Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Doyen vs. Sporting II: The Bitter End of Sporting’s Fight at the Swiss Federal Supreme Court. By Shervine Nafissi

Editor’s Note: Shervine Nafissi (@SNafissi) is a Phd Student in sports law and teaching assistant in corporate law at University of Lausanne (Switzerland), Faculty of Business and Economics (HEC).

 

Introduction

The factual background

The dispute concerns a TPO contract entitled “Economic Rights Participation Agreement” (hereinafter “ERPA”) concluded in 2012 between Sporting Lisbon and the investment fund Doyen Sports. The Argentine player was transferred in 2012 by Spartak Moscow to Sporting Lisbon for a transfer fee of €4 million. Actually, Sporting only paid €1 million of the fee while Doyen Sports financed the remaining €3 million. In return, the investment company became the owner of 75% of the economic rights of the player.[1] Thus, in this specific case, the Portuguese club was interested in recruiting Marcos Rojo but was unable to pay the transfer fee required by Spartak Moscow, so that they required the assistance of Doyen Sports. The latter provided them with the necessary funds to pay part of the transfer fee in exchange of an interest on the economic rights of the player.

Given that the facts and circumstances leading to the dispute, as well as the decision of the CAS, were fully described by Antoine Duval in last week’s blog of Doyen vs. Sporting, this blog will solely focus on the decision of the Swiss Federal Supreme Court (“FSC”) following Sporting’s appeal against the CAS award. As a preliminary point, the role of the FSC in the appeal against CAS awards should be clarified.More...

Doyen vs. Sporting I: Doyen’s Pyrrhic Victory at the CAS

At the end of December 2015, the CAS decided on a very public contractual dispute between Sporting Clube de Portugal Futebol SAD (Sporting) and Doyen Sports Investments Limited (Doyen). The club was claiming that Doyen’s Economic Rights Participation Agreement (ERPA) was invalid and refused to pay Doyen’s due share on the transfer of Marcos Rojo to Manchester United. The dispute made a lot of noise (see the excellent coverage by Tariq Panja from Bloomberg here, here and here) as it was the first TPO case heard by the CAS after FIFA’s ban. Yet, and it has to be clear from the outset, the case does not affect the legality of FIFA’s TPO ban; it concerned only the compatibility of Doyen’s ERPA with Swiss civil law. The hearing took place in June 2015, but the case was put under a new light by the football leaks revelations unveiled at the end of 2015 (see our blog from December 2015). Despite these revelations, the CAS award favoured Doyen, and was luckily for us quickly made available on the old football leaks website. This blog will provide a commentary of the CAS decision. It will be followed in the coming days by a commentary by Shervine Nafissi on the judgment, on appeal, by the Swiss Federal Tribunal. More...

FIFA’s provision on the protection of minors - Part 3: The compatibility of Article 19 with EU law. By Kester Mekenkamp.

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre. This blog is, to a great extent, an excerpt of his forthcoming thesis, which he shall submit in order to complete his master’s degree.

This final blog aims to provide some broader perspective, by sketching first the grander scheme in which Article 19 RSTP – FIFA's provision on the protection of minors – operates. Thereafter, the focus will shift towards testing Article 19 RSTP, thereby keeping in mind the previous blogs (Part 1: The Early Years and Part 2: The 2009 reform and its aftermath), against EU free movement law.  


Putting Article 19 RSTP into perspective: The bigger picture

After having investigated the nuts and bolts of FIFA’s provision on the protection of minors in the first two parts of this blog, it might be useful to address its bigger picture.

Article 19 RSTP and its accompanying provisions regulate only a small share of the targeted activity. There is, unfortunately, also an illegal world. Circumvention of the prohibition is allegedly commonplace.[1] Visas and passports can be falsified.[2] Work permits can be obtained on the basis of jobs arranged by clubs.[3] More...


FIFA’s provision on the protection of minors - Part 2: The 2009 reform and its aftermath. By Kester Mekenkamp.

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre. This blog is, to a great extent, an excerpt of his forthcoming thesis, which he shall submit in order to complete his master’s degree.


