FIFPRO is suing FIFA.
Among various reports from the world of sports, the mainstream media has also picked up the information that FIFpro has filed a complaint with the European Commission against FIFA regulations, alleging that these regulations are in conflict with fundamental principles of EU law regarding the freedom of movement of workers, and above all, competition law. Do FIFA regulations actually violate EU law, and will the actions taken lead to changes in the football transfer market? I will try to answer these questions in this post.
Firstly, what is FIFpro and which FIFA regulations are we talking about? FIFpro is an organization representing professional footballers, currently around 65,000 players, whose simplified goal is to represent the interests of professional footballers. As per the organization's official statement, it has lodged a complaint with the European Commission alleging that FIFA rules concerning the transfer system are in conflict with EU competition law regulations, thereby demanding a declaration of their invalidity. Which regulations are being referred to?
These are the Regulations on the Status and Transfer of Players (RSTP), which have been mentioned several times on this blog. In short, these are rules that establish, among other things, the principles of player transfers 1)I wrote about the concept of transfers HERE as well as issues regarding contract stability.
As per the official summary available on the FIFpro website, the organization aims to change unnecessary (in their view) work restrictions, change the transfer market in a way that players are not seen as tradable assets, protect basic player rights in terms of labor law and obligations law, including the right to regular payments without delays, achieve equality between parties in the unilateral termination of contracts (club and player), and create a better policy ensuring the achievement of goals such as youth training and financial solidarity among clubs.
The complaint is fundamentally based on four allegations, however, before discussing them, it is necessary to clarify a certain point. FIFpro has not made the content of the complaint public, and the summary mentioned above has a rather petitionary character, making it difficult to predict the legal arguments used by its authors. Therefore, the analysis of the organization's allegations will somewhat be an attempt to decode them.
The allegations formulated by FIFpro include, among others:
- the transfer system in general, as shaped after the groundbreaking ruling in the "Bosman case,"
- Article 17(1) of the RSTP,
Article 17 Consequences of Terminating a Contract Without Just Cause The following provisions apply if a contract is terminated without just cause: 1. In all cases of unjustified termination, the party in breach shall pay compensation. Subject to Article 20 and Annex 4 on Training Compensation, and unless otherwise provided for in the contract, compensation shall be calculated with due consideration of the law of the country concerned, the specificity of sport, and any other objective criteria. Such criteria shall include, in particular, the remuneration and other benefits due to the player under the terminated contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, the fees and expenses paid or incurred by the Previous Club (amortized over the remaining length of the contract), and any other factor determined by the Dispute Resolution Chamber, which may be invoked in the interests of a better application of the principle of compensation for breach of contract.
- Article 17(3) of the RSTP,
In addition to the obligation to pay compensation, each player found to have breached the contract during the Protected Period will also face sporting sanctions. Such sanctions include a restriction of his playing rights in Official Matches for a period of four months. In circumstances aggravating the offense, the restriction may apply for six months. In all cases, the sporting sanctions apply from the commencement of the next Season with the New Club. Unilateral breaches without just cause or sporting justifications after the end of the Protected Period do not result in sporting sanctions. However, disciplinary measures may still be imposed outside the Protected Period for failure to give notice in due form (i.e., within fifteen days of the last match of the Season). The Protected Period starts anew in the event of contract extension, with the extension of the previous contract.
- Article 18(3) of the RSTP,
Article 18 Specific provisions relating to contracts between Professional Players and clubs A Club intending to conclude a contract with a Professional Player must inform the player’s current club in writing before entering into negotiations with the player. A Professional Player may only conclude a contract with another club if his contract with his present club has expired or will expire within six months. Any breach of this provision shall be subject to appropriate sanctions.
Referring to the most general allegation, it is worth mentioning that the "Bosman"2)named after the Belgian player who was the plaintiff in the case ruling is a judgment of the European Court of Justice issued in 1995, which profoundly changed the transfer market in global football for years to come. I have discussed the ruling itself here, so I will quote only a fragment here:
Regulations concerning the change of club colors by players in the shape we know today are a result of the famous proceedings before the Court of Justice of the European Communities concluded with a judgment of December 15, 1995, known as the "Bosman case". (...), for the purposes of this post, it should be noted that the Court questioned the regulations of sports associations that linked the player's ability to change employers (clubs) after the expiration of the contract to payment for the transfer, training, and promotion. The Court also found restrictions established by sports associations, according to which in matches organized by them, football clubs can field only a limited number of professional players who are citizens of other member states, to be incompatible with community rules. This initiated negotiations between the European Commission, FIFA, and UEFA, which ended with the signing of an agreement on March 5, 2001, regarding the new transfer system in football. The result of this agreement is the Regulations of October 13, 2003, concerning the Status and Transfer of Players (hereinafter referred to as the "RSTP").
