The international journal dedicated to football law
# 13 - June 2020 Football Legal # 1 - June 2014 Special Report: Third Party Ownership (TPO)
Football Legal # 2 - December 2014 Special Report: Financial Controls of Football Clubs
Football Legal # 3 - June 2015 Special Report: The new Regulations on Working with Intermediaries
Football Legal # 4 - December 2015 Special Report: International Football Justice
Football Legal # 5 - June 2016 Special Report: TPO/TPI: an update
Football Legal # 6 - November 2016 Special Report: Broadcasting & Media Rights in Football Leagues
Football Legal # 7 - June 2017 Special Report: Minors in Football
Football Legal # 8 - December 2017 Special Report: Data in Football
Football Legal # 9 - June 2018 Special Report: Termination of Players’/Coaches’ Contracts
Football Legal # 10 - December 2018 Special Report: Integrity in Football
Football Legal # 11 - June 2019 Special Report: Major Football Competitions: Key Legal Challenges & Ongoing Reforms
Football Legal # 12 - December 2019 Special Report: Private Football Academies
Football Legal # 13 - June 2020 Special Report: Challenges in Football Facing COVID-19
Subscriptions: www.football-legal.com © Football Legal 2020 - All rights reserved worldwide ISSN: 2497-1219 EDITORIAL BOARD
Saleh ALOBEIDLI Eugene KRECHETOV Lawyer, Saleh Alobeidli Advocates Lawyer, Eksports Law Dubai - UNITED ARAB EMIRATES Moscow - RUSSIA
José Luis ANDRADE Andrew MERCER ECA General Counsel Acting General Counsel & Legal Director, AFC Nyon - SWITZERLAND Kuala Lumpur - MALAYSIA
Nasr El Din AZZAM Luc MISSON Lawyer, SPORT MAKERS Lawyer, MISSON Bureau d’avocats Cairo - EGYPT Liège - BELGIUM
Efraim BARAK Marcos MOTTA Lawyer, Efraim Barak Sport Law and Consultancy Lawyer, Bichara & Motta Advogados Tel-Aviv - ISRAEL Rio de Janeiro - BRAZIL
Michele BERNASCONI Patricia MOYERSOEN Lawyer, BÂR & KARRER AG Lawyer, Cabinet Moyersoen Zurich - SWITZERLAND Paris - FRANCE
Ricardo DE BUEN RODRíGUEZ João NOGUEIRA DA ROCHA Lawyer, DE BUEN RODRIGUEZ ABOGADOS Lawyer, MRGL Advogados Mexico City - MEXICO Lisbon - PORTUGAL
David CASSERLY Emin OZKURT Barrister, KELLERHALS CARRARD Lawyer, OZKURT Law Office Lausanne - SWITZERLAND Istanbul - TURKEY
Daniel CRAVO Peter PALEOLOGOS Lawyer, CRAVO PASTL e BALBUENA Player Agent & Lawyer, LIBERO Consulting Porto Alegre - BRAZIL Melbourne - AUSTRALIA
Juan de Dios CRESPO PÉREZ Benoit PASQUIER Lawyer, RUIZ-HUERTA & CRESPO Lawyer, BP Sports Law Valencia - SPAIN Zurich - SWITZERLAND
Nick DE MARCO José Juan PINTÓ SALA Barrister, Blackstone Chambers Lawyer, Pinto Ruiz & Del Valle London - ENGLAND Barcelona - SPAIN
Mario GALLAVOTTI Joachim RAIN FIFA Director of Independent Committees Lawyer, SCHICKHARDT Rechtsanwälte Zurich - SWITZERLAND Ludwigsburg - GERMANY
Horacio GONZÁLEZ MULLIN Ariel RECK Lawyer, GONZALEZ MULLIN, KASPRZYK & Asociados Lawyer, RECK SPORTS LAW Montevideo - URUGUAY Buenos Aires - ARGENTINA
Georgi GRADEV Aspa SOULOUKOU Partner, SILA International Lawyers Lawyer, SOULOUKOU & Partners Law Firm Sofia - BULGARIA Athens - GREECE
Paul GREENE William STERNHEIMER Lawyer, Global Sports Advocates Lawyer, Morgan Sports Law Portland (Maine) - USA Lausanne - SWITZERLAND
Mark HOVELL David WU Lawyer, MILLS & REEVE LLP Lawyer, Partner, Llinks Law Offices Manchester - ENGLAND Shangai - CHINA
Andrey KHARITONCHUK Takuya YAMAZAKI Head of FC Shakhtar Legal Department Lawyer, Field-R Law Offices Kiev - UKRAINE Tokyo - JAPAN
Jan KLEINER Julien ZYLBERSTEIN Lawyer, BÂR & KARRER AG UEFA Chief Policy and Stakeholder Affairs Advisor Zurich - SWITZERLAND Nyon - SWITZERLAND
Dennis KOOLAARD Lawyer, De Kempenaer Advocaten Arnhem - THE NETHERLANDS
21 bis, rue du Professeur Calmette Publishing Director: Alexandre DURAND Designer: Maxime FAVERJON 33150 CENON - FRANCE Chief Editor: Ronan DAVID Photo credits: AFP Editors: Juan CRESPO RUIZ HUERTA & Printed by: Copymédia Michelle SHEK Editorial
The health emergency provoked by the COVID-19 pandemic has taken the lives of thousands around the world and has pushed governmental authorities to take quick and drastic actions, in order to prevent further spread of the disease. Professional football has naturally been involved in these measures, given the number of people who gather around this sport. Football bodies around the world were obliged to postpone (sometimes to cancel) their competitions. This unprecedented situation first of all highlighted the unpreparedness of the football ecosystem to face such a crisis: first of all economically, as evidenced by the financial situation of many clubs who no longer have money to pay players; also legally, since this situation had not been foreseen in almost any of the ongoing contracts (TV rights, International competitions, ploughing contract, etc.). Even if it is too early to assess the impact of COVID-19 on the functioning and development of football, stakeholders will certainly be led in the short and medium term to re- examine the relevance of the current business model of the football industry.
Alexandre Durand Ronan David CONTENTS # 13
PERSPECTIVES 9 Court of Arbitration for Sport (CAS)
195 The Creation of the Dispute Resolution Chamber in 10 Eligibility and Nationality in Football Colombia By José Juan Pintó & Matilde Costa Dias By César Giraldo, Cristina Delgado and Carlos Buitrago 16 A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Principles 198 The application of loss of chances, player’s market By Victor A. Berezov value, replacement costs, and specificity of sport criteria under Art. 17 RSTP in CAS jurisprudence
25 Sell-on clauses in light of FIFA and CAS By Georgi Gradev jurisprudences
By Frans de Weger and Dannick Luckson 202 Strict Liability of Football Clubs for their Supporters’ Misconduct – Special Focus on the Boca Juniors v. 36 The gap in FIFA’s regulatory framework regarding River Plate & CONMEBOL case football coaches and the issue concerning the By Luis Torres Montero access of FIFA’s jurisdiction in cases with an international dimension 208 Payment of Outstanding Salaries and Team By Diego Eidelvein Do Canto Performance Bonuses By Eugene Krechetov
213 Repeated offence: the case “SC Internacional v. SPECIAL REPORT - CHALLENGES IN Udinese Calcio S.p.A & FIFA” FOOTBALL FACING COVID-19 41 By Diego Eidelvein Do Canto
216 The Clément Lenglet case
218 Interview with Olivier Martin
WORLD IN REVIEW - INTERNATIONAL NEWS 183 FIFA
219 Abusive conduct in an employment relationship between a club and a foreign football player - The European Union (EU) case of Alberico Barbosa da Silva v. Akwa United FC By Diego Eidelvein Do Canto 184 The General Court of the European Union Dismisses the Decision of the European Commission on State 224 The Rights of the Child and the FIFA Protection of Aid to Valencia Club de Fútbol Minors By Ivan Bykovskiy By Gustavo Albano Abreu
186 ECtHR Points Out a Systemic Problem regarding the Settlement of Football Disputes in Turkey UEFA
230 Atromitos FC not punished for insufficient Swiss Federal Tribunal organization during the 3rd qualifying round of the 2019-2020 UEFA Europa League
188 Recent Jurisprudence of the Swiss Federal Tribunal By Aspa Souloukou on Football Matters
By Dr Jan Kleiner & Francisco Rapp
6 Football Legal WORLD IN REVIEW - Russia NATIONAL NEWS 231 252 The Football Union of Russia makes another step in the transparency and predictability of decisions Australia of the Dispute Resolution Chamber By Eugene Krechetov 232 Player Trials in the legal spotlight as young Australian footballer takes legal action against an 253 Following the transfer scandal, the Football Union A-League club of Russia introduces a new “imputed” solidarity By Peter Paleologos mechanism By Eugene Krechetov 234 Australian club versus coach contract termination cases determined at FIFA By Peter Paleologos Spain
255 First Criminal Case Judgement with a Guilty France Verdict on Match-Fixing in Spain By Enric Ripoll González
236 The PSG had the right to keep Hatem Ben Arfa away 257 The Viana Pacts and a new modification of the 238 An intermediary registered in England sees its Royal Decree-Law 5/2015 authorization to operate in France denied By Juan de Dios Crespo Pérez & Carlos Marroquín Romera
Germany 259 The first Spanish women’s division has its collective agreement
239 New Cases Involving the VAR By Juan de Dios Crespo Pérez & Océane Alba By Joachim Rain 261 The Spanish Futsal Cup tested a referee assistance video system Greece By Juan de Dios Crespo Pérez & Hugo Morel
243 Multiclub ownership in Greece - PAOK FC and 263 Product advertising through Spanish football Xanthi FC proven to be owned by the same person clubs’ sponsorship and upcoming limitations on By Aspa Souloukou the regulatory landscape By Ignacio Triguero Gea 244 Decision of Civil Court of Greece awarding Agent’s remuneration but reducing the penalty clause as excessive USA By Aspa Souloukou 268 The Women’s National Soccer Team Loses Momentum in their Lawsuit while the United States Italy Soccer Federation Experiences a Massive Overall By Matthew D. Kaiser 245 New Ambush Marketing Provisions in Italy By Stefano La Porta
COMMUNITY 271
The Netherlands
247 Impact of Dutch Remote Gambling Act on Professional Football
By Tim Wilms
Football Legal 7 8 Football Legal — Perspectives —
Football Legal 9 PERSPECTIVES
Eligibility and Nationality in Football
Eligibility and Nationality in Football
By José Juan Pintó & Matilde Costa Dias Lawyers, Pintó Ruiz & Del Valle Barcelona – Spain
➔➔ Nationality – National team – Ineligibility – Foreign players – FIFA Regulations – National law The dynamics of eligibility and nationality in football have turned into a trending topic within the football industry, especially given the rumors that FIFA is considering an overhaul of the rules which govern players’ eligibility for national teams, including a proposal which would allow players to switch allegiance in certain circumstances.1
Introduction
In 2017, Mr Victor Montagliani, CONCACAF’s President, The present article will address the rationale behind addressed this matter and stated that there were issues the rules surrounding a footballer’s national team regarding the rules which are aimed at preventing eligibility, as well as its different interpretations players from switching between national teams or throughout the years, and will also draw attention representing countries they have no connection with.2 to a recent case brought before UEFA which brings into focus the wider issue of how the world of football The truth is that since the beginning of time, interacts with the concept of nationality and how the representing one’s country on the international stage latter relates to the issue of a player’s eligibility. has long been understood as the highpoint of a football player’s career. Bearing this in mind, FIFA’s aim behind the rules concerning the eligibility of players to play for national teams, has always been to preserve and The Evolution of the Rules Governing a protect the existence of a true and genuine link between Player’s Eligibility the player and the national team he represents, thus preventing and avoiding by all means the existence of Due to the constant evolution of modern football, the abusive naturalizations. In recent times, globalization, rules surrounding a player’s eligibility have suffered the development of international club competitions and several amendments and adaptations throughout the the topic of national team eligibility have added new years, specifically in 2004, 2007 and 2008. Before features to the scene and provoked the intervention FIFA’s reform of the rules concerning eligibility in 2004, of FIFA and, on several occasions, the need by FIFA to a player who played an international competition for a adapt the regulations. nation, even at underage level, was tied to representing that nation for the rest of his career.3 Nevertheless, When it comes to eligibility for a national team, many these rules changed with the arrival of a new version may think that this is a straightforward subject, i.e. play of FIFA Regulations Governing the Application of the for one team and one team only - the country of birth. Statutes (RGAS) approved in 2004. However, the situation can become quite complicated and on occasion requires a deeper analysis, for instance, In the 2004 version, Article 15.1 of FIFA RGAS consideration of geography and citizenship issues established that “Any person holding the nationality as well as some particular circumstances which can of a country is eligible to play for the representative complicate the resolution of these types of disputes. teams of the Association of his country.”4 In other
1 Information available at www.bbc.com 3 See FIFA RGAS version of 2001 - https://resources.fifa.com 2 Information available at www.marca.com 4 See FIFA RGAS version of 2004 - https://resources.fifa.com
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Eligibility and Nationality in Football
words, if a player had never played for a national team, the regulations, players would be entitled to represent he could assume another nationality and play for the the association of a certain country only if they had national team of the new country, irrespective of his been granted nationality on a permanent basis, age. This resulted in a number of Brazilian players and it ruled that Article 15.1 of FIFA RGAS must playing in the German Bundesliga wanting to acquire therefore include the following provision: “Eligibility a new nationality in order to be eligible to play for the shall be based on permanent nationality that is not new association. dependent a residence, i.e. conditional nationality - the so-called “resident’s passport” - is insufficient.” To prevent those situations - where a player changed his nationality or accepted another nationality simply On the occasion of the 58th FIFA Congress held in in order to be able to play for the new national team - 2008, in an attempt of strengthen the protection of FIFA issued Circular no. 9015 in March 2004, in which it nationality in national teams and safeguard young declared that any player who acquires a new nationality players from being exploited, it was decided to in order to comply with Article 15.1. of FIFA RGAS shall introduce relevant changes to the rules governing only be eligible to play for the national team if he fulfils the eligibility of players to play for national teams, one of the following conditions: which were reflected in Articles 15 to 18 of FIFA RGAS.7 The major change included in these rules was the a) The player was born on the territory of the relevant modification of Article 17 (d), pursuant to which any Association; player who assumed a new nationality should only be eligible to play for the new representative team if b) His biological mother or biological father was he has “(…) lived continuously for at least five years born on the territory of the relevant Association; after reaching the age of 18 on the territory of the relevant Association.” c) His grandmother or grandfather was born on the territory of the relevant Association; Since the 2011 version of FIFA Statutes, the rules surrounding a player’s eligibility can be found d) He has lived continuously for at least two years on specifically in Articles 5 to 8 (instead of 15 to 18) of FIFA the territory of the relevant Association. RGAS. Such articles address the principle of national team eligibility expressed in Article 5, as well as the According to FIFA, the above conditions were cases where nationality entitles players to represent introduced to ensure that a player had a clear more than one association as dictated by Article 6, the connection with the relevant country, and as a result, to conditions on eligibility in cases where a player acquires the association in question, thus preventing methods a new nationality as set forth in Article 7, and finally, or practices in which the integrity of the competition the situations where a player changes association could be jeopardized. expressed in Article 8, as will be explained below.
Sadly, three years later, FIFA found out a new situation of abuse regarding players’ eligibility for association teams. In 2007, certain players who had never The analysis of Articles 5 to 8 of FIFA previously represented any national team and who RGAS fulfilled condition d) of FIFA Circular Letter no. 901 dated 19 March 2004 (that is, continuous residence for at least two years on the territory of the relevant The principle of national team eligibility association), had obtained the nationality of the country in question and been issued with a passport. Pursuant to Article 5 of FIFA RGAS, “Any person However, it was brought to FIFA’s attention that such holding a permanent nationality that is not dependent players have been granted full nationality only for as on residence in a certain country is eligible to play long as they remain resident in the country, and as a for the representative teams of the association of that result, the passport was granted on a temporary basis country.” Hence, the terms of this general rule prevent and the applicant would lose that status/citizenship if temporary residents who are not citizens of the relevant he/she would leave the country permanently. country being considered eligible. This principle also extends to the situations included in Article 5.2 where This situation led FIFA to issue Circular no. 10936 in a player “who has already participated in a match which it decided that, to prevent any further abuse of (either in full or in part), in an official competition
5 www.fifa.com 7 See the content of FIFA Circular Letter no. 1147 issued on 18 June 2008 6 Available at resources.fifa.com www.fifa.com
Football Legal 11 PERSPECTIVES
Eligibility and Nationality in Football
of any category or any type of football for one the condition of “living continuously on the territory association may not play an international match for for at least two years”. This therefore means that the a representative team of another association”8, with players merely need to be born there or have family the exception of the conditions specified in Article 8, ties through their parents or grandparents in order to which allows a player to change association if certain be eligible, as it happened in the case of West Ham’s requirements are met. player Declan Rice.9
Therefore, in order to be eligible to play for a national team, the player must first possess the Acquisition of a new nationality (permanent) nationality of the country he or she wishes to play for. However, football does not exist in Let’s now turn our attention to what seems to be the a vacuum and its participants are a reflection of the most complex article surrounding a player’s eligibility: world in all its variety. That means that footballers may Article 7. This provision contains the rules for a player possess more than one nationality and thus qualify to change nationality and thus represent a new national to play for more than one team, as expressed in the team. The criteria are identical to Article 6.1, apart following articles. from item (d), which requires a player to have “lived continuously for at least five years after the age of 18 on the territory of the relevant association”. This Representation of more than one association was the well-known case of Diego Costa, who was teams based on nationality allowed to play for Spain on account of his Spanish nationality, which he gained through residence. While Article 6 states that “A player who is eligible to he was born in Brazil, he was also eligible to play for represent more than one association, may play in an Spain having gained citizenship in July 2013, and the international match for one of these associations only fact that he had been a resident there for five years if, in addition to having the relevant nationality, he satisfied FIFA’s rules. fulfills at least one of the following conditions: According to FIFA, item (d) was introduced with the a) He was born on the territory of the relevant aim of avoiding abusive naturalizations carried out with association; the sole purpose of making a player eligible to play for a specific association, i.e. the choice of the player for a b) His biological mother or biological father was born new nationality shall not be dictated by the intention on the territory; to play for a specific representative team. Indeed, in naturalization cases, this rule institutes a de facto c) His grandmother or grandfather was born on the prohibition to play at international level before the age territory; of 23 years old. d) He has lived continuously on the territory for at There is, however, a difficulty when applying such least two years.” provision, as the regulations do not provide for a concrete definition of the phrase “living continuously For example, the four ‘home nations’ in the United for at least five years” expressed in Article 7 (d). This Kingdom are all grouped under the same “British” often raises questions as to whether actual physical nationality label. However, a player who falls under presence in the country during those 5 years is this nationality bracket cannot simply pick-and- necessary, or if, for example, a short-term abroad is choose which country he wishes to play for within that considered as an interruption of such time period. In this territory. He must first meet one of the conditions of sense, it should be noted that the FIFA Commentary Article 6.1. seems to invite a strict interpretation of this article and makes reference to a physical presence requirement.10 In addition, Article 6.2 further states that “regardless Furthermore, it defines “living” as having the main of Article 6.1, associations sharing a common point of one’s existence in the country concerned. nationality may make an agreement under which item (d) is deleted completely or amended to specify Nevertheless, although a narrow interpretation of the a longer time limit.” The four British ‘home nations’ rule seems to be FIFA’s recommended approach in have opted to delete item (d) above, which establishes 9 Recently, West Ham United’s newest prodigy, Declan Rice, has committed his future to seeking to represent England at full international 8 The terms “official competition” refer to matches played for representative level, despite having made several appearances for the Republic of teams in competitions organized by FIFA or any confederation (i.e. not Ireland. www.natlawreview.com friendly games). 10 FIFA Commentary to RSTP, ft 133.
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Eligibility and Nationality in Football
order to prevent abusive naturalizations, it is also true subject to the exceptions expressed thereon, as that such strict interpretation could lead to absurd follows: scenarios, where for instance: (i) a player who takes a long family vacation in another country during a) He has not played a match (either in full or in part) in the relevant period; (ii) a player needing to seek an official competition at “A” international level for medical treatment in another country for some time; his current association, and at the time of his first or (iii) even players who leave the country during the full or partial appearance in an international match extended winter break (for example, the Russian and in an official competition for his current association, Ukrainian leagues where the winter break takes almost he already had the nationality of the representative 3 months), could potentially be considered as having team for which he wishes to play); breached the obligation of “living continuously” in the country. b) He is not permitted to play for his new association in any competition in which he has already played Additionally, it shall also be noted that there is an for his previous association. exception to Article 7 (d). In cases where a player has lived continuously in a certain country for at least five In other words, if a player through the operation of years before the age of 18, and would therefore not Articles 5, 6 and 7 is eligible to represent more than one meet the requirement of Article 7 (d) - the player can country, he may - but once only - request to change the apply to the Players’ Status Committee (PSC) to request association for which he is eligible to play for, provided an exception to this rule and become eligible. This that he complies with the abovementioned exceptions. deviance from the content of Article 7 (d) is allowed in order to avoid situations where a player who has a Notwithstanding the above, it is also worth noting genuine and personal commitment to a country (i.e. that Article 8.2 states that where a player has played not linked to football) and has acquired the relevant for a national team but then permanently loses his nationality at a later stage, would be prevented from nationality without his consent or against his will representing the association team of that country until due to government action, he can request to play for he turns 23 if the article were applied strictly.11 another association whose nationality he has acquired. This may apply where there is a break-up of a previous To this end, if FIFA PSC can establish that the move was nation or territory. for reasons not related to football (e.g. family, asylum, cultural reasons, etc.) then the exception will likely Lastly, it shall be noted that if a player is eligible to be granted. This may only be applied in cases where change teams, then Article 8.3 states that the player it is evident and proven that the naturalization of the must “submit a written, substantiated request to the player is not abusive to the spirit of the Regulations. FIFA general secretariat. The Committee will then In doing so, this rule is not inflexible, for under very make a decision.” Once the player files the request, he restrictive preconditions, a player might be declared is not eligible to play for any national team until it has eligible to play for the relevant association despite been processed. not fully complying with the content of Article 7 (d). However, this will depend on the documentary evidence, which shall demonstrate that no abuse of rights was envisaged. The burden of proof lies with the The application of Article 7 (d) of FIFA player and his representative association. RGAS to the case of the Player Junior Moraes
Change of association In the recent case of the player Junior Moraes - a 32 year old Brazil-born striker who represented Finally, and if the criteria set forth in the articles above Ukraine’s national team during the UEFA European are satisfied, a player must then look to Article 8.1, Championship 2018-2020 after acquiring Ukrainian which provides that players who (i) have more than nationality - the Portuguese Football Federation one nationality, (ii) acquired a new nationality, or (PFF) and the Football Federation of Luxembourg (iii) are eligible to play for several teams due to their (FFL) submitted two protests against the Football nationality, will be able to change teams, only once, Federation of Ukraine (FFU) before UEFA, invoking that FFU had fielded an ineligible player. 11 For instance, a case where the player has lived in the country since the age of 4 due to reasons not linked to football, would have to wait until the age of 23 to comply with the requirement set forth in Article 7 (d). However, in order to prevent these unfair situations, the player can apply to the PSC to request for an exception to this rule and become eligible.
