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

New Event! Zoom In on World Anti-Doping Agency v. Russian Anti-Doping Agency - 25 February - 16:00-17:30 CET

On Thursday 25 February 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), organizes a Zoom In webinar on the recent award of the Court of Arbitration for Sport (CAS) in the case World Anti-Doping Agency (WADA) v. Russian Anti-Doping Agency (RUSADA), delivered on 17 December 2020.


Background
In its 186 pages decision the CAS concluded that RUSADA was non-compliant with the World Anti-Doping Code (WADC) in connection with its failure to procure the delivery of the authentic LIMS data (Laboratory Information Management System) and underlying analytical data of the former Moscow Laboratory to WADA. However, the CAS panel did not endorse the entire range of measures sought by WADA to sanction this non-compliance. It also reduced the time frame of their application from four to two years. The award has been subjected to a lot of public attention and criticisms, and some have expressed the view that Russia benefited from a lenient treatment.   

This edition of our Zoom in webinars will focus on assessing the impact of the award on the world anti-doping system. More specifically, we will touch upon the decision’s effect on the capacity of WADA to police institutionalized doping systems put in place by certain states, the ruling’s regard for the rights of athletes (Russian or not), and its effect on the credibility of the world anti-doping system in the eyes of the general public.


To discuss the case with us, we are very happy to welcome the following speakers:


Participation is free, register HERE.

Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 5: Rethinking Redistribution in Football - By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi recently completed a Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.

 

As one may have gathered from the series thus far, the question that comes out of this endeavour for me, is whether redistribution in football would be better divorced from the transfer system?

In my introductory blog I point towards historical, cultural, and of course the legal explanations as to why redistribution was established, and why it might be held onto despite obvious flaws. In my second blog, I point out how the training compensation and solidarity mechanisms work in practice through an African case study, as well as the hindrance caused and the Eurocentricity of the regulations. The key take-away from my third blog on the non-application of training compensation in women’s football might be that training compensation should apply to both men’s and women’s football, or neither. The sweeping generalisation that men’s and women’s football are different as justification for the non-application to the women’s game is not palatable, given inter alia the difference between the richest and poorest clubs in men’s football. Nor is it palatable that the training compensation mechanism is justified in men’s football to incentivise training, yet not in women’s football.

In the fourth blog of this series, I raise concerns that the establishment of the Clearing House prolongs the arrival of a preferable alternative system. The feature of this final blog is to consider alternatives to the current systems. This endeavour is manifestly two-fold; firstly, are there alternatives? Secondly, are they better?  More...


Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 4: The New FIFA Clearing House – An improvement to FIFA’s training compensation and solidarity mechanisms? - By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi recently completed a Bachelor of Law (LL.B) and a Bachelor of Philosophy (B.Phil.) at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.

In September 2018, the Football Stakeholders Committee endorsed the idea of a Clearing House that was subsequently approved in October of the same year by the FIFA Council. A tender process commenced in July 2019 for bidders to propose jurisdiction, operation and establishment. Whilst many questions go unanswered, it is clear that the Clearing House will be aimed at closing the significant gap between what is owed and what is actually paid, in respect to training compensation and solidarity payments. The Clearing House will have other functions, perhaps in regard to agents’ fees and other transfer related business, though those other operations are for another blog. It will hence act as an intermediary of sorts, receiving funds from a signing and therefore owing club (“new” club) and then moving that money on to training clubs. Whilst separate to FIFA, to what extent is unclear.

I have landed at the position of it being important to include a section in this blog series on the soon to commence Clearing House, given it appears to be FIFA’s (perhaps main) attempt to improve the training compensation and solidarity mechanisms. As will be expanded upon below, I fear it will create more issues than it will solve. Perhaps one should remain patient and optimistic until it is in operation, and one should be charitable in that there will undoubtedly be teething problems. However, it is of course not just the function of the Clearing House that is of interest, but also what moving forward with the project of the Clearing House represents and leaves unaddressed, namely, the issues I have identified in this blog series. More...

