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So What is Left ...?

In summary, I am highly sceptical that either of the reasons provided by the Court in Bosman—the need to preserve a degree of competitive balance and equality between clubs and encouragement to train young players—are sufficient to justify a transfer system. This, however, is to not to say that footballers are always to be treated in the same way as car-makers and bankers.

Governing bodies may preclude the movement of players between clubs at the sharp end of the season as part of their legitimate concern to maintain fair competition: a so-called ‘transfer window’ is not condemned by EU law, provided it is not contaminated by arbitrary or discriminatory features.^3 Such a restriction would not be found in the market for car-makers or bankers, because there is no comparable period of intensified competition across the calendar year. Sport is special. The restriction confines the opportunities for mobility of athletes, but, as the 2007 Commission White Paper accurately put it, in the absence of such rules, ‘the integrity of sport competitions could be challenged by clubs recruiting players during a given season to prevail upon their competitors’.^4 Moreover, as Chapter 8 has shown, footballers are different from car-makers and bankers in the matter of selection for international representative sport. But these are exceptional instances. It takes a very good argument to justify the treatment of footballers as employees which differs from that of employees in other sectors of the economy. The two reasons given by the Court in Bosman—the need to preserve a degree of competitive balance and equality between clubs and the encouragement to train young players—are not good enough reasons to accept a transfer system. [1]

But there is a good reason for a transfer system. The matter of ‘transfer windows’ is one aspect of the genuine need to structure the mobility of players in such a way as to ensure the integrity of the competition in the context of a global game.

Abandoning the transfer system entirely would mean that clubs could no longer rely on the transfer system to retain players or to extract a fee for them if they leave. They would instead have to turn to the private law to protect their commercial interests, by drafting appropriately attractive contracts. The consequences of a player changing club during the term of the contract would be assessed exclusively in the light of relevant rules of private law, accompanied by the relevant provisions of local employment law. Footballers would be like car-makers and bankers. The best argument for a continuation of a lex sportiva which governs a transfer system would hold that this model would lead to instability in the international market for playing talent, because the enforceability of contracts would vary according to local contract and employment laws. There would be an obvious problem if a player in State X is able under local law to bring a contract to an end by payment of a small sum to the employer, while in State Y a player is required to complete the contractual term in all circumstances: a club in State Z would be more likely to look for new players in X than in Y. This suggests a need for some common rules on the amount of flexibility allowed to players wishing to change clubs while still under contract. This, in short, would be to argue for a lex sportiva for a global game that is not fragmented along national lines. There is validity to this claim.

The current FIFA Regulations were examined earlier. They take special account of the position of young players, though they also envisage that transfer fees shall be payable for older players who remain in contract but wish to change clubs. It follows from the discussion in section 9.12 that I am sceptical that distinct treatment of young players is justified in the absence of better reasons why football clubs are uniquely unlikely to invest in youth training without the help of such inducements. That apart, the Regulations, seen more generally, probably represent a legitimate method for attending to the need for common rules which shape the composition of club squads and therefore the integrity of the competition by regulating the mobility of players between clubs. A sporting ‘margin of appreciation’, addressed in Chapter 7.4, would also argue in favour of their compatibility with EU law: this would be reinforced by a genuinely participatory framework, embracing all affected interests, including players, within which the rules are produced.m

But detail matters. Much must depend on the level at which compensation for termination without just cause is fixed, as well as the frequency with which sporting sanctions are imposed. The more burdensome the intervention from the perspective of the player, the more probable that it will be treated as a disproportionate [2]

restriction under EU law, were an appropriate case to arise and to provoke litigation. It is likely to be the new system as interpreted by the CAS that is eventually the subject of challenge before the Court of Justice. It was, after all, a CAS ruling imposing sanctions that generated the highly important ruling of the Court of Justice in Meca-Medina06 and it cannot be excluded that a CAS ruling imposing an obligation on a player to pay compensation and/or to submit to a suspension from playing could similarly come to be tested pursuant to EU law. Expression of doubt that the revised transfer system will survive is especially pertinent in the light of the model of compensation used by the CAS in Matuzalem}'17

As explained earlier, in section 9.9, Matuzalem himself could not rely on EU law, because he was Brazilian. But a player who falls within the personal scope of EU law would doubtless argue that an award calculated in the way that the CAS preferred in Matuzalem should be treated as a restriction on free movement and/or a distortion of competition which exceeds that necessary to achieve the stated sporting objectives. Bernard was a ‘joueur espoir’, whereas Matuzalem was an established high- level player, but the Court’s anxiety in Bernard was to exclude that disproportionately onerous transfer fees might be dressed up as ‘compensation payments’ and so the analysis in Bernard should not be confined to the case of restrictions faced by young players. An ‘EU Matuzalem’ might plausibly argue that an award of approaching €12 million payable by the player to the club goes beyond what is permitted under Article 45 TFEU. The award is very high: the method of calculation relatively intransparent. In fact one of the Court’s objections to the French system under review in Bernard was that the club’s loss ‘was established on the basis of criteria which were not determined in advance’.08 Uncertainty associated with the size of the compensation that will be deemed payable, plus the fear that it may turn out to be high, acts as a stern deterrent to the player considering a unilateral breach of his contract. This tips the balance firmly towards contractual stability as the main winner—which means a priority for the interests of the clubs. The strong dissuasive effect on the player’s readiness to change clubs is arguably to claim too much protection for clubs under the cover of the specificity of sport. There therefore is a solid argument that the way that Article 17 of the FIFA Regulations has been interpreted and applied by the CAS places a much heavier emphasis on the virtues of contractual stability than the players’ rights under EU law and that, as an unbalanced and disproportionately restrictive system, it is for that reason incompatible with EU law.09 Put another way, the choices made by the CAS mean that the transfer system which the Commission approved in 2002130 is no longer the system as currently operational.

