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Challenging the Transfer System: George Eastham

In the United Kingdom, the original home of professional football, the decision of the English High Court in 1963 in Eastham v Newcastle United found unlawful a system which had in barely modified form existed since the nineteenth century.[1] This had allowed a club not simply to demand a transfer fee but also to ‘retain’ the player if an acceptable fee were not offered by another club and, in certain circumstances, not to pay him at all. This demonstrated an immense imbalance and could and did force players out of the game to seek employment elsewhere even where another football club wanted to offer employment: Eastham brought his case because Newcastle United’s intransigence had had precisely this effect on him.

Eastham may seem like very ancient history, but it is not, because, as will be explored, it set the scene for Bosman in Luxembourg over thirty years later, and it still has resonance today, given that a form of the transfer system endures in football which remains of legally questionable status. The judgment of Wilberforce J in the case tells a story with a strong flavour of a nineteenth-century master and servant relationship. He notes a maximum wage, applicable at the time of the dispute although abandoned by the time Eastham was decided, which was fixed within the industry at ?20 per week during the football season. It is commonplace nowadays to read of top footballers being paid ?200,000 a week. Wilberforce J in the High Court found that the ‘retain’ element of the system amounted to an unreasonable restraint of trade and that it was therefore contrary to the English common law. The objection was that it went too far in prioritizing employer interests over those of the employee.

The court did not rule against the possible application of any form of collectively agreed and enforced transfer system. Wilberforce J was prepared to take the view that the system ‘provides a means by which the poorer clubs can on occasions, obtain money, enabling them to stay in existence and improve their facilities’ and more generally ‘it provides a means by which clubs can part with a good player in a manner which will enable them to secure a replacement’.[2] He did not declare explicitly how a revised system should be shaped: this would go beyond the judicial function in a restraint of trade case. But he clearly left room in his explanation of the role of the restraint of trade doctrine for football’s governing bodies to devise a system that was less rigid and more balanced. A revised system focusing on the payment of a fee in return for an agreement to transfer a player’s registration, while ameliorating the player’s position to some extent by suppressing the ability of the first club simply to retain the registration and in practice drive the footballer out of his chosen profession, was accordingly crafted in the wake of the ruling.

In this way a revised system lived on after the Eastham decision in the summer of 1963. This was the road that led eventually to Bosman over thirty years later in the Court of Justice in Luxembourg.[3] The rulings deserve to be considered as a pair, even if they arise in different legal orders and concern transfer regimes that are not identical, because of the striking similarity between the arguments advanced and largely rejected in Eastham and those deployed later in Bosman. In Eastham the club and the Football League sought to defend the transfer system on the basis that ‘If a player could do just as he liked at the end of the football season, the wealthier clubs would at once snap up the best players’.9 This is best summarized as an argument for the transfer system to serve as a means to achieve balance in sport. The claim that ‘All professional football leagues elsewhere in the world have the combined retention and transfer system or one that amounts to it, which shows that it has the unqualified approval of those best fitted to judge’10 is an argument rooted in expertise: sport knows best, and judges should keep out. The supplementary submission that ‘In considering the system as a whole, it should be borne in mind that the present system, based on a stable league, does secure benefits to players which a smaller organisation might not be able to secure’n is nothing more than an obstinate refusal to imagine that the sporting world could ever be different. In fact this final claim carries a deeply unpleasant sense that players should do as they are told and stop complaining, and it was rightly treated as inapt to defend the practices challenged in the case.

In short, these interventions taken in combination put forward one central claim—that sport should be granted autonomy from legal regulation. That was the core of the case made in defence of the transfer system in Bosman too. In fact, much of what was argued in Eastham was recycled in Bosman. It was dismissed in both cases in a way that was not precisely in line, because restraint of trade under the English common law does not exactly match EU free movement law. However, the rejection was thematically consistent. Both tribunals concluded that, however special football might be, it is not so special that it can claim a justification to maintain a system as restrictive and burdensome as that at stake in the cases. It is to Bosman that attention now turns.

  • [1] [1964] Ch 413. See S Boyes, ‘Eastham v Newcastle United FC’ in J Anderson (ed), Leading Casesin Sports Law (TMC Asser 2013) ch 5.
  • [2] Eastham (n 6) 437. 8 Bosman (n 1). 9 Eastham (n 6) 424.
  • [3] io ibid 424. ii ibid 425.
 
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