New Event! Zoom In on International Skating Union v. European Commission - 20 January - 16.00-17.30 (CET)

On Wednesday 20 January 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret, is organising a Zoom In webinar on the recent judgment of the General Court in the case International Skating Union (ISU) v European Commission, delivered on 16 December 2016. The Court ruled on an appeal against the first-ever antitrust prohibition decision on sporting rules adopted by the European Commission. More specifically, the case concerned the ISU’s eligibility rules, which were prohibiting speed skaters from competing in non-recognised events and threatened them with lifelong bans if they did (for more details on the origin of the case see this blog). The ruling of the General Court, which endorsed the majority of the European Commission’s findings, could have transformative implications for the structure of sports governance in the EU (and beyond).

We have the pleasure to welcome three renowned experts in EU competition law and sport to analyse with us the wider consequences of this judgment.


Guest speakers:

Moderators:


Registration HERE


Zoom In webinar series

In December 2020, The Asser International Sports Law Centre in collaboration with Dr Marjolaine Viret launched a new series of zoom webinars on transnational sports law: Zoom In. You can watch the video recording of our first discussion on the arbitral award delivered by the Court of Arbitration for Sport (CAS) in the Blake Leeper v. International Association of Athletics Federations (IAAF) case on the Asser Institute’s Youtube Channel. Click here to learn more about the Zoom In webinar series.

Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 3: The Curious Non-Application of Training Compensation to Women’s Football – By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi is a final semester Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) student, at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.

 

As recently as September 2020, questions were raised in the European Parliament on the non-application of training compensation to women’s football. Whilst this blog will predominantly consider potential inconsistencies in reasoning for and against training compensation in men’s and women’s football, the questions before the Commission were largely on the theme of disrespect and discrimination. Somewhat unfortunately, the questions raised were side-stepped, with Ms Gabriel (Commissioner for Innovation, Research, Culture, Education and Youth) simply stating that: “The TFEU does not give the Commission the competence to interfere in the internal organisation of an independent international organisation such as FIFA.” This might be true in theory, though one might feel some degree of uneasiness if privy to the Commission’s role in the 2001 FIFA regulatory overhaul.

It is currently explicit in the regulations and the commentary, that in women’s football, signing clubs are not required to compensate training clubs for developing players, through the training compensation mechanism that exists in men’s football. Though it is a contentious comment and as will be expanded below, this may not have always been the case.

At Article 20 of the FIFA Regulations on the Status and Transfer of Players (RSTP), one will find that the principles of training compensation shall not apply to women’s football. Further, in FIFA’s recently released Women’s Football Administrator Handbook (the handbook), it states that disputes relating to training compensation are limited for the moment to male players only.[1]

Regulations on solidarity contributions on the other hand do apply to women’s football, but given transfer fees are not so common, the use of the mechanism is not either. As an indication of how uncommon the activation of the solidarity contribution mechanism in women’s football might be, FIFA reported in the handbook just four claims with the Players’ Status Department in 2016 (three claims involving the same player), and zero since.[2] That is in comparison to hundreds of claims made per season in men’s football, where signing and owing clubs had not fulfilled their obligation to pay the solidarity contribution.

Given the aforementioned, this blog will largely focus on training compensation and how it came to be the case that this mechanism, often presented as critical in the context of men’s football, does not apply in women’s football. To do so, I will first discuss the reasoning advanced in an unpublished CAS award, which one may reasonably suspect played a fundamental role in shaping the current exemption. I will then turn to FIFA’s timely response to the award and the adoption of its Circular No. 1603. Finally, I will point out the disconnect in FIFA’s decision to adopt two radically different approaches to the issue of training compensation in male and female professional football. More...


New Event! Zoom In on Transnational Sports Law - Blake Leeper v. IAAF - 4 December at 4pm (CET)

The Asser International Sports Law Centre in collaboration with Dr Marjolaine Viret is launching a new series of zoom webinars on transnational sports law: Zoom In. The first discussion (4 December at 16.00) will zoom in on the recent arbitral award delivered by the Court of Arbitration for Sport (CAS) in the Blake Leeper v. International Association of Athletics Federations (IAAF) case.

