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. 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...

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...


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...



Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part.1: The historical, legal and political foundations - 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.


In 2019, training compensation and solidarity contributions based on FIFA’s Regulations on the Status and Transfer of Players (RSTP) amounted to US$ 75,5 million. This transfer of wealth from the clubs in the core of the football hierarchy to the clubs where the professional players originated is a peculiar arrangement unknown in other global industries. Beyond briefly pointing out or reminding the reader of how these systems work and the history behind them, this blog series aims to revisit the justifications for FIFA-imposed training compensation and the solidarity mechanism, assess their efficacy and effects through a case study of their operation in the African context, and finally analyse the potential impact of upcoming reforms of the FIFA RSTP in this context.

First, it is important to go back to the roots of this, arguably, strange practice. The current transfer system and the legal mechanisms constituting it were largely the result of a complex negotiation between European football’s main stakeholders and the European Commission dating back to 2001. The conclusion of these negotiations led to a new regulatory system 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. Before paying some attention to the historical influences and how we arrived at these changes, as well as the justifications from the relevant bodies for their existence, let us briefly recall what training compensation and the solidarity mechanisms actually are. More...



Asser International Sports Law Blog | Sports governance 20 years after Bosman: Back to the future… or not? By Borja García

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

Sports governance 20 years after Bosman: Back to the future… or not? By Borja García

Editor's note:

Dr Borja García joined the School of Sport, Health and Exercise Sciences at Loughbourough University in January 2009 as a Lecturer in Sport Management and Policy. He holds a PhD in Politics, International Relations and European Studies from Loughborough University (United Kingdom), where he completed his thesis titled ‘The European Union and the Governance of Football: A game of levels and agendas’.

 

In this leafy and relatively mild autumn, we are celebrating two important anniversaries. Recently, we just passed ‘Back to the Future day’, marking the arrival of Marty McFly to 2015. In a few weeks, we will be commemorating the 20th anniversary of the Bosman ruling. Difficult to decide which one of the two is more important. As we move well into the 21st century’s second decade, these two dates should mark a moment to consider innovation. They are perhaps occasions to take stock and reflect how much sport has evolved to reach this new future… or not.

When Marty McFly ‘landed’ on October 21st 2015, at 4.29 PM, he found a whole new world. Flying skateboards, holograms, massive jumbo screens… There was not much reference to sport governance in Back to the Future, although in the vein of the rest of the film, one would anticipate a modern, innovative and decidedly better sporting world. However, if Marty McFly, coming from the 1980s or 1990s, had arrived into the real October 21st 2015 and looked at the present state of sport governance, he may have thought his De Lorean was not working properly! Twenty years on from Bosman, and more than a decade since major scandals that were supposed to change the landscape of sport (so we were told back then), a familiar feeling of déjà-vu emerges when reading the sport news nowadays.

The late 1980s and 1990s were characterised by legal insecurity, scandals and transformation in the governance of sport. There were legal challenges to the legitimacy of governing bodies. Bosman was just one of them, but on the back of the ruling the European Commission was inundated with questions related to the application of EU law to the rules of sport governing bodies. Those were also days of major public opinion upheaval against the institutionalised doping or the mismanagement of the IOC.

Fast forward to 2015 and we find ourselves in a very similar situation! After a period of relative calm, legal challenges from stakeholders against rules and regulations of governing bodies have flourished everywhere. Dutch skaters against ISU, Mr. Striani against UEFA, FIFPro against the international transfer system, the Spanish and Portuguese leagues against FIFA... just to name a few. Moreover, it seems as if doping and corruption never left us. It was cycling back then, and Russian athletics now. It was the Olympics and Salt Lake City in the 1990s, football, Russia and Qatar now. It seems not much progress has been achieved in 20 years.

Why is that? One of the reasons is that, despite some changes and mild modernisation, the governance structures are still very similar. No flying skateboards around FIFA or the IOC, I am afraid. Sport continues to be regulated by international federations trying to keep their place at the top of a pyramid that, however, is no longer there because it has given place to a much more complex network. The transformation from vertical governance to horizontal structures, that caused many problems in the public sector as described by Rod Rhodes[1] (among others), has not been correctly addressed in sport.

