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

Goodbye 2015! The Highlights of our International Sports Law Year

2015 was a good year for international sports law. It started early in January with the Pechstein ruling, THE defining sports law case of the year (and probably in years to come) and ended in an apotheosis with the decisions rendered by the FIFA Ethics Committee against Blatter and Platini. This blog will walk you through the important sports law developments of the year and make sure that you did not miss any. More...

Unpacking Doyen’s TPO Deals: In defence of the compatibility of FIFA’s TPO ban with EU law

FIFA’s Third-Party Ownership (TPO) ban entered into force on the 1 May 2015[1]. Since then, an academic and practitioner’s debate is raging over its compatibility with EU law, and in particular the EU Free Movement rights and competition rules. 

The European Commission, national courts (and probably in the end the Court of Justice of the EU) and the Court of Arbitration for Sport (CAS) will soon have to propose their interpretations of the impact of EU law on FIFA’s TPO ban. Advised by the world-famous Bosman lawyer, Jean-Louis Dupont, Doyen has decided to wage through a proxy (the Belgian club FC Seraing) a legal war against the ban. The first skirmishes have already taken place in front of the Brussels Court of first instance, which denied in July Seraing’s request for provisional measures. For its part, FIFA has already sanctioned the club for closing a TPO deal with Doyen, thus opening the way to an ultimate appeal to the CAS. In parallel, the Spanish and Portuguese leagues have lodged a complaint with the European Commission arguing that the FIFA ban is contrary to EU competition law. One academic has already published an assessment of the compatibility of the ban with EU law, and many practitioners have offered their take (see here and here for example). It is undeniable that the FIFA ban is per se restrictive of the economic freedoms of investors and can easily be constructed as a restriction on free competition. Yet, the key and core question under an EU law analysis, is not whether the ban is restrictive (any regulation inherently is), but whether it is proportionate, in other words justified. 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...

Unpacking Doyen’s TPO Deals: FC Twente's Game of Maltese Roulette. By Antoine Duval and Oskar van Maren

The first part of our “Unpacking Doyen’s TPO deals” blog series concerns the agreements signed between Doyen Sports and the Dutch football club FC Twente. In particular we focus on the so-called Economic Rights Participation Agreement (ERPA) of 25 February 2014. Based on the ERPA we will be able to better assess how TPO works in practice. To do so, however, it is necessary to explore FC Twente’s rationale behind recourse to third-party funding. Thus, we will first provide a short introduction to the recent history of the club and its precarious financial situation. More...

Unpacking Doyen’s TPO deals - Introduction

The football world has been buzzing with Doyen’s name for a few years now. Yet, in practice very little is known about the way Doyen Sports (the Doyen entity involved in the football business) operates. The content of the contracts it signs with clubs was speculative, as they are subjected to strict confidentiality policies. Nonetheless, Doyen became a political (and public) scapegoat and is widely perceived as exemplifying the ‘TPOisation’ of football. This mythical status of Doyen is also entertained by the firm itself, which has multiplied the (until now failed) legal actions against FIFA’s TPO ban (on the ban see our blog symposium here) in a bid to attract attention and to publicly defend its business model. In short, it has become the mysterious flag bearer of TPO around the world. Thanks to a new anonymous group, inspired by the WikiLeaks model, we can now better assess how Doyen Sports truly functions. Since 5 November someone has been publishing different types of documents involving more or less directly the work of Doyen in football. These documents are all freely available at http://footballleaks.livejournal.com/. By doing so, the group has given us (legal scholars not involved directly in the trade) the opportunity to finally peruse the contractual structure of a TPO deal offered by Doyen and, as we purport to show in the coming weeks, to embark upon a journey into Doyen’s TPO-world. More...

Book Review: Questioning the (in)dependence of the Court of Arbitration for Sport

Book Review: Vaitiekunas A (2014) The Court of Arbitration for Sport : Law-Making and the Question of Independence, Stämpfli Verlag, Berne, CHF 89,00

The book under review is the published version of a PhD thesis defended in 2013 by Andrew Vaitiekunas at Melbourne Law School. A PhD is often taking stock of legal developments rather than anticipating or triggering them. This was definitely not the case of this book. Its core subject of interest is the study of the independence of the Court of Arbitration for Sport (CAS) – an issue that has risen to prominence with the recent Pechstein ruling of January 2015 of the Oberlandesgericht München. It is difficult to be timelier indeed. More...



