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

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...



The EU State aid and sport saga: The Real Madrid Decision (part 2)

This is the second and final part of the ‘Real Madrid Saga’. Where the first part outlined the background of the case and the role played by the Spanish national courts, the second part focuses on the EU Commission’s recovery decision of 4 July 2016 and dissects the arguments advanced by the Commission to reach it. As will be shown, the most important question the Commission had to answer was whether the settlement agreement of 29 July 2011 between the Council of Madrid and Real Madrid constituted a selective economic advantage for Real Madrid in the sense of Article 107(1) TFEU.[1] Before delving into that analysis, the blog will commence with the other pending question, namely whether the Commission also scrutinized the legality of the operation Bernabeú-Opañel under EU State aid law. By way of reminder, this operation consisted of Real Madrid receiving from the municipality the land adjacent to the Bernabéu stadium, while transferring in return €6.6 million, as well as plots of land in other areas of the city. More...

Resolution of Disputes Arising From Football Contracts in Turkey. By N. Emre Bilginoglu

Editor’s note: N. Emre Bilginoglu[1] is a lawyer based in Istanbul. His book entitled “Arbitration on Football Contracts” was published in 2015.


Introduction

With a total market value of approximately 911 million EUR, the Turkish Super League ranks as one of the prominent football leagues in Europe. Five of the eighteen teams that make up half of the total market value are based in Istanbul, a busy megalopolis that hosts a population of fifteen million inhabitants.[2] As might be expected, the elevated market value brings forth a myriad of disputes, mainly between the clubs and the players. However, other crucial actors such as coaches and agents are also involved in some of the disputes. These actors of the football industry are of all countries, coming from various countries with different legal systems.

One corollary of rapid globalisation is the development of transnational law, which is quite visible in the lex sportiva.[3] Like foreign investors, foreign actors of the sports industry look for some legal security before signing a contract. FIFA does protect these foreign actors in some way, providing players and coaches legal remedies for employment-related disputes of an international dimension. But what if the legal system of the FIFA member association does not provide a reasonable legal remedy for its national actors?[4] More...


The World Anti-Doping System at a Crossroads

“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. ‘Which road do I take?’ she asked. ‘Where do you want to go?’ was his response. ‘I don’t know,’ Alice answered. ‘Then,’ said the cat, ‘it doesn’t matter.”

Tomorrow the Foundation Board of the World Anti-Doping Agency (WADA) will gather in Glasgow for its most important meeting since the creation of the Agency. Since the broadcasting of a documentary alleging systematic doping in Russian athletics by the German public broadcaster in December 2014, the anti-doping world has been in disarray. The various independent investigations (the Pound Report and the McLaren Report) ordered by WADA into doping allegations against Russian athletes have confirmed the findings of the documentary and the truth of the accusations brought forward by Russian whistle-blowers. Undeniably, there is something very rotten in the world anti-doping system. The current system failed to register a widespread, and apparently relatively open, state-sponsored scheme aimed at manipulating any doping test conducted in Russian territory. Moreover, it was not WADA that uncovered it, but an independent journalist supported by courageous whistle-blowers. More...


The EU State aid and sport saga: The Real Madrid Decision (part 1)

Out of all the State aid investigations of recent years involving professional football clubs, the outcome of the Real Madrid case was probably the most eagerly awaited. Few football clubs have such a global impact as this Spanish giant, and any news item involving the club, whether positive or negative, is bound to make the headlines everywhere around the globe. But for many Spaniards, this case involves more than a simple measure by a public authority scrutinized by the European Commission. For them, it exemplifies the questionable relationship between the private and the public sector in a country sick of never-ending corruption scandals.[1] Moreover, Spain is only starting to recover from its worst financial crisis in decades, a crisis founded on real estate speculation, but whose effects were mostly felt by ordinary citizens.[2] Given that the Real Madrid case involves fluctuating values of land that are transferred from the municipality to the club, and vice versa, it represents a type of operation that used to be very common in the Spanish professional football sector, but has come under critical scrutiny in recent years.[3] More...

International and European Sports Law – Monthly Report – October 2016. By Kester Mekenkamp.

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.  


The Headlines
We are looking for an International Sports Law Intern (with a particular interest in the CAS)! More information can be found here.


The (terrible) State of the World Anti-Doping System

The fight against doping is still on top of the agenda after the Russian doping scandal. The national anti-doping organizations (NADOs) have reiterated their call for an in depth reform of the World Anti-Doping Agency at a special summit in Bonn, Germany. These reforms are deemed urgent and necessary to “restore confidence of clean athletes and those who value the integrity of sport” and secure “the public’s desire for a fair and level playing field”. The NADOs propose, amongst others things, to separate the investigatory, testing and results management functions from sports organizations, and to remove sports administrators from crucial anti-doping executive functions. More...