In this decision, reminiscent of the famous Pistorius award rendered a decade ago, the CAS panel ruled on the validity of an IAAF rule that places the burden on a disabled athlete to prove that a mechanical aid used to compete in IAAF-sanctioned competitions does not give them an overall competitive advantage. While siding with the athlete, Blake Leeper, on the burden of proof, the CAS panel did conclude that Leeper’s prosthesis provided him an undue advantage over other athletes and hence that the IAAF could bar him from competing in its events.

To reflect on the key aspects of the decision and its implications, we have invited scholars with different disciplinary backgrounds to join the zoom discussion. 

Confirmed guests

 Moderators


The webinar is freely available, but registration here is necessary.

Last call to register to the 2021 edition of the Sports Law Arbitration Moot - Deadline 1 December

Dear all,

Our Slovenian friends (and former colleague) Tine Misic and Blaž Bolcar are organising the second edition of the Sports Law Arbitration Moot (SLAM).

The best four teams of the SLAM competition will compete in the finals, which will be held in Ljubljana, Slovenia, on 30th and 31st March, 2021.

This is a great opportunity for students to familiarise themselves with the world of sports arbitration, to meet top lawyers and arbitrators in the field, and to visit beautiful Ljubljana.

Go for it!

You'll find more information and can register at https://sportlex.si/slam/en

Pistorius revisited: A comment on the CAS award in Blake Leeper v. IAAF - By Marjolaine Viret

On 23 October 2020, a panel of the Court of Arbitration for Sport (‘CAS’) rendered an award in the matter opposing Mr Blake Leeper (‘Mr Leeper’ or ‘the Athlete’) to the International Association of Athletics Federation (‘IAAF’).[1] The CAS panel was asked to make a ruling on the validity of the IAAF rule that places on a disabled athlete the burden to prove that a mechanical aid used to compete in IAAF-sanctioned competitions does not give such athlete an overall competitive advantage.

The award is remarkable in that it declared the shift of the burden of proof on the athlete invalid, and reworded the rule so that the burden is shifted back on the IAAF to show the existence of a competitive advantage. Thus, while the IAAF won its case against Blake Leeper as the panel found that the sport governing body had discharged its burden in casu, the outcome can be viewed as a victory for disabled athletes looking to participate in IAAF-sanctioned events. It remains to be seen how this victory will play out in practice. Beyond the immediate issue at stake, the case further presents an illustration of how – all things equal – assigning the burden of proof can be decisive for the real-life impact of a policy involving complex scientific matters, as much as the actual legal prerequisites of the underlying rules.

This article focuses on some key aspects of the award that relate to proof issues in the context of assessing competitive advantage. Specifically, the article seeks to provide some food for thought regarding burden and degree of proof of an overall advantage, the contours of the test of ‘overall advantage’ designed by the CAS panel and its possible bearing in practice, and potential impact of the ruling on other areas of sports regulations such as anti-doping.

The award also analyses broader questions regarding the prohibition of discrimination in the regulation of sports, as well as the interplay with international human rights instruments such as the European Convention on Human Rights (‘ECHR’), which are not explored in depth here. More...

Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 2: The African Reality – By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi is a final semester Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) student, at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.


Having considered the history and justifications for the FIFA training compensation and solidarity mechanisms in my previous blog, I will now consider these systems in the African context. This appears to be a worthwhile undertaking given these global mechanisms were largely a result of European influence, so understanding their (extraterritorial) impact beyond the EU seems particularly important. Moreover, much has been written about the “muscle drain” affecting African football and the need for such drain to either be brought to a halt, or, more likely and perhaps more practical, to put in place an adequate system of redistribution to ensure the flourishing of African football that has essentially acted as a nursery for European football for at least a century. In the present blog, I intend to draw on my experiences as a football agent to expand on how FIFA’s redistributive mechanisms function in practice when an African player signs in Europe via one of the many kinds of entities that develop or purport to develop talent in Africa. I will throughout address the question of whether these mechanisms are effective in a general sense and more specifically in relation to their operation in Africa.More...