Football Legal 13 PERSPECTIVES
Eligibility and Nationality in Football
In short, both federations protested the Player’s or make any reference to “actual physical presence” participation in the matches played by Ukraine against as a condition to satisfying the requirement under Portugal and Luxembourg on the basis that Mr Moraes Article 7 (d) of FIFA RGAS. was not eligible to play for the FFU national team, since he did not fulfil any of the conditions set forth Given the absence of any definitive indication in the FIFA in Article 7 of the FIFA RGAS, particularly the concept rules suggesting that the “actual physical presence” of of “living continuously” contained in Article 7(d). a player is required in the country at all times during According to the protests filed, the longest continuous the relevant period, the UEFA Appeals Body applied period that Mr Moraes had lived in Ukraine was 4 years Swiss Law rules of statutory interpretation to construe and seven months, having played for Metalurh Donetsk the intention behind the wording “living continuously”. and Dynamo Kiev between July 2012 and February To this end, UEFA considered that such requirement 2017, before he moved on loan to Chinese side Tianjin means that a player shall have a continuous residence Quanjian, thus breaching the relevant 5-year period on the territory of the relevant association. Under established in such article. Swiss domestic Law, this usually means maintaining one’s center of vital interest in the country concerned The UEFA Ethics and Disciplinary Inspector (UEFA and being registered with the municipal authorities.12 EDI) concluded that the FFU had failed to fulfill the Therefore, under Swiss nationality law, residency is requirements of Article 7 by fielding an ineligible player primarily based on authorized presence in Switzerland in both matches, and requested the UEFA Control and such residency is not interrupted by a short-term and Disciplinary Body (CEDB) to open disciplinary abroad (i.e. less than 6 months), where the foreigner proceedings against FFU, declaring both matches as intends to return to Switzerland. Applying this analysis forfeited. At both instances, the UEFA CEDB and UEFA to the case at hand, this would therefore mean that Appeals Body, decided in favor of FFU, since they the Player’s residence in Ukraine was not interrupted considered that the concept of “living continuously” by a four-month stay abroad (in China) as long as the had not been breached by the Player, and therefore, Player intended to return to Ukraine. all requests for relief filed by the PFF and FFL were dismissed. Taking into consideration such interpretation, UEFA proceeded to analyze whether there existed a genuine At the center of both UEFA Decisions (i.e. the link between the Player and Ukraine. In this sense, the UEFA CEDB and Appeals Body decisions) was the UEFA Appeals Body first observed that the Player (i) interpretation of the wording “living continuously” had lived in Ukraine with his family for close to seven in the context of Article 7 (d) of FIFA RGAS, and years before acquiring nationality. Moreover, the consequently, the analysis of whether or not the UEFA Appeals Body noted that (ii) the Player returned Player’s four-month loan to China had interrupted his to Ukraine after the loan period in China and had a “continuous living” in Ukraine. Additionally, UEFA also continually lasting employment agreement with FC had to assess in its decision if such concept required Dynamo Kyiv between 2015 and 201813. Also, (iii) upon the physical presence of a player in a country, as completion of term of his contract with FC Dynamo argued by both PFF and FFL. Kyiv, the Player remained in Ukraine, being employed by FC Shakhtar Donetsk, where he is still registered. In this case, the UEFA Appeals Body first started by Finally, the UEFA Appeals Body found that (iv) the declaring that one shall first look into the rationale of center of the Player’s life, including his family, was Article 7 (d) of FIFA RGAS. According to the evidence effectively in Ukraine (even during his loan period) and adduced during the proceedings, it remained clear that he did, in fact, have a special connection with the that the aim of such regulations is to ensure that there country, both for personal and professional reasons. is a genuine and clear link between players acquiring a new nationality and their new country of citizenship, The loan period did not in order to prevent abusive naturalizations for sporting interrupt his residency in purposes. Ukraine In this context, the UEFA Appeals Body observed that, contrary to what had been argued by PFF and In light of the above, the fact that the rule does not FFL, nothing led it to conclude that the purpose of require an actual physical presence of a player in the such regulation had anything to do with the physical country, together with the Player’s clear link to Ukraine, presence of a player in the territory of the relevant resulted in the UEFA Appeals Body being comfortably country for five years uninterruptedly. In fact, neither 12 taxsummaries.pwc.com FIFA RGAS nor FIFA’s Regulations or Statutes mention 13 The effects of such employment relationship were only suspended during the four-month loan to China.
14 Football Legal PERSPECTIVES
Eligibility and Nationality in Football
satisfied that the Player had lived continuously in five years”, such interpretation must be clarified and Ukraine for five years after the age of 18 and, thus, explained by means of a written document to the it deemed that the loan period did not interrupt his football community in order to avoid scenarios such as residency in Ukraine according to Swiss Law. the one analyzed above.
On a final note, the current regulations allow players who satisfy the relevant eligibility requirements to Conclusion change their national team if they have not played a senior competitive match for another nation. Whether FIFA explained during its Football Law Annual this will remain the case over time, or whether any Review 2018 that the association passed more than regulatory changes are included as part of FIFA’s 80 decisions relating to national team eligibility and ongoing reforms, will be decided by FIFA through change of association in 2018, thus proving that this its usual consultation process. It will be interesting to topic is becoming more predominant in the football see how the position of nationality in football evolves, industry.14 The changes to the FIFA RGAS gave room especially taking into account global geopolitical for different interpretations and the necessity to changes. assess the rationale behind these specific rules. Indeed, globalization in football often demands a constant review of the sociological, footballing and legal implications of the regulations, especially with regards to players wishing to change nationality and, as a result, representative team, as established by Article 7 of FIFA RGAS.
It is our understanding that the purpose of such rules, besides protecting young players and preventing abusive naturalizations, is to ensure that players have a genuine commitment and clear link to the national association which selects them on its roster. This is primarily ensured by the permanent holding of the nationality of the country of the national association in question, meaning that nationality must not be pegged to the residence of the player in a certain country (Article 5.1), and also by residing with the intention of permanently establishing one’s domicile in the country concerned (Article 7).
To this end, we accept that a strict interpretation of Article 7 (d) of FIFA RGAS is, as a general rule, required. Particularly, in scenarios where many national associations and the competitions they participate in may be impacted by the interpretation of such a legislative provision. However, we also find that strict interpretation of the rule is not absolute: exceptions can be applied on a case-by-case basis and shall therefore be left to the discretion and analysis of the deciding body, as demonstrated by the case of Junior Moraes.
Indeed, one of the lessons learned from Junior Moraes’ case is related to the application and interpretation of Article 7 (d). Importantly, it is our understanding that if the condition of “living continuously for at least five years” established in Article 7 (d) of FIFA RGAS shall be understood, according to FIFA, as being “actually physically present in the territory for at least
14 “Relive: FIFA Football Law review” www.fifa.com
Football Legal 15 PERSPECTIVES
A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Principles
By Victor A. Berezov Chairman of the Dispute Resolution Chamber of the Football Union of Russia Arbitrator at the National Centre of Sport Arbitration Member of the FIG Disciplinary Commission CAS Arbitrator (2015-2019) Moscow – Russia
➔➔ FIFA – FIFA Regulations – Contractual stability – Breach of contract – Collective Bargaining Agreement (CBA) – FIFPRO – Players’ Union – Player contract – Player transfer
According to the detailed research undertaken by Forbes in July 2019 “The World’s 50 Most Valuable Sports Teams 2019”1, more than half of the 50 most valuable sports franchises2 belong to the National Football League (NFL). One should not be surprised if Real Madrid CF, Manchester United F.C., Juventus F.C. and many other solid soccer3 teams are looking with envy and jealousy at their American fellow athletes.
Introduction FIFA Regulations vs. Collective Bargaining Agreement (CBA) The fourth consecutive year of this “financial tournament” is marked by the fact the Dallas Cowboys As we all know, the European model of sports through (Cowboys) remains the most valuable sports franchise decades of regulatory enhancement has developed in the world of international professional sports at the unified approach applied to the organization of USD 5 billion. Curiously enough whilst the Cowboys every single sport competition within this system. lead virtual financial competition by far, their sporting results are quite mediocre. The Cowboys have failed The key role in this system belongs to non-commercial, to reach the NFC Championship Game4 for last 23 (!!!) non-governmental, private associations which have years. monopolized5 the right to be called major event organizations - the International Olympic Committee The NFL has created the most unique and prosperous (IOC) and similar associations (for multisport events professional league where financial success of the like the Olympic Games) and International Federations franchise does not necessarily (and in some cases very (in each single sport - IF). rarely) depend on its successful performance on the field. To this end, it would be reasonable and useful to Under this concept, the IOC and the IFs are the only cast a glance on how this league is working comparing possible sources for regulatory provisions relating with the similar legal institutions in soccer. to the respective competitions, save for the World Anti-Doping Agency (WADA) with its anti-doping regulatory functions. All the participants of these competitions (the clubs, the athletes and coaches, the referees, etc.) shall accept and confirm their adherence to the provisions adopted by the IOC and IFs. This is the only way for them to be declared eligible to participate 1 By Kurt Badenhausen - www.forbes.com in these competitions. 2 The term “franchise” is widely used in the NFL in order to identify an organization which has a right to have a team play in the NFL. 3 For the sake of convenience, the word “football” will be used in relation to the American football and the word “soccer” will refer to European football. 5 This concept of a monopoly-based approach of governing in the 4 The NFL is divided into two conferences: American Football Conference European sports model has been under scrutiny by state courts on (AFC) and National Football Conference (NFC). The champions of the numerous occasions and has been consistently confirmed either entirely AFC and NFC annually meet in the Superbowl - the final stage of the NFL or partially with some reservations. See, for example, Mutu and Pechstein Postseason (play-off). Therefore, the NFC Championship Game can be v Republic of Switzerland (ECHR, 2 October 2018), Dehiba v Atletissima compared with the UEFA Champions League Semifinal stage. (Cour Civile Tribunal Cantonal Vaud 87/2001).
16 Football Legal PERSPECTIVES
A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
However, the major challenge for the whole It is more than likely that the IOC will need to construction led by the IOC and IFs, including FIFA, use all their available resources through the IOC is that the key stakeholders of the competitions who Athletes’ Commission in order to assess how far the truly constitute the heart and the core of the modern consequences of this trend might extend and to sports - the athletes (and in team sports - the clubs) evaluate all possible risks in this regard. - do not directly (or sometimes even indirectly) participate in developing and adopting the rules which Basically, the same applies to FIFA and its approaches they are affected by. to the regulatory framework.
In April 2020, the Global Athlete - a newly established At the end of the day, FIFA is just an artificially designed organization aimed at the protection of the rights and superstructure which has historically monopolized the interests of Olympic athletes - conducted thorough sport of soccer and declared itself as the unique source and detailed research in relation to the distribution of football law. of funds by the IOC.6 The report revealed that the IOC allocated only 4.1% of their revenue (more than It is important to underline that this shall not be USD 1 billion annually) to the athletes while in the considered as a blatant criticism of FIFA’s existing professional leagues this number is between 40 and regulatory system but rather an attempt to 60% of total income. demonstrate how this system might be improved and adjusted in order to face further challenges. On the basis of this research, the Global Athlete made a statement addressed to the IOC and other key Pursuant to Article 6 of the FIFA Statutes, it is the stakeholders of the Olympic Movement outlining some exclusive competence of the FIFA Council “to regulate major conclusions in this regard. Three conclusions are the status of players and the provisions for their really of true interest in terms of the legal framework transfer, as well as questions relating to these matters, in the context of relationships between the IOC and in particular the encouragement of player training by the athletes: clubs and the protection of representative teams, in the form of special regulations from time to time.” ➥➥ “Collective bargaining/leverage: Athletes should be appropriately compensated for preparing It is of utmost importance that out of 37 FIFA Council and attending the Olympic Games. Currently the members only 5 are former soccer players, and only 1 majority of athletes and their families financially of these 5 members was an international level soccer subsidize years of training, travel and equipment player (Dejan Savicevic). None are active players but to compete for a multi-billion dollar industry of the instead the FIFA Council is composed of a number Olympic Games. of politicians (either active or former), businessmen, lawyers etc. who develop and adopt the rules by which ➥➥ Unbalanced distribution of funds: Athletes who the players are earning their living. sell the Olympic Games currently only receive 4.1% funding directly from the Olympic Movement Predictably, this concept of law-making process has revenues through scholarships, grants, and awards been challenged on numerous occasions over the for successful competition, numbers which athletes years in different State courts across Europe. cannot negotiate. Of the 4.1% the IOC only provides .5% directly to athletes. The IOC annual revenues Consequently, it should come as little surprise that exceed $1.4 billion. one of the key pillars of the current FIFA/UEFA legal system of status and transfer - the free agency concept ➥➥ Professional Sport compared to Olympic Sport: and no quotas on foreign players in international club Despite the IOC’s claim of a non-profit status, the competitions - has not been the result of thoughtful IOC reliance on broadcast rights and revenues and consistent evolution of the applicable rules but has makes the Olympic movement much more closely derived from the notorious and hard-hitting ruling of resemble a professional sports league. Yet the the European Court of Justice in the “Bosman case” of 5 largest professional sport leagues in the world 1995 (ECJ, 15 December 1995, Case C-415/93, URBSFA pay between 40-60% of their revenues directly to and others v. Bosman and others).7 players. The IOC has spent a mere 4.1% on athletes.” It took decades for FIFA officials to understand that the system where the players do not have any right to negotiate and actively participate in developing
6 globalathlete.org 7 www.football-legal.com
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
and adopting transfer and status rules is completely Once the draft of the CBA is hammered out by the NFL flawed. franchise owners, it goes for a vote by the both sides.
And again, this understanding has not appeared Primarily, the NFL franchise owners (32 franchises) evolutionarily but after a complaint lodged by FIFPRO - vote and then the three-stage voting procedure is on the worldwide representative organization established the part of the NFL Players Association (NFLPA). for protecting the rights of professional soccer players - with the European Commission in 2015. FIFPRO made The first step is a vote within the NFLPA Executive it abundantly clear that the existing FIFA transfer and Committee (11 active players), then 32 representatives status system was unbalanced and unfair towards (one active player from each team) make their choice soccer players. on the draft of the CBA. These two first steps are of recommendation nature – just in order to assist the This case could have potentially become “the Bosman players to better understand the position of those 2.0 precedent” but in 2017, FIFA and FIFPRO came to players who worked directly on the CBA draft. some peaceful long-term agreement and in 2018, FIFA slightly amended its Regulations on the Status and The final and the principal stage of voting involves all Transfer of Players (FIFA RSTP) in favor of the players.8 professional football players with active NFL player contracts. The CBA is considered to be accepted and Nevertheless, the problem relating to the way in which valid should the majority (50% + 1 vote) of players are FIFA (and actually all other IFs) deal with the rules in favor of the proposed agreement. which directly affect athletes has not been resolved in the global context until now. Needless to say, this approach is much more attractive and effective because once the CBA is accepted by Still, the FIFA Dispute Resolution Chamber and similar the players, this is a 100% guarantee that within the judiciary bodies within the national associations term of the new CBA there would be no single legal annually register thousands of disputes, mainly dispute or even discussion concerning the legitimacy related to different violations of players’ contracts. of the existing rules, contrary to what often happens in Undoubtedly, the myriad of disputes registered in the FIFA legal playground. the decision-making bodies of FIFA and national associations may have various reasons, but the Once the CBA is accepted by the disproportionate system of negotiating and adopting players, this is a 100% the rules of the soccer market and legal field is still guarantee that [...] there a big issue and a huge challenge for the world of international soccer. would be no single legal dispute
That being said, it is time to turn to the NFL which Yes, there is a flip side to this coin. When the players serves as a true showcase of the way in which a league are empowered to block the entering into force of is handling these complicated issues concerning the the new CBA, it could potentially result in a lockout system of the status and transfer of football players. situation, as has already happened in various American professional leagues including the NFL. The lockout Surprisingly, despite the issues at stake being means that the upcoming season (the first season of complicated and very costly, the NFL approach is very the new CBA) is not going to commence until two straightforward. negotiators (the franchise owners and the players) agree on every single controversial item of the CBA. In the NFL, the so-called Collective Bargaining Agreement (CBA) is de facto the document which The lockout threat is a very powerful leverage for the contains all relevant provisions concerning football players against the owners because every lockout players’ status, their transfers (trades), free agency situation will inevitably bring huge financial losses to issues, salary caps, doping control and all other items. the franchise owners. Sometimes the players blatantly blackmail and intimidate the owners in pursuit of some Unlike their fellow FIFA colleagues, in the NFL, this vital favorable provisions for them. and constitutive document is subject to discussion and approval only by those who are really affected by the For example, in February-March 2020, the franchise CBA - the franchises and the players. owners and the players were discussing the new CBA 2021 which, inter alia, revolutionarily foresees one additional regular season game (from 16 games to 17 8 www.fifa.com
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
games NFL regular season). Given that the 16-game eliminated (only fines left), the threshold for a positive format has been used by the NFL since 1978, this is test has been increased more than 3 times (from 35 ng a really significant change to the NFL regular season to 150 ng) and a very tight testing window has become structure. even tighter (only 2 weeks during preseason camps instead of 4 months). We know that the NFL generates huge financial benefits and the additional regular season game will Summarizing the above, the new CBA 2021 has been surely secure additional benefits for the franchise finally adopted after the voting by all 1,978 NFL players. owners. But what we also know is that football is a But it was a truly tightrope walk with only a 51.5% majority very brutal game which is regularly overloaded with of votes cast in favor of a new deal (1,019 vs 959 votes). players’ injuries, and, therefore, even one additional game will undoubtedly result in additional health risks for the players. Contractual stability: what is really Hence, the players reasonably expected from the owners needed to be contractually stabilized? a lot of incentives in order to accept the additional game to the regular season. While, basically, the players Contractual stability was declared as a fundamental approach to demand something in lieu of the potential principal of FIFA’s transfer and players’ status system risk of being injured during the 17th game is quite almost 20 years ago. It has its roots in the famous understandable (i.e. health insurance, increasing salary FIFA Circular Letter no. 769 of 24 August 200111 where cap and some other financial bonuses), some other FIFA solemnly announced that “contractual stability specific demands from the NFLPA seem to be mind- is of paramount importance in football, from the blowing and embarrassing from our standpoint, based perspective of clubs, players, and the public.” on the WADA-paradigm legal and ethical environment. Introducing the new FIFA Regulations on the Status More specifically, under the current CBA, the NFL and Transfer of Players (RSTP), the international has got the softest anti-doping policy in the world of governing body in 2001 explained that “the relations sports.9 For example, the players beyond the regular between players and clubs must therefore be governed season (out-of-competition testing) may be tested by a regulatory system which responds to the specific only once and only in a very tight window during needs of football and which strikes the right balance preseason activities. between the respective interests of players and clubs and preserves the regularity and proper functioning Another example of unprecedented leniency in the of sporting competition. Accordingly, the new anti-doping rules is the sanctioning system for doping Regulations seek to ensure that, in the event a club and abusers. For the first offence involving an anabolic a player choose to enter into a contract, this contract agent, the player who fails the testing shall be declared will be honoured by both parties.” ineligible for six… games. G-A-M-E-S… In terms of months it is equal to 1.5 months (just compare this with The legal basis for maintenance of contractual stability the standard 4-year period of ineligibility under the between professionals and clubs is enshrined in the World Anti-Doping Code). The first offence involving Article 13 of the FIFA RSTP which states as follows: “A diuretics or stimulants will lead a player to get a ban contract between a professional and a club may only for two games (basically, it is equal to two weeks). be terminated upon expiry of the term of the contract or by mutual agreement.” Let’s also remember that the NFL list of prohibited substances10 is very limited if we again compare it with That being said, the next article of the FIFA RSTP the enormous WADA Prohibited List. immediately foresees an exception to the main rule - the parties may terminate the contract early if there However, all of a sudden while negotiating the terms is a just cause for termination (outstanding salaries, of the CBA 2021, the NFLPA demanded to soften the abusive conduct and a bunch of sporting just causes). softest anti-drug policy, especially when it concerns cannabinoids. Whilst it is absolutely reasonable to entitle a suffering party with a right to the early termination of a contract, As a result, according to the new CBA 2021, the Article 17 of the FIFA RSTP and its commentary delivers suspension for a cannabinoids violation has been a genuine hammer-blow to this legendary contractual stability mythologeme. 9 nflpaweb.blob.core.windows.net 10 nflpaweb.blob.core.windows.net 11 resources.fifa.com
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
Article 17 of the FIFA RSTP deals with the of Danish player Martin Braithwaite acquired by the consequences of terminating a contract without just Spanish giant from small Spanish club Club Deportivo cause, basically saying that “the party in breach shall Leganés, S.A.D (Leganes). pay compensation”. To put it simply, the mission of Article 17 was to explain to a breaching party the The synopsis of the story is that Barcelona lost its aftermath of its breaching behavior - either financial or principal striker Luis Suarez and another attacking disciplinary (or both) and to ultimately issue a warning player Ousmane Dembele due to their injuries after the not to terminate an effective contract early without expiry registration deadline and desperately needed just cause. an additional forward to the roster.
