FIFA/UEFA task force proposals on transfers: replaying the old (failed) arguments

The FIFA/UEFA Task Force proposals designed to deal with the EC Commission’s objections to transfer fees within contract, envisage maintaining transfers within the national leagues. On the other hand, an arbitration system will be established to fix fees for international transfers within the EU. The object of this exercise is to take national transfers outside the scope of the EU competition and free movement rules on the basis that trade between member states is not affected by these transfers. In this way, the Task Force hopes to maintain national transfers (which are of most concern to the smaller clubs) whilst liberalising international transfers with a view to avoiding a repetition of the excesses typified by of the exorbitant Luis Figo fee.

Even if the EC Commission were to somehow accept that the principle of “subsidiarity” applied here and leave national transfers intact, and also accept other elements of the proposals (such as a minimum contract period of 3 years and a ban on transfers under the age of 18), it is difficult to see how the attempt to maintain national transfers can achieve the governing bodies’ objectives even in the short term.

The first problem is that the proposals do not address the potentially destructive effect of national law on national transfers. For example, the UK Competition Act requires the courts and the Office of Fair Trading to follow EU decisions: it is difficult to see how these bodies could ignore the EC Commission’s objections to the whole transfer system (which were not confined simply to its international elements) if a national transfer were to be challenged by a player or club. Moreover, the restraint of trade doctrine still exists quite independently of competition law; players and clubs could use this law as well to obtain freedom of movement or to avoid paying a large transfer fee for a national transfer within a contract.

On a practical level, the proposal to maintain the transfer system for national transfers is equally flawed. If players can move more easily within contracts if they move abroad than if they remain within their national leagues, they may well do just that. Doubtless substantial signing-on fees will give them every incentive to do so. The result is likely to be precisely the loss of national character of leagues that UEFA so deplores because it contributes to pressures for the creation of a European Super League which would undermine its authority.

The proposal also shows that the governing bodies have a short memory. After the Bosman case was decided, The Premier League clubs carried on paying transfers for one season on national transfers for out-of-contract players. This position was supported at the time by the players union. However, fearful of legal challenge and aware of the incentives such a system created for players to move abroad (as transfer fees were abolished for such moves), Premier League clubs swiftly fell into line with the rest of Europe. It is surprising to say the least that the Task Force is throwing its weight behind a proposal that is legally flawed, self-defeating and with a negative recent English experience fresh (presumably) in the minds of some of its members.

But this is not all. The Task Force commissioned an economic report designed to show that the transfer system redistributes wealth from rich buying clubs to small selling clubs. This argument was fully ventilated in Bosman and rejected as a justification of the transfer system for out-of-contract players. It is simply naive to suppose that it will be any more successful here.

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