International and European Sports Law – Monthly Report – October 2020 - By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi is a final semester Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) student, at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.


The Headlines

Aguero and Massey-Ellis incident: An Opportunity for Change and Education?

In mid-October a clip went viral of Argentinian star Sergio Aguero putting his hands on sideline referee, Sian Massey-Ellis. A heated debate ensued in many circles, some claiming that Aguero’s conduct was commonplace, others taking aim at the appropriateness of the action, around players touching official and a male touching a female with an unsolicited arm around the back, the squeeze and pull in. Putting the normative arguments aside for a moment, the irony of the debate was that all sides had a point. Football, almost exclusively, has grown a culture of acceptance for touching officials despite the regulations. Male officials who have let such conduct slide, have arguably let their female colleague down in this instance.

Whilst a partial defence of Aguero might be that this kind of conduct takes place regularly, the incident could serve as a learning experience. If Massey-Ellis’ reaction was not enough, the backlash from some of the public might provide Aguero and other players the lesson, that touching a woman in this way is not acceptable.

Returning to football, the respect and protection of officials in sport, the key here appears to be cracking down on touching officials entirely. This is not a foreign concept and football need only look at the rugby codes. Under no circumstances does the regulations or the culture permit that a player from the rugby codes touch a referee. It is likely the case that the obvious extra level of respect for officials in these sports derives from a firm culture of no touching, no crowding officials, communicating with officials through the team captain only, with harsh sanctions if one does not comply.

The Football Association of England has decided no action was necessary, raising questions of how seriously they take the safety of officials, and gender issues. This is ultimately a global football issue though, so the confederations or international bodies may need step in to ensure the protections that appear at best fragile.  


Rugby Trans issue

The World Rugby Transgender guideline has been released and contains a comprehensive unpacking of the science behind much of the regulatory framework. Despite many experts applauding World Rugby on the guidelines and the extensive project to reach them, the England Rugby Football Union is the first to defy the World Rugby ruling and transgender women will still be allowed to play women’s rugby at all non-international levels of the game in England for the foreseeable future. This clash between national bodies and the international body on an important issue is concerning and will undoubtedly be one to keep an eye on.

 

CAS rejects the appeal of Munir El Haddadi and the Fédération Royale Marocaine de Football (FRMF)

The refusal to authorise a footballer to change national federation is in the headlines with the CAS dismissing the appeal of the player and Moroccan federation, confirming the original determination of the FIFA Players’ Status Committee.

This has been given considerable recent attention and seemingly worth following, perhaps best summed up by FIFA Director of Football Regulatory, James Kitching, where in a tweet he notes: “The new eligibility rules adopted by the FIFA Congress on 18 September 2020 have passed their first test. We will be publishing our commentary on the rules in the next fortnight. Watch this space.” More...



Asser International Sports Law Blog | Blog Symposium: Why FIFA's TPO ban is justified. By Prof. Dr. Christian Duve

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

Blog Symposium: Why FIFA's TPO ban is justified. By Prof. Dr. Christian Duve

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective. 

Editor’s note: Finally, the last blog of our TPO ban Symposium has arrived! Due to unforeseen circumstances, FIFA had to reconsider presenting its own views on the matter. However, FIFA advised us to contact Prof. Dr. Christian Duve to author the eagerly awaited blog on their behalf. Prof. Dr. Christian Duve is a lawyer and partner with Freshfields Bruckhaus Deringer LLP and an honorary professor at the University of Heidelberg. He has been a CAS arbitrator until 2014. Thus, as planned, we will conclude this symposium with a post defending the compatibility of the TPO ban with EU law. Many thanks to Prof. Dr. Duve for having accepted this last-minute challenge!