This lofty mission of persuading one not to terminate Barcelona used an emergency exception provided by players’ contracts early has been spectacularly the national transfer regulations in case of confirmed smashed by paragraph 1.3 of the FIFA Commentary for multiple injuries and registered a Danish attacker Article 17 of the FIFA RSTP which contemplates that outside the transfer window by triggering a buyout “the parties may, however, stipulate in the contract clause in his contract with Leganes. This was done the amount that the player shall pay to the club as against the will of Leganes which is completely compensation in order to unilaterally terminate the understandable because despite the EUR 18 million contract (a so-called buyout clause). The advantage transfer fee, Leganes lost their key player and the club’s of this clause is that the parties mutually agree on chances to win a relegation battle dramatically went the amount at the very beginning and fix this in the down. Interestingly, the motion of Leganes to register contract. By paying this amount to the club, the player an additional player after Mr Braithwaite’s departure is entitled to unilaterally terminate the employment was rejected by the Spanish football authorities. contract. With this buyout clause, the parties agree to give the player the opportunity to cancel the contract Leganes Director General Martin Ortega claimed that at any moment and without a valid reason, i.e. also “We would understand this rule applying if there were during the protected period, and as such, no sporting a mutual agreement between clubs, but the current sanctions may be imposed on the player as a result of rules go against equality between clubs. We'll do the premature termination.” whatever it takes in a situation that causes irreparable harm.”12 How does a concept of “buyout clause” correspond to the principle of contractual stability? How is it possible to That is exactly what the buyout clause concept is declare that the contract shall be respected by both parties bringing to the world of soccer - inequality and a and this contractual respect is of paramount importance massive blow to contractual stability. whilst simultaneously encouraging the parties to insert in their contracts buyout clauses which can literally serve as In general, the transfer rules safeguard two fundamental a lethal weapon for a contract and then calmly describe values: i) the financial interest of players and ii) the the advantages of this lethal weapon. contractual stability and integrity of teams.
Therefore, any rule that allows one team to steal (even How does a concept of “buyout by paying a compensation) a player from another team clause” correspond to the against the will of the latter, damages the interests of principle of contractual the key collective stakeholders of the international stability? soccer - the teams.
Furthermore, in Spain, the concept of a buyout clause The teams are interested in a balanced and consistent in contracts is directly envisaged by the national roster, and this is exactly the fundamental value that legislation. Under the Real Decreto 1006 of 26 June should have been ultimately protected by the “soccer” 1985, the player and the club are forced to include in law-makers. a professional contract a provision establishing for a player a compensation to be paid by him in order to The NFL perfectly demonstrates how this fundamental unliterally terminate the effective contract legitimately. value is preserved by the league.
This is not contractual stability. The NFL CBA does not allow any player to unilaterally terminate his effective player contract for any reason Let us remember the infamous latest case from 2020 (except for contract breach committed by the franchise, with F.C. Barcelona (Barcelona) and the transfer 12 bleacherreport.com
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
which however, has not been an issue for a very long the NCAA competitions are extremely commercially time due to the financial success of every NFL team). successful and therefore there are no issues concerning This is a key pillar of the NFL contract system - a player training compensation when a student becomes a may not unliterally leave his team during the term of professional player. his player contract. No buyout clauses are permitted whatsoever. Annually each April, the NFL conducts the rookie draft which is the only source for the NFL franchises Furthermore, it might seem crazy and unfair towards to get new players. Therefore, the rookie draft is the the players, but a great deal of the NFL contractual critical landmark for each NFL franchise on their way rules completely ignore the will and intentions of the to achieving competitiveness and success. players in question, and the free agency has some very specific peculiarities intrinsic only to the NFL: The NFL historically attempts to make a balanced and unpredictable competition by virtue of a draft system ➥➥ the players are drafted by the NFL franchises where the worst team in the previous season has got without taking into account their desire and wishes the first pick in the draft, the second worst team has got and the players are obliged to follow the drafting the second pick and so forth for each team in reverse team and to sign a rookie contract (which is a order depending on the results of the previous season. 4-year deal with the option of 5th year triggered There are seven rounds of the NFL rookie draft. upon the team’s willingness); But the main principle which vehemently distinguishes ➥➥ any player with an effective contract may be traded the NFL rookie draft from the FIFA designed system by their franchise to another franchise at any time of recruiting youth players into professionals is a total without his consent (except for top-level stars who ignorance of the player’s will as to where to begin his may negotiate “no trade” clause in their contracts professional career. but these are very rare cases); Let’s imagine a boy from Texas who grew up as the ➥➥ any player can be released by the franchise at any Cowboys fiery fan dreaming to play for the Cowboys time by virtue of unliteral termination of his player someday. The boy played for four years for his contract provided that the franchise pays the university in the NCAA and became eligible for the player “the guaranteed amount” according to his NFL rookie draft. To his horror in the second round of player contract; the draft he has been selected by the New York Giants (Giants) - the arch-rival franchise to the Cowboys. The ➥➥ a player with an expired player contract (free boy hated the Giants with every atom of his young agent) may be forced to play for his club during heart but as of now he has to sign his rookie contract one, two or even three additional years by virtue of (4-year contract) with the Giants and to fight twice per “franchise tag”. season against his beloved Cowboys. His dreams, his wishes and his intentions mean nothing in the world of Let’s see each of these items one-by-one. professional football.
As a matter of fact, a player has got only one way to The NFL Rookie Draft avoid playing for the team which drafts him - to reject signing a contract offered by the drafted team. In this The rookie draft in American professional sports is a situation, a player would miss the entire next season unique system of recruiting young promising athletes and then will be eligible to re-enter the NFL rookie in professional teams from the NCAA system - the draft next year. National Collegiate Athletic Association, i.e. from the university sports. However, in practice it is almost impossible to choose this way of behavior because of three main reasons: The unique nature of the rookie draft in American professional leagues is that it cannot be reproduced ➥➥ missing the entire season may seriously affect within the European model of sports because of the the player’s skills and conditions and endanger a different structure of youth sports in the USA and in player’s chances to be selected high at the next Europe. In the USA, the colleges and universities do draft; not have any affiliation with any professional team and therefore any team may draft any player from ➥➥ the player will not receive any financial any university. Moreover, in football and in basketball, compensation during this missing year;
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
➥➥ the reputation of a player would be seriously and other relevant terms and conditions. damaged by rejecting a contract from a team which drafted him since the NFL rookie draft is a sacred cow for the NFL, teams, media and fans. Termination of a Player Contract
The NFL approach concerning early termination of a player contract by a team is very clear and precise. In the 100-year of NFL history, we can find only a few examples where players began to threaten a drafting In this regard, we need to refer to Article 11 of the NFL team with rejection of a rookie contract in order to Player Contract which is quite self-explanatory: arrange his trade to another (more favorable) team. “11. SKILL, PERFORMANCE AND CONDUCT. Player But in the overwhelming majority of cases, a rookie understands that he is competing with other obediently accepts his draft pick and tries to become players for a position on Club’s roster within the “a franchise player” (long-term leader) for the team applicable player limits. If at any time, in the sole which believed in him and selected him in the draft. judgment of Club, Player’s skill or performance has been unsatisfactory as compared with that of other players competing for positions on Trades Club’s roster, or if Player has engaged in personal conduct reasonably judged by Club to adversely Another major distinction between the NFL and FIFA affect or reflect on Club, then Club may terminate transfer systems is the way how players move from this contract. In addition, during the period any one team to another. salary cap is legally in effect, this contract may be terminated if, in Club’s opinion, Player is anticipated In soccer, this player movement is called “transfer” and to make less of a contribution to Club’s ability to usually involves some financial compensation which compete on the playing field than another player is paid by the new team to the player’s old team for or players whom Club intends to sign or attempts early termination of his effective contract. No transfer to sign, or another player or players who is or are is allowed without the consent of the player. already on Club’s roster, and for whom Club needs room.” On the contrary, in the NFL, a franchise may “trade” a player (to be more precise - his player contract) Here we can identify three general reasons as to why a without his knowledge and will. Article 17 of the NFL club may terminate player contract: (a) unsatisfactory Player Contract which is a part of the new NFL CBA performance of a player; (b) personal conduct of a 2021 states as follows: player adversely affecting or reflecting on club; (c) financial rationale related to an opportunity for a club to “17. ASSIGNMENT. Unless this contract specifically immediately sign another player with the same (or even provides otherwise, Club may assign this contract better) level of performance but with less salary amount. and Player’s services under this contract to any successor to Club’s franchise or to any other Club in A club may terminate a player contract at any time the League. Player will report to the assignee Club either during preseason or within regular season. The promptly upon being informed of the assignment only obligation for a club is to pay a player the so- of his contract and will faithfully perform his called “guaranteed” amount of his salary. services under this contract. The assignee club will pay Player’s necessary traveling expenses FIFA and the NFL has completely in reporting to it and will faithfully perform this different approaches on the contract with Player.” issue of early termination of Usually, a player is traded in exchange for another players’ contracts player (players) and/or a draft pick (picks) in future NFL rookie drafts. In the NFL, trades of a player in The salary of NFL players is basically divided into two exchange for cash are prohibited. parts: a “guaranteed” amount and a “non-guaranteed” amount. Consequently, a club which terminates a player Importantly, a team which acquires a new player contract early, must pay the remaining part of his by virtue of trade automatically acquires his player “guaranteed” amount which counts against this club’s contract with the previous team, including his salary salary cap even after a player is released and is no longer
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
a part of this franchise.13 If a player contract foresees The exclusive franchise tag prohibits a player from only a “non-guaranteed” amount or a “guaranteed” negotiating with other clubs. A player may either amount has been already paid in previous years of accept this tender and get a new one-year contract a contract, a player is released without any further with significantly better financial terms or decline this compensation regardless of the remaining amount of tender. By declining a franchise tag tender, a player “non-guaranteed” amount of his salary. misses one next full season and after one-year waiting period becomes a free agent and may sign with any As we can see again, FIFA and the NFL has completely club without any restrictions. different approaches on the issue of early termination of players’ contracts. The “non-exclusive franchise tag” means a tender with less favorable financial conditions but allows a player In other words, in the FIFA transfer system, an early to negotiate with other clubs. If a player with non- termination of a player contract by a club without just exclusive franchise tag accepts an offer from another cause is always considered as unlawful behavior and club, his current club either matches this offer and shall necessarily have legal consequences (financial keeps a player or does not match the offer from the compensation and sometimes disciplinary sanctions). other club and loses the player in exchange of two In the NFL, a right to terminate a player contract early first-picks of the rookie draft. at any time and for any reason is a legitimate option for a franchise burdened only by an obligation to pay the What is the rationale behind franchise tags? Usually, a remaining part of the “guaranteed” amount of salary. franchise tag is used towards one of the best players of a club with an expiring contract when his current club But it is worth being reminded that although this is unsure as to whether a new long-term contract with seems to be a tough and crazy system in the NFL, in a solid salary shall be offered to the player because of relation to players this system has been accepted and his health or playing issues and the club wants to have confirmed directly by the players (by accepting the an additional year to assess and evaluate the situation. CBAs) for decades and has never been an issue during Another reason for applying the franchise may be the NFL franchise owners and NFLPA negotiations on seen when a club has some problems with a salary renewal of each subsequent CBA. cap for the upcoming season and is not able to offer a long-term contract immediately but will have such opportunity a season after applying the franchise tag. Free agency and franchise tags The franchise tag concept is two-fold. On the one hand, The institution of franchise tags may be considered as a player gets guaranteed a new one-year contract one of the weirdest features of the NFL contractual with sufficiently better financial terms compared to system because no other American professional league his previous contract. However, on the other hand, a contains this type of free agency limitation. player’s right to negotiate with other teams as a free agent is either denied (exclusive franchise tag) or The franchise tag is a relatively young part of the NFL limited to some extent (non-exclusive franchise tag) CBA and was first introduced in 1993. while his new long-term deal is delayed for a minimum of a year during which he potentially risks being injured In general, the franchise tag may be described as a and not getting an offer with a new contract upon very effective tool for a club to keep one of its players expiry of his one-year franchise tag contract. in the roster after his player contract is expired. A club is entitled to apply a franchise tag once a year to only one player becoming an unrestricted free agent. Conclusion By applying the “exclusive franchise tag” a club does not allow this player to become a free agent and offers This brief research constitutes a very broad description him a tender (additional one-year contract) with a of the main existing features of the NFL contractual one-year salary equal to the average salary of the top system compared to similar institutions within the five players’ salaries at this position during the current FIFA regulatory system. year or 120% of this player’s salary in the previous year, whichever is greater. It is easy to see that the NFL’s supreme interest is to protect its franchises (teams) in every possible way, 13 The “guaranteed” amount of a player salary which is being paid after a player is released from this club is known as “dead money” since this sometimes to the detriment of player’s rights and amount hits the salary cap of this franchise even though the player is not interests. on its roster anymore.
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A Brief Review of the NFL Contractual System in Terms of the FIFA Legal Prinicples
This is the usual picture of every NFL preseason or The true success of the NFL as a corporate professional even season period when a team signs a player and league is the extremely low, if any, number of individual after several days/weeks/months routinely releases contractual disputes. This might be achieved within him without any compensation (due to no guaranteed FIFA only by involving players in the legal dialogue amount of salary in the player contract) just because as equal partners and in the law-making process in a they found a new player with the same ability but with bargaining format. less financial demands or just because they immediately need to release some free space in their salary cap.
But why do the players accept these rules and why have they never raised any questions as to whether it is fair and adequate?
That’s very simple. In the USA, there is a fundamental axiom that the financial success of professional teams ensures financial prosperity of the players. NFL players are lavishly rewarded with multi-million contracts for being drafted without taking into account their preferences, for being traded at any time and to any team without their consent, for being released from the club at any time without any need to explain the reasons for such release.
The American and the European models of sport are so different that it would be highly utopian even to attempt to reproduce or implement any of the NFL contractual system features into the FIFA transfer system.
The American and the European models of sport are so different
Mainly, the reason for this distinction lies in the mere fact that the American professional leagues are operating within one legal system (USA and sometimes Canada) and FIFA is dealing with more that 200 national associations all over the world. Thus, it is extremely difficult to create unified and detailed rules with the potential of being equally implemented in all national, associational and international dimensions. FIFA has been always constrained to invent some general compromise-mode rules in order to give national associations an ample opportunity to adjust these general rules in accordance with the laws of their respective countries.
Whilst sometimes FIFA has been very successful in this complicated legal adventure, there were a few tough moments in the FIFA history of law-making process.
However, the ultimate goal which is really needed to be sought by FIFA in this regard is to make clear and precise rules without any kind of ambiguity or uncertainty.
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Sell-on clauses in lightInterv of FIFAiew w iandth N CAunoS S juriantosprudences Rocha
Sell-on clauses in light of FIFA and CAS jurisprudence
By Frans de Weger1 Lawyer, BMDW Advocaten Haarlem – The Netherlands And Dannick Luckson2 Legal trainee, Employers’ Organisation for Dutch Professional Football Clubs (FBO) Zeist – The Netherlands
➔➔ Sell-on clause – Player transfer – Transfer fee – FIFA Players’ Status Committee (PSC) – Court of Arbitration for Sport (CAS) – CAS proceedings – FIFA proceedings - Contractual stability
In this article, the authors will focus on the so-called sell-on clause. All the relevant published jurisprudence of the FIFA Players’ Status Committee (PSC) and, on appeal, the Court of Arbitration for Sport (CAS) will be analysed in depth. An analysis will follow and the key principles that derive from the leading football jurisprudence and the legal pitfalls will be highlighted.
Introduction12
Over the last decades international football has turned In doing so, the authors analyzed all the relevant and into a very lucrative business. Transfer fees of tens of leading jurisprudence of the FIFA Players’ Status millions of euros have become more and more common Committee (PSC)3 and, on appeal, the Court of on a worldwide scale. Signing talented players, and Arbitration for Sport (CAS).4 subsequently transferring them for a higher amount to a third club, has become a very lucrative investment for clubs. As such, a frequently used way to keep a financial interest in a talented player, is to add a sell-on Purpose and mechanism of sell-on clause to the transfer contract. clauses
We will see that sell-on clauses are beneficial for both the old and the new club. The old club possibly benefits Background from the subsequent transfer, whereas the new club will initially have to pay a lower amount and will only Sell-on clauses are often included in transfer agreements. be obliged to pay part of the transfer fee if the player The FIFA Regulations on the Status and Transfer of is transferred to a third club for a higher fee, and was Players (RSTP) do not provide for a definition or a therefore worth the initial investment. further clarification of the sell-on clause. However, the CAS describes the purpose of sell-on clauses as follows: In this article, the authors will specifically focus on the sell-on clause. In this regard, the authors will “The Sell-On Clause contains a well-known discuss the benefits of the clause, but also the legal mechanism in the world of professional football: pitfalls related to this concept. Amongst others, the 3 There is little jurisprudence of the FIFA Dispute Resolution Chamber background and its purpose, the triggering criteria (FIFA DRC) in relation to sell-on clauses. See, inter alia, DRC 30 January and the determination of the amount due by clubs 2012, no. 01121201. Therefore, this contribution mainly focuses on the jurisprudence of the FIFA PSC and the CAS. in connection to sell-on clauses will be highlighted. 4 There is little literature on this subject. The authors refer to a contribution of CAS Arbitrator Mark A. Hovell, “A brief review of recent CAS 1 Frans de Weger is attorney-at-law at and founder of BMDW Advocaten. jurisprudence in relation to football transfers”, published in the CAS De Weger is CAS Arbitrator since 2015 and author of the book “The Bulletin. See also A. Duval and A. Rigozzi, Yearbook of International Sports Jurisprudence of the FIFA Dispute Resolution Chamber”, 2nd edition, Arbitration 2015, chapter 4, “The Sell-on Clause in Football: Recent Cases published by T.M.C. Asser Press in 2016. and Evolutions”, 2016, TMC Asser Press/Springer, The Hague, 2016. See 2 Dannick Luckson is a former legal trainee of BMDW Advocaten and also L. Colantuoni and W. DeVlies, “The sell-on clause in football: recent currently working as a legal trainee for the Employers’ Organisation for cases and evolutions”, Yearbook of International Sports Arbitration 2015, Dutch Professional Football Clubs (FBO). TMC Asser Press/Springer, The Hague, 2016, p. 73-91.
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its purpose is to “protect” a club (the “old club”) example, when a player is transferred for EUR 2,000,000, transferring a player to another club (the “new club”) a “profit-sharing sell-on clause” would only oblige the against an unexpected increase, after the transfer, in new club to share the part of the subsequent transfer the market value of the player’s services; therefore, fee above EUR 2,000,000 with the old club. Under the the old club receives an additional payment in the same circumstances, a sell-on clause whereby the old event the player is “sold” from the new club to a club is entitled to a part of the total transfer fee would third club for an amount higher than that one paid oblige the new club to share a part of the total transfer by the new club to the old club. In transfer contracts, fee. Because of the contractual nature of a sell-on for that reason, a sell-on clause is combined with clause and the contractual autonomy that parties enjoy, the provision defining the transfer fee: overall, the which will also be discussed later on, being entitled parties divide the consideration to be paid by the to a percentage of the total transfer compensation is new club in two components, i.e. a fixed amount, therefore also a possibility. This difference might seem payable upon the transfer of the player to the new irrelevant at first blush, but as the rationale behind the club, and a variable, notional amount, payable to the clause is of relevance, we will see that it will have some old club in the event of a subsequent “sale” of the implications when calculating the sell-on fee, as will also player from the new club to a third club.”5 be discussed later on in this article.
We see that sell-on clauses are often used in transfers in which a relatively small club (from a smaller league) Legal classification sells a player to a relatively big club (from a bigger league). It often concerns a relatively unknown player In order to analyze what legal qualification a sell-on that has the potential to become a big player as a result clause should be given, it makes sense to first examine of which his market value (future transfer fees) will in what way a club and a player are contractually increase. Under these circumstances the selling club is bound from a legal perspective. often interested in accepting a relatively small transfer fee in exchange for a sell-on clause, as it provides the When a player signs an employment contract for possibility for the selling club to benefit from a later a number of years with say Club X, Club X gains an increase in the market value of the player. This might entitlement to use the federative rights of the player. also significantly benefit the new club, simply because When Club Y wants to acquire those federative rights it pays a relatively low transfer fee. In fact, the new by concluding an employment contract with the club does not have to pay a high transfer fee at once player, the new club should in principle wait until the with the risk that the talented player does not develop employment contract with Club X has expired. If Club as was expected.6 Y wants to acquire the federative rights at an earlier stage than that, they have to conclude a transfer In this context, sell-on clauses are beneficial for both agreement with Club X whereby Club X and the the old and the new club. The old club possibly benefits player mutually terminate the employment contract, from the subsequent transfer, whereas the new club in exchange for compensation. This compensation will initially have to pay a lower amount and will only usually entails a sum of money.9 be obliged to pay part of the transfer fee if the player is transferred to a third club for a higher fee, and was As mentioned before, sell-on clauses are often included therefore worth the initial investment. in transfer agreements. Sometimes, when a young talented player is expected to become more valuable in the future ( when it is expected that potential new Sell-on clauses are beneficial i.e. clubs will be willing to pay a larger sum of money in for both the old and the new the future to terminate the player’s contract in order club to conclude a new employment contract with him), clubs want to “keep a stake in the economic rights” Later on in this article, we will see that this type of of the player. The legal construction used to realize sell-on clause was categorized by the CAS as the “profit- this is that Club X receives a contractual entitlement to sharing sell-on clause”.7 From the jurisprudence of the a specified part of the compensation that Club Y will CAS it follows that the CAS also recognized a second receive in the future. This “sell-on clause” is a part of type of sell-on clause, whereby the old club is entitled the compensation Club X receives for the termination to a percentage of the total transfer compensation.8 For of the contract and as such, is stipulated in the transfer agreement. In this context, the authors find that this 5 CAS 2010/A/2098 6 CAS 2007/A/1219; see also CAS 2014/A/3461 7 CAS 2016/A/4379 9 However, as we will see later in this article, it is also possible that players 8 CAS 2016/A/4379 are exchanged and that no transfer fee is paid.