This is the second part of a three-piece blog on FIFA’s provision on the protection of minors, Article 19 of the Regulations on the Status and Transfer of Players. The contribution in its entirety aims to provide an encompassing overview of the rule’s lifespan since its inception in 2001. The previous (first) part has shed light on the “birth” and “first years” of the provision, and as such illustrated the relevant developments from 2001 till 2009. This second part covers the rule’s “adolescent years”, which span from 2009 to the present. The major changes put forward in the 2009, 2015 and 2016 versions of the RSTP will be addressed. Thereafter the important CAS decisions concerning Article 19, Muhic, Vada I and II, FC Barcelona, RFEF, and the FIFA decisions relating to Real Madrid and Atlético Madrid, will be scrutinized. The third, and final, part will constitute a substantive assessment of the provision under EU Internal Market law.

Given that the version adopted in 2008 left Article 19 untouched, the 2009 RSTP represented the next significant step in the regulation of the protection of minors. It had become clear that the system as used up to that point was inadequate to achieve its goal,[1] most notably because several national associations still neglected to strictly apply the rules.[2] More...


FIFA’s provision on the protection of minors - Part 1: The Early Years. By Kester Mekenkamp.

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre. This blog is, to a great extent, an excerpt of his forthcoming master thesis. 


On 24 November 2016, a claim was lodged before a Zurich commercial court against FIFA’s transfer regulations by a 17-year-old African football player.[1] The culprit, according to the allegation: The provision on the protection of minors, Article 19 of the Regulations for the Status and Transfer of Players.[2] The claimant and his parents dispute the validity of this measure, based on the view that it discriminates between football players from the European Union and those from third countries. Besides to Swiss cartel law, the claim is substantiated on EU citizenship rights, free movement and competition law. Evidently, it is difficult to assess the claim’s chance of success based on the sparse information provided in the press.[3] Be that as it may, it does provide for an ideal (and unexpected) opportunity to delve into the fascinating subject of my master thesis on FIFA’s regulatory system aimed at enhancing the protection of young football players and its compatibility with EU law. This three-part blog shall therefore try to provide an encompassing overview of the rule’s lifespan since its inception in 2001. More...


The entitlement to Training Compensation of “previous” clubs under EU Competition Law. By Josep F. Vandellos Alamilla

Editor’s note: Josep F. Vandellos is an international sports lawyer associated to RH&C (Spain). He is also a member of the Editorial Board of the publication Football Legal and a guest lecturer in the ISDE-FC Barcelona Masters’ Degree in Sports Management and Legal Skills.


Article 6 of Annexe IV (Training compensation) of the FIFA-RSTP (Ed. 2016) contains the so-called “Special Provisions for the EU/EEA” applicable to players moving from one association to another inside the territory of the European Union (EU) or the European Economic Area (EEA).
The provisions regarding training compensation result from the understanding reached between FIFA and UEFA with the European Union in March 2001[1], and subsequent modifications introduced in the FIFA-RSTP revised version of 2005 to ensure the compatibility of the transfer system with EU law.[2]
This blog will focus on the exception contained in article 6(3) Annexe IV of the FIFA-RSTP. According to this article, when “the former club” fails to offer a contract to the player, it loses its right to claim training compensation from the players’ new club, unless it can justify that it is entitled to such compensation. Instead, the right of “previous clubs” to training compensation is fully preserved irrespective of their behaviour with the player.[3] From a legal standpoint, such discrimination between the “former club” and the “previous clubs” raises some questions that I will try to address in this paper. More...



Unpacking Doyen’s TPO Deals: The Final Whistle

Footballleaks is now operating since nearly half a year and has already provided an incredible wealth of legal documents both on TPO (and in particular Doyen’s contractual arrangements) and on the operation of the transfer system in football (mainly transfer agreements, player contracts and agents contracts). This constant stream of information is extremely valuable for academic research to get a better grip on the functioning of the transfer market. It is also extremely relevant for the shaping of public debates and political decisions on the regulation of this market. As pointed out on the footballleaks website, it has triggered a series of press investigations in major European news outlets.

