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Compensation and equivalent for player training (part 1) .

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While discussing the solidarity mechanism, I mentioned that the fees from this aspect are not the only ones that the acquiring club is obliged to pay to the clubs where the player trained. In addition to the transfer fee and the solidarity mechanism fee (for international transfers), the new club may be required to pay compensation for the training of the player if it is affiliated with a different football association than the player's previous club, or an equivalent for the training if the change of club membership occurs within the Polish association. However, it is characteristic that these fees are due only in the case of a change of club membership by young players, up to the age of 23 (with the reservation of the recent change in regulations regarding the training compensation).

 

To clarify the topic, it is worth starting with a certain distinction. The issues of fees for training players from the Polish perspective are regulated by basically three legal acts. The first, mentioned multiple times in previous posts - the FIFA Regulations on the Status and Transfer of Players - abbreviated as RSTP 1)RSTP - Regulations of the Status and Transfer of Players, and the resolutions of the Polish Football Association (PZPN): a resolution regarding the status of players appearing in Polish football clubs and the principles of changing club membership, and resolution no. VIII/121 of June 16, 2011 - principles for determining a lump-sum equivalent for the training of a player with the status of an amateur, a professional player, and a professional player to whom the club did not offer a contract extension.

 

The RSTP and the PZPN resolutions are not competing acts. The RSTP applies when there is a change of club membership for a player between clubs affiliated with different football associations - simply put, clubs from different countries. The PZPN resolutions, on the other hand, concern changes within clubs under the jurisdiction of the association, i.e., Polish football clubs. We will begin discussing the international regulations first, followed by the national regulations in the second part of the article.

 

As a rule, compensation for training is due to be paid to the club that trained the player when he signs his first professional contract or when, already having professional status, he is "transferred" between clubs before reaching the age of 23. According to FIFA regulations, player training generally takes place between the ages of 12 and 23. However, compensation for training is provided for the period between the ages of 12 and 21, and it is paid if the conditions for its award are met before the player turns 23.

 

The assumption that a player trains until the age of 21 is a presumption that can be rebutted. In cases where it is obvious that the player's training process ended before reaching the age of 21, the period for which compensation is due is shortened. 2)art. 1, para. 1 of Annex 3 to the RSTP The immediate question arises: what criteria allow us to determine that a player has completed training before reaching the age of 21? Based on selected jurisprudence from the Court of Arbitration for Sport and the FIFA Dispute Resolution Chamber, a general conclusion can be drawn that a player's training is considered complete if the player is a full member of the team - for example - regularly playing in first-team matches, receiving compensation at the level of other senior squad members, etc. In the case of 2004/A/594 concerning the dispute over training compensation for Yossi Benayoun, it was recognized that the player's training ended when he reached the age of 16.

 

The rationale indicated that the following circumstances supported this:

 

– acknowledgment by the plaintiff that the player is the most talented Israeli player, among all players appearing in the Israeli national teams (junior and senior),

– the amount of monetary compensation received from an earlier loan of the player,

– designation in club documents as the "regular player for the club" 3)„regular player for the club”.

 

In the ruling 2003/O/527, the Court of Arbitration judges ruled that the player completed training in the season in which he signed his first professional contract and played 15 matches for the first team.

 

As I mentioned earlier, compensation for training is due in two cases: when a player is registered for the first time as a professional or when, already a professional, he is transferred between clubs belonging to different football associations. 4)art. 2 of Annex 4 to the RSTP However, compensation is only due if this condition is met no later than the end of the season in which the player turns 23. It is important to note that the term "transfer" 5)when a Professional is transferred between clubs of two different Associations also includes the situation where a player signs a contract with a new club after the expiration of the existing one, while the common understanding would only point to situations where a player terminates the existing contract with his club in agreement and with consent, to sign a contract with the acquiring club.

 

6)Compensation for training is therefore also due in a situation where, after the expiration of the existing contract with club X, the player signs a new contract with club Y. However, an important exception to the above rule must be noted. In cases where both the new and the previous club of the player belong to football associations of countries in the European Union or EEA 7)European Economic Area, the condition for awarding compensation is the offer of a contract by the previous club. If this condition is not met, no compensation is due, unless the previous club can justify that it is entitled to such compensation. Furthermore, the previous club must offer the player a contract in the form of a written letter at least 60 days before the expiration of his current contract. This offer must be for the equivalent value of the current contract. 8)art. 6, para. 3 of Annex 3 to the RSTP

 

This raises the question of what circumstances may justify a club's entitlement to receive compensation despite not making an offer to the player. This issue has been the subject of proceedings before the FIFA Dispute Resolution Chamber and the Court of Arbitration for Sport in Lausanne 9)as a result of an appeal. This case concerned the Dutch goalkeeper Tim Krul,10)known to a wider audience for his performance in the World Cup against Costa Rica, where he came on before the penalty shoot-out and saved 2 penalties who, after the expiration of his contract with ADO Den Haag, signed a contract with Newcastle United. In this dispute, the Dutch team demanded payment of compensation from the English, even though they did not meet the formal requirements specified in the regulation (they did not submit a contract proposal 60 days before the expiration of the contract). However, the Court of Arbitration ruled that the Dutch had sufficiently demonstrated the circumstances justifying the award of compensation.