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sell-on entitlement should not be considered as the clear wording of a contract, as also clearly follows “keeping ownership over the economic rights” in the from CAS jurisprudence, such as CAS 2016/A/4790.13 sense of property law, but this entitlement should be In that case, the CAS Panel found that no such dwelling considered as a new conditional contractual obligation. on inexact expressions had occurred. The provision at stake did not leave room for interpretation as the The most standard practice of sell-on clauses whereby wording was clear and unambiguous. In this respect, Club X is the selling club of the player and Club Y is the the Panel also referred to the principle of “in claris non buying club of the respective player can be drawn up fit interpretatio”, which provides that the language as follows: of a provision governs its interpretation where the language is clear and explicit and does not involve an “In case of a subsequent transfer of the player to a ambiguity or absurdity. In other words, as was decided third club during the term of the employment contract in that case, the CAS Panel did not need to look for the with Club Y, Club X will be entitled to receive 15% of true intention of the parties at the moment of signing, the transfer fee” as the true intention was reflected in the clear wording of the loan agreement (see CAS 2006/A/1152 and CAS 2011/A/2681).
In this context, in the event that a sell-on clause is not clear, it is important to take note of the principle “in dubio contra stipulatorem”, which establishes that, in case of ambiguity or contradiction, the interpretation of unclear clauses (such as sell-on clauses) will be In view of the above, and from a more legal perspective, interpreted to the detriment of the party that drafted in this article, the authors will analyze sell-on clauses them, which also clearly follows from leading and as being new conditional contractual obligations clubs consistent jurisprudence of the CAS (see, inter alia, CAS legally commit to. 2018/A/6023 and CAS 2017/A/5279).14 Therefore, it is of legal relevance which party drafted the sell-on clause. The contractual nature of sell-on clauses involves a number of implications. First, which can also be It is of legal relevance which derived from the principles of contractual freedom party drafted the sell-on and autonomy, parties are free to contract as they clause prefer. Subsequently, the interpretation of contractual provisions has to assess the intention the parties had when they concluded the contract. In other words, the primary goal of interpretation is to ascertain the Parties that are entitled to sell-on clauses true common intentions of the parties.10 The standard way the CAS evaluates sell-on clauses, is to explore As a general rule, as follows from Article 18ter of the “real and common intent of the parties.”11 Where the RSTP, which provision was included in the RSTP a factual consensus cannot be proven, declarations in 2015, no club or player is entitled to enter into an of the parties must be interpreted pursuant to the agreement with a third party whereby a third party is principle of good faith in the sense in which they could being entitled to participate, either in full or in part, in and have been understood, taking into account the compensation payable in relation to the future transfer wording and context and all circumstances.12 of a player from one club to another, or is being assigned in relation to a future transfer or transfer Parties must, however, also be aware that a CAS Panel compensation. Considering definition no. 14 of the FIFA does not need to look for the true intention of the parties RSTP, which definition is related to Article 18ter of the at the moment of signing, when these are reflected in RSTP, a third party is defined as a party other than the player being transferred, the two clubs transferring the 10 CAS/2013/A/3054; see also CAS 2005/A/871, CAS 2011/A/2449 and CAS 2013/A/3379. It comes down to the question of how to interpret player from one to the other, or any previous club, with these contractual clauses that are under review. In this regard, the Sole which the player has been registered. In view of the Arbitrator finds it necessary to refer to Article 18 (1) CO, which provides as follows: “When interpreting the form and the contents of a contract, above provisions, it follows that clubs will therefore the mutually agreed real intention of the parties must be considered and not be considered as third parties and as such are not incorrect terms or expressions used by the parties by mistake or in order to conceal the true nature of the contract […]”. There is consistent legally entitled to add sell-on clauses to their transfer CAS jurisprudence on how to interpret contractual clauses, see, inter contracts. alia, CAS 2015/A/4057, CAS 2008/A/1544, CAS 2016/A/4519 and CAS 2016/A/4379. 11 CAS 2010/A/2098 13 CAS 2016/A/4790; this also clearly follows from CAS 2013/A/3137. 12 CAS 2013/A/3054 14 See also CAS 2004/A/642
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As of 1 June 2019, the only other party that can be sporting performance and economic rights exceeded entitled to a sell-on fee is the player being transferred. the amount of EUR 3,250,000.16 In other words, in employment contracts between players and clubs a provision whereby the player In this context, it must also be stressed that transfer is entitled to participate, either in full or in part, is fees that are received by the selling club on an permitted in relation to a future transfer or transfer instalment basis, result in payments of any sell-on fees compensation. As explained by FIFA in its Circular to a previous club on a pro rata basis. Further to this, a no. 1679, this change to the definition was introduced party cannot claim for instalments that have not fallen in order to reflect the jurisprudence of the FIFA due yet.17 This also follows from the CAS jurisprudence, Disciplinary Committee related to the reiterated such as CAS 2013/A/3367 and CAS 2012/A/2875.18 practice of clubs, which entered into agreements with some of their players entitling them to receive specific A party cannot claim for compensation in the event of a future transfer to instalments that have not another club. It is FIFA’s position, and rightly so, that fallen due yet such amounts promised to players should be seen as part of the remuneration due to the players under their employment relationships with their clubs and such agreements are not in violation of FIFA’s rules on third- Non-payment by a third club party ownership of players’ economic rights. The jurisprudence clearly shows that the former and the Taking into account the above provisions, if follows new club are basically in it together with regard to the that the RSTP do not leave room for any other third sell-on clause.19 For example, in a decision of the PSC of parties, such as intermediaries, investment companies 7 May 2014, a club was entitled to receive 25% of the or family members of the player, to participate, either difference between the transfer price and the amount in full or in part, in compensation payable in relation to of EUR 425,000.20 When the player was subsequently the future rights of a player from one club to another in sold to a third club for the amount of EUR 3,750,000, relation to a future transfer compensation. which had to be paid in three equal instalments, the new club sent the old club a payment plan in which it committed to pay it after one week of receipt from the third club. However, when the third club failed to pay the Triggering events sell-on clause third installment, the new club objected to pay the old club the sell-on amount which was payable under the third instalment. In that case, the Single Judge decided Transferring portion of economic rights that sell-on clauses are contractual agreements which are not definitive and subject to undetermined future As a starting point, it can be derived from the events. Because of this uncertainty, the new club’s jurisprudence of the CAS that even if a sell-on fee obligation to pay a share of the transfer compensation does not specifically make reference to 100% of the could not be set as of the moment of the conclusion of economic rights, the sell-on clause will be triggered the contract and was subject to the subsequent receipt even if only a portion of economic rights is transferred.15 of the relevant amount by the new club. In the context From an award of the CAS of 11 May 2015, the Panel of the risk-sharing, the outcome seems fair.21 referred to clause 8 of the transfer agreement between 16 The CAS Panel seems to take note that this decision could establish the former club AC Sparta Praha and the new club an easy way for clubs to circumvent a sell-on clause by selling a small Genoa, which determined that a sell-on fee needs to portion of the economic rights, paying the former club a sell-on fee based on this small portion, and subsequently buying back these economic be paid “in case of the future definitely transfer of the rights. Therefore, the CAS Panel mentions that the situation would be player’s sports performances and economic rights different if there is any evidence of bad faith when a club sells a portion of the economic rights and subsequently reacquires the full 100% of the from Genoa to another Club for a total amount higher player’s economic rights in order to prevent having to pay a sell-on fee than € 3.250.000,00.” The Panel found that this based on 100% of the economic rights. 17 PSC 23 April 2013, no. 04132127. See also PSC 23 September 2015, no. clause was triggered by a subsequent transfer from 09151634 and PSC 30 June 2015, no. 06152122. Genoa to Inter because: i) the rights to the player’s 18 By the same token it makes sense that if a third club receives an amount in relation to a sell-on clause instalments and the sell-on clause sporting performances were definitively transferred provides for certain deductions, the deductions will also be deducted from Genoa to Inter; ii) the player’s economic rights proportionately. 19 Please note that the party claiming compensation on the basis of a were also definitively transferred from Genoa to Inter sell-on clause bears the burden of proof and must provide evidence (albeit not 100% of them); and iii) the amount received in support of its assertion that a sell-on-clause was actually part of the agreement. See PSC 15 January 2014, no. 01141680. by Genoa related to the transaction of the player’s 20 PSC 7 May 2014, no. 0514799. See also PSC 23 April 2013, no. 04132127 and PSC 19 March 2013, no. 03132290. 15 CAS 2014/A/3701 21 CAS 2005/A/896 and CAS 2014/A/3508. See also CAS 2005/A/848.
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In a case before the CAS from 2012, which is in line with the loan fee of EUR 200,000 was in fact a definitive the rationale of the above PSC decision, Helsingborgs transfer fee since the player had not returned to the was entitled to receive 15% of the net amount of a lending club. The CAS decided that: “The present future transfer from Parma. The player was transferred situation is very common and in the present case from Parma to Internazionale for a transfer fee of EUR does hardly differ from a typical, final transfer of a 10,000,000 and, on the same day, Parma entered player, who is joining a club after his former employer into a co-ownership agreement in which 50% of the accepted the early termination of their contractual economic effects of the player were sold back to Parma obligations against a financial compensation”. Because for EUR 5,000,000. Six months later, Internazionale of the classification of the transfer as a “definitive bought the remaining 50% of the economic effects for transfer” by the CAS Panel in that case, the former EUR 4,200,000. In this case, it was in dispute whether club was entitled to its sell-on share.24 the sell-on fee should be based on a transfer fee of EUR 10,000,000 or EUR 9,200,000. The CAS Panel in The question of whether a sell-on that case underlined the common practice in the world clause is also triggered in the of football whereby contracting parties deviate from case of a temporary transfer initially agreed fictitious amounts. A sell-on fee has to be based on the amount which is actually received by a club for selling a player and not on an indicative A similar situation occurred in a CAS award of amount. In this case the amount of EUR 10,000,000 27 November 2012. When the player was transferred was only an indicative amount for the transfer of 100% from FC Flora (Flora) to Heracles Almelo (Heracles), of the economic rights, and Parma and Internazionale the agreement contained a sell-on clause which agreed on the sale of the remaining 50% at a later stipulated that: “in case Heracles sells the player to a date.22 Therefore, the sell-on fee in the present case third club, FC Flora will receive 15% of the transfer fee had to be based on EUR 9,200,000.23 above EUR 200.000.“25 Subsequently, the player was loaned to AZ Alkmaar (AZ) during the last six months of his employment contract for a loan fee of EUR Temporary Transfer vs. Definitive Transfer 380,000. FC Flora then argued that the requirements in the sell-on clause had been met and that the club The authors also take note of disputes that focus was entitled to its sell-on fee. The CAS Panel concluded on the question of whether a sell-on clause is also that the drafting of the sell-on clause could have been triggered in the case of a temporary transfer, taking better. Whilst “selling” and “transfer fee” point in the into account that the sell-on clause as included in the direction of a definitive transfer, the clause could have contract does not explicitly provide and consequently expressly excluded any true loan fee. leaves room for this. In cases of an unclear clause, it is important to clearly define under what circumstances The main question was, similar as in the previous CAS the sell-on clause will be triggered; only in the case of case, whether the transfer to AZ had to be considered a permanent transfer or also in the case of a temporary as a definitive or a loan transfer. Whilst assessing this, one? To avoid misunderstanding in cases in which the the Panel sought the real and common intent of the sell-on clause explicitly excludes temporary transfers, parties, as referred to earlier in this article. Following it is important to clearly define when a transfer can be Swiss Law, the emphasis was not so much on what a categorized as a definitive transfer, and when it must party may have meant but on how a reasonable man be considered a temporary transfer. would have understood his declaration.26 The CAS Panel decided that there were more facts speaking in For example, in a CAS award of 9 July 2007, the issue favour of this being a definitive transfer.27 The Panel at stake was whether a transfer had to be classified as concluded that the word “sells” is different from a loan or as a definitive transfer. In that case, a player “loans” in a literal was loaned for a fee of EUR 200,000 during the last year of his employment contract with the club. After this loan period neither the borrowing nor the lending club offered the player a new contract. The selling club, 24 CAS 2007/A/1219. See also PSC 10 November 2017, no. 11170343, CAS 2014/A/3508 and CAS 2018/A/5809. which was entitled to sell-on participation, argued that 25 This is the fee Heracles paid for the player, making this sell-on clause a “profit sharing sell-on clause”. 26 ATF 129 III 118 consid. 2.5 p 122; 128 III 419 consid. 2.2 p. 422; for further 22 CAS 2012/A/2875. See also CAS 2014/A/3701, in which award the explanation, see also CAS 2012/A/2733, par. 8.4. CAS Panel stressed that it adhered to the view expressed in CAS 27 The test of facts is done in 8.10-8.11, with the most important factors in 2012/A/2875 insofar as it differed from the approach that was taken in favour of it being a definitive transfer such that there was no mechanism CAS 2013/A/3317. to call the player back, the high loan sum in comparison to the wages 23 It comes down to the question of what is actually received, which follows and the loan agreement mirroring the remaining part of the employment from CAS 2014/A/3508 and CAS 2016/A/4669. contract.
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sense, but when looking at these circumstances the transfer where no explicit monetary value is attached. CAS Panel was satisfied that a reasonable man would The RSTP are silent as to the legal question of how see no difference here. Therefore, the sell-on clause the exchange of players should be treated, namely if was triggered, and Flora was entitled to its sell-on fee. these exchanges necessitate the payment in relation However, when calculating the compensation, the CAS to sell-on clauses or a solidarity mechanism. If such Panel did agree with Heracles that the salary the latter payments are prescribed, issues arise as to the paid during the loan period had to be deducted from question of how to equate the exchange of a player the “loan” fee.28 to an economic value, in order to be able to determine any payments due. In a decision of the PSC of 7 May 2014, the old club was entitled to receive an incentive of 40% of the The authors observe that many issues arise as to amount of any compensation related to any departure the exchange of players in relation to a solidarity of the player before the expiration of his employment mechanism, but player exchange can also generate contract. In that case, the Single Judge held that the speculation as to how ‘sell-on clauses may come into loan transfer of the player could not be considered as play.32 Currently, there are very few CAS cases which a “departure” triggering the payment of the conditional address this issue.33 fee as stipulated, since the employment contract was not terminated but temporarily suspended.29 Also The authors are of the opinion in a PSC decision of 20 November 2014, a player was that sell-on clauses can be loaned for a loan fee of EUR 1,000,000 with a purchase triggered in the event an option against the payment of EUR 500,000. The old and new club disagreed whether the sell-on entitlement exchange of players takes place they agreed on only covered definitive transfers or if it also covered loan agreements. They agreed that “[the Where two clubs agree to a sell-on clause, if one of new club] undertakes that to ensure the 40% of the the clubs engages in a player exchange in the future economic rights of the player held by [the old club] in devoid of a financial transaction, questions may arise case of transfer of the player to any other organization” in determining the transfer value so as to establish (emphasis added). In this regard, the Single judge the percentage due in accordance with the sell-on acknowledged that the payment obligation by the new agreement. It seems that if the initial clause did not club would only be triggered in the event of the transfer explicitly prescribe terms in the case of a future of the player. The Single Judge was of the opinion that exchange of players for either club who engages if the intention of the parties was to broaden the scope another club, the clubs may use a similar methodology of the clause’s applicability, they would have explicitly as that applied in the DRC or CAS judgements when included in its wording the precise kind of transfer, i.e. applying the solidarity mechanism.34 This methodology loan agreements, that would have triggered the payment would be the averaging of the two exchanged players’ obligation as well. In view of the above, the Single prior transfer values. Given the occurrence of player Judge of the PSC decided that, when a sell-on clause is exchanges, it would be beneficial for clubs which formulated as it is in the present case, it only covers the agree to sell-on clauses to stipulate in their contracts definitive transfer, i.e. only the transfer compensation of how the financial value of a potential “free” exchange EUR 500,000.30 of players can be determined so as to ascertain the appropriate sell-on fee due. Nowadays, parties often try to take care of future situations whereby players Trade of players31 might be exchanged. For example, clubs try to provide for this by stating that if the new club will receive some A very interesting phenomenon is the occurrence of other form of consideration (including, but not limited the exchange of players, whereby clubs choose to to, player exchange, the playing of a friendly match swap players without the imposition of any direct and/or a percentage of future transfer) in return for financial obligations, i.e. transfer fees. Situations the player’s transfer, the parties shall agree in good involving player exchanges have presented new legal faith to an appropriate equivalent transfer fee received questions and challenges before sport tribunals given by the new club. There is not much more that clubs the uncertainty of equating an economic value to a 32 See, inter alia, DRC 26 May 2016, no. 0516200 and DRC 7 June 2018, no. 06181269. 28 CAS 2012/A/2733 33 CAS 2016/A/4821; see also another CAS case, i.e. CAS 2015/A/4197, but 29 PSC 7 May 2014, no. 0514303. See CAS 2008/A/1793, which award the award is not published. See also CAS 2014/O/3781-3782, in which follows the same line of thought. award it was not established by the CAS Panel that the two transfers 30 PSC 20 November 2014, no. 1114580. were separate and independent. 31 See also Frans M. de Weger & Allison Hatch, ‘Principles deriving from 34 See, inter alia, DRC 26 May 2016, no. 0516200 and DRC 7 June 2018, “Exchange of Players” jurisprudence’, Football Legal # 11 (June 2019), p. 31. no. 06181269; see also CAS 2016/A/4821.