Taking the Blue Pill or the Red Pill: Should Athletes Really Check their Medications against the Prohibited List Personally? - A Comment by Marjolaine Viret (University of Neuchâtel )

Editor's Note:  Marjolaine is an attorney admitted to the Geneva bar (Switzerland) who specialises in sports and life sciences.   She currently participates as a scientific collaborator at the University of Neuchâtel on a research project to produce the first article-by-article legal commentary of the 2015 World Anti-Doping Code. Her latest book Evidence in Anti-Doping at the Intersection of Science & Law was published in 2016 in the International Sports Law Book Series of T.M.C. ASSER Press.


INTRODUCTION

On 30 September 2016, a panel of the Court of Arbitration for Sport (“CAS”) rendered its award in the matter opposing high-profile tennis player Maria Sharapova to the International Tennis Federation (“ITF”). Maria Sharapova was appealing the two-year ban imposed on her by the ITF Tribunal in June 2016 for her use of Meldonium, a substance newly added to the WADA Prohibited List 2016[1]. Since neither the ITF nor WADA had chosen to challenge the Tribunal’s decision, the stakes of the case were rather simple: would the player convince the CAS panel that she should benefit from a finding of “No Significant Fault or Negligence”[2], thereby allowing for a reduction of the sanction down to a minimum of one year, or should the decision of the Tribunal be upheld? In its award, the CAS panel decided to grant such finding and reduced the sanction to 15 months.

This blog does not purport to be a ‘comment’ on the CAS award. Rather, it seeks to place the Sharapova matter into a broader context with respect to a specific issue: the expectations on Athletes when it comes to their awareness of the prohibited character of a substance, specifically when taking a medication[3]. In July 2016, I presented at the T.M.C Asser Institute in The Hague various current challenges of anti-doping that the Meldonium cases exposed (see the video here). One of these challenges concerned the modalities for including new substances onto the Prohibited List. This blog represents a follow-up on my presentation, in the light of the findings contained in the CAS award. More...



Case note: State aid Decision on the preferential corporate tax treatment of Real Madrid, Athletic Bilbao, Osasuna and FC Barcelona

On 28 September 2016, the Commission published the non-confidential version of its negative Decision and recovery order regarding the preferential corporate tax treatment of Real Madrid, Athletic Bilbao, Osasuna and FC Barcelona. It is the second-to-last publication of the Commission’s Decisions concerning State aid granted to professional football clubs, all announced on 4 July of this year.[1] Contrary to the other “State aid in football” cases, this Decision concerns State aid and taxation, a very hot topic in today’s State aid landscape. Obviously, this Decision will not have the same impact as other prominent tax decisions, such as the ones concerning Starbucks and Apple

Background

This case dates back to November 2009, when a representative of a number of investors specialised in the purchase of publicly listed shares, and shareholders of a number of European football clubs drew the attention of the Commission to a possible preferential corporate tax treatment of the four mentioned Spanish clubs.[2]More...



Asser International Sports Law Blog | 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

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

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.

1. Operation and Function of the Clearing House

The Clearing House will apparently work in the following ways:

When a player is registered as a professional for the first time, or, in the case an international transfer becomes known via TMS (Transfer Matching System), a Preliminary Player Passport will be created. This will contain the information acquired by FIFA from the relevant national associations and money owing will be calculated, per the FIFA redistributive mechanisms (enshrined in Article 20 and Annex 4 of the RSTP in the case of training compensation, and at Article 21 and Annex 5 in the case of the solidarity mechanism; see Blog 1 for a comprehensive overview). Aforesaid calculation will be undertaken by FIFA and not the Clearing House, and the Preliminary Passport will be reviewed, then given the green light or conversely disputed by the relevant member associations, rather than the training clubs supposedly due compensation. Payment directions, including bank accounts and official contact details of clubs and national associations connected to the redistribution will then be communicated by FIFA to the Clearing House. An invoice may then be issued to the new club and the obligation of that club is to pay accordingly, to the Clearing House. The Clearing House will then distribute to the training clubs, though its mandate extends to confirming and ensuring the amounts and details are correct, and the money makes it to its destination. FIFA will be made aware of which payment obligations have been fulfilled, and which have not. It is FIFA and not the Clearing House then who may sanction non-compliant clubs.

