Gab Marcotti explains a breaking story that could have massive implications for the soccer world in the years to come.
On Friday, FIFPro, the world footballers' union, will lodge a legal complaint against FIFA with the European Commission arguing that current transfer regulations are illegal and anti-competitive. It could lead to the biggest shake-up in the game since the Bosman ruling.
Really? Tell me more.
Currently, transfers of players between clubs are governed by the Regulations on the Status and Transfer of Players (RSTP), which FIFA produced back in 2001 and has updated periodically. If you want to nerd out, you can read it here.
No thank you. I'll let you explain what I need to know.
OK, so it all begins with Jean-Marc Bosman. He was a Belgian footballer who took his case to the European Court of Justice, which eventually ruled in his favor. His contract had expired but owing to the rules at the time, his club could still charge a transfer fee if he moved.
The European courts found the transfer rules at the time were illegal and a form of restraint of trade. Players who were out of contract were granted free agency, and limits on the number of foreigners per team were deemed to be illegal, at least within the European Union.
Yep, I remember all that...
So FIFA and others were worried by the implication in the Bosman ruling. If players were to be treated just like any other worker, did that also mean they could resign, give notice and walk out on their teams? That was the terrifying thought at the time: total anarchy.
The European Commission realized this too and instructed FIFA to sit down with other stakeholders (UEFA, clubs, FIFPro, etc.) to hammer out a set of rules that would comply with European Law while still ensuring some level of stability. The commission urged them to ensure whatever rules they came up with met five basic criteria.
They needed to safeguard the players' contracts (e.g. you couldn't be downsized just because your manager no longer liked you), maintain the stability of competitions (e.g. you couldn't have guys switching teams every week), ensure the stability of clubs (e.g. remain financially viable), promote competitive balance (e.g. wherever possible, the rules should allow all teams to have a chance at success) and finally, promote solidarity (e.g. money had to trickle down).
FIFPro now say those RSTP rules have failed footballers. They believe most of those goals aren't being achieved, and rules need to be rewritten.
Do they have a point?
In some ways, yes. Take contractual stability, for example; there are plenty of footballers who simply don't have it. A FIFPro survey of more than 3,000 players in 12 countries revealed 42 percent claimed they weren't paid on time, and 14 percent said they often received their paychecks three months late.
My heart bleeds for them. Must be hard getting paid late when you're getting paid $10 million a year.
Yeah, but that applies to a tiny minority of players. FIFPro represent some 70,000 footballers. The vast majority don't make millions -- they're relatively normal folks with normal salaries who have mortgage and car payments to make.
OK, fine. But if you don't get paid and you're under contract, you can sue, right?
Yes, but in some countries you wouldn't trust the legal system as far as you can throw it. In many others, it's still a process that can take several years. Plus, suing a football club for breach of contract brings other hardships: Twelve percent of players surveyed said they were victims of violent acts, while 10 percent said they were subjected to bullying. And they can't just leave and play for another club because FIFA would consider it a breach of contract, and they would be banned.
But can't they just complain to FIFA or their FAs about their clubs and at least get released from their contracts?
They can complain to their FAs, but in some countries, it's a long and difficult process. They can complain to FIFA but that can take even longer, and in the meantime, they sit and don't get paid. As Theo Van Seggelen, FIFPro's secretary general, puts it, "It's like playing Russian roulette with five bullets."
So what about FIFPro's other points?
Here, I think they're on slightly shakier grounds. It's hard to argue competitions aren't more stable as a result of the RSTP, but FIFPro say clubs are no more stable because they continue to go bust and into administration. That may be true, but it's not clear whether the transfer system is responsible as much as bad decision-making (and maybe dubious owners).
There is little in the way of competitive balance in most top leagues, but again, is that down to transfer regulations? I would have thought other aspects -- wealthy owners, allocation of TV revenues, socioeconomic differences, the size of the club -- seem more important.
And the re-allocation of resources? The trickledown effect? Surely FIFPro are wrong about that too?
Not necessarily. They point out that while some portion of the transfer fees does trickle down to lower divisions and smaller clubs, it's a small proportion of the total. And the vast majority of transfer spending is simply big clubs trading with one another. But I actually think this point is somewhat irrelevant...
How so?
Well, it may have been one of the stated goals of the Commission but if you want to redistribute resources, there are much better ways to do it than tweaking transfer regulations. You can distribute TV money differently or make clubs share box office revenues. That would have much more of a direct effect.
OK, so back to this complaint. What happens next?
Well, the Commission will either uphold it or reject it. If they uphold it, they'll ask FIFA to sit down with stakeholders such as UEFA, the European Clubs' Associations (ECA), the European Professional Football Leagues (EPFL) and, of course, FIFPro and write better regulations that actually comply with EU law.
Wait, time out. What is all this about the European Commission and European Law? Shouldn't this be a worldwide issue?
Well, yeah, but you can't expect FIFPro to sue in 190+ countries at the same time. The European Commission is as good a place as any because it governs 25 countries, and most of the world's biggest leagues are among them. It was the same thing with Bosman. The rest of the world (and certainly FIFA) tends to fall into line with what the Commission wants.
Got it. So FIFA and the stakeholders rewrite the rules. But surely they're not going to agree to abolish transfer fees and transfer windows and stuff like that? And, in any case, the European Commission isn't going to ask them to do that, is it?
Well, we just don't know. Nobody thought Bosman was going to win either, remember? But I agree; it's unlikely they'll decide to overhaul the system to that point, but FIFPro can still use it to get better terms for players.
Like what?
Well, maybe hard and fast rules whereby if you're not getting paid, you at least become a free agent rather easily so you can find another job while you seek redress in the courts. And maybe some sort of solidarity fund -- perhaps a tiny percentage of FIFA's huge media rights revenue -- so that players who are waiting to get compensation via the courts can at least keep their households running.
That seems fair. Who would argue with that?
Well nobody, except perhaps the odd football club owner. The sticking point, I think, will be this business with freedom of movement and whether players should have the right to seek new employment while still under contract without the payment of a transfer fee.
Haven't we been here before?
Indeed. You may recall something called Article 17 of the RSTP. It basically allowed a player who was under contract to breach his contract and sign for another club, provided certain conditions were met. So, for example, you could only do it if you were a certain age and if you had completed three years under your current contract.
The first case was a guy named Andy Webster, who moved from Hearts to Wigan in 2006. But there were only a couple cases after that and, in fact, it soon became unworkable.
Why?
Under Article 17, there was still compensation to be paid. But rather than establish a clear mathematical formula for deciding the compensation -- like, say, the residual value of the contract -- they decided FIFA's Dispute Resolution Chamber would determine it.
In Webster's case, the compensation was quite reasonable, around $250,000. But shortly thereafter when Brazilian midfielder Matuzalem invoked Article 17 to leave Shakthar Donetsk, things turned out differently. The DRC set compensation at around $8 million. And when it was appealed and the case went to the Court of Arbitration of Sport, they went even higher, putting it at around $15m -- around ten times Matuzalem's salary. Van Seggelen said, "It was like a tackle from behind from CAS."
The bottom line is nobody invoked Article 17 since then. The uncertainty over compensation and the risk of essentially paying what would equate to a transfer fee (or more) became a huge deterrent.
So I'd imagine it's something FIFPro may look to revisit. Whether the clubs go for it is another matter.
So when will all this happen?
Not for a while. I doubt the Commission will come up with a decision for another year or so. And they'll have to negotiate, most likely with some kind of deadline. So it could be a couple of years before anything changes.