Why transfer fee systems improve market competition, and why the Bosman ruling was flawed

Abstract

Over the years competitive balance has decreased in many football competitions in Europe. This means that the number of clubs with a realistic chance of winning important prizes has declined. Consequently, there is less choice for the many consumers who want to watch, or become fan of, a club from their own country that can win important prices. Put differently, in many national consumer markets competition has decreased. Unfortunately, the legal profession has paid insufficient attention to the effect of decreasing competitive balance on competition in consumer markets. This is also relevant for the Bosman ruling. The ruling prohibited transfer fees for out-of-contract players. This has led to a decrease in competitive balance. Therefore, the ruling has decreased the competition in national consumer markets. However, in making the ruling the European Court of Justice fully neglected the possibility of such a decrease. While it did apply the hard law concerning the free movement of workers, and it did take account of the specific features of the sport and the need for competitive balance more specifically (even though this was not decisive in the end), it neglected hard competition law as regards the competition in consumer markets. If it had not done so the ruling might have been different, and better for the football fans.