The Court of Arbitration for Sport after Pechstein: Reform or Revolution?

The Pechstein ruling of the Oberlandesgericht (OLG) München rocked the sports arbitration world earlier this year (see our initial commentary of the decision here and a longer version here). The decision has been appealed to the German Bundesgerichtshof (BGH), the highest German civil court, and the final word on the matter is not expected before 2016. In any event, the case has the merit of putting a long-overdue reform of the Court of Arbitration for Sport (CAS) back on the agenda. The last notable reform of the structure and functioning of the CAS dates back to 1994, and was already triggered by a court ruling, namely the famous Gundel case of the Swiss Federal Tribunal (SFT). Since then, the role of the CAS has shifted and its practical significance has radically changed (the growth of CAS’s caseload has been exponential). It has become the most visible arbitration court in Switzerland in terms of the number of awards appealed to the SFT, but more importantly it deals with all the high-profile disputes that arise in global sport: think, for instance, of Pistorius, the recent Dutee Chand decision or the upcoming FIFA elections.More...

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. More...


The 2006 World Cup Tax Evasion Affair in Germany: A short guide. By Gesa Kuebek

Editor's note:

Gesa Kuebek holds an LLM and graduated from the University of Bologna, Gent and Hamburg as part of the Erasmus Mundus Master Programme in Law and Economics and now work as an intern for the Asser Instituut.


On Monday, 9 November, the German Football Association (DFB) announced in a Press Release the resignation of its head, Wolfgang Niersbach, over the 2006 World Cup Affair. In his statement, Niersbach argued that he had “no knowledge whatsoever” about any “payments flows” and is now being confronted with proceedings in which he was “never involved”. However, he is now forced to draw the “political consequences” from the situation. His resignation occurred against the backdrop of last week’s raid of the DFB’s Frankfurt headquarters and the private homes Niersbach, his predecessor Theo Zwanziger and long-standing DFB general secretary Horst R. Schmidt. The public prosecutor’s office investigates a particularly severe act of tax evasion linked to awarding the 2006 World Cup. The 2006 German “summer fairy-tale” came under pressure in mid-October 2015, after the German magazine “Der Spiegel” shocked Fußballdeutschland by claiming that it had seen concrete evidence proving that a €6.7 million loan, designated by the FIFA for a “cultural programme”, ended up on the account of Adidas CEO Robert-Louis Dreyfuß. The magazine further argued that the money was in fact a secret loan that was paid back to Dreyfuß. Allegedly, the loan was kept off the books intentionally in order to be used as bribes to win the 2006 World Cup bid. The public prosecutor now suspects the DFB of failing to register the payment in tax returns. German FA officials admit that the DFB made a “mistake” but deny all allegations of vote buying. However, the current investigations show that the issues at stakes remain far from clear, leaving many questions regarding the awarding of the 2006 World Cup unanswered.

The present blog post aims to shed a light on the matter by synthetizing what we do know about the 2006 World Cup Affair and by highlighting the legal grounds on which the German authorities investigate the tax evasion. More...




Blog Symposium: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code. By Mike Morgan

Introduction: The new WADA Code 2015
Day 1: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies
Day 2: The “Athlete Patient” and the 2015 World Anti-Doping Code: Competing Under Medical Treatment
Day 3: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code

Editor's note
Mike Morgan is the founding partner of Morgan Sports Law LLP. His practice is focused exclusively on the sports sector. He advises on regulatory and disciplinary issues and has particular experience advising on doping and corruption disputes.

Mike acted on behalf of National Olympic Committees at three of the last four Olympic Games and has represented other sports bodies, clubs and high profile athletes in proceedings before the High Court, the FIFA Dispute Resolution Chamber, the American Arbitration Association and the Court of Arbitration for Sport. More...






Asser International Sports Law Blog | Unpacking Doyen’s TPO Deals: In defence of the compatibility of FIFA’s TPO ban with EU law

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

Unpacking Doyen’s TPO Deals: In defence of the compatibility of FIFA’s TPO ban with EU law

FIFA’s Third-Party Ownership (TPO) ban entered into force on the 1 May 2015[1]. Since then, an academic and practitioner’s debate is raging over its compatibility with EU law, and in particular the EU Free Movement rights and competition rules. 