The more modest ‘Webster calculation’, initially preferred by the CAS in determining the compensation due, would probably comply with EU law as interpreted [3] [4] [5] [6] [7]

by the Court.[8] [9] [10] [11] Something a little more onerous might too, if based on a clearly articulated and objective set of criteria apt to reflect the specificity of sport and, in particular, the virtues of encouraging training, contractual stability, and teambuilding. Matuzalem looks to go too far, both in the size of the award and in the level of uncertainty. It is, after all, a requirement of EU law that individuals are able to understand their legal position in order to adapt their conduct accordingly. This is a manifestation of the principle of legal certaintyi32 and it also appears in the context of free movement law, where the Court has consistently taken the view that transparency and openness are necessary elements in the justification of any system that inhibits free movement.i33 Indeed it is a principle elsewhere embraced by the CAS itself. i34

Reliance on EU law to challenge sporting sanctions under the FIFA Regulations seems equally plausible, should the necessary connecting factors to EU law feature in a particular case. It was explained previously that Matuzalem was successful in persuading the Swiss Federal Supreme Court to find that the extra sanctions, including a suspension from playing, imposed on him under a CAS ruling as a result of failure to pay the compensation award made against him were unlawful.i35 The extra sanctions infringed public policy, given the restriction on his rights as an individual, and in any event they were unnecessary, given that the compensation claim by the previous club against Matuzalem which had been upheld by the CAS could anyway be enforced before the ordinary courts by reliance on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. There was no need for an additional private sanction imposed under the lex sportiva.

One would expect no different outcome under EU internal market law, provided of course that the player possessed the right nationality to rely on EU law, which Matuzalem did not. It would go too far to say that sporting sanctions could never conceivably be justified under EU law, but the case would be arduous, for it must be shown why conduct is treated as so egregious that it leads to a denial of the player’s right to do his or her job. And—to repeat—it should be borne in mind that such repressive measures would never be meted out to an ordinary employee outside the world of sport, whose legal concerns would arise only as matters of contract and employment law.

There are therefore aspects of the current FIFA Regulations which are vulnerable to challenge under EU law, in particular when one looks at the associated, but inconsistent, practice of the CAS. This sharpens the importance of the story told in Chapter 2 of how EU law does not grant rulings of the CAS, and the lex sportiva more generally, autonomy from its application. Sport has a specific nature, according to Article 165 TFEU, but it seems highly unlikely that the transfer system as developed, especially by the CAS and especially in Matuzalem, can be justified, given the way in which it prioritizes the interests of the clubs and the governing bodies over those of the players. These are disproportionate restrictions, achieved through the strong grip exercised by the powerful over the regulatory structure in sports governance. A suitable case would give the Court of Justice a chance to rule in this vein: a superior outcome would be for the CAS to absorb the controlling influence of EU law into its practice with greater fidelity and consistency.[12] [13]

  • [1] 3 Case C-176/96 Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL v Federation royalebelge des societes de basket-ball ASBL (FRBSB) [2000] ECR I-2681. The system dealt with in that casewas so contaminated, and thus did not comply with EU law. 124 White Paper on Sport (n 44) section 4.3, p 15.
  • [2] 5 On ‘social dialogue’, see Chs 7.4 and 6.10. On assessing the legal status of the transfer systemin the light of social dialogue, see S Gardiner and R Welch, ‘Nationality Based Playing Quotas and theInternational Transfer System post-Bosman’ and R Parrish, ‘The European Social Dialogue: A NewMode of Governance for European Football?’ both in A Duval and B Van Rompuy (eds), The Legacyof Bosman: Revisiting the Relationship between EU Law and Sport (TMC Asser/Springer 2016) ch 4 andch 8, respectively.
  • [3] Meca-Medina (n 113). See Ch 5. m Matuzalem (n 87).
  • [4] 128 Bernard (n 1) para 47.
  • [5] 129 On the lawfulness of the system, see eg Pearson (n 55); P Czarnota, ‘FIFA Transfer Rules andUnilateral Termination without Just Cause’ (2013) 2 Berkeley Journal of Entertainment and Sports Law
  • [6] 1; R Parrish, ‘Article 17 of the FIFA Regulations on the Status and Transfer of Players: Compatibility withEU Law’ (2015) 22(2) MJ 256; J-C Drolet, ‘Extra Time: Are the New FIFA Transfer Rules Doomed?’in S Gardiner, R Parrish, and R Siekmann (eds), EU, Sport, Law and Policy (TMC Asser 2009) ch 10.
  • [7] IP/02/824, 5 June 2002.
  • [8] See n 84.
  • [9] eg Case C-110/03 Belgium v Commission [2005] ECR I-2801, para 30; Case C-386/06 R(International Association of Independent Tanker Owners (Intertanko)) v Secretary of State for Transport[2008] ECR I-4057, para 69.
  • [10] eg Case C-219/07 Nationale Raad van Dierenkwekers en Liefhebbers [2008] ECR I-4475.
  • [11] 134 Czarnota (n 129) 42. i35 4A_558/2011, 27 March 2012.
  • [12] See Ch 2.2.
  • [13] It is backed by a critical paper written by a leading sports economist: S Szymanski, ‘TheEconomic Arguments Supporting a Competition Law Challenge to the Transfer System’, published onFIFPro’s website accessed 29 November 2016.
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