Extra Time: Are The New Fifa Transfer Rules Doomed?

Abstract

With the Bosman decision, the European Court of Justice (ECJ) forced the Federation Internationale de Football Association (FIFA) to change its transfer rules. These new rules, adopted in July 2001, were supposed to answer the ECJ concerns about the restriction of the free movement Introduction The Bosman (1) decision of the European Court of Justice (ECJ) transformed the rules of international soccer (2) transfers, giving more freedom to the players. It also placed the Federation Internationale de Football Association (FIFA), soccer's international governing body, in a difficult situation. They were forced to revise their rules on international transfers in order to align them to the ECJ ruling. After a lot of bargaining and dealing the new rules came in effect in September 2001. In 2005, FIFA changed the rules again, in the hope to make them more robust and prevent future contestation. The purpose of this paper is to examine these new rules and to determine whether they violate article 39 of the Treaty establishing the European Community (Treaty) by restricting the free movement of persons and if so, whether they would meet the test for legality of such rules created by the ECJ in the Bosman case. What are transfer fees? This question may seem superfluous for the soccer fan, but for the reader that does not necessarily know the ins and outs of this sport, a short explanation may be needed. There are two ways for a soccer club to get the rights on a player. First it can train him from the beginning via academies or related amateur soccer clubs. The second way is to buy the rights to field a player from another club, this is called a transfer. The money that is paid from the buying club to the selling club is called a transfer fee. The North American sports fans are familiar with the concept of trades where teams trade players for other players. However soccer's tradition is to transfer players for money. (3) Bosman, much ado about nothing? There is a lot of literature on the Bosman decision. I do not intend in going in a detailed analysis of the case, but I consider that a short history of it and an analysis of its impact on the soccer transfers is necessary to help the reader understand the context that led to new transfer rules. History of the case Mr. Bosman was a promising young Belgian soccer player. At the expiration of his contract he ended up in a contractual dispute with his current club. In consequence he asked to be transferred to a new club. A deal was made between Bosman, his old club and a French club for his transfer. However, the old club had doubts about the financial strength of the French club and stopped the transfer procedures. Bosman had to obtain a court order to be able to sign a contract of employment with another club. In the proceedings, Mr. Bosman asked for a permanent injunction and compensation from his old club. His main argument was that the transfer system was a violation of the right of free movement of persons within the EU and a violation of the EU competition law. The matter was referred to the ECJ by the Belgian court (4). The ECJ therefore had to determine the legality of the transfer system. It decided that the transfer fees charged for a player that had ended his contractual relationship with the club was an illegal restriction of the free movement of persons. Regarding the competition law and the possible restriction of the market for players, the ECJ refused to consider it, since it was unnecessary for their ruling. (5) However, before the ECJ decision, the Belgian appeal court had ruled that the transfer regulations were decisions of associations by which the clubs restrict competition for players between themselves, that transfer fees were dissuasive and tended to depress the salary of players and that the restriction on competition might constitute abuses prohibited by Article 86 (now 82). …