The European Commission, national courts (and probably in the end the Court of Justice of the EU) and the Court of Arbitration for Sport (CAS) will soon have to propose their interpretations of the impact of EU law on FIFA’s TPO ban. Advised by the world-famous Bosman lawyer, Jean-Louis Dupont, Doyen has decided to wage through a proxy (the Belgian club FC Seraing) a legal war against the ban. The first skirmishes have already taken place in front of the Brussels Court of first instance, which denied in July Seraing’s request for provisional measures. For its part, FIFA has already sanctioned the club for closing a TPO deal with Doyen, thus opening the way to an ultimate appeal to the CAS. In parallel, the Spanish and Portuguese leagues have lodged a complaint with the European Commission arguing that the FIFA ban is contrary to EU competition law. One academic has already published an assessment of the compatibility of the ban with EU law, and many practitioners have offered their take (see here and here for example). It is undeniable that the FIFA ban is per se restrictive of the economic freedoms of investors and can easily be constructed as a restriction on free competition. Yet, the key and core question under an EU law analysis, is not whether the ban is restrictive (any regulation inherently is), but whether it is proportionate, in other words justified.

I will first present the key arguments of the opponents of the ban, before offering my own assessment. As the reader might know, I am no friends of FIFA and a staunch critic of its bad governance syndrome. Although I am convinced that FIFA’s governance deserves a ground-up rebuilt, I also believe that FIFA’s TPO ban is justified.

 

I.               Antithesis: FIFA’s TPO ban is contrary to EU law 

The legal waters are very much chartered insofar as the question of the application of EU law to FIFA’s TPO ban is concerned.[2] The key legacy of the CJEU’s jurisprudence on sport, starting with the Bosman ruling, is that FIFA’s regulations do not escape the reach of EU law and that they must be subjected to a proportionality control of the restrictions they impose on economic freedoms. The fundamental question with respect to the TPO ban is then whether it will be deemed justified and proportionate by the national courts, the CAS, the European Commission and ultimately the CJEU.

The opponents of the FIFA ban consider first and foremost that the practice of TPO (they usually prefer to refer to as Third-Party Investments or Third-Party Entitlements) is a legitimate financial investment practice, which is needed to sustain and raise the competitiveness of certain clubs. Basically if banks are reluctant to finance those clubs, then less risk-averse investors have to step in. Thus, they support investment in the training capacity of the clubs (especially in South America) and their capacity to take their chances in the most prestigious competitions (for example FC Porto or Atlético Madrid). Hence, TPO can be seen as a legitimate investment practice and its regulation left to the contractual freedom of the parties. Such a radical libertarian view is not often supported nowadays,[3] as the potential integrity risks of TPO are widely acknowledged.[4]

Instead, if the risks connected to TPO are to be tackled, it is argued that TPO should be properly regulated. In EU law jargon, this is labelled a less restrictive alternative.[5] The existence of a less restrictive alternative would point at the disproportionate nature of the FIFA ban. For example, a bundle of regulatory measures are suggested by the Spanish league (La Liga):

·      Prohibition of certain transactions based on the player's age;

·      Maximum percentage of participation in the "economic rights";

·      Quantitative limitations on the maximum number of players per club;

·      Maximum remuneration for the investor;

·      Prohibition of certain clauses that may limit the independence and autonomy of the clubs; and

·      Prohibition of transactions depending on the investor's particular status or business (or participation in the same) such as shareholders, directors and managers of the clubs.

The proposed regulatory changes would undeniably be an improvement with regard to the current situation. However, I do not believe they are sufficiently credible to undermine the legality of FIFA’s TPO ban.

 

II.             Thesis: FIFA’s TPO ban is compatible with EU law

A.    The necessity to tackle the integrity risks generated by TPO

First, we need to come back to the function and functioning of TPO deals. There is a reason why banks refuse to offer loans to certain clubs. They are often in difficult financial situations, their revenues do not add up with their expenses. Investment funds fill this gap, they replace banks in financially supporting these clubs. In return, they expect a modern version of the “pound of flesh”, a share of the transfer fee attached to a specific player. For a club, the TPO investments will only be fruitful while it is successful on the pitch and lucky in picking the players it recruits. It is a very risky bet on the future. In good times everybody wins, but in bad times the club is in deep trouble (see FC Twente’s fate). The TPO system works as a devil’s circle, the club is drawn into more and more TPO deals to stay financially viable.