In summary of the remaining allegations, it should be mentioned that FIFpro argues that the new transfer system did not solve the problem that was the subject of the Bosman case.
It is stated that before the introduction of the RSTP, a transfer fee had to be paid for a player even though his contract had expired, and now a fee must be paid for a player bound by a contract. The organization sees the system as objectifying players, making them assets subject to turnover, which is contrary to the European Charter of Fundamental Rights. It points out that a player who signed a contract is essentially unable to terminate it because the compensation he would have to pay is calculated based on his market value, that is, the transfer fee paid for the player. Therefore, players are limited in their ability to change employers, which affects the competitiveness of the market and introduces barriers.
Once again, I will mention that the organization did not disclose the content of the complaint, so I can only assess the published statement, which I find... less convincing. First of all, I emphasize that the complaint was filed due to an alleged violation of competition law by the organization, hence the reference to the Charter of Fundamental Rights and the freedom of movement of workers is somewhat tangential. FIFpro alleges that a player bound by a contract cannot change clubs without "buying out" the contract for a transfer fee. In my opinion, this is rather obvious, assuming that the principle stemming from Roman law, which requires the observance of contracts, is not unique to the Polish legal system but is a norm in all European and other legal systems.
Therefore, if a player decides to sign a contract for a specified period of time, the assumption of such a contract is that it will be fulfilled. After all, a transfer is nothing more than a payment from the acquiring club to the releasing club for releasing the player from the obligation to perform the contract. The contract cannot be indefinite but only for a specified period, up to a maximum of five years. However, it is logical that if a player decides to sign a longer contract or extend the contract well in advance, this fact will be reflected in the player's earnings.
There are no legal obstacles for players to sign short contracts, for example, for one season, and only after the end of the season decide whether to stay at the club or look for employment elsewhere. However, for practical reasons, they enter into longer contracts, which is beneficial both for themselves (risk of injury, loss of form) and for the club. As a comparison, Polish labor law also limits the possibility of terminating fixed-term employment contracts. Such contracts can only be terminated with notice if such a possibility has been stipulated in the contract.
However, existing FIFA regulations provide opportunities for terminating the current contract if there are justified reasons. The organization argues that players are often left without means to live in cases where clubs are late in paying salaries. It should be noted that as a result of, among other things, FIFPro's actions, UEFA has adopted guidelines for national football associations regarding the minimum requirements for professional football contracts. These provisions allow players to unilaterally terminate contracts in cases of salary payment arrears.
I have written about Polish regulations in this regard HERE. It would be advisable, of course, to standardize these rules and introduce them into the RSTP, but in practice, at least in European clubs, and since the complaint is being filed with the European Commission, a player whose club fails to meet its obligations on time is not "sentenced" to remain with the club.
Referring to the arguments regarding the "commoditization" of players and treating them as assets subject to trade, it should be reminded that the player's consent is a prerequisite for a transfer to take place. Of course, there have probably been pathological cases where a player was forced into a transfer, but even the best-designed regulations cannot eliminate such pathological situations. The regulations related to compensation for unilateral unjustified termination of a contract also faced criticism.
The organization argues that in such a case, the player is obliged to pay his "market value," often a staggering transfer fee. However, it is worth noting that this principle works both ways, and a club that unilaterally terminates a contract without justified reasons is obliged to pay the player's salary for the remaining duration of the contract, i.e., the player's remaining earnings (according to internal PZPN regulations, this amount may be reduced if the player finds a new club, by the amount of the salary paid to him). Fifpro also drew attention to the practice of Third Party Ownership, which was recently banned by FIFA. Interestingly, some player agencies have taken legal action (before the national courts of Member States) arguing that the TPO ban violates European law.
Personally, the arguments of FIFpro do not convince me, although I suspect that the complaint itself is much better justified than it appears from the abbreviated summary available on the organization's website. Of course, I am far from saying that the RSTP is a legislative masterpiece, although the content of the regulations represents a compromise taking into account the specificity of sports. It is difficult to imagine athletes changing jobs in a manner dictated by labor law regulations, multiple times during a season.
I also do not agree with the arguments that the current system only supports the wealthiest clubs. I consider mechanisms like solidarity payments and training compensation to be much more successful than, for example, the national idea of - training equivalent. Criticizing the huge sums of money involved in player transfers, it should be remembered that from the solidarity payment alone, 5% of the transfer amount goes to the clubs that trained the player. We will probably have to wait a few years for a resolution in this matter, and of course, any developments on this issue will be reported on the blog.