This blog article outlines FIFA’s reasons to introduce Art. 18ter FIFA Regulations on the Status and Transfer of Players (RSTP) which bans third-party ownership of players’ economic rights (TPO). In recent years, TPO was perceived as a threat to the integrity of football competitions within the international football community[i] and has become an area of concern for FIFA. Nevertheless Art. 18ter RSTP has been heavily criticized mainly by the proponents of TPO and a complaint has been filed with the European Commission by the Spanish and the Portuguese Leagues for an alleged violation of EU competition law. In the following it will be shown that such criticism does not sufficiently take into consideration the specific characteristics of the practice of TPO as well as football in general. It explains the rationale behind Art. 18ter RSTP which

-      fosters the integrity of competition which is a priority topic for FIFA,

-      promotes the independence of clubs by preventing third parties’ influence in sporting decisions,

-      leads to stable squads,

-      provides an opportunity for investors to invest in the clubs rather than in single players,

-      leads to financially healthier clubs.

Hence, with the introduction of Art. 18ter RSTP, FIFA pursues legitimate aims which justify the ban of the TPO practice.


1.              FIFA’s Way to Art. 18ter RSTP

TPO covers various situations in which a third party invests in the economic rights of a player in order to receive a compensation with regard to a future transfer. Whilst it is widely used in South America and in Southern Europe as an alternative funding possibility, especially to finance investments in sporting talent,[ii] TPO is explicitly prohibited in England, France and Colombia.[iii] The English ban on TPO was introduced in 2008 after the commotion caused by the Tévez case in 2006 where the contract between Tévez and West Ham United contained a provision giving a third party owner the right to decide on the transfer and the transfer fee of the player without any right to veto by the club.

FIFA has introduced a new rule Art. 18bis RSTP which prohibits clubs to enter into contracts that are liable to jeopardise the club’s independence, its policies or the performance of its teams and freedom of decision-making in employment and transfer-related matters and came into force on 1 January 2008.[iv] However, after having mandated two studies providing data and information on TPO in several countries in 2013 and 2014, it was felt that Art. 18bis RSTP was not sufficient and did not address this subject in an appropriate manner. Therefore FIFA decided to introduce a new Art. 18ter RSTP as from 1 May 2015.

The main provision of Art. 18ter RSTP reads:

1.      No club or player shall enter into an agreement with a third party whereby a third party is being entitled to participate, either in full or in part, in compensation payable in relation to the future transfer of a player from one club to another, or is being assigned any rights in relation to a future transfer or transfer compensation. […]

It has been criticized that Art. 18ter RSTP prevents and restricts competition in the market for capital investment in football in a way that is not proportionate for attaining its legitimate objective and that Art. 18ter RSTP is therefore incompatible with EU Competition law. However, such criticism does not sufficiently take into consideration the specific characteristics of football as will be shown in this blog.


2.              The Rationale of Art. 18ter RSTP

First and foremost, Art. 18ter RSTP protects the integrity of the game itself by allowing for the necessary freedom in the contractual relationship between a club and a player, to determine whether and when the player is fielded as well as to decide independently and for sporting reasons only whether and when they are transferred.

Second, with regard to financial aspects of the clubs, critics undervalue that Art. 18ter RSTP is limited to a prohibition of an investment in a club’s players and does not in any way limit an investment in the clubs themselves leading to financially healthier clubs.

2.1           Art. 18ter RSTP Fosters the Integrity of Football

Art. 18ter RSTP pursues several legitimate aims, inter alia, the integrity of competition (2.1.1.), the independence of clubs (2.1.2.) and the stability of squads (2.1.3.).

2.1.1      Integrity of Competition

The protection of the integrity of the game is not only one of FIFA’s main objectives according to Art. 2 e) of the FIFA Statutes, it was also recognized by the European Commission as a legitimate aim justifying limitations on competition.