Furthermore, TPO deals are not unlike the complex financial instruments that led to the terrible financial crisis of 2008. They give way to similar conflicts of interest. Where banks were selling derivatives based on subprime mortgages to their clients while betting against them at the same time, TPO funds might push their clients to recruit (thanks to loans they have generously provided for high interests) a mediocre player in which they already have a stake. Another option would be for a TPO fund, which is often (if not always) also acting as an agent, to force the departure of a player by triggering an offer which the club cannot refuse (or it would have to buy back the rights which is impossible due to its financial situation). The many hat(s) of TPO investment funds are extremely worrying in terms of conflicts of interest.[6] The most dangerous, though in my view less likely (but see the Tampere case), risk being that TPO investors would use their broad networks of influence to fix games. FIFA’s objective of curbing those risks is clearly a legitimate one.

The heart of the trade of TPO funds is to leverage the hubris of football clubs, to corner them into making a bad financial deal in return for a credible shot at winning a title. But once the high is over, the low starts and the awakening is rather uncomfortable. The high financial risks saddled to the club are sustainable only so long as it is a winner. As soon as its fate on the pitch turns, the bad news accumulates and not unlike a bank run the club crashes, while the investors have more often than not managed to escape before the fall. In short, unless you truly believe in the superpowers of the invisible hand of the market, this practice, as well as the financial practices that led to the financial crisis, deserves either a thorough regulation or an outright ban.

B.    Is there a realistic regulatory alternative to the ban?

The key question for the assessment of the TPO ban under EU law is whether the many negative externalities triggered by the use of TPO could be tackled by the way of a less restrictive encroachment on the economic freedoms of the investors/clubs than the FIFA ban. Critics of the ban have very much insisted on the existence of less restrictive regulatory alternatives and put forward some proposals. Yet, I am of the opinion that these alternatives are generally unworkable in the present context. The main reason being that FIFA is incapable to properly regulate and control the TPO investment market. This is due to the fact that FIFA does not dispose of the legal competence needed to force investment funds to disclose information. To do so, it must be empowered by governments to be able to cease the information wanted, which is unlikely. Some would object, that this could be done via the FIFA TMS system put in place to supervise international transfers. But it would be extremely difficult for FIFA to verify any complex set of contractual information entered into the TMS. The destiny of former article 18 bis of the FIFA Regulations on the Status and Transfers of Players (see the 2014 version here) is there to prove this point. Under article 4.2 of Annexe 3 of the FIFA RSTP 2014, Clubs were already supposed to provide a “Declaration on third-party payments and influence”. Nonetheless, in previous years, FIFA was unable to charge any club (except for Tampere in a match-fixing context and due to a local police investigation) on the ground that an investor was exercising undue influence, mainly because it lacked the knowledge needed to do so. This is exemplified in the case of the ERPA signed by Doyen and FC Twente, which was only partially disclosed to the Dutch Football Association.

If FIFA is powerless, how is it supposed to enforce the ban? Well here lies the crucial difference between a ban and complex regulation. A ban is simpler to enforce, as it is merely a black-or-white matter. FIFA will be able to rely on investigative journalists unearthing investment contracts linked to transfers. The mere existence of a TPO contract will lead to a dissuasive sanction, without the need to get into the nitty-gritty details of each case. It thus makes it easier for FIFA to control the use of TPO and to force investment funds to come out in the open and take charge of the management of a club if they wish to stay active on the transfer market. The higher probability of being caught linked to the use of TPO will most likely work as a strong deterrent for clubs to engage in such a financing practice. This is undeniably a blunt instrument, and in an ideal world a true regulation of the TPO market would be put in place and enforced, but this ideal world is not compatible with the pluralist and complex transnational legal setting in which the transfer system operates. The complex regulatory schemes proposed as substitute to the ban are very well intended, but they do not take into account the extreme difficulty (and costs) linked to their implementation. The fiasco of the old FIFA Players’ Agents Regulations illustrates the practical constraints that burden any regulation of the football transfer market.