In this blog, I want to come to a closure on our reporting on Doyen’s TPO deals. In the past months, we have already dealt with the specific cases of FC Twente and Sporting Lisbon, reviewed Doyen’s TPO deals with Spanish clubs, as well as discussed the compatibility of the TPO ban with EU law. In the Sporting Lisbon case, Doyen has since earned an important legal victory in front of the CAS (the ensuing award was just published by Footballleaks). This victory should not be overstated, however, it was not unexpected due to the liberal understanding of the freedom of contract under Swiss law. As such it does not support the necessity of TPO as an investment practice and does not threaten the legality (especially under EU law) of FIFA’s ban.

In our previous blogs on Doyen’s TPO deals we decided to focus only on specific deals, Twente and Sporting Lisbon, or a specific country (Spain). However, nearly six months after the whole footballleaks project started, we can now provide a more comprehensive analysis of the TPO deals signed by Doyen. Though, it is still possible that other, yet unknown, deals would be revealed, I believe that few of Doyen’s TPO agreements are still hidden. Thanks to footballleaks, we now know how Doyen operates, we have a precise idea of its turnover, its return on investments and the pool of clubs with which it signed a TPO agreement. Moreover, we have a good understanding of the contractual structure used by Doyen in those deals. This blog will offer a brief synthesis and analysis of this data.More...





Unpacking Doyen’s TPO Deals – Sporting Lisbon’s rebellion in the Rojo case. By Antoine Duval and Oskar van Maren

In this blog we continue unpacking Doyen’s TPO deals based on the documents obtained via footballleaks. This time we focus on the battle between Doyen and Sporting over the Rojo case, which raises different legal issues as the FC Twente deals dealt with in our first blog.

 

I.              The context: The free-fall of Sporting

Sporting Lisbon, or Sporting Club de Portugal as the club is officially known, is a Portuguese club active in 44 different sports. Although the club has the legal status of Sociedade Anónima Desportiva, a specific form of public limited company, it also has over 130.000 club members, making it one of the biggest sports clubs in the world.

The professional football branch of Sporting is by far the most important and famous part of the club, and with its 19 league titles in total, it is a proud member of the big three cartel, with FC Porto and Benfica, dominating Portuguese football. Yet, it has not won a league title since 2002. More...

A Bridge Too Far? Bridge Transfers at the Court of Arbitration for Sport. By Antoine Duval and Luis Torres.

FIFA’s freshly adopted TPO ban entered into force on 1 May (see our Blog symposium). Though it is difficult to anticipate to what extent FIFA will be able to enforce the ban, it is likely that many of the third-party investors will try to have recourse to alternative solutions to pursue their commercial involvement in the football transfer market. One potential way to circumvent the FIFA ban is to use the proxy of what has been coined “bridge transfers”. A bridge transfer occurs when a club is used as an intermediary bridge in the transfer of a player from one club to another. The fictitious passage through this club is used to circumscribe, for example, the payment of training compensation or to whitewash a third-party ownership by transforming it into a classical employment relationship. This is a legal construction that has gained currency especially in South American football, but not only. On 5 May 2015, in the Racing Club v. FIFA case, the Court of Arbitration for Sport (CAS) rendered its first award involving directly a bridge transfer. As this practice could become prevalent in the coming years we think that this case deserves a close look. More...

The CAS and Mutu - Episode 4 - Interpreting the FIFA Transfer Regulations with a little help from EU Law

On 21 January 2015, the Court of arbitration for sport (CAS) rendered its award in the latest avatar of the Mutu case, aka THE sports law case that keeps on giving (this decision might still be appealed to the Swiss Federal tribunal and a complaint by Mutu is still pending in front of the European Court of Human Right). The decision was finally published on the CAS website on Tuesday. Basically, the core question focuses on the interpretation of Article 14. 3 of the FIFA Regulations on the Status and Transfer of Players in its 2001 version. More precisely, whether, in case of a dismissal of a player (Mutu) due to a breach of the contract without just cause by the player, the new club (Juventus and/or Livorno) bears the duty to pay the compensation due by the player to his former club (Chelsea). Despite winning maybe the most high profile case in the history of the CAS, Chelsea has been desperately hunting for its money since the rendering of the award (as far as the US), but it is a daunting task. Thus, the English football club had the idea to turn against Mutu’s first employers after his dismissal in 2005, Juventus and Livorno, with success in front of the FIFA Dispute Resolution Chamber (DRC), but as we will see the CAS decided otherwise[1]. More...