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can do to try to avoid future problems in relation to indemnification clause in their contract following the Real exchange of players. In any event, the authors are of Decreto 1006/1985. The player subsequently terminated the opinion that sell-on clauses can be triggered in the his contract, having the indemnification clause paid event an exchange of players takes place. by a third club. The Panel decided that, contrary to the claim of Lens, this termination was not to be considered as a “resale”. The Panel found, in the context of a “sale” Early termination of employment contract contract, that a transfer, being the object and purpose of the parties’ consent, can actually be made in two ways: (i) In addition to the situation where a new club concludes by way of assignment of the employment contract; and a transfer agreement and the old club terminates an (ii) by way of termination of the employment agreement employment contract, a player and club can also decide with the old club and signature of a different employment to mutually agree to terminate the employment contract, agreement with the new club. It is important that in both or one of the parties can end the contract unilaterally. scenarios, the old club expresses its agreement against the receipt of a payment.39 On the other hand, a transfer of For example, in a CAS 2009/A/1759, a player was a player can also take place outside the scheme of a “sale” transferred from FC Metz to Galatasaray. FC Metz (Metz) contract, if the employment agreement is terminated as would receive EUR 2,000,000 and additionally, in the a result of: (i) its expiration or (ii) its breach. In that event, event of the player being transferred from Galatasaray the transfer is not a sale, because the old club did not to a third club, an amount corresponding to 20% of the express its consent to the termination.40 Against this legal amount of the transfer compensation exceeding EUR background, the CAS Panel decided that the termination 2,000,000. When the player did not receive his salary by the player by paying the indemnification clause was not from the new club for 4 months, he unilaterally terminated a sale since Sevilla did not consent to the early termination his employment contract with just cause.35 Afterwards but was obliged to “tolerate” it. Therefore, the sell-on the player signed by a new club as a free agent and amount was not due in this case.41 was eventually transferred for EUR 25,000,000. Metz claimed that had prevented the fulfillment Galatasaray The termination by the player of the contract in bad faith.36 In this case, the Panel had by paying the indemnification no hesitation in considering that Galatasaray had not clause was not a sale respected the principle of good faith since it had failed to pay their employee, which is one of the core obligations of an employer. When the CAS Panel determined the In a more recent case before CAS between Sevilla FC amount that had to be paid, they made an estimation (again) and AS Nancy Lorraine, which concerned an of the market value of the player at the moment the appeal against the decision of the PSC of 24 July employment contract was terminated. When estimating 201942, the question whether the exercise of the buy- the market value, the Panel noted that a player’s “market out clause had to be considered as a transfer triggering value” is not necessarily equal to an eventual amount the sell-on clause and how the sell-on clause had to be determined in a “release clause”. After assessing multiple interpreted, was also considered. The relevant sell-on factors, it was to be deemed that the player would have clause was stipulated in the following way: “In case a been transferred for an amount of EUR 4,000,000 at the definitive transfer of the player is signed, and the player moment the contract was terminated, and consequently is transferred from [the Respondent] to another club, this amount was applied when calculating the sell-on fee.37 allowing [the Respondent] to realize a capital gain, 12% of this value will be transferred to [the Claimant].” As in In a CAS 2010/A/2098, a player was transferred from RC the abovementioned (and successful) CAS case against Lens (Lens) to Sevilla FC (Sevilla). In case of a “resale” of Lens, Sevilla was of the opinion that no transfer had the player by Sevilla to another club Lens would receive an taken place, because the player had only exercised his additional fee, expressed as a percentage of the “capital unilateral right to an early termination of the employment gain” made by Sevilla.38 The player and Sevilla included an agreement. In this case, the CAS Panel deemed the intention of the parties to be the most important factor,
35 That this termination was with “just cause” was also decided in CAS but nevertheless came to a different conclusion. 2006/A/1180. 36 Pursuant to Article 156 CO. For an extensive description regarding Article 156 CO, see par. 14 of CAS/2009/A/1756. See also CAS 2014/A/3647- 39 Under Swiss Law, according to Article 184 CO, this expression of consent 3648. is a necessary element for a sale contract. 37 The entire calculation of the player’s market value and its justification are 40 CAS 2010/A/2098, par. 27-28. This case concerned a termination mentioned in CAS/2009/A/1756, par. 28-32. without just cause as opposed to CAS/2009/A/1756 (which concerned a 38 Recently, there was some debate about this “indemnity clause” construction termination with just cause by the player). again in connection to the so-called “Vitolo case” in which the player Vitolo 41 The CAS Panel adds that, if sufficient evidence had been given of bad was transferred from Sevilla FC to UC Palmas, and subsequently to Atletico faith on the part of Sevilla, it could have reached a different decision; CAS Madrid. However, this case was decided by the Spanish arbitration court 2010/A/2098, par. 42. and will not be dealt with by the authors in this contribution. 42 PSC 24 July 2019, no. 07192352
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The CAS found that a “transfer” must be seen as a club. In this case, the PSC held that the old club would “movement” in the registration/employment relation. only be entitled to receive compensation from the new The Panel noted, and rightly so, that the wording of club in the event that the player would be transferred the sell-on clause was wide enough to cover every kind to a third club and the respondent would receive a of transfer, both in a contractual and non-contractual transfer compensation in exchange for such transfer, framework, for which Sevilla was to receive a payment, either from the player or a third party. In this context, independent of the exact legal construction behind the the transfer agreement did, however, not refer to the transfer. The different outcome in relation to the “Keita- situation where the new club and the player would case” can be explained by the fact that in this case the voluntarily agree upon the early termination of the triggering element was the general, and broad term employment contract with mutual consent and the “transfer”, whereas in the “Keita case” the triggering player would, subsequently, join a third club as a free element was a “resale”. Sevilla’s appeal was rejected.43 agent. Therefore, the PSC finally decided that the old club was not entitled to receive the minimum amount. In a decision of the PSC of 18 March 201344, which appeal led to the CAS award of 8 May 201445, the dispute revolved around a player who was transferred Other avoiding mechanisms from Boca Juniors (Boca) to Corinthians, by a transfer agreement containing a sell-on clause. Later on, the We have also observed mechanisms whereby clubs try player signed an employment contract with West Ham to avoid paying sell-on fees. In a CAS award of 23 March United after a termination of contract with mutual 201547, FC Lokomotiv (Lokomotiv) was obliged to pay consent between the player and Corinthians. Boca a former club, FC Nika, 15% of the amount received for claimed that by terminating the employment contract a subsequent transfer. Lokomotiv then transferred the by mutual consent, Corinthians had, similar as in the player free of charge to FC SKA Rostov (Rostov). Four case in CAS/2009/A/1756, prevented the fulfillment months after the transfer, the player terminated his of the contract in bad faith. Both the FIFA and CAS contract with Rostov, and entered into an employment Panel did, however, not agree, because there was no contract with his former employer, Lokomotiv. After evidence of payment to Corinthians, and there was no several years, Lokomotiv sold the player to Spartak for situation whereby Corinthians had tried to circumvent a transfer fee of EUR 8,000,000. FC Nika argued that its contractual relations towards Boca. Even though it was still entitled to the sell-on fee since the transfer the normal situation would be to transfer the player for to Rostov was not a permanent transfer but had in fact a significant amount of money, the termination of the to be considered as a loan agreement. employment contract was a business decision. In the light of all this, the CAS found that the sell-on clause The CAS agreed with this position. In the opinion of was not applicable. the CAS Panel, the transfer was a simulated act, the main indicators being the fact that at the time the In a decision of the PSC of 18 March 201346 a former transfer from Lokomotiv to Rostov took place, Rostov club was entitled to a sell-on percentage of 15% had already reached the limit of 5 loaned players, “at the moment the player or a third party pays the and therefore could not loan the player and the fact early termination clause in order to be transferred to that the player, after agreeing to a sell-on clause, was another team or his transferred by Club B (“the new transferred free of charge. By formalizing the transfer club”) to another team. ACS (“the old club”) shall as a definitive transfer, Lokomotiv aimed to circumvent receive the minimum amount of EUR 125.000, - in both the rule limiting the number of loaned players any of the mentioned events of early termination or and the sell-on clause. The CAS Panel deemed the transfer.” Because neither of them benefited from the “definitive transfer” to be a simulated act, and therefore employment relationship, the new club and the player considered it to be a loan. Taking this in consideration, mutually agreed upon the early termination of the the sell-on clause had not yet been triggered when the employment contract free of charge. Subsequently, the player was transferred to Spartak, and hence FC Nika player signed an employment contract with another was entitled to 15% of the transfer fee.48
43 CAS 2019/A/6525 44 PSC 18 March 2013, no. 03133212 and PSC 26 March 2012, no. 0312234. 45 CAS 2012/A/3012. In light of Article 156 of the CO, the CAS Panel agreed that the clause at stake in the agreement was a conditional clause. However, the CAS Panel considered that the occurrence of the condition foreseen in such clause was not prevented by the respondent’s early 47 CAS 2014/A/3508; see also CAS 2004/A/701. termination of the agreement because such termination was, at least 48 Because Lokomotiv had not yet received the total transfer fee of EUR from the evidence filed by the parties in this case, just the exercise of the 8,000,000,-, the CAS Panel considered that the sell-on fee should be parties’ right (the respondent and the player) to freely terminate a labour based on the amount actually received, and not on the indicative amount contract early by mutual consent. of EUR 8,000,000, -, which was also confirmed in CAS 2012/A/2875; see 46 PSC 18 March 2013, no. 03133212 also CAS 2011/A/2449.
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Sell-on clauses in lightInterv of FIFAiew w iandth N CAunoS S juriantosprudences Rocha
Determination of the amount deriving to the amount which is received in the creditor’s from the sell-on clause bank account. Therefore, the deduction could not be limited to tax and bank costs, but covered all possible deductions, including those deriving from the solidarity Which amount should be used when mechanism. This interpretation of “net amount” as calculating a sell-on fee? the amount which is received in the creditor’s bank account in the context of sell-on clauses was also An important aspect regarding a sell-on clause is the confirmed in another award of the CAS which was assessment of the amount which is used in order to issued on 17 December 2012.51 calculate the amount due. Since a sell-on clause aims to split the economic risk, and therefore also the economic There is some debate on profit, clubs often agree to receive a percentage of the whether agent costs can be “net transfer fee”. As stated before, a sell-on fee should deducted in principle be based on the amount which is actually received by a club. In this regard, it is interesting which amounts can be deducted from the total transfer fee There is some debate on whether agent costs can be in the case of a sell-on fee based on a “net transfer deducted.52 For example, in an award of 20 October fee”. The definition of this “net transfer fee”, is often 2016, Sunderland was entitled to 20% of “any transfer disputed between the clubs. Furthermore, it is also fee received” by Al-Ain FC in case of a subsequent important to define which costs can be deducted in transfer. The player was subsequently transferred case a sell-on fee is based on “any transfer fee”. to a third club for EUR 9,000,000. Under these circumstances, the CAS Panel ruled as follows: “The The definition of this “net Sell-on Clause speaks of ‘any transfer fee received’, not of a net transfer fee, i.e. a sum received after transfer fee” is often deduction of the costs in direct connection with the disputed between the clubs transfer of the player including the agent’s costs or intermediary remuneration. Entering into the In a CAS award of 16 January 200649, the new club intermediary agreement was a business decision of Fulham and the former club Metz agreed that, if a the Appellant which cannot be held to the detriment player was transferred from Fulham for a fee, Metz of the Respondent.” In other words, the CAS Panel would receive a “one-off” payment, being 15% of any decided in this case that where the clear wording of net transfer fee above the transfer fee paid to Metz. The a sell-on clause speaks of “any transfer fee received”, words “net transfer fee” were not explicitly defined in and not of a “net transfer fee”, i.e. a sum received after the agreement. When the player was subsequently sold, deduction of the costs in direct connection with the Fulham wanted to deduct all the costs and expenses transfer of the player, including the agent costs or any associated with the employment of the player, namely intermediary remuneration, no deduction should be the agent fees, the player’s wages, bonuses, insurance made from the transfer fee received by the club selling and the fixed amount paid to Metz pursuant the the player to a third club regarding the payment of the transfer agreement. The CAS Panel in charge decided sell-on fee to the “old club” of the player transferred. that Fulham was only entitled to deduct the agents’ Consequently, the CAS Panel also underlined that costs, as these were the only costs in direct connection since Al-Ain FC and the third club had agreed that with the transfer of the player to the third club. Al-Ain would pay any solidarity to training clubs, the solidarity payments could not be deducted from the On 10 November 200650, the CAS Panel ruled an total transfer compensation. 53 award on the definition of “the net amount”, although in another context since the case was not related to 51 CAS 2012/A/2806 52 In an unpublished decision of the PSC of 7 April 2010, the old and the a sell-on clause (but nonetheless has relevance in this new club had agreed that: “L'Olympique de Marseille (the old club) respect). The question was whether it was possible and Standard de Liège (the new club) agree to split the eventual compensation for a transfer of [the player] to a third club in half.” When to deduct a solidarity contribution and training the player was subsequently transferred from Standard de Liège to a compensation from the total transfer compensation third club for an amount of EUR 1,000,000, Standard de Liège was of the opinion that it was allowed to deduct the transfer bonus paid to the when calculating the “net amount”. The CAS Panel player, and the agent costs. The PSC agreed with this position. Since ruled, in that case, that the proper interpretation the sell-on clause was not clear on whether the ‘net amount’ or ‘gross amount’ had to be paid, the Single Judge was of the opinion that it was of “net amount” is “without any deduction”, in the only fair to consider that the clause was limited to half of the amount sense that the net amount must exactly correspond actually received by Standard de Liège as a transfer compensation. The Single Judge decided that the deduction made for the commission paid to the agent and the transfer bonus paid to the player was allowed. 49 CAS 2005/A/896 53 CAS 2016/A/4379; See also PSC 11 May 2012, no. 0512060; see also CAS 50 CAS 2006/A/1018 2013/A/3054 and CAS 2005/A/896.
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It must be taken into account that in the context of the right to offer a different transfer agreement permitted deductions, as indicated before, the principle with another third club which would effectuate that of “in dubio contra stipulatorem” is also relevant, following River Plate would receive a higher sum of money. which it must be established which party drafted the clause, which also follows from CAS jurisprudence.54 The player was subsequently transferred to Porto for a transfer price of EUR 3,400,000 under the condition that Porto would bear all expenses related to the Are variable amounts part of the “total transfer transaction.59 The total sum of the tax expenses transfer compensation”? amounted to EUR 833,000. It was in dispute whether the sell-on fee should be calculated over the transfer price, or In a CAS award of 15 December 201755, Genoa over the transfer price plus the tax expenses. In the first and Dinamo Zagrebia (Dinamo) could not agree place, the CAS Panel decided that in cases where two on the interpretation of the words “total transfer clubs share the economic rights over a player, the club compensation”. Dinamo was entitled to a sell-on bonus who maintains the registration of the player has a heavy of EUR 1,000,000 “in case of subsequent definitive degree of responsibility to inform the previous club with transfer of the Player to a third club for a total regard to the terms and conditions of the transfer in transfer compensation higher than EUR 4.000.000” view of the financial profit-sharing rights of the previous (emphasis added).56 club. In the second place, the CAS Panel also analyzed in this case the agreement and negotiations that were In this case, the player was subsequently transferred conducted between the parties and finally came to to a third club, for the fixed amount of EUR 3,500,000 the conclusion that Palermo had, based on the specific and a conditional fee of EUR 1,000,000 in case the circumstances, accepted the transfer price of EUR player participated in 20 matches. At the moment the 3,400,000 as the economic rights.60 player had played in 20 matches, and the condition was therefore fulfilled, Dinamo argued that the club was still entitled to the sell-on bonus. Genoa submitted that When interpreting sell-on clauses, by “total transfer compensation” the parties meant the “real and common intent of the only the fixed compensation amounts of a subsequent parties” is used to determine transfer and not the variable amounts stipulated the legal consequences of said clauses therein. Finally, the CAS Panel ruled in this case that: by “total transfer compensation” the parties, which are established football clubs that are commercially experienced and familiar with transfer agreements and Conclusions the terms used therein, intended to regard both the fixed transfer fee and the variable amounts stipulated As mentioned in the introduction, a “sell-on clause” is for the subsequent transfer of the player.57 an optional clause in a transfer contract which obliges a new club to share an eventual future transfer fee in case of a subsequent transfer with the old club. The The responsibility to share information contractual obligations deriving from sell-on clauses are often disputed between parties due to their poor In a CAS award of 13 September 201358, Palermo contractual drafting which has led to many disputes in transferred a player to River Plate, and was entitled front of FIFA and the CAS. When interpreting sell-on to 50% of the economic rights over a future transfer clauses, the “real and common intent of the parties”, following the transfer contract. Further to this, River beyond the literal meaning of the words used in a sell-on Plate had to inform Palermo about the terms and clause, is used to determine the legal consequences conditions of the offer made by any future third club. of said clauses. In this regard, it is important to keep River Plate needed Palermo’s authorization for a the principle of “in dubio contra stipulatorem” in mind, transfer of the player to a third club, and Palermo had which establishes that the interpretation of an unclear clause will be interpreted to the detriment of the party 54 CAS 2011/A/2508; see also CAS 2018/A/6023 and CAS 2017/A/5279. that drafted the clause. 55 CAS 2017/A/5213 56 See also PSC 28 February 2017, no. 02171787 57 Please note that this award is also in compliance with CAS 2012/A/2875 in which the CAS Panel, considers that “in the opinion of the Panel, it is 59 These include 24,5% taxes to the Argentine Football Association and the common practice in the world of football that the contracting parties Argentinian Players’ Union, any other contribution, right, tax, rate or tariff deviate from initially agreed fictitious amounts. The Panel considers that in accrued in Portugal, and the costs of agents. a sell-on fee is to be based on the amount actually to be received by a 60 It is remarkable that the CAS Panel is focusing on the interpretation of club for selling a player to a subsequent club and not on an indicative the parties in this specific case based on their correspondence, and it is amount. (emphasis added)”. not, like in most other cases, trying to find a general interpretation of the 58 CAS 2013/A/3054 words used in the transfer contract.
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Sell-on clauses in lightInterv of FIFAiew w iandth N CAunoS S juriantosprudences Rocha
The authors note that whereas FIFA has a more formal, ➥➥ The Parties should explicitly stipulate which textual approach, and remains close to the literal events (for example a definitive transfer and/or a meaning of the words used when interpreting a sell-on loan transfer and/or a trade of players) trigger the clause, the CAS has a more material approach, and entitlement to a sell-on fee. If this is not explicitly tries to interpret sell-on clauses in the sense in which stipulated in the contract, the claiming party bears they could and have been understood when taking into the risk that the sell-on clause will in principle only account the context and all relevant circumstances. be due in case of a definitive transfer.
The material approach of the CAS has proven to be ➥➥ The parties should specify with utmost precision very effective in order prevent the circumvention which costs will be deducted from a subsequent of the application of sell-on clauses on multiple transfer fee. In case of a “net transfer fee”, it must occasions. For example, in CAS 2014/A/3701, a player be taken into account that the costs in direct was transferred for an amount of EUR 16,000,000 and, connection to the transfer (such as agents’ fees) at the same time, 50% of his economic rights were sold can be deducted, as the relevant amount is the back to the selling club for EUR 8,000,000. In that case, “amount actually received”. It is to be expected FIFA decided that the sell-on fee should be calculated that in case of “any transfer fee” none of these costs based on a transfer fee of EUR 16,000,000, as that was can be deducted from the amount stipulated in the the amount in the subsequent transfer agreement. On subsequent transfer agreement. In all cases, if a appeal, the CAS Panel disagreed and decided that the variable bonus amount is included in a subsequent sell-on fee should be calculated based on a transfer transfer agreement, the variable amounts must be fee of EUR 8,000,000 as that was the amount actually considered when determining the sell-on fee in received.61 While the outcome of the CAS award does case the criteria are fulfilled. not appear to be unjust, it also seems to interfere with the principle of legal certainty as the wording of the ➥➥ There is a heavy duty of information on the new respective sell-on clause and subsequent contract club. As the clubs agree to share the financial were clear. consequences in case of a subsequent transfer, a former club should at least be provided with the It should also be mentioned that, in several cases, a club relevant information regarding a subsequent transfer did have (partial) success in avoiding the application of that is necessary to determine the eventual sell-on a sell-on clause because of the, in the authors’ opinion, fee, such as a copy of the transfer (or loan) contract overly formal approach taken by the CAS. The best or termination letters and agreements. This also example is the so-called “Keita case” in which Sevilla did makes sense from the background perspective of the not have to pay a sell-on percentage, because the CAS sell-on clause: the parties are basically in it together. Panel decided that the payment of an indemnification clause was not deemed to be a “resale” since Sevilla did ➥➥ The parties should anticipate in advance which not express its consent. The outcome of this case may amounts the former club will be entitled to in have contributed to the subsequent disputes between case of a mutual termination of the employment Sevilla and former clubs about sell-on clauses in the so- agreement, unilateral termination or in case the called “Vitolo case” and “Lenglet case”. The (very much club receives another form of compensation welcomed) outcome in the Lenglet case was that the (such as friendly matches, a player exchange, sell-on clause, which explicitly mentioned “transfer”, the take-over of wage payments or a new sell-on was triggered by payment of the indemnification fee. percentage, etc.). For example: an appropriate The importance of drafting the sell-on clause becomes “equivalent transfer fee” the parties shall agree very clear in this case as the different outcome in the upon in good faith and/or a specified liquidated Lenglet case was mainly due to a slightly different damages amount. wording of the respective sell-on clause. The authors are fully aware that the wording of a sell-on In the authors’ opinion, a well-drafted sell-on clause is the clause is heavily dependent on the bargaining power of most important factor to effectuate the legal obligations the parties concerned, and it will therefore not always parties have agreed on. After an extensive analysis of be possible to contract as desired. Nevertheless, in the applicable jurisprudence, the takeaway principles addition to discussing the CAS and FIFA jurisprudence from this article when drafting a sell-on clause are: on sell-on clauses, this article does hopefully aim to give a better indication of the legal pitfalls, possibilities 61 The CAS Panel reconstructs the transfer as one transfer amounting to and what ought to be taken into account when drafting EUR 8,000,000 in which 50% of the economic rights were retained. In the opinion of the CAS Panel, and as mentioned earlier in the article, on a sell-on clause. the fact that only 50% of the economic rights were transferred does not prevent the sell-on clause from being triggered.
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FIFA's Regulatory Framework Regarding Football Coaches
The gap in FIFA’s regulatory framework regarding football coaches and the issue concerning the access of FIFA’s jurisdiction in cases with an international dimension
By Diego EIDELVEIN DO CANTO Lawyer, Cravo, Pastl e Balbuena Advogados Associados Porto Alegre – Brazil
➔➔ Coach – Coach contract – FIFA Regulations – Labour disputes – Jurisdictional competence – Fundamental Rights
FIFA is not properly addressing issues and disputes involving clubs and coaches with an international dimension, since it does not provide any type of material dispositions concerning the regulation and protection of club- coach employment relationships.