C.    TPO is not compatible with the 2001 agreement between the European Commission and FIFA

There is a final argument in favour of the compatibility of the TPO ban with EU law, which is grounded in the 2001 agreement between FIFA, UEFA and the European Commission. As should be obvious by now, the existence of TPO is dependent on the existence of the FIFA transfer system. Such a transfer system is unknown in other industries (though one could very well imagine a transfer system for academics for example). In turn, the FIFA transfer system restricts the economic freedom of both clubs and players. The European Commission highlighted these restrictions during its investigation of the FIFA transfer system in the early 2000s. However, the Commission signed an agreement with FIFA and UEFA signalizing its support for a new (the current) FIFA transfer system in 2001 and put an end to its investigation. This support was conditioned on the idea that a form of transfer system was needed to maintain the contractual stability necessary to the existence of stable and successful teams.[7] This is the fundamental assumption that underlies the compatibility with EU law of the FIFA transfer system, and therefore the sheer existence of TPO. Yet, TPO as a practice is per se promoting contractual instability. Players have to change clubs for TPO investors to cash in on their investments. It is perfectly logical for TPO contracts to include various clauses strongly incentivizing clubs to sell their players. If not, they will have to bear the costs, for example, of paying a fee (usually the invested amount plus a healthy interest) in case the player leaves the club on a free transfer, or forcing the club to buy back at market rate the investors’ shares in the economic right of a player in case of an offer above a minimum price. For a cash-strapped club, e.g. a club that lost access to the banking system and has to turn to TPO investors, this is usually impossible and means that it will be forced to sell-on the player. In a way, TPO is a radical perversion of the deal stroke by FIFA/UEFA and the Commission. The transfer system was meant to ensure that contractual stability is secured in football, not to enhance contractual instability. This contradiction between TPO and the rationale conditioning the legality under EU law of the FIFA transfer system will necessarily bear on the EU Commission’s analysis of FIFA’s TPO ban.

 

Conclusion: TPO is a symptom, the transfer system is the problem

20 years of the Bosman case oblige, the case has been back in the news cycle this week (see here, here, and here). It is widely credited, or rather blamed, for having changed football for bad, turning it into some kind of commercial monster. I very much doubt this storytelling is right. It is based on a collective misreading of the case. Bosman took stock of a contemporary development in football at that time: the eagerness of the “football family” to commercialize its activities by primarily selling TV rights in a monopoly position. What Bosman is about, then, it is the regulation of this economic activity. Central questions are: How should the proceeds be distributed and especially who should bear the costs of ensuring competitive balance amongst the teams? Until Bosman the players were the main losers, they could not move freely across Europe and in some countries they could not transfer for free even after the end of their contracts. This situation was deemed an unjustified restriction on the player’s freedom by the Court. Nevertheless, and this is widely forgotten, Bosman is not about dogmatically ensuring that economic freedoms and a deregulated market always prevail. In fact, Advocate General Lenz was advocating as an alternative to the transfer system that the economic revenues derived from TV rights be shared more equally to ensure competitive balance.[8] This is obviously an important restriction on the economic freedom of clubs and leagues, yet the Court endorsed it as viable alternative.[9] Since then, the Court has repeatedly approved various type of sporting regulations restricting the economic freedoms of athletes or clubs.[10] After Bosman, FIFA and UEFA (supported by many clubs) insisted on maintaining a transfer system instead of the alternative suggested by Lenz and the Court. Despite the Commission’s aforementioned challenge of the legality of the FIFA transfer system, FIFA and UEFA were able to marshal the political support of the most influential Member States (France, Germany and the UK) in their bid to save the transfer system.[11] This led to the 2001 agreement and to the survival of the transfer system in its current form.