As Jack Anderson has correctly pointed out, perhaps one of the problems is that the current political governance structures of sport are not fit for purpose. They lack real separation of powers. For example, when the Spanish athlete (now a senator!) Marta Domínguez is allegedly accused of doping due to irregularities in her blood passport, WADA sends the dossier to the Spanish Athletics Federation, in which Domínguez was a vice-president for a few years, serving under the current president (who has been in charge since 1989, so probably Marty McFly knows him well!). Can the disciplinary committees of such a body be really independent and be expected to pass a clear and decisive judgment? Of course, they cannot and have not done so!

But the questions are perhaps more systemic. Are international sport federations really fit for the purpose of modern sport? The new reality of sport is one where the commercial dimension is increasingly divorcing from the coveted grassroots or sport-for-all Holy Grail. ISFs, and most public sport policies, are still attempting to house these two different realities under one common roof. Questions need to be asked as to whether this confusion des genres is even possible. There was a time in which the European Commission suggested that international federations had to separate their regulatory and commercial roles. But not much has been done in that respect since the Formula 1 case. Perhaps it should be accepted that elite and professional sport needs a new approach. If ISFs are serious, they need to start putting in place much more modern management and governance structures. Executive committees need to stop being ‘representative’ of the stakeholders, turning to be ‘skills based’. They need, of course, to be much more age, race and gender diverse. Independent directors need to be fully incorporated to councils, boards and federations’ EXCOs. Standing committees need to be more independent and need to have targets… This is nothing new, but it reads as a revolution in the world of international sport.

Given the governance failures of sport, it is often questioned whether public authorities could/should/ought to regulate or bring sport to account. Here, it seems fair to say that following the political ‘backlash’ of Bosman, aptly articulated by some sport bodies, politicians have erred on the cautious side. The idea that the EU “was trying to kill club football in Europe”, as put forward by Lennart Johanson on 16 December 1995 was powerful enough to discourage the EU, and other public authorities for that matter, to regulate sport. The reality is that, to date, perhaps the EU is the only public body that has managed to bring to account international sport, even in a limited fashion, as I have argued in a recent article[2]. The mainstreaming of the autonomy and specificity of sport into EU policies, however, has deterred EU institutions from pursuing a much more proactive approach in the control and regulation of sport.

After Bosman, there was a period in which both sport and EU law found each other. There were negotiations and some changes in both sides. There were even positive noises coming from different social dialogue committees. The calm, however, has been broken abruptly. And we have woken up back to the future, as if 1995 had never passed. ASSER’s very own Antoine Duval, and some authors such as Arnout Geeraert have recently argued that the EU should be much stronger in its application of EU law to sport. The problem is: can they really do it? In an increasingly Eurosceptic environment amongst the peoples of Europe, can the EU really risk trying to have a go at sport? It can be argued, that sport as an area of ‘soft politics’ and popular culture may give the EU some of its lost legitimacy back. But I am not so sure. In a recent survey, part of the FREE Project, we asked Europeans in nine countries whether they trusted the EU (amongst other bodies) to regulate the governance of football. The answer was clear: No, they do not. Of the nine different organisations offered in the survey, the EU was the third least trusted body, only above the media and national governments. In the survey, only 40% of the Europeans in the nine countries polled trusted the EU in this respect. This goes down to 21% when the survey is restricted to core football fans, not the general public. In other words, Europeans do not trust the EU, nor national governments to improve the governance of football. So, if the EU tries to have a stronger position in the application of European law and policies to sport, it may well backfire.

Normally, I have refrained from such a normative approach to governance. As a political scientist, I prefer to analyse what actors do, rather than to tell them, what to do. However, it is clear to me that what they have done so far is not working. Twenty years on from Bosman, and a visit of Marty McFly after, the ‘future’ of international sport governance looks conspicuously similar to the past. And it is not good. We need a solution that brings us to the future, to a real future where the past is finally put to rest.


[1] Rhodes, RAW. (1997) Understanding governance: policy networks, governance, reflexivity and accountability, Maidenhead: Open University Press.

[2] Meier, HE and García, B. (2015) ‘Protecting private transnational authority against public intervention: The power of FIFA over national governments’. Public Administration, Early view, September 2015, doi: 10.1111/padm.12208.

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