 

It was found that, due to the fact that representatives of the ADO Den Haag team had been negotiating the signing of a professional contract with the player throughout the season and had also expressed written interest (as required by the regulations of the Dutch Football Association) in further training the player, they acted in good faith and with due diligence. 11)The judgment also clarified two important issues. It was recognized that the first sentence of the provision applies to both professional and amateur players, while the second and third sentences apply only to professional players.

 

The regulations also state that compensation for training is not due in the event that any of the negative conditions are met, such as:

 

- The club terminates the contract with the player without just cause (however, this does not infringe upon the rights of previous clubs to compensation),

- As a result of the transfer, the professional player reverts to amateur status,

- The transfer is conducted to a Category 4 club (more on this shortly).

 

 

After discussing the basis for awarding compensation for player training, it is time to discuss how the amount of compensation is calculated. Compensation is calculated for each season in which the player was trained at the club, between the ages of 12 and 21, unless the player's training ended earlier, in which case the upper limit is the age at which the training was completed. To determine the total amount of training compensation for a player, you must multiply the number of seasons the player played at the club by the corresponding amount listed in the FIFA table.

 

tabela

 

The training compensation aims to reflect the cost that a team would have to bear if it wanted to train the player itself. Therefore, for determining the amount of compensation, the classification of the acquiring club is important, not the previous club. 12)Exception art. 6 par. 1 of Annex 4 to the RSTP Therefore, to determine the amount of compensation, you should: first find the appropriate federation in the table (for European clubs, UEFA), and then the category to which the club is classified. Only clubs from England, France, Germany, Italy, the Netherlands, and Spain (from the top leagues) are classified into the first category. Polish clubs have been classified into categories III and IV. It is also important to note that for training a player between the ages of 12 and 15 (four seasons), fees are charged according to the fourth category, regardless of the category in which the acquiring or first professional contract-signing club is classified.

 

For example, a player born in Argentina played for 6 years in his country in Club X, from the age of 12 to 18. At the age of 19, he signed a contract with Club Y, a Category 1 club in Spain. Club Y is obligated to pay Club X an amount of 310,000 EURO [(4 x 10,000 EUR) + (3 x 90,000 EUR)].

 

In addition to the method described above for determining the amount of compensation, two exceptions have been provided for the transfer of players between clubs within the EU/EEA territory. In such cases, if the clubs belong to different categories, the compensation amount is calculated based on the average training costs of both clubs. However, if the acquiring club is in a lower category than the previous club, the calculation is based on the training costs of the lower category club.

 

So, if the player from the previous example played for a Category III club in Poland and moved to a Category I club in Spain, the compensation would be 220,000 EUR [ (4 x 10,000) + 3 x [(90,000+30,000) : 2]], and if the transfer was in the opposite direction, the club from Poland would be obligated to pay 130,000 EUR.

The competent body for resolving disputes over training compensation is the FIFA Dispute Resolution Chamber. Additionally, Article 5(4) of Annex 4 to the RSTP grants the Chamber the competence to correct the amount due to a club as compensation if it would be evidently disproportionate.

 

The compensation must be paid within 30 days of the player being registered as a Professional, to all clubs that trained the player, in an amount depending on the number of seasons spent at each club. Of course, in the case of a subsequent transfer of the professional player, before he turns 23 years old, the compensation is paid only to the previous club.

Regulations regarding training compensation for domestic transfers will be discussed in the second part of the entry.

 

Photo by Ben Sutherland / Foter / CC BY

 

  1. RSTP – Regulations of the Status and Transfer of Players  
  2. art. 1 para. 1 of Annex 3 to the RSTP  
  3. "regular player for the club"  
  4. art. 2 of Annex 4 to the RSTP
  5. when a Professional is transferred between clubs of two different Associations  
  6. Training compensation is therefore also due in a situation where, after the expiration of the existing contract with club X, the player signs a new contract with club Y.  
  7. European Economic Area  
  8. art. 6 para. 3 of Annex 3 to the RSTP  
  9. as a result of an appeal  
  10. known to a wider audience for his performance in the World Cup against Costa Rica, where he entered the field before the penalty shootout, saving 2 penalties  
  11. The judgment also clarified two more important issues. It was recognized that the first sentence of the provision applies to both professional and amateur players, while sentences 2 and 3 refer only to professional players.
  12. exception under art. 6 para. 1 of Annex 4 to the RSTP