It is certainly ironical that the transfer system is based on the same legal principles denounced by UEFA and FIFA officials when they talk of slavery regarding TPO. This hypocrisy, rightly pointed out by the critics of the ban,[12] does not entail that the TPO ban is contrary to EU law, as they in turn seem to assume. However, it does imply that TPO as a practice is just the tip of the iceberg. In fact, it is a symptom, as well as the murky world of agents, of a global transfer market gone rogue. This is due mainly to the insistence of FIFA in transforming players into moveable assets included on the balance sheets of clubs. The transfer system is certainly not about contractual stability or the financing of training facilities. Indeed, FIFA is trumpeting the growing number of transfers each year (see this year’s celebratory press release here) and is very much dragging its feet as far as enforcing training compensations and solidarity payments is concerned.[13] Undoubtedly, there is some doublespeak going on. If clubs are forced to turn to TPO investors it is mainly because FIFA and UEFA (and the big clubs) have refused to put in place the necessary redistributive mechanisms to ensure a minimum of competitive balance as was advocated by the CJEU in the Bosman ruling 20 years ago (and by the EU Commission recently). Instead, they have put their faith into a transfer system that is neither correcting competitive imbalances nor guaranteeing contractual stability (a view supported by Stefan Szymanski on behalf of FIFPro). FIFA has lost control over its Frankenstein-like transfer system and it is desperately trying to rein its negative externalities with regulatory patches (e.g. UEFA’s Financial Fair-play Rules or FIFA’s TPO ban). In this regard, the TPO ban is unlikely to contravene EU law, but it is also unlikely to be a solution to the many problems caused by FIFA and UEFA’s handling of the post-Bosman football era.


[1] See FIFA Circular no. 1464 announcing the ban.

[2] This is well done by Johan Lindholm in his article: Can I please have a slice of Ronaldo? The legality of FIFA’s ban on third-party ownership under European union law.

[3] The Spanish Competition Authority comes close to such a view in its advisory opinion criticizing FIFA’s TPO ban. It states at page 6 (in Spanish): “Se ha de partir del hecho de que si el mercado ha facilitado la aparición de estas operaciones es porque una multitud de agentes (tanto clubs como jugadores), actuando de manera descentralizada, han considerado que es lo mejor para sus intereses. Por tanto, la prohibición del TPO resulta en una limitación de la capacidad de obrar y de la libertad de empresa, restringiendo el uso de una conducta que en principio es maximizadora de beneficios (o minimizadora de pérdidas).”

[4] Even though very reluctantly by the Spanish Competition Authority, see p.9-10.

[5] This is also the view of Johan Lindholm, he considers that “regulation is likely a legally more successful response to the perceived ills of TPO”.

[6] This is also true for other types of third party funding, for example in arbitration.

[7] This is in essence the meaning of paragraph 57 of the EU Commission’s rejection decision in the Affaire IV/36 583-SETCA-FGTB/FIFA. The paragraph states : « La protection des contrats pendant une période de durée limitée qui se traduit par des sanctions correspondant notamment à la suspension du joueur pendant une période de 4 mois à 6 mois (dans des cas de récidives) semble indispensable pour garantir la construction d’une équipe. Un club a besoin d’un temps minimum pour construire son équipe. Si un joueur pouvait rompre unilatéralement son contrat dès la première année et être transféré à la fin de la saison vers un autre club, sans aucune sanction autre que la compensation financière, son club d’origine n’aurait pas de possibilité de construire convenablement son équipe. Les sanctions visent donc à démotiver les joueurs de rompre unilatéralement leurs contrats pendant les deux premières années pour permettre l’existence d’équipes stables. En raison des spécificités du secteur en cause la durée de la période protégée et des sanctions semble être proportionnée aux objectifs légitimes quelles visent à atteindre. »

[8] See in particular paragraphs 218-234 of his Opinion.

[9] See para. 110 of the Bosman ruling.

[10] For example: Selection rules in Deliège; Transfer windows in Lehtonen; FIFA’s agent regulation in Piau; Doping sanctions in Meca-Medina; Training compensations in Bernard. The European Commission also recognised the legality of UEFA’s rule limiting the multiple ownership of clubs in ENIC.

[11] On this episode see Borja Garcia’s article, ‘The 2001 informal agreement on the international transfer system’.

[12] In his article Johan Lindholm criticizes this moral posture taken by FIFA and UEFA. He rightly points at its hypocrisy: “[…] a third party owning fifty percent of the economic rights to a player is the very height of moral corruption, but a club owning one hundred percent of the same right is not only perfectly acceptable but also applauded”.

[13] A recent study commissioned by the European Clubs Association (ECA) on the transfer market, shows (at page 88) that the solidarity payments are way below the 5% threshold imposed by the FIFA RSTP (reaching instead only 1,15% of the transfer fees).

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