argue that more player power is a bad thing.