With regard to the UEFA rule on the “Integrity of the UEFA Club competitions: Independence of clubs” establishing a ban on the ownership of several clubs participating in the same competition by the same person or company, the European Commission held that the ban was in any case a necessary rule to ensure its legitimate aim of protecting the integrity of sporting competitions by “protecting the uncertainty of the results and giving the public the right perception as to the integrity of the […] competitions with a view to ensure their proper functioning“.[v] Previously, a Court of Arbitration for Sport (CAS) decision has also confirmed the validity of this limitation and found that “when commonly controlled clubs participate in the same competition, the «public’s perception will be that there is a conflict of interest potentially affecting the authenticity of results»” and that “that ownership of multiple clubs competing in the same competition represents a justified concern for a sports regulator and organizer”.[vi]

The danger of such conflicts of interests is, however, not limited to club owners, it extends to investors, agents and coaches. Similar to the situations in which a third party has interests in several clubs participating in the same competition, conflicts of interests can also arise in cases where third parties own shares in economic rights of several players of different teams which are competing against each other.[vii] Especially if a player in which a third party has an economic interest competes against a club that is owned by the same investor, there is a significant potential for such conflicts. Even within the same team, the risk of having the same owner of a number of players presents a competitive integrity risk.[viii]

In any case and irrespective of an actual conflict, a conflict may at least be perceived by the public in connection with TPO. Such perception leads to a loss of confidence in the integrity of the competition and damages the image of the sport. In the light of the increasing threat of match manipulation, the involvement of third-party owners creates a danger to the reputation of the competition that could weaken the football world. The integrity of the game is therefore only guaranteed if players and clubs are not influenced by third parties owning the players’ economic rights with the aim to maximize their investment.[ix]

2.1.2      Independence of Clubs

To ensure the independence of its Members’ affiliated clubs is one of FIFA’s objectives pursuant to Art. 18 para. 2 of the FIFA Statutes. The second TPO study found that “the spread of TPO in the majority of the cases may be closely related to a partial takeover of the clubs’ control by actors seeking primarily short-term profit and speculating on the purchase and sale of economic rights, regardless of sporting concerns”[x]. TPO potentially has an impact on player selection on the field of play and creates complications for transfer negotiations as the clubs’ sporting interests (e.g. of holding a player despite a lucrative offer or of letting a player go without being offered a lucrative transfer fee) may conflict with investors seeking a profitable return on their investment.

Even though interests may coincide if the investor speculates for a rise in the player’s market value (e.g. Santos FC refusing Chelsea FC’s offer for Neymar), one prominent example of conflicting interests is the Tévez case in which West Ham United was deprived of any rights with regard to a future transfer of the player. More recently, contract renewal negotiations with Zambrano, a key player of Eintracht Frankfurt, are jeopardized by a third party whose entitlement to future transfer compensation for Zambrano is to be bought by Eintracht.[xi] 

Overall, the more clubs are depending on TPO financing, the more negotiating power third party investors have. The second TPO study mentions the purchase of economic rights at preferential prices, pre-emptive rights on new players or even greater influence on transfer policy.[xii] Moreover, with players’ economic rights in the hands of various investors the fragmentation of interests within a club increases. The independence of clubs can only be guaranteed by preventing a partial takeover of the clubs’ control by third parties especially with regard to transfers.

2.1.3      Stability of Squads

The aforementioned clash of interests between investors speculating on the purchase and sale of players’ economic rights and clubs reoccurs when it comes to the frequency of transfers. Whereas an investor makes money out of transfers, a club may be more interested in building a stable team and team cohesion for sporting reasons. The Demographic Study of CIES in 2014 found that “in general, the number of transfers carried out by teams during the current season is at an all-time high” and stated that “the increasing speculation surrounding players’ transfers is also visible through the progressive drop in the number of club-trained players, which has attained its lowest level since 2009”.[xiii] Pursuant to the same study, players recruited from January 2013 onwards represented 41.3% of squads on average (10.2 signings per club). At the same time, the best performing clubs generally have the most stable squads. For instance, FC Barcelona has the most stable squad among European top division teams. Its Players have been for 5.5 years in the first team squad on average pursuant to the Demographic Study of CIES in 2014.[xiv]

Leagues and club representatives stressed in the Second TPO study that the increasing gaps between clubs in terms of stability contribute to the general decline in the competitive balance both at national and international level.[xv] FIFA’s overall objective to promote football, laid down in Art. 2 a) of the FIFA Statutes, is endangered by such contractual instability caused by TPO.

2.2           Art. 18ter RSTP Provides an Incentive for Investment in Clubs

Football clubs play the central role with regard to the aforementioned legitimate aims. In order to achieve those objectives, appropriate financing mechanisms are fundamental for football clubs. It is undisputed that clubs need external sources. A solution that takes sufficiently into account the role of the clubs and their needs can only be to finance clubs directly. By prohibiting the TPO of single players’ economic rights, Art. 18ter RSTP creates an incentive for investors to invest in the clubs themselves.

Admittedly, some football clubs have been affected by financial difficulties and thus do not seem to be attractive for investors at first sight. In this context, however, it must be taken into account that clubs that seek regular access to talent by means of TPO are becoming even more and more dependent on the regular injection of funds from external investors which may lead to a “vicious circle of debt and dependence”.[xvi] With a club selling its players’ economic rights to third parties, the value of the respective club’s assets decreases. As a result, it is even harder to find potential investors interested in financing the club.[xvii] Therefore TPO cannot be a sustainable financing option. Improving the overall financial health of club football is a major concern for football associations. Therefore the UEFA Financial Fair Play Regulations (FFP) were established to prevent professional football clubs from excessive spending. Although the regulations only contain disclosure requirements with regard to TPO, they were released in view of a TPO ban.[xviii]

Overall, critics therefore have to take into account that Art. 18ter RSTP prohibits only one single form of investment whilst it promotes at the same time investment in the clubs specifically tailored to the overarching aim of fostering the integrity of the game.


3.              Conclusion

Art. 18bis RSTP has already targeted the aforementioned legitimate aims. However, this provision may be easily circumvented by inserting a clause into the TPO agreement stating that it does not permit any exercise of influence by the third party within the club’s employment and transfer-related matters, policies or performance of its team. In practice, the engaged third parties will interfere with a club’s sporting decisions in many cases despite such a contractual clause. Interviewees in the second TPO study reported that in practical terms, many third­party investors do influence the transfer of players.[xix] Therefore, there is a consensus among football stakeholders that TPO should be restricted. The legitimate aims underlying Art. 18ter RSTP can be achieved most effectively by a total ban of the TPO practice. Whereas critics point to the lack of financing options caused by the prohibition of TPO, this blog has argued that in the specific context of football competitions the integrity of the game benefits from direct investments in the clubs.


[i] Cp. FIFA Circular no. 1420 of 12 May 2014.

[ii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 3.

[iii] Moreover, Poland has a rule which is interpreted by its football association as prohibiting third parties to hold a player’s economic rights with an exception for former clubs, cp. TPO study I, p. 3, 17 et. seq.

[iv] Art. 18bis RSTP, as introduced in 2008, reads:

1.   No club shall enter into a contract which enables any other party to that contract or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.

2.   The FIFA Disciplinary Committee may impose disciplinary measures on clubs that do not observe the obligations set out in this article.

[v] European Commission, Rejection Decision of 25 June 2002, Case COMP/37 806: ENIC/ UEFA, para. 47.

[vi] Arbitration CAS 98/200 AEK Athens and SK Slavia Prague / Union of European Football

Associations (UEFA), award of 20 August 1999, para. 48 (available at http://jurisprudence.tas-cas.org/sites/CaseLaw/Shared%20Documents/200.pdf).

[vii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p.  9, 81.

[viii] Cp. Third-party ownership of players’ economic rights, Part I., Centre international d’étude du sport, p. 33.

[ix] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 81 et. seq.

[x] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 8.

[xi] Available at: http://www.fr-online.de/eintracht-frankfurt/carlos-zambrano-eintracht-frankfurt-zambrano-deal-gefaehrdet,1473446,29843342.html.

[xii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

[xiii] Available at http://www.football-observatory.com/demographic-study-2014-now.

[xiv] Available at http://www.football-observatory.com/demographic-study-2014-now.

[xv] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 78.

[xvi] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 9.

[xvii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

[xviii] Available at http://www.uefa.com/community/news/newsid=2064391.html.

[xix] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

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