October 7 – It’s been described by some experts as Bosman Mark 2 and could have significant implications for years to come.
The European Court of Justice (ECJ) has ruled that some of FIFA’s transfer rules are contrary to EU law, potentially opening a can of worms in terms of the way professional players can move from one club to another.
The ECJ was called upon to judge a long-running dispute between former French international midfielder Lassana Diarra (pictured) and FIFA over what happens when players unilaterally terminate their contract.
In a highly anticipated verdict, judges found that by restricting a footballer’s ability to seek further employment, current FIFA rules hinder the EU’s free movement and competition between clubs.
“The Court holds that all of those rules are contrary to EU law,” it said.
The fear for clubs now is that the Diarra case will encourage more players to attempt to break their contracts and join another team without a transfer fee having to be negotiated, changing the face of the European transfer market – just as the Bosman case did in the mid-1990s.
The Bosman judgement allowed players to move to another club at the end of their contract without any monies being exchanged – but this potentially goes much further.
Diarra’s legal team, led by Jean-Louis Dupont, who also advised the then little known Jean-Marc Bosman all those years ago, successfully argued that Diarra, who played for Chelsea, Arsenal, Real Madrid and Paris St Germain, was unfairly denied a transfer following a dispute a decade ago with Lokomotiv Moscow. Dupont has dubbed the case ‘the Bosman 2.0 affair’, and hailed the new ruling as “a total victory”.
A lawyer for world players’ union FIFPRO, Pieter Paepe, agreed. “The entire economic logic behind the transfer market is undermined today,” he told AFP.
In response to Friday’s verdict, FIFA said it would “analyse the decision in coordination with other stakeholders before commenting further”.
But it somewhat played down the judgement, saying it only took issue with a tiny part of its rules and that it endorsed the “legality of key principles of the transfer system”.
“The ruling only puts in question two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players,” FIFA said.
The background to the Diarra case is that in August 2014, Lokomotiv Moscow terminated his contract citing contractual breaches. The Russian club sought €20 million compensation from Diarra, now aged 39. Diarra refused and requested that Lokomotiv pay him compensation instead.
He was eventually ordered to pay his former club €10 million by FIFA, a fine that was upheld by the Court of Arbitration for Sport. Diarra also received a backdated 15-month suspension.
According to FIFA regulations, if a player terminates his contract unilaterally and “without just cause”, he must pay compensation which includes his remuneration and benefits until the end of his contract.
Diarra’s lawyers argued the rules violated the EU’s free movement of workers, and were contrary to the principle of free competition.
Diarra requested €6 million from FIFA on the grounds that he was prevented from playing during most of the 2014-2015 season. Belgian side Charleroi rescinded a contract offer, fearing the possible legal and financial consequences of his dispute with his Lokomotiv.
After several twists and turns, a Belgian court asked the ECJ for an opinion. And on Friday judges found that the rules impede the free movement of players by “imposing considerable legal risks, unforeseeable and potentially very high financial risks as well as major sporting risks on those players and clubs wishing to employ them”.
The ruling could be a particularly heavy blow for smaller teams who often rely on recruiting and developing young talent and then selling players on for a high fee to balance the books.
“This is a decision that creates significant uncertainty in the global football transfer market,” Simon Leaf, a partner at legal firm Mishcon de Reya, said.
“In the short term, it could lead to more attempts by players to frustrate contracts in order to achieve a desired international move. This, in turn, is likely to lead to more disputes between clubs and players arising, as players may be emboldened when it comes to trying to force a transfer to take place.”
“The key question that Fifa will now be asking itself is what rules could be implemented to ensure that a fair balance between stability in the commercial transfer market on the one hand, and compliance with EU competition and free movement laws on the other hand is maintained.
“Going forwards, we could well see a game of cat and mouse develop as players seek to test that balance and further rely on the use of EU competition and free movement law as a sword, with the possibility that clear boundaries do not emerge for some time.”
Ian Giles, another sports lawyer and a partner at Norton Rose Fulbright, added: “It’s entirely possible this means players will feel they can now break contracts and sign on with new clubs, without the selling club being able to hold them or demand significant transfer fees. This will likely result in reduced transfer fees and more economic power for players. It will also be interesting to see whether more players start to breach their contracts in the meantime, emboldened by the ECJ’s judgment.”
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