For a more comprehensive overview of the Clearing House, please see Toni Roca’s piece on the LawInSport website; FIFA’s Clearing House: The Future Of Solidarity Mechanism & Training Compensation.

2. Potential Positives & Success of a Kind

One can see the positive side of modernising, centralising and digitising the transfer system, so as to improve compliance and efficiency in accordance with the regulations as they stand and the payment obligations that arise from those regulations. If achieved, FIFA can say it has ticked that box and many stakeholders will be pleased.

As mentioned in the second blog of this series, “In 2018, it was reported that just USD$67.7m of the USD$351.5m due to be distributed in solidarity contributions, was actually paid. That is a mere 19.3% of what should have trickled down and perhaps just as alarming is that this percentage has been worsening”. If FIFA does in fact close the gap between what is owed and what is paid by way of the Clearing House, that would indeed be success of kind. Hundreds of millions of dollars might make it to training clubs, some of those undoubtedly do not need the compensation, but a large share of those that might benefit are the kind of club I have referred to throughout this series as nurseries and/or victims of the so-called muscle drain. If achieved, one would then have to take their hats off to FIFA, as a specific objective would have been accomplished.

Success in the way imagined above would just be solving one issue, however. I appreciate that hundreds of millions of dollars can go a long way in achieving some form of redistributive solidarity and the fruits of that redistribution could potentially be far-reaching. Though lingering behind this hypothetical success would of course be, what proceeding with the Clearing House ignores.

3. Cause for Concern

Whilst one has to applaud FIFA’s efforts towards improvements, there appears a myriad of questions left unanswered not only about the Clearing House but additionally about the redistributive mechanisms themselves. To proceed under the guise that all is well with these systems and that all that needs to be remedied is the gap between what is owed and what is actually paid, is to ignore much of what I have raised in this blog series.

The following excerpt from a relevant FIFA webpage captures the organisations’ position.

“The original objectives and principles of the transfer rules remain sound: the protection of contractual stability; encouragement of training; solidarity between the elite and grassroots; protection of minors; competitive balance; and ensuring the regularity of sporting competitions”. 

To expand, this kind of sentiment highlights FIFA’s intention to proceed without answering the fundamental questions, as though it is the position held by all that these systems are targeted at legitimate objectives and adequate to attain them. This is clearly not just a case of once the Clearing House is in operation, the systems will simply work perfectly. To put the practical critique aside momentarily, the establishment of the Clearing House is no response to a fundamental critique, the philosophical flaws in justification for the redistributive mechanisms and it appears the hindrance cause by the systems to players’ free movement will continue to be ignored. 

Additionally, and returning to a practical perspective, with the Clearing House relying on a Players Passport, the compliance or non-compliance of national associations to provide and maintain the correct information seems to be what the project hinges on. Historically, some national federations have not been so reliable in this sense, so this is likely to be another aspect that will need significant attention. There may be less disputes given the supposed streamlining of the payment process, but might this quickly be forgotten given the introduction of the Clearing House seems to simultaneously mean an increased administrative burden on FIFA and the national associations? Then let us not proceed as though there will be no disputes at all. We are yet to be made aware what the process will be in the case of a dispute over the amounts calculated, a dispute over the Preliminary Passport, or the expiry dates of outstanding payments, to point to a few issues that may arise. Afterall, the dynamics of a transfer will change with the introduction of the intermediary Clearing House and will take some getting used to. Furthermore, it looks as though the training clubs owed money will not be involved directly in the process of disputes, which is to be dealt with by the member associations. This is questionable, as not all clubs have good relationships with their national associations, nor are national associations necessarily more trustworthy or better positioned to handle a dispute. On occasions it has been found that the reason a training club has not received their training compensation or solidarity payment, was because it was being held by a national federation (see section 4. of Blog 2 for a personal anecdote of an instance as such).

4. Concluding remarks

This account of questions and concerns is not exhaustive, and yet I would emphasise the issues with training compensation and solidarity mechanism more generally. Could the establishment of the Clearing House in fact raise more questions and cause more problems than it solves, given it may just semi-solve one problem, that of the gap between what is owed and what is paid? It is reasonable to ponder whether the commencement of the Clearing House in fact houses, protects and reinforces FIFA’s commitment to systems that are ultimately flawed, when time and energy could be better spent completely overhauling them. As it stands, and if one finds themselves sympathetic to the issues I have identified throughout this series, one can be reasonably concerned that the establishment of the Clearing House prolongs the arrival of a preferable alternative system.

In my next and final blog of this series, I intend to consider alternative systems of redistribution. I will also take the opportunity to address the idea that football clubs are incentivised by training compensation and solidarity payments.

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