Introduction FIFA Global Transfer Market Report 2019 – Men3, in 2012, clubs around the world completed In recent decades, the integration between people 12,006 international transfers of football players and nations, resulting from globalization, has gained and, in 2019, this number increased to 18,042. remarkable speed of materialization and consolidation, since the world, as a “global community”, has increased This natural process led FIFA to adopt the principle more and more international interactions. according to which, as a general rule, disputes and issues between football stakeholders should be dealt with The immediacy and ease of communications has made and settled within the structures of organized football, elements such as distance and time disappear1, giving a that is, by sporting decision-making bodies.4 Moreover, timeless and transnational character to interpersonal and considering the specificity of sport, FIFA established a institutional relations. On this point, Erik Jayme2 teaches regulatory framework in order to improve and develop that modernity means plurality, communication, speed, the game of football and related matters5, as well as to ubiquity, fluidity and, especially, an internationalization ensure the enforcement of its rules and principles, which of private interpersonal relations. occur by means of its Statutes, Disciplinary Code, Code of Ethics, Regulations on Working with Intermediaries, This movement can also be identified in football Governance Regulations, Regulations on the Status and relationships. Year after year, we can observe that Transfer of Players (RSTP) and Rules Governing the the football market is facing an internationalization Procedures of Players’ Status Committee (PSC) and the of its market. For example, according to the Dispute Resolution Chamber (DRC).6
However, it can be observed that FIFA does not 1 Antony Giddens teaches that: “In the modern era, the level of time-space provide a complete set of standards which can deal distanciation is much higher than in any previous period, and the relations between local and distant social forms and events become correspondingly with all issues and disputes relating to this huge ‘stretched’. Globalisation refers essentially to that stretching process, in so far as the modes of connection between different social contexts or regions become networked across the earth's surface as a whole.” 3 resources.fifa.com (GIDDENS, Anthony. The Consequences of Modernity. Polity Press, p. 64). 4 See: Omar Ongaro and Marc Cavaliero. Dispute resolution at the 2 Erik Jayme. Direito internacional privado do novo milênio: a proteção da Fédération Internationale de Football Association and its judicial bodies. pessoa humana face à globalização. Cadernos do Programa de Pós- Football Legal # 4 (December 2015), p. 48 et seq. Graduação em Direito – PPGDir/UFRGS. vol. I. no. 1. p. 85-97. Porto 5 Cf. Article 2 Alegre: UFRGS, mar. 2003, p. 86 e ss. 6 www.fifa.com
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FIFA's Regulatory Framework Regarding Football Coaches
market. Despite the fact that FIFA has a structure to As to applicable material law to coach-related disputes, regulate, improve and develop the football market and with an international dimension, Article 2 of FIFA Rules stakeholders’ relationships, it is worth noting that its Governing the Procedures of the PSC and the DRC regulations are mostly focused on relations between establishes: “In their application and adjudication of national associations, clubs, licensed match agents, law, the Players’ Status Committee and the DRC shall intermediaries and football players. apply the FIFA Statutes and regulations whilst taking into account all relevant arrangements, laws and/or For this reason, we can affirm that, in the current stage collective bargaining agreements that exist at national of FIFA’s regulations, FIFA is not properly addressing level, as well as the specificity of sport.” issues and disputes involving clubs and coaches with an international dimension.7 Nevertheless, there does not exist in FIFA’s regulatory system (except from the provision concerning FIFA Considering the above, the present article seeks to PSC jurisdiction) any material disposition regulating analyze the gap in FIFA’s regulations regarding football the club-coach employment relationship. Besides coaches and the issue concerning the access of FIFA’s that, the scope of FIFA (cf. Article 1.1) is to: “[…] lay jurisdiction in cases with an international dimension. down global and binding rules concerning the status of players, their eligibility to participate in organised football, and their transfer between clubs belonging to different associations.” FIFA’s competence to hear club-coach disputes and the difficulties faced In this sense, it must be considered that is well- by football coaches to access FIFA’s established in jurisprudence10 that employment jurisdiction contracts signed between a club and a football coach are not governed by FIFA RSTP. As a consequence, In accordance with Article 22, lit. c) and Article 23, pars. football coaches cannot take advantage of the 1 and 4, of FIFA RSTP, the FIFA PSC is, as a general rule, protection provisions of Articles 12bis, 14, 14bis, 17 and competent to deal with employment-related disputes 24bis of FIFA RSTP. This fact only shows the difference between a club and coach with an international in the treatment by FIFA of football players and football dimension, unless an independent arbitration tribunal coaches (despite the fact that both employment guaranteeing fair proceedings exists at the national relationships should be regulated and protected, level8 and the contractual parties have explicitly considering the peculiarities of each activity). chosen it in the contract as its jurisdiction. Additionally, it could be stated that, prima facie, Furthermore, Article 6 concerning the Rules Governing sporting sanctions will not be applied in cases of the Procedures of the PSC and the DRC expressly disputes involving a football coach and a club where mentions that coaches are considered as parties there is: a) the existence of overdue payables related in FIFA’s proceedings before the PSC. However, to the employment contract; and/or b) the occurrence according to the doctrine, the term “coach” shall be of a termination of the employment contract with interpreted restrictively and does refer to football or without just cause. Since, on the one hand, FIFA coaches, including assistant coaches, but not to regulations do not contain any provision, in general, physical trainers, masseurs and video analysts, concerning the status of coaches and, in particular, amongst others.9 regarding the termination of an employment contract; and, on the other hand, the FIFA Procedural Rules also do not facilitate and/or confer accessibility of FIFA’s 7 As to this issue, Josep F. Vandellos Alamilla affirms that: “From Walker to Bosman, and to the most recent developments in the FIFA Regulations jurisdiction for coaches. on the Status and Transfer of Players (RSTP) through Circular no. 1625 of April 2018, there have been innumerable cases which have helped 10 As example, in case CAS 2015/A/4161 Vladimir Sliskovic v. Qingdao players build a legal corpus and a set of principles protecting their status Zhongneng Football Club, award of 28 April 2016, the Sole Arbitrator in relation to football clubs. state that: “90. Although Article 2.2 of the FIFA RSTP implies without 110 years have passed since the creation of the first players’ union. necessarily requiring professional players to have written contracts with However, football coaches have still failed to gather under a strong their clubs (CAS 2014/A/3739 & 3749, para. 159), the same cannot be international union capable of defending their interests and regulating said for coaches, whose contracts – apart from the issue of the FIFA their status. This is where problems begin, because football coaches are PSC’s jurisdiction - are not governed by the FIFA RSTP (cf. section probably the most vulnerable collective in football when it comes to VIII (c) below). […]114. The Respondent submits that Chapter IV of the contractual stability.” Josep F. Vandellos Alamilla, Terminating a football FIFA RSTP is limited to “Maintenance of contractual stability between coach’s employment contract, Football Legal # 9 (June 2018), p. 74. professionals and clubs” - not coaches - and as such the FIFA RSTP do 8 See FIFA Circular no. 1010. not entitle the Appellant to any compensation for breach. 115. Whereas 9 In this sense, see: Omar Ongaro and Marc Cavaliero. Dispute resolution the Sole Arbitrator has established that the FIFA regulations are primarily at the Fédération Internationale de Football Association and its judicial applicable to this case supplemented by Swiss law (cf. section VII above), bodies. Football Legal # 4 (December 2015), p. 51; Josep F. Vandellos he is cognizant of the fact that the FIFA regulations do not contain any Alamilla, Terminating a football coach’s employment contract, Football provision regarding the manner in which compensation is to be awarded Legal # 9 (June 2018), p. 75. in employment disputes between clubs and coaches. […]’.”
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FIFA's Regulatory Framework Regarding Football Coaches
It should be noted that cases related to an international The main basis for using the analogy in disputes employment-related dispute between clubs and involving clubs and coaches is the principle of equality, coaches are not exempt, by FIFA, from the payment which requires similar species to be governed by of an advance of costs or procedural costs. The same similar rules.12 On this subject, it should be applied the does not occur in DRC proceedings relating to disputes Roman brocard that provides “ubi eadem legis ratio, between club players in relation to the maintenance ibi eadem legis dispositio”, that is, where there is the of contractual stability as well as international same reason, there must be the same rule of law. employment-related disputes between a club and a player, which are free of charge ( . Article par. 2, of cf The absence of a specific regulation FIFA Procedural Rules). is causing legal uncertainty for football coaches’ This fact constitutes a financial barrier for the coaches’ access to justice11, which prevents some plaintiffs from employment relationships filing claims before FIFA PSC in order to charge, for example, overdue payables or compensation for the This method of filling a gap is a process that reveals breach of contract with or without just cause. implicit norms, as the norm analyzed, in principle, would not be applicable to a certain case, since it would not Foreign football coaches are exposed to the same be comprehended in its hypothesis of incidence, but, risks as foreign football players when they go abroad, due to the existence of a deficiency in the legal system, in order to try to improve their careers and their as well as the similarity of the question analyzed, its remuneration. However, it seems that the football application could occur.13 coaches have been forgotten by FIFA over the years, since FIFA does not have a specific regulation which However, the application of analogy requires the rigor could give legal certainty to this part of the football of logic for those who apply it, not including a passive or market. And the situation is worse, as FIFA is not mechanical action, thus presupposing: a) a hypothesis handling mechanisms to remove the financial barrier, not foreseen by the legal norm, otherwise there would which could allow coaches proper and complete be only extensive interpretation; b) a similarity between access to FIFA’s jurisdiction. the legal norm analyzed and the fact that is sought to be contemplated, there being an element of identity; and c) a fundamental identity, there being real similarity and same reasoning between both situations, in essence and effect.14 The analogy as tool to protect and regulate club-coach relationships and For this reason, we are of the opinion that the relevant alternatives to removing the barrier provisions contained in the FIFA RSTP, considering the for football coaches access to FIFA’s specificity of the coaches’ activity, can be applied, by jurisdiction. analogy, to contractual disputes involving clubs and coaches, as of the disposition regarding the Articles It is crystal clear that the absence of a specific 12bis, 14, 14bis, 17 and 24bis of FIFA RSTP. regulation is causing legal uncertainty for football coaches’ employment relationships and to this part of Concerning the problem of the coaches’ accessibility the football market. to FIFA’s jurisdiction, the same gap-filling method can be used, which is that, FIFA can apply, by analogy, the Considering the gap in the FIFA’s regulatory framework disposition of Article 18, par. 2, of the FIFA Procedural regarding, in general, the status of football coaches Rules, stating that these types of proceedings would and, in particular, the termination of an employment also be free of charge. contract signed between clubs and coaches, as well as the eventual default concerning payments, the analogy It is worth noting that such interpretation would be could be an important tool to protect and regulate the made in order to allow football coaches to exercise club-coach employment relationship. This approach is their fundamental right to access to justice and the very important at this moment, since it is not possible right to a fair trial, which is in line with Articles 2, lit. “a”, to verify FIFA’s movement in order to regulate and protect this essential part of the football market. 12 Carlos Maximiliano. Hermenêutica e aplicação do direito. 20a ed. Rio de Janeiro: Editora Forense, 2011, p. 171. 13 Maria Helena Diniz. Compêndio de introdução à ciência do direito: introdução à teoria geral do direito, à filosofia do direito, à sociologia jurídica e à lógica jurídica, norma jurídica e a aplicação do direito. 24ª ed. 11 Access to justice is defined as the ability of people to seek and obtain a São Paulo: Saraiva, 2013, p. 483. remedy through formal or informal institutions of justice for grievances 14 Karl Engisch. Introdução ao pensamento jurídico. Tradução de J. Baptista in compliance with human rights standards. Machado. 8.ª ed. Lisboa: Calouste Gulbenkian, 2001, p. 293.
38 Football Legal PERSPECTIVES
FIFA's Regulatory Framework Regarding Football Coaches
“d”, “e”, “g”, Article 3, Article 5, par. 1, lit. “a”, and par. 2, support the payment of the advance of costs to initiate of the FIFA Statutes.15 proceedings before FIFA.
In reference to Article 5, par. 2, of the FIFA Statutes, In this regard, it should be stressed that the Article it should be noted that FIFA should “provide the 117 of the Swiss Civil Procedure Code establishes that necessary institutional means to resolve any dispute a person is entitled to legal aid if he does not have that may arise between” clubs and officials, i.e. coaches. sufficient financial resources. That is, considering the Nevertheless, until this moment, this disposition is not Swiss Civil Procedure Code, legal aid comprises an being effectively applied by FIFA. exemption from the obligation to pay any advances, provide security and from court costs.16 This provision Consequently, considering the above-mentioned could also be applied by analogy to the hypothesis articles and FIFA’s commitment to providing the discussed in the present article. necessary institutional means to resolve any dispute, FIFA should consider the application, by analogy, Considering the above and: a) the existence of a of Article 18, par. 2, of the FIFA Procedural Rules legal gap in the FIFA regulations concerning football to disputes concerning international employment- coaches-related relations and disputes; b) that the related disputes between a club and a coach, as well current FIFA regulatory framework is not developing as to its relevant maintenance of contractual stability. and protecting this part of the football market; c) that Otherwise, in many cases, football coaches will not be the current FIFA regulations are preventing football able to properly exercise their fundamental rights. coaches from freely and effectively accessing FIFA’s jurisdiction, FIFA should consider the application, by FIFA should consider the application, analogy, of Article 18, par. 2, of the FIFA Procedural Rules, Article 42, pars. 1 and 4, letter “a”, of the FIFA by analogy, of Article 18, par. 2, Disciplinary Code and/or Article 117 et seq. of the Swiss of the FIFA Procedural Rules to Civil Procedure Code, to this type of disputes. disputes concerning international employment-related disputes between a club and a coach Final remarks As an alternative to the application of Article 18, par. 2, of the FIFA Procedural Rules, FIFA could also remove The extent and volume of problems FIFA has dealt with the financial barrier to coaches properly and enable in recent times numerous. In particular, more recently, them to fully access FIFA’s jurisdiction by applying, it has been observed that FIFA is making a clear by analogy, the provisions of Article 42, pars. 1 and 4, effort to remove these deficiencies from its regulatory letter “a”, of the FIFA Disciplinary Code, extending legal system. That is, in recent times, FIFA has been quite aid to coaches that do not have financial resources to critical and proactive in remedying any inadequacies in its regulations.
15 The above-mentioned articles of FIFA Statutes Edition 2019 set forth the following: Despite all these efforts, there are still some blind “2 Objectives spots in its regulatory framework. Of course, it should The objectives of FIFA are: a) to improve the game of football constantly and promote it globally not be forgotten that the number of coaches who have in the light of its unifying, educational, cultural and humanitarian values, a relationship of an international dimension, which particularly through youth and development programmes; […] characterizes FIFA’s jurisdiction, is infinitely smaller d) to control every type of association football by taking appropriate steps than the number of players and even clubs involved. to prevent infringements of the Statutes, regulations or decisions of FIFA or of the Laws of the Game; For this reason, it is understandable to a certain e) to use its efforts to ensure that the game of football is available to and extent that there has not been a focus or a priority in resourced for all who wish to participate, regardless of gender or age; […] regulating this sector. However, this share of the market g) to promote integrity, ethics and fair play with a view to preventing all is also an important segment, although the numerical methods or practices, such as corruption, doping or match. 3 Human rights expression in the contingent of demands may not be FIFA is committed to respecting all internationally recognised human as voluminous and does not attract as much attention rights and shall strive to promote the protection of these rights. […] as players and clubs. 5 Promoting friendly relations 1. FIFA shall promote friendly relations: a) between and among member associations, confederations, clubs, That being said, the present article aims to point out officials and players; and that the internationalization of the football market, as […] 2. FIFA shall provide the necessary institutional means to resolve a reflection of the globalization, is showing that FIFA is any dispute that may arise between or among member associations, confederations, clubs, officials and players.” 16 www.admin.ch
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FIFA's Regulatory Framework Regarding Football Coaches
not properly addressing issues and disputes involving clubs and coaches with an international dimension, since it does not provide any type of material dispositions concerning the regulation and protection of club-coach employment relationships.
This fact is aggravated because, currently, it is well- established in jurisprudence that football coaches are not governed, considering the specificity of their activities, by FIFA RSTP. This gap in FIFA’s structure ends up not conferring the proper treatment on this part of the football market and not being productive to arrange the entire possibility of development and protection. On the other hand, it can be observed that the current regulations are creating barriers to the coaches’ access to FIFA’s jurisdiction.
The analogy could be an important tool to fulfill the gap in FIFA’s regulations
For this reason, considering the absence, until this moment, of a FIFA movement to regulate this part of the market, we have the opinion that the analogy could be an important tool to fulfill the gap in FIFA’s regulations concerning, in general, the status of football coaches and, in particular, the termination of an employment contract signed between clubs and coaches, as well as to the problem of the accessibility of coaches to FIFA’s jurisdiction.
Such interpretation could be made in order to allow football coaches to exercise their fundamental rights of access to justice and the right to a fair trial, which is in line with Articles 2, lit. “a”, “d”, “e”, “g”, Article 3, Article 5, par. 1, lit. “a”, and par. 2, of the FIFA Statutes, and could allow FIFA to improve, develop and protect all of the football market (and not only part of it, as has been occurring).
40 Football Legal — Special Report —
Football Legal 41 CHALLENGES IN FOOTBALL FACING COVID-19 The world is currently waging a battle without precedent in this century: the fight against COVID-19, which has completely subverted the way of life we had built for many decades.
The football world has been no exception. Sporting activities have been suspended, some of them gradually returning with closed-door matches.
This Special Report aims first of all to present all the measures adopted by the various professional football bodies around the world to overcome the economic impact of this health crisis on their activities.
It also offers an analysis of the first legal problems facing football in this context.
In a final section, it attempts to discuss the future and the possible issues that the COVID-19 pandemic raises for the world of football and its economic model.
This Special Report is the result of a broad consultation with football stakeholders. This collective work aims to report on the situation of the football industry in relation to COVID-19 in June 2020. SPECIAL REPORT
Challenges in Football Facing COVID-19
Contents
International Governance
1 Football p. 45 Competitons 2
p. 57 Force 3 Majeure Labour p. 99 Relations 4 Disputes 5 Resolution p. 114 How could the p. 153 Football Industry Change? 6
p. 160
Contributors
We would like to warmly thank all the contributors and persons consulted in the preparation of this Special Report:
Bandar Al Hamidani – Saleh Alobeidli – Jonas Baer-Hoffmann – Calum Beattie – Gonzalo Bossart – Gianluca Cambareri – Pedro Castro – Francisco Cortez – Daniel Cravo – Juan de Dios Crespo Perez – José María Cruz – Gregory Ernes – Marcelo Fejió de Medeiros – Mario Flores Chemor – Emilio Garcia Silvero – Román Gómez Ponti – Lars Hilliger – Assen Hinov – Monserrat Jimenez – François Klein – Ian Laing – Wouter Lambrecht – Stefano La Porta – Sébastien Ledure – João Lima Cluny – Paolo Lombardi – Achta Mahamat Saleh – Giandonato Marino – Gonzalo Mayo – Mathieu Moreuil – Anastasia Malyarchuk – Charlie Marshall – Victoriano Melero – Andrew Mercer – José Maria Montenegro – Francisco Moya Naulin - Patricia Moyersoen – James Mungavin – Jean-Jacques Nouyadjam – Dzhamil Oda – Peter Paleologos – Roberto de Palma Barracco – Luca Pastore – Tomás Pereda Rueda – José Carlos Peres – Jérôme Perlemuter – Diogo Pinto – Zhao Qiwei – Joachim Rain – Matthieu Reeb – Paulo Rendeiro – Filipe Sanches Mendes – Nuno Santos Rocha – Jochen Schneider – Tom Seamer – Daniela Sousa Marques – Rodrigo Steinmann Bayer – Patrick Stewart – Rafael Terreiro Fachada – Willem Thijssen – Jaimy Vanenburg – Sjoerd Vincenten – Oleg Zadubrovskiy
44 Football Legal International 1 Governance
Faced with this unprecedented crisis in international football, FIFA and the other stakeholders involved in the governance of international football have urgently addressed the situation and provided as much support as possible to those on the front line (clubs and players).
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International Football Governance
FIFA facing COVID-19, an example of International Governance through social dialogue
each Federation on the basis of the opinion or decision of its competent national public health authorities.
Thus, FIFA shows that it does not intend to interfere with the Federations’ power as long as they comply with the state laws. Nor does it intends to place a constraint on clubs or players who must not only respect the national laws, but also their collective bargaining agreements in force. By Patricia Moyersoen Lawyer, Moyersoen Avocats In relation to governance, FIFA AIAF President Paris – France precisely outlines the decision- making mechanism it adopted. It points out that Article 27 of the FIFA Regulations on the Status and Transfer of Players (RSTP) On 7 April 2020, FIFA published both mitigate the consequences of states that unforeseen events as a document entitled “COVID-19 disruptions caused by COVID-19 well as cases of force majeure shall Football Regulatory Issues”. and ensure that any response be decided by the FIFA Executive This document was drafted and is harmonized in the common Council (nowadays known as published in order to anticipate interest.” Council), whose decisions are final. all enquiries and requests relating to the impact of COVID-19 on the The guidelines’ aim is therefore Therefore, the Bureau of the FIFA organization of football all around to harmonize solutions in Council gathered on 18 March 2020 the world and more specifically, the common interest. People and recognized that the disruption on relations between clubs and concerned by this document to football caused by COVID-19 was players at a time when all national are FIFA’s stakeholders which a “case of force majeure”. In order and international competitions had include not only confederations to face this particular case of force been suspended. and national associations, but also majeure, the Bureau established a leagues, clubs, and players. working group. This working group Presented in the form of guidelines, was chaired by the chairman of this document is newsworthy Upon reading the guidelines, the FIFA Football Stakeholders inasmuch as it shows the extent we can easily realize that the Committee and composed of of FIFA's regulatory power, while common interest doesn’t not representatives from the FIFA also revealing a new governance only lie in preserving the fairness administration, Confederations, method that relies essentially on of competitions, but also in Member Associations, the dialogue and cooperation. protecting the players’ contract European Club Association (ECA), which requires the survival of FIFPRO and the World Leagues In this regard, the preamble of this the clubs. Both clubs and players Forum (WLF). document is quite meaningful. are considered as the key driver of football activity. FIFA then This working group held meetings First of all, FIFA points out that, specifies that it is not in a position on 26 March and 2 April 2020. As a as the world football’s governing to instruct its Member Associations result of those meetings, the group body, it has the responsibility and or make a determination on established that the Member mandate “to provide appropriate when football should resume or Associations and Leagues were guidance and recommendations not in each country or territory. wishing to resume the competitions to MAs and their stakeholders to That decision must be made by (which at this moment were on
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International Football Governance
hold) and that, in order to do so, majeure and lets the co-contracting not only to advise our clients and it would be necessary to extend parties suggest and implement negotiate on their behalf but also the 2019-2020 season and thus solutions in order to remediate to challenge decisions taken at postpone the start of next season. this situation. This applies to national level if they are not in line employment contracts as well as with the FIFA recommendations. Based on this observation, it was transfer and loan contracts. crucial to provide stakeholders with At a time when most national guidelines on the consequences Concerning the contractual issues, governments have declared a of an extension of the 2019-2020 FIFA is just appealing to the state of emergency to adopt season beyond the date originally necessary level of cooperation and ultra-binding measures towards recorded by the Federations in the compliance with the guidelines their citizens, it is enlightening to FIFA Transfer Matching System. laid out by the working group observe how the world football’s from the Member Associations governing body is dealing with this After discussions, the working and other football stakeholders. situation by relying on cooperation. group was unanimously in favor However, FIFA is disclosing which of the first set of guidelines. Those criteria will be adopted by its guidelines are the outcome of an judicial bodies in the event they agreement between the parties are solicited to deal with a dispute involved, which clearly shows the of a contractual nature. real social dialogue carried out on an international scale by FIFA. It is By indicating that this Official FIFA remarkable that these guidelines document was only the 1.0 version are set out by the working and by reserving its rights to group that brings together update the guidelines, where representatives of all stakeholders, appropriate, over the course of while FIFA makes it an "official this pandemic, FIFA stresses that document". this form of governance through a consultation process is in The content of the guidelines application and working. clearly shows the boundary between FIFA's various powers, Indeed, the consultation process namely its regulatory power, has been continuing since its jurisdictional power, and its 13 workshops have been held from political power, which rely on a 8 April to 7 May 2020, involving genuine dialogue with its core 350 participants, and led to the stakeholders. identification of frequently asked questions as well as several new Among those guidelines, some are regulatory and legal issues for binding, and some are not. The consideration. guidelines directly linked to the RSTP are binding. Those relating After discussions with its core to the fate of players and coaches’ stakeholders between 15 May 2020 contracts are not binding; they and 5 June 2020, FIFA issued a are to be considered as general new official document in the form interpretative guidelines to the of a Question and Answers (Q&A) RSTP. which have been approved by the Bureau on 11 June 2020. Thereby, FIFA is clearly drawing the boundary of its competences This document reflects a new by assuming that it cannot way to set out guidelines and interfere with the fate of contracts recommendations by answering signed before the outbreak of the questions and giving clarifications COVID-19 pandemic. It therefore and legal explanations. does not draw any conclusions from its acknowledgement that It gives to practitioners, particularly this disruption is a case of force to football lawyers, a fantastic tool
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International Football Governance
The work FIFA has done so far with the relevant game stakeholders in changing the rules governing world football should continue
Interview with Emilio Garcia Silvero Chief Legal and Compliance Officer, FIFA Zurich – Switzerland
What was/is/will be FIFA's role Following that, FIFA conducted Once again, I wanted to thank all in the management of the health more than 13 workshops with the game stakeholders for their crisis related to COVID-19? representatives from its member invaluable input, help and support associations and confederations, throughout this process. Since the very first day, FIFA has members of the WLF, and members had a leading role in providing of the ECA, which involved more guidance and recommendations to than 350 participants from around Why did you refer to the situation associations and their stakeholders the world. The FIFA administration as “force majeure” in the FIFA to both mitigate the consequences has also answered more than Guidelines? of disruptions caused by COVID-19 150 electronic queries regarding and ensure that any response is COVID-19 and football regulations This exact question was raised harmonised in the common interest. since the publication of the during our consultation workshop document. with the game stakeholders. With a collaborative and constructive approach (a policy The result of this consultation The Bureau of the Council did that FIFA has been applying with process was the issuance of a new not determine that the COVID-19 all game stakeholders), a working document identifying frequently outbreak was a force majeure group composed of representatives asked questions (FAQs) as well situation in any specific country from the FIFA administration, as several new regulatory and or territory, or that any specific confederations, MAs, the European legal issues, such as registration/ employment or transfer agreement Club Association (ECA), FIFPRO eligibility and intermediaries. was impacted by the concept of and the World Leagues Forum Again, this document was force majeure. (WLF), managed to produce the discussed and agreed between COVID-19: Football Regulatory FIFA and its core stakeholders Whether or not a force majeure Issues document, which, I must during a consultation process. situation (or its equivalent) exists say, was well received. in the country or territory of an The future role of FIFA will remain association is a matter of law and This document summarised the the same as from the beginning: to fact, which must be addressed on negotiations and agreement be continuously and fully committed a case-by-case basis vis-à-vis the between FIFA and representatives in assisting Member Associations relevant laws that are applicable of its core stakeholders on a range and football stakeholders around to any specific employment or of regulatory and legal issues the world during this special and transfer agreement. impacted by COVID-19. difficult period.
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International Football Governance
Does the current situation lead A number of topics currently being you to consider how the rules discussed, such as the increase of governing world football might the number of matches played, evolve in the medium or long how competitions are organized, term? a transfer fees cap, are all good examples of matters that have I believe that the work FIFA has emerged due to this crisis and done so far with the relevant game require proper analysis and stakeholders in changing the rules response for all those involved in governing world football should football. continue. Only with a constructive, inclusive and collaborative spirit I trust that football will stay more of consultation among all of those united than ever and there will be that participate in football, one can further solidarity to shape a better find suitable answers to benefit football in the future. And FIFA will football as a whole in the medium be part of it. or long term. In other words: clubs or employees cannot rely on the Bureau decision This current situation was to assert a force majeure situation good to continue promoting an (or its equivalent). active, strong and open channel of communication among This matter and others are representatives of clubs, players reflected in the new version of the and leagues, encouraging a document released on 11 June. positive dialogue and discussion on how the rules governing world football should evolve. This How has this crisis affected the situation helped us to strengthen timetable for the reforms planned these ties. by FIFA? I advocate that these working The reforms planned by FIFA processes should continue within are ongoing and at the moment the goal to modernize the football there is no significant delay. regulatory framework. If one The FIFA Clearing House is wishes to protect the game in expected to start operating at the its entirety, ensure transparency beginning of 2021 and the new and safeguard the interest of all agent framework hopefully will game stakeholders, this is the way be approved in October 2020 or forward. March 2021. I believe we are on track and have good momentum to continue implementing the On a more personal note, do you remaining reforms, such as for think this crisis will - and should - minors or fiscal regulations, and change football in a fundamental not losing focus of our objective: to way? modernize the football regulatory framework. I believe there are a To be honest, I believe it has already few exceptions such as the new changed. Who would think on rules regarding international loans having football without spectators, that were already approved but a leagues being cancelled or five definitive date needs to be set. substitutions in a single game? This crisis was good to step back Stay tuned, as there will be more and allow us to reflect on what has news in this respect. been done so far and what can be changed in the future for the good of football on a global scale.
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International Football Governance
ECA’s analysis, excluding transfer funding flows, points to a revenue loss of at least €3.6bn for top tier European club football over this season and next
Interview with Charlie Marshall Chief Executive Officer, European Club Association (ECA) Nyon – Switzerland
What is ECA's position on the the clock with fellow stakeholders it has not faced before. Overnight, restart of competitions? from across football including revenue streams including UEFA, FIFA, European Leagues broadcasting, sponsorship and Most top tier professional football and FIFPro and also medical match day revenue came to an leagues are now back in action experts who have been advising abrupt halt whilst costs remain. across Europe, with some nearly on shaping medical and safety ECA’s analysis, excluding transfer completed. Sadly, the reality is protocols. Worryingly, not all of funding flows, points to a revenue that some have had to be called professional football, however, has loss of at least €3.6bn for top tier off. The UEFA Club Competitions, been able to find ways to resume European club football over this namely the UEFA Champions competitions. For leagues further season and next, assuming all League and the UEFA Europa down the pyramid it has not made competitions complete on their League, are envisaged to take sense to restart - with costs vastly current (revised) schedules. Unless place in August in revised formats outweighing benefits, especially in significant cost control measures designed to enable maximum a world where matchday income are taken, EBITDA-wise, this space for domestic and national has been cauterised by the absence translates into around €2.8bn of team football also to take place of fans. The next challenge will be losses across the system. Clubs are across the summer and into the to bring all of football back to life on the front line and most exposed autumn. with the return of fans - again, to this hit - as they are the ones who something we are working with our take most of the financial risks and Competitions are the lifeblood of the members on to ensure this is done pay most of the bills. By extension, game - economically and socially. quickly but responsibly, with public many people whose livelihoods are Without compelling, competitive safety setting the pace. directly linked to the club game will football, income sources and social also be affected. Beyond the game currency dries up. From the start itself, it’s important to remind we have been focused on getting The COVID-19 crisis is affecting ourselves that football is a major football up and running again as the financial situation of many contributor to Europe’s GDP. Any soon as it had been possible to do clubs. What can the ECA do to hit the game itself takes will have so safely and in a manner which help clubs? an impact well beyond the direct meets public health and safety industry participants. needs. This has only been possible The financial impact of this crisis with the approval of governments on clubs large, medium and small ECA’s focus since this crisis started and other responsible public cannot be overstated. Even with has been on mitigating the financial authorities and with the buy-in of all the resumption of competitions, pain our members and clubs key stakeholders. To support these the club game is faced with a real beyond our membership are facing. efforts, we have worked round existential crisis the extent of which As in other sectors, safeguarding
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International Football Governance
the flow of liquidity around the approach to shaping a strategy to and protect something they feel system is key to ensuring survival. meet the challenges being inflicted passionately about, something that In that sense we have been working on the game. There’s a level of you can tell takes up such a massive with our members to get a detailed understanding that ours is an eco- part of their daily lives and brings picture of the financial hit they are system and that for football as a them so much joy and happiness. facing. Armed with this information whole to come through this crisis When people care as much as this we have worked hand in hand we must come together in finding the chances of positive outcomes with both UEFA and FIFA to reach solutions. Our interactions with rise tenfold. decisions to alleviate the difficulties. governing bodies and League The early decision in March to and Player representatives have advance around €70m in EURO taken place at many levels and in In several domestic leagues 2020 compensation payments many forms, be it through formal tensions have arisen between to 676 clubs for player release to committees, working groups, clubs and with the national National Team competitions has individual projects or just regular federation or league. What does helped a lot, especially clubs in bilateral exchange of views and this inspire you? smaller countries. The adaptation of information. In parallel to the Financial Fair Play (FFP) regulation established vehicles of cooperation, In each country there are a unique including the tight but reasonable we have created specific COVID-19 set of dynamics with historical management of the no overdue operating groups to manage at pace relations between stakeholders payables conditions, the extension a full range of topics between us as and individuals at play which of the deadline for assessment of stakeholders - from calendar and make it hard for me to comment licensing decisions for participation competitions through to financial on specific situations. What I in the 2020-21 UCCs and the and player regulatory issues. would say, is that from the outset, reconfiguration of the breakeven Depending on the specific issues the general direction of the assessments to neutralise the we cover, we engage with different stakeholders at European level was impact of COVID has also helped. stakeholders at different times and at very clear that everything should At FIFA level, recommendations various levels of detail. One element be put in place to try and conclude were issued in relation to easing that I’ve witnessed is the level of domestic competitions to avoid rules around player contracts flexibility the stakeholders have the problems that you refer to. In which also offered a degree of shown in recent months. Without it, some instances, not just France respite for the clubs. Given the crisis management becomes almost but Belgium, the Netherlands and lasting and heavy impact of the impossible. For a governance others, decisions were taken at crisis, I expect ongoing reviews of system which is often characterised national level that called a halt to existing regulations and rules to be as being led by competing interests, proceedings rather than seek to undertaken to see whether deeper I believe football has shown itself restart competitions. Time will be structural changes are required quite adept in managing this period the judge of these decisions. as the game looks to pick itself of instability. Looking forward, I can say with confidence that the up and rebuild, indeed reimagine, There is more that its long-term financial health. The way football has come together unites us than simple and brutal truth is that the over recent weeks bodes well divides us! road ahead will be bumpy and for the future. Relationships have unpredictable for many clubs and been greatly strengthened and the we will need to manage this reality level of respect and trust amongst Assessing the tensions around as best we can to limit the damage. stakeholders is in a healthy place stakeholders, I believe if there is right now. In addition, there is one thing to be learned from the something I have witnessed over last few months, is that football How does the ECA cooperate recent weeks that will be of great is a true ecosystem made up of with other football stakeholders? value as we look to secure the different elements which all play future of the game. The passion an important role in ensuring the The level of cooperation and and love for the game of football game’s success and well-being. engagement between stakeholders administrators is truly remarkable. The era in which stakeholders at European and global level has The efforts colleagues from across adopt purely antagonistic “us rarely been higher than it is right the football spectrum have put into against them” attitudes is moving now. It’s been obvious from the start managing the crisis to date have on. For football to progress and of the crisis that the scale of what been admirable; people have been prosper, even more so in a time we’re facing requires a collective working round the clock to save of rebuild that we will be faced
Football Legal 51 SPECIAL REPORT
International Football Governance
with in the years ahead, clubs, AI technologies being employed (such as youth or lower league leagues, governing bodies, NAs, to recreate a fan experience on football) which doesn’t have the player representatives must screen and in audio - not just same commercial fundamentals? come together in a spirit of unexpected but undreamt of only How do the governance and collaboration. Our game needs four months ago. financial distribution models need all these stakeholders, with each to change to support this? How having a role to play, to shape its I believe that one effect of the do relationships with fans, media future. I’m convinced that if we all crisis on all of us has been to and commercial partners need to adopt this mindset we can focus reflect on the future of the game change? less on what divides us and focus to a degree and on a level we’ve around a unity of purpose to build not seen before. Football is While this moment is deeply a sustainable future for the game characterised by its fast pace concerning its also paradoxically in which we all have important and both on and off the field. A hiatus quite exciting and energising. At constructive roles to play. There is like the one we have experienced this point we don’t have all the more that unites us than divides should not be forgotten - perhaps answers but once we’re out of this us! we need to move to a different immediate crisis we will need to rhythm of how we manage all focus on football’s future ensure We’ve heard a lot of commentators aspects of the game. We need its long-term well-being and suggest that “football will be more flexibility in the system and sustainability. forever changed by COVID”. a better ability to respond quicker Given the scale of this pandemic by adjusting or resetting certain As Winston Churchill said all those it seems beyond doubt that there elements. How do you reorganise years ago “Never let a good crisis will be a pre-COVID and a post- competitions at short notice? go to waste”. Football must do just COVID with respect to all levels How do you deal with empty or that and bring about reform that of society - and, for now, an “in- partially full stadia? How do you will allow for the game to continue COVID”. It’s still hard at this stage build a dynamic and sustainable to develop and prosper and bring to predict what this will actually business model which enables you the excitement to the future translate into for football. We’re to flex cost and deal with times of generations of fans from across still watching games without any income uncertainty? How do you the world. fans in the stadia, with virtual and sustain developmental football
52 Football Legal SPECIAL REPORT
International Football Governance
Football needs to protect its people
Interview with Jonas Baer-Hoffmann General Secretary, FIFPRO Hoofddorp – The Netherlands
How does FIFPRO cooperate with elite markets have the necessary Looking ahead, the uneven other Football Stakeholders? means to mitigate the current economic recovery poses a serious crisis, we can see especially in threat to economic division and While FIFPRO and the relevant lower leagues and smaller football enhancing the wealth gap in the international football stakeholders markets that club revenues have football industry. While everyone have taken initial steps at the come under severe stress due in football is facing the same operational level to address the to competition cancellations crisis, domestic circumstances pragmatic needs of players and and the absence of match day differ significantly and require the football industry, such as revenue. This is married with often tailored responses. Nevertheless adjustments to the Regulations on times an underdevelopment of international leadership in football the Status and Transfer of Players, collective bargaining, which leaves is needed to correct some of the the uncertainty of the current individual people exposed and the weaknesses in the governance of situation requires us to consider competitions fragmented. the professional game, establish new paths to imagine the future of safeguards for the people of the football industry. This squarely International football and establish a new includes industrial relations and solidarity to ensure that football leadership in mandated decent employment remains viable around the world. football is needed to safeguards, as a bedrock for Professional football requires now innovative business solutions for correct some of the a forward-looking review of the players, clubs and leagues alike. weaknesses in the current situation that analyses governance the complete picture of the Different to the 2008 crisis, the global football markets, taking high-level financial impact of The prospect of losing clubs to into account the diverse needs this crisis on our economies and insolvencies, losing wages and of players and clubs. Therefore, societies will not leave global losing jobs for players, sporting the solidarity, courage to change football markets unharmed. Several staff and other club officials is a and collectivism between players, months into the crisis, it is evident concern across our membership. clubs, leagues and federations that players’ salaries and contracts, Beneath the surface of iconic star will be essential to find fair and at all levels of the football industry, players and elite clubs there is a sustainable measures for the future are coming under pressure. Our fragmented, precarious and diverse of the football industry. economic impact assessment on economic and social situation players and the football industry evolving for players. Like many shows that the crisis impacts workers, many players are currently big and small football markets facing a threat to their careers and - leagues and clubs alike. While ability to provide for their families.
Football Legal 53 SPECIAL REPORT
International Football Governance
How does FIFPRO help players Ivory Coast’s players association of the professional football’s elite in difficulty? Is there a solidarity (AFI) handed out vouchers for European leagues. It has showed fund? food and goods to players at all how poorly some clubs treat their 38 professional clubs. employees as soon as money FIFPRO has been assisting its is short. Football stakeholders members and players directly on Chilean union SIFUP opted to urgently need to tighten judicial legal issues but also on mental health financially support players because process and enforce contracts matters. We have also assisted in health and safety measures meant and governance regulations the negotiation with international they were not allowed to hand on a domestic level to protect and national stakeholders and out food packages. Player unions employees and their families. shared best practices. in, for example, Egypt, Gabon Football needs to protect its (ANFPG) and Hungary (HLSZ) people. Many unions have had the need are also financially supporting to help players even more due to footballers. And for more than Many problems of the current the extreme situation. Colombia’s one month, the Gabonese union system, that existed already, are players union, ACOLFUTPRO, has has been providing shelter for two now coming to light and showing sent food parcels to 101 female foreign players who have been what nobody wants to see. The players who have been left without abandoned by their club. These late payments as a usual and pay or social security after their are all just some examples which “justified” habit and the undue league was suspended. Their show the great work the unions pressure on workers are signs counterparts in Panama, AFUTPA, have been carrying out. that there are clear changes to be are distributing 580 food packages made. The fact that, after a couple to male and female players, while FIFPRO is negotiating with FIFA of days of suspension of football, a FAP, the union in Paraguay, visited for the possibility of a special club is already in a situation where players at second division clubs to fund to tackle COVID-19 related it “needs” to reduce salaries or give them food baskets. hardship for players, but this is still even fire players and staff, shows not yet settled. that the controls on the finances Player unions in Egypt (EPFA), of clubs are either not in place or Honduras (AFHO) and Uruguay This crisis underlines how working, and the club licensing (MUFP) are helping professional fragile pay and conditions are in system has showed that it needs footballers with food parcels. general, and especially outside revision in general.
54 Football Legal SPECIAL REPORT
International Football Governance
The key ingredients of a resumption are health, sport, finance and politics
Interview with Jérôme Perlemuter General Secretary, World Leagues Forum Zurich – Switzerland
Does WLF have a single position of competitions have typically in any business when you are at on this particular issue of the been and still are the result of a standstill, you still need to pay resumption of the leagues? collaboration between professional your employees and creditors What are the key principles that football leagues and national during a time when you may not should guide the resumption of authorities. Thus, in practical terms, have the liquidity to do so. In competitions? once a competition has been some countries, going back to the suspended, the duty of professional pitch, even behind closed doors, Throughout history, pandemics football is to prepare resumption is essential to collect media rights have yielded conditions that have under the best possible conditions and sponsorship revenues, while varied significantly between their as defined in conjunction with in some other countries, revenues affected continents and even from their corresponding national mainly derive from gate receipts. one country to another. During the government. Though it makes sense to play again 14th century, the bubonic plague from a sporting standpoint, even struck continents, one after the The key ingredients of a resumption behind closed doors, it does not other, at different rates. The same are health, sport, finance and always make sense from a financial pattern was followed by cholera in politics. Health and preservation of standpoint. The final ingredient the 19th century and again with the the players and officials is the most is politics. Football is dependent Spanish flu after the Second World important element when you decide on governmental decisions and War. But COVID-19 is spreading to get back to the pitch. This begins policies during this pandemic. faster than its predecessors and the moment that all those involved There is a symbolic aspect of is also producing a variety of in a match leave their home to the football as well - it can serve as resulting conditions around the moment that they return. Specific both an example of resilience or world that are further impacted by protocols must guarantee the as a sacrifice to demonstrate that factors such as stark variations in safest possible conditions for all everyone should suffer. health care system capacity and of these people. Sport is next on we are still waiting to ascertain the the list because, when possible, impact of seasons and weather on it is always better to determine What can WLF do to help the the pandemic. a champion and final ranking by leagues? playing out the full season and not Consequently, solutions must curtailing it. But in many instances, This crisis is a first for everyone which be found first and foremost at a leagues were forced to amend their truly underscores the importance national level. Leagues need to format and shorten their season of WLF to our members. When you implement strategies that align and, in some counties, they simply face a global, catastrophic situation with their country’s national decided to stop playing altogether. with no prior experience, sharing policy. Suspension and resumption The next ingredient is finance. As problems and solutions with your
Football Legal 55 SPECIAL REPORT
International Football Governance
peers, collaborating, and devising As for football bodies, they Football is very specific in the best practices are key. We are living had to make indispensable and sense that it is probably one of the in a time where our members are consequential decisions without businesses (if not “the business”) keen to understand how others are the legal comfort that they with the most advanced dealing with similar situations and traditionally have. international self-regulation. how lessons learned from their own FIFA Regulations on the Status experiences can assist in return. As far as I see it, it is important and Transfers of Players are very to maintain as much flexibility as unique and crucial in structuring possible for governing bodies to football activities. How do you collaborate with adopt tailored solutions. To the best national authorities? What of my knowledge, no two leagues The pandemic has made it conditions have influenced a that have prematurely ended their imperative to adapt these decision to stop playing? What competition have adopted identical regulations, at least temporarily. are the consequences of a approaches. Do you declare a Without going into too much decision to curtail a competition? champion? What about the ranking? detail, the impact of the suspension How do you deal with player How about promotions and or stoppage of competitions on contracts? When can fans return relegations? All of these issues and player contracts has been massive. to your stadiums? many others depend very much on To name a couple of examples, a country’s domestic situation and the question of extending player All of these questions are both culture. Mexico, Panama, Argentina, contracts and loans was addressed terribly complex and very practical France, Belgium, Scotland, the as were the issues of frustration at the same time. Netherlands or the UAE have all around contracts and transfer adopted different solutions. windows. In general, most of the issues that we have had to deal with relate The problem, to put it simply, is The purpose of the work that to governance, calendar, business that you cannot make everyone we carried out with FIFA was to and legal matters. For the WLF, happy. And whatever decision you provide guidelines and flexibility it was critical to have visibility of make, there will be some clubs that to football bodies and clubs. In this the varying circumstances of our will be impacted negatively from a respect, we have to commend FIFA more than 40 members and be sport and financial perspective. So, for the inclusive and collaborative agile in providing guidance, when from their viewpoint, why not go approach that they have taken needed. This has been - and still is - to court and fight it? with regards to these matters - a challenging and stimulating time. with not only the WLF but also But I expect decisions from with FIFPRO and the European federations and leagues to be Club Association (ECA). In your opinion, do leagues quite solid. So far, I have not heard that decide to terminate their of any court ruling against a league One other area where the competitions prematurely run a with respect to a decision around collaboration between football legal risk? ending a competition prematurely. bodies is absolutely key is the I trust that courts will acknowledge calendar. The pandemic has Your audience is mainly composed the unique situation that we are substantially disrupted the football of lawyers. Many have probably facing and accept the authority of calendar with many competitions dealt with force majeure stipulations football leagues and federations to stopped, suspended, amended or as standard end-of-contract useless make their own best decisions in postponed. Domestic, continental provisions that you write down this respect. and international calendars all had knowing that you will never use it. to be amended and will be further In a way, let’s admit that we all re- amended. Not all decisions have discovered the beauty of force How does WLF cooperate been made as of this interview majeure and now we will all look at with international governing and we hope that the same it with a different set of eyes. bodies and with other football collaborative approach will prevail stakeholders? between stakeholders. A lawyer’s job is to anticipate solutions to anticipate problems International cooperation with but with COVID-19, we are facing governing bodies is another uncertainty and unpredictability. important aspect of the WLF’s activity during this pandemic.
56 Football Legal 2 Football Competitions
The current pandemic caused by COVID-19 has disrupted the professional football competitions at national, continental and world levels.
To this extent, football bodies have been adopting a range of measures (including recommendations, guidelines and concrete decisions) which impact the normal functioning of competitions between clubs and between national teams.
FIFA itself, while recognizing that the current pandemic is a situation of force majeure, considers that it is not in a position to instruct the FIFA Member Associations or to decide on the date on which football competitions should be suspended or restart in each country, as this depends on the decision of each Member Association taking into account the directives of respective national public authorities.
Football Legal 57 SPECIAL REPORT
Football Competitions
UEFA's Competitions
UEFA, together with its Member ➥➥ Youth team competitions: Associations and its major
Dzhamil Oda stakeholders, has adopted a o The UEFA European U-17 Associate, Morais set of decisions that impact its Men and U-19 Women Leitão competitions.1 Championships’ final tournaments were cancelled; In terms of competitions, the following measures are highlighted: o The UEFA European U-17 Women’s and U-19 ➥➥ All men’s and women’s national Men’s Championships’ Filipe team matches scheduled for final tournaments were Sanches Mendes June 2020 have been postponed postponed until further Junior Lawyer, Morais Leitão until further notice, which notice; includes qualifying matches for EURO 2020 and the EURO 2021 ➥➥ The UEFA club competition for women; as for the final UEFA finals (men’s and women’s EURO 2020 men’s tournament, Champions League and Europa with Francisco Cortez, Partner and Paulo Rendeiro, Partner same was rescheduled for League), scheduled for May Morais Leitão 11 June 2021 to 11 July 2021; 2020, were postponed until Lisbon - Portugal further notice; ➥➥ All matches in other UEFA competitions, including ➥➥ The Futsal Champions League centralised international final, scheduled for April 2020, friendly matches, have been was postponed until further postponed until further notice; notice and all UEFA futsal competitions have also been
1 According to as updates on UEFA's website: postponed; www.uefa.com www.uefa.com
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Football Competitions
➥➥ UEFA Super Cup is under the ability to decide on the i.e. 30 June 2020 at the latest, review; final position in their domestic provided that the situation competitions, taking into account improves, and the resumption ➥➥ The deadlines for all UEFA club the specific circumstances of of matches is prudent and competitions for 2020-2021 each competition; appropriate; have been postponed without a date, in particular as regards ➥➥ The final decision on the ➥➥ Possible limitations or drops the admission process and eligible places for UEFA of current exclusive calendar registration of players. club competitions must be slots, potentially resulting in confirmed by the relevant the scheduling of domestic UEFA also reiterates, in its press authorities at domestic level. league matches mid-week release on the eligibility guidelines and scheduling of UEFA club 2, for participation in its competitions UEFA has decided competitions matches on the need to complete the domestic weekends; to suspend the competitions for the 2019-2020 provisions on season, albeit in different formats. ➥➥ Possible adjustments of the National associations or leagues club licensing 2020-2021 Champions League may, however, have legitimate and Europa League qualifying reasons to terminate domestic If the aforementioned conditions rounds, in case of conclusion competitions, in particular in the are not met (save for any other of the 2019-2020 sports season following cases: factors) and if there is a public after 30 June 2020. perception of unfairness in a club’s ➥➥ Existence of an official order qualification, UEFA may refuse the prohibiting sporting events so admission to any club proposed that the domestic competitions by a National Association in cases cannot be completed before a where domestic competitions date that would make it possible ceased prematurely. to complete the current season in good time before the start of In the context of club licensing and the next season; financial fair play, UEFA supports the proposal to allow national ➥➥ Insurmountable economic associations more time to complete problems which make finishing the club licensing process until the the season impossible because admission process for the next it would put at risk the long- season of UEFA club competitions term financial stability of the is redefined. domestic competition and/or clubs. In addition, UEFA has decided to suspend the provisions on club UEFA further adds that if a domestic licensing relating to the preparation competition ceases prematurely and verification of clubs’ future due to legitimate reasons outlined financial information in connection above, it will request the National with the participation in UEFA club Associations concerned to select competitions in 2020-2021. clubs for UEFA competitions in 2020-2021 on the basis of sporting Furthermore, UEFA, ECA, EL and merit in the 2019-2020 domestic FIFPRO Europe approved a joint competitions as follows: resolution which established3 the following set of commitments ➥➥ The procedure for selecting regarding club competitions: clubs should be based on objective, transparent and ➥➥ Commitment to complete all non-discriminatory principles. national and European club National Associations and competitions by the end of leagues should otherwise have the current sports season,
2 UEFA Statement, 23 April 2020. 3 www.uefa.com
Football Legal 59 SPECIAL REPORT
Football Competitions
CONMEBOL's Competitions
What is CONMEBOL’s position The envisaged timetable, at regarding the resumption first, was to resume CONMEBOL of national and continental Libertadores and CONMEBOL competitions? Sudamericana in the first weeks of May 2020. Given the rapid CONMEBOL´s position regarding evolution of the COVID-19 the resumption of national and pandemic, it forced CONMEBOL continental competitions has to modify the initial plan and
Interview with Monserrat Jimenez been to guarantee all health currently there is no return date for Deputy General Secretary & Legal requirements for the proper these competitions. CONMEBOL Director, CONMEBOL performance of our tournaments, is constantly evaluating different Luque – Paraguay our main message is that there scenarios, which depends on the must not be a “rush” to play football progress of countries in dealing again. Moreover, CONMEBOL must with the COVID-19 virus, but the comply with governmental policies goal is to play again as soon as from the health institutions in each possible. The commitment is of the member countries. We are to conclude both CONMEBOL in constant communication with Libertadores and CONMEBOL football organizations in the region, Sudamericana this year. and our focus is to safeguard the health of all members of the great football family. The President What are the main principles that of CONMEBOL has maintained should guide this resumption? the commitment that the current editions of CONMEBOL The main principles that should Libertadores and CONMEBOL guide the resumption of football Sudamericana 2020 must be are the lives and health of football played and concluded. players, as well as spectators, coaches and referees. Thus, when
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Football Competitions
we can ensure everyone involved Additionally, CONMEBOL has 2. Provisions such as the can participate in a safe manner, published a series of regulatory prohibition of spitting, kissing this will be our indication to return. modifications that will come into the ball, exchanging jerseys or force once football resumes, any clothing parts with rivals Solidarity has guided CONMEBOL among which we can highlight: or teammates, or any other in managing this global threat. person; Due to our solid financial 1. The creation of a medical situation, carried out since 2016, registry for the control of 3. Obligation to submit to CONMEBOL has been able to players and officials within temperature control before fulfil its obligations with Member its jurisdictions, based on the each game, the use of face Associations and Clubs. Situations list filed by the participating mask for players and officials like the one we are dealing with clubs of CONMEBOL who are in the substitute bench; require agile economic responses, Libertadores and CONMEBOL and our actions in this field has Sudamericana. Members of the 4. CONMEBOL has reduced been aimed at preserving the medical control registry must 30% of the fines established health of South American football compulsorily take the COVID-19 in the Disciplinary Code and at all levels. Specifically, to reduce test in accordance with the Competition regulations for the economic impact, CONMEBOL provisions of the CONMEBOL infractions; has advance USD 75 million to Medical protocol; Member Associations and Clubs. 5. Clubs are allowed to substitute 5 players from the initial roster CONMEBOL has its headquarters Solidarity has filed, during the competition. in Paraguay and has been working guided CONMEBOL closely with the Government, and in managing has offered its convention center this global threat for the care of the sick if so required.
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Football Competitions
AFC's Competitions
What is the situation of the AFC’s The AFC expects that upcoming competitions? Have they been national team competitions, like the suspended / stopped / resumed? AFC U-16 and U-19 Championships, If suspended, do you know if and which are scheduled to be when they will resume? held towards the end of the year in Bahrain and Uzbekistan Clearly these are unprecedented respectively, will go ahead (with and uncertain times for the whole some rescheduling, if necessary). Interview with Andrew Mercer Acting General Counsel & football community. Against this Alternative arrangements for Legal Director, Asian Football background, it was inevitable competitions originally scheduled Confederation (AFC) that there would be an impact for earlier in the year, like the AFC Kuala Lumpur – Malaysia on the AFC’s operations and Futsal Championships and the competitions in 2020, particularly AFC Futsal Club Championships, around the scheduling and hosting will be made in due course, with of matches. the emphasis being very much on playing these competitions in Matches in the AFC’s continental 2020. club competitions, the AFC Champions League and the AFC Throughout the period of Cup (both already underway at lockdown, the AFC has consistently the Group Stage) were postponed underlined its commitment to in March/April/May after detailed deliver its competitions and that consultations with the AFC’s objective has not changed. In Member Associations and their the context of the AFC’s club clubs, and in line with the approach competitions, this commitment taken by many competition was recently reaffirmed in various organisers across the globe. meetings in the first week of June
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Football Competitions
between the AFC and the relevant What are the principles that have ‘Unity’ is one of the core values Member Associations and leagues, guided/will guide your actions in underpinning the AFC’s Vision at which the attendees committed managing this crisis? and Mission, and it has never been to agreeing a format and timetable more apparent and valuable than for the remaining matches. The AFC believes that the health in the last few months. and well-being of its stakeholders We recognise that this is an must be our main and unwavering extremely complex and changeable priority throughout 2020 and In your opinion, how will this situation with many governments beyond. The decision to suspend unique crisis change the football imposing travel restrictions and competitions was taken so industry? What changes do border controls, and each country decisively earlier this year in light you think will be necessary in taking its own approach in matters of our overriding determination tomorrow’s football? of public health and quarantine. to protect the safety of all those This certainly creates challenges involved in the sport. In this The pandemic has had an in the context of international regard, at this time, it is extremely enormous impact and has touched competitions, but the AFC is important to be guided by every corner of the globe, bringing working closely with its Member government advice, as well as the with it unprecedented health and Associations to overcome them. advice of local and international economic challenges. All of the health authorities. elements of the so called ‘new Thankfully, we are now seeing normal’ will impact the game, positive signs from Member We also recognise that football whether we think in terms of office Associations and the return has a role to play in the future to culture and governance (working of football at a national level. bring some normality and sporting from home; the viability of in-person Associations like the Korea enjoyment back to people’s lives, meetings, congresses and AGMs), Football Association and Vietnam something which underlines our economics (the financial viability Football Federation have made determination to deliver a safe of so called ‘mega events’ and the great strides in recent weeks to return to action when possible. hosting of international sporting restart their national leagues, competitions in the post-pandemic and others will soon follow. From a governance perspective, era; the impact of the pandemic on These are good indicators of the stakeholder engagement is key. commercial arrangements; financial determination and commitment of We are in constant contact with challenges at clubs) or sporting the AFC’s Member Associations to our Member Associations to matters (quarantine procedures; return to action and are a source of understand the football, health, adjustments to the Laws of the great inspiration and optimism to political and legal landscape in Game). the AFC as we plan the restart of each of their territories, as well as our own competitions. the impact of government/border Some of these issues, such as restrictions (something which matters of player welfare, build on Nevertheless, although we are varies greatly), in order that we can already well-established topics of beginning to see the light at the evaluate when is the right time to debate, with the issues at stake and end of the tunnel, we are fully resume football competitions. The the need for a positive resolution aware that work needs to be done AFC is in regular contact with FIFA having been precipitated by the on a Continental level before we as regards to the global regulation impact of the pandemic. Other can see a return to the pitch in of football during the crisis and is areas, such as matters affecting AFC competitions. With this in participating in key FIFA working international travel, are more mind, the AFC is working hard to groups. We have also looked to uniquely pandemic-related and find solutions which will allow us to maintain an open and transparent will require bespoke intervention complete all our matches, and also channel of communication with from football governing bodies protect the sporting integrity and commercial partners during this and national authorities to resolve value of our competitions. Whilst challenging period. in a spirit of collaboration and I would not want to speculate as solidarity. to the exact date of any return, Indeed, we are extremely proud the AFC has been steadfast in its that Asian football and its many Much of the discussion around desire to reschedule matches in stakeholders have rallied around the return of football has rightly 2020 and remains firmly in that each other – and their communities been focussed on the health mindset. – during this crisis, standing and welfare of players and non- together in a collaborative spirit. playing staff. Physical and mental
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Football Competitions
health matters have clearly been game’ experience to draw in and not forget that dealing with the brought to the fore in the present maintain public interest (whether ‘here and now’ is very much the crisis, as has the financial impact matches are consumed in-stadia or priority at this time, as opposed to of the pandemic manifesting in a via broadcast media). However, as engaging in too much speculation heightened risk of non-payment they say, there is an opportunity in on the future. This is because of players and coaching staff, and every crisis, and there will no doubt the disruption to the status quo other contractual disputes. FIFA, be technological developments caused by the pandemic and the as well as representative bodies designed to address some of these various health risks involved are like FIFPRO, have taken positive issues in the coming months. still unfolding. Even as one country action to support their stakeholders exits ‘lockdown’, another enters in these matters and should be Financial worries and constraints a period of restriction, and the commended for their approach. are certain to dominate discussions threat of subsequent waves of The pandemic also adds another at club and league level in the next mass infection remains a very real layer to pre-existing dialogue on the few years, with topics such as club concern for scientists and medical potential impact of travel on players licensing and financial fair play professionals. We are still in the and the potential over-burdening (and linked with that, inevitable crisis response phase and there of players caused by national and public debates around the viability will be ample opportunity, post- international match schedules, and of salary caps and spending limits) crisis, to reflect on experiences and such topics will certainly remain at sure to play a central role in such evaluate what worked, what needs the top of the football’s agenda in conversations. improvement and where changes the coming years. will/must be made. At this time, we must be focussed on giving a It would appear likely that matches Football does timely, accurate and consistent will be played ‘behind closed not exist in a response to the challenges football doors’ in many jurisdictions until a bubble and its stakeholders face in the medical consensus is reached on present. the measures required to prevent the spread of (and/or the roll out of There is understandably a lively Football does not exist in a bubble. a cure for) the COVID-19 virus, and debate about the future going Everyone in the world wants this is certainly a major challenge on in football right now, and it clarity and certainty on their future for a sport which heavily relies on is undoubtedly important to be right now, but neither are readily the atmosphere created by fans prepared for change. However, available. and the desirability of the ‘live football organisations should
64 Football Legal SPECIAL REPORT
Football Competitions
CAF's Competitions
What is the situation of the 4. The MA has stopped its local national competitions in Africa? leagues and the current standings of their ladder The National Competitions in are accepted as final. This Africa can be categorized into five represents 5% of our MAs. different situations: 5. The MA has not yet started its 1. The Member Association (MA) season. This represents 5% of Interview with Achta Mahamat Saleh Director, Legal Affairs & Compliance has a strategy in mind to be our MAs. Division, Confédération Africaine de able to resume its competitions Football or has already decided to Cairo – Egypt complete its season. From How were the rankings decided, June 2020 to August 2020 the championship titles awarded is the window where all the and the qualifying slots for the leagues should be completed. Continental Cups decided? This situation describes 36% of our MAs. Each MA has adopted its own strategy in deciding the final 2. The MA has suspended its rankings to accommodate the competitions and all of its COVID-19 situation in their country. results. This represents 31% of Whether suspending, stopping our MAs. or resuming their competitions with current standings or without, 3. The MA is undecided on whether depends solely on the MA’s to suspend or complete its assessment of the situation and competitions and is waiting how to make the best out the for further developments. This situation they are in. represents 24% of our MAs.
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As for the qualifying slots for the by virtue of an application to These events were delayed due to Continental competitions, kindly be submitted in accordance the ongoing coronavirus pandemic find below our engagement rules with the regulations of the that is affecting all significant and please keep in mind that federation and /or the present sports stakeholders. these are not currently updated regulations. for the COVID-19 situation and a As for the CAF Champions League, new model might be implemented 4. If for any reason, the national it will resume in September 2020, by the Executive Committee to league of a federation did not according to an official statement accommodate these unforeseen take place, the federation in released by the African football’s circumstances: question has the right to submit governing body. the participation request of the “ IV. ENGAGEMENTS same club(s) engaged having played the national league from What are the principles that guide 1. In conformity with the provisions the previous season. your actions in managing this of the present regulations, the crisis? twelve countries obtaining **These are the regulations governing the best results in the clubs the CAF Champions League. For CAF has been in close contact with competitions during the the abovementioned articles, the all the 54 member associations previous five years will be regulations for the CAF Confederation on how the situation has affected allowed to register in addition Cup are exactly the same with the them and the strategies they to the champion club, a second exception of substituting “CAF have in place for resumption of team, namely the runner-up of Champions League” with “CAF footballing activities. It is based on the national league. Confederation Cup”. their responses and strategies that CAF is rescheduling its activities. 2. If a federation is entitled to CAF is also in close contact with one club, the club champion FIFA and other confederations on of the national first division Each MA has various working groups to come championship will be engaged adopted its own up with joint strategies to manage to CAF Champions League. strategy in the crisis in Africa and globally. If this club champion of a deciding the final federation cannot be engaged rankings We are working closely with the to CAF Champions League for World Health Organization (WHO) various reasons, the Interclubs through our development division Committee reserves the right to and medical committee as well accept the club vice-champion On 30 June 2020, the CAF as governments and independent of the national first division Executive Committee held an agencies to manage the crisis. championship by virtue of an online meeting where the African The main principle guiding CAF application to be submitted in football’s governing body discussed in managing the crisis is putting accordance with the regulations the consequences of the ongoing the health of players, officials and of the federation and /or the coronavirus pandemic.1 fans as the number one priority. present regulations. We would only resume footballing The main measures taken by the CAF activities when it is safe enough 3. If a federation is entitled to Executive Committee were related to resume and the risk is at a two clubs, the club champion to the postponement of several CAF minimum level. and vice-champion club of club and international competitions, the national first division including the CAF Champions championship will be engaged League, the Total African Nations From a legal point of view, in CAF Champions League. Championship Cameroon 2020, to what extent does this If the club or club champion Women’s Africa Cup of Nations pandemic change the short and runner-up of a federation cannot 2020, and several qualifying events. medium-term relationship with engage to CAF Champions These events will now take place broadcasters? League for various reasons, the from January 2021 to January 2022. Interclub Committee reserves As of today, CAF’s competitions the right to accept the club have only been postponed. Should
finishing third of the first 1 Football Legal website, The CAF Executive they all be resumed, payments division national championship Committee Unveils Post-Coronavirus schedule aside, this will not affect Strategy
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our relationships with our current broadcasters in the short term. Contractual terms will of course need to be re-assessed in case CAF were to cancel or amend the formats of its national and clubs competitions.
A round table with our broadcasters will have to take place
In the medium-term, the change in the relationship with broadcasters will depend on how the situation evolves. Assuming the situation does not go back to normal and that we cannot play the competitions in a pre-COVID-19 format (without any restrictions whatsoever and without modifying the current competitions format), a round table with our broadcasters will have to take place, during which the terms of our agreements will need to be re-discussed.
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England
The last Premier League match was played on 9 March. The competition was then put on hold. The 2019-20 Premier League season resumed on 17 June, with matches taking place behind closed doors. The EFL SkyBet Championship (England’s second tier professional men’s league) also resumed in June. All other professional men’s and women’s leagues have curtailed season 2019-2020.
As regards the top four leagues in (b) the Championship resumed England, the current position is as on 20 June 2020.3 The current follows: plan is for the season to be completed. Games will be (a) the Premier League resumed played behind closed doors. on 17 June 2020. The current Discussions continue as plan is for the season to to whether the number of be completed. Games will substitutes permitted and Tom Seamer Barrister, Morgan Sports Law be played behind closed matchday squad sizes will be London – England doors. The Premier League increased, in order to cater for aims for games to be held players’ likely reduced fitness in ‘home’ stadia, but has levels; put in place a neutral-venue contingency plan.1 The number (c) League One and Two clubs of substitutions permitted voted on 9 June 2020 to end is to be increased to five2, the regular season, using a and matchday squad sizes points-per-game average to will increase accordingly; decide the final league table.
It was widely suggested that clubs would bring legal actions if their particular league is not concluded 1 www.premierleague.com 2 www.premierleague.com 3 www.efl.com
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as they would have wished. For Throughout the COVID-19 example, it has been reported pandemic, the overriding priority that the teams that headed the of the Premier League has been Championship could sue the Premier the health and wellbeing of League4 were they to be denied the everyone. The safety of players, chance to secure promotion. coaches and club staff has been paramount in the phased return to Separately, it has been reported training and this will continue to Mathieu Moreuil1 that certain agents are considering Director of International Football be the case when fixtures return. bringing claims against Premier Relations and EU Affairs Strict protocols have been put in League clubs5 who have withheld The Premier League place to ensure that stadiums are Brussels – Belgium fees owed due to the uncertainty as safe as possible for everybody caused by the COVID-19 outbreak. present. Those protocols have "As the 2019-2020 Premier League been developed in consultation However, no such actions have yet season resumed on 17 June, the with clubs, players, managers and been commenced, as far as I am title, relegation and qualification in line with the guidelines set out aware. Albeit any such action in the for European competition should by the UK Government." English courts would likely remain be decided at the end of the at a very early stage (such that it season (last matchday scheduled would, for now, remain private), on 26-27 July). and any arbitration (whether pursuant to Rule K of the Rules of 1 The opinion expressed by the author is strictly personal and does not affect the opinion of the Premier the Football Association, Section X League or its decision-making and judicial bodies. of the Rules of the Premier League, or Section 9 of the EFL Regulations) would be confidential (with some exceptions as provided by Rule K11 of the Rules of the Football Association, Rule X.31 of fans and the wider community the Rules of the Premier League, cope with the consequences of and Rule 20 of Appendix 2 to the COVