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Challenging the Transfer System: Jean-Marc Bosman

In the EU it was the litigation in Bosman that finally brought the matter before the gaze of the Court of Justice in Luxembourg.^ Eastham focused on the English game. Bosman had a more international dimension. The background was provided by the network of governance populated by clubs, national associations and, continental associations—i n Europe, the Union of European Football Associations (UEFA)—and, at the apex of the organizational pyramid, Federation Internationale de Football Association (FIFA), the world organizing body, which is based in Switzerland. Footballers, contracted to their club as employees, are subject to the rules decided within this system of governance: the rule-makers are at the top of the organizational pyramid, the players at the base.

Chapter 4 told the story of how Jean-Marc Bosman, a Belgian national employed in his home country as a footballer, came to rely on EU law when prevented from joining a new employer, a French football club, Dunkerque. As there explained, even though his contract of employment with RC Liege had come to an end, he was not free to enter into a new contract of employment with a new employer until such time as approval for the transfer of his registration had been given. Typically this would entail payment of a transfer fee by the new club to the old—the size of the fee would vary in rough association with the quality and age of the player. Plainly no such obstruction would affect an employee in a normal industry. But sport is special; football is different. Since the relevant transfer of registration from the Belgian to the French club did not occur, Bosman was unable to join his prospective new club. Indeed, in the absence of compliance with the transfer regulations imposed collectively within the sport, Dunkerque would not have been able to select him to play without being subject to prompt, collectively enforced sanctions. It is exactly [1]

here that football operates in a way that cannot be traced elsewhere. The process of contractual negotiation between employer and employee occurs in the shadow of the wider network of horizontal and vertical arrangements governing the player’s status, enforced through the lex sportiva. Rules made and applied through the collective network of governance—the pyramid with FIFA at its apex—cut across contractual negotiation. Footballers are less free than ordinary workers in choosing their employer.

The Court found that Bosman had been victim of a violation of what was then Article 48 of the Treaty Establishing the European Economic Community (EEC), today Article 45 of the Treaty on the Functioning of the European Union (TFEU), the Treaty provision dealing with the free movement of workers. The Court did not deny that sport is special. Quite the contrary. But sport was not special enough to protect such an extremely restrictive system from the condemnation of EU law. The operative part of the ruling finds that it is incompatible with EU law to provide that a professional footballer who is a national of one Member State may not, on the expiry of his contract with a club, be employed by a club of another Member State unless the latter club has paid to the former club a transfer, training, or development fee. In this sense Bosman has close structural similarities with the ruling in Eastham. There is an acceptance that sport is special—but not as special as was assumed by the governing bodies. So a transfer system could feasibly survive—but not the transfer system attacked in the case, which was too restrictive. So in Bosman, just as over thirty years earlier in Eastham, the judges left it to the governing bodies in sport to respond to the demands of the law by reducing and reshaping the lex sportiva.

The centrally important paragraph in Bosman is paragraph 106, in which the Court declared:

In view of the considerable social importance of sporting activities and in particular football in the Community, the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and of encouraging the recruitment and training of young players must be accepted as legitimate.

Chapter 4 explores the importance of this declaration at a general level: it set the tone for extracting from a barren Treaty background an acceptance that the interpretation of EU law shall be sensitive to the sporting context and, as articulated in particular in Chapter 7, it is a source of the commitment to ‘the specific nature of sport’ now found in Article 165 TFEU. The concern in this chapter is more concrete. What precisely does this concession to the social importance of sporting activities entail in the shaping of a transfer system that can withstand scrutiny conducted in the name of EU law?

That examination now follows. However, a final observation on the Bosman ruling itself is deserved. It is the starting point of modern EU sports law. Walrave and Koch in 1974 was the first decision of the Court dealing with the intersection of EU law and sport, but its ripples were intellectual rather than practical in significance.[2]

Sport resisted any litigious torrent. Bosman, by contrast, was the springboard to a far more juridicalized landscape in European sport, in association with a far more commercialized landscape (most of all in the sphere of broadcasting: Chapter 11). Given the transformative practical effect of Bosman, it is remarkable to note with hindsight how the governing bodies in football seemed to sleepwalk into Bosman. The arguments presented were thin. As mentioned in Chapter 4.6 the impression is that the governing bodies assumed Bosman would be induced or intimidated to settle the matter out of court. Moreover, in November 1995, a month before the Court ruled, UEFA had requested the Court to order a measure of inquiry under its Rules of Procedure with a view to obtaining fuller information on the role played by transfer fees in the financing of small or medium-sized football clubs.[3] But the Court dismissed this application. It was made at a time when, in accordance with the Rules of Procedure, the oral procedure was closed. UEFA was foolishly late. One would do well to improve on the following as a pointedly critical summary of the complacent and self-regarding attitude of the governing bodies in the sport:

... it was said that this system, the combined system of registration, retention and transfer fees, or something like it, is operated in all professional leagues and has been so operated for a long time. This is claimed as evidence that those who know best consider it to be in the general interest of the game. I do not accept this line of argument. The system is an employers’ system, set up in an industry where the employers have succeeded in establishing a united monolithic front all over the world, and where it is clear that for the purpose of negotiation the employers are vastly more strongly organised than the employees. No doubt the employers all over the world consider the system a good system, but this does not prevent the court from considering whether it goes further than is reasonably necessary to protect their legitimate interests .

Perfectly judged—and yet this rebuke was not aimed at the arguments advanced in Bosman at all. It is in fact an extract from the judgment of Wilberforce J in Eastham v Newcastle United in 1964, over thirty years before Bosmanl The feature to note is continuity. The same dogged and shabbily reasoned arguments advanced without success in Eastham were recycled in Bosman—without success. In Bosman, as in Eastham, the background assumption of the governing bodies was that one way or another the lex sportiva would prevail. But it did not.

  • [1] Bosman (n 1).
  • [2] Case 36/74 Walrave and Koch v Union Cycliste Internationale [1974] ECR 1405. See Ch 4.2.
  • [3] Bosman (n 1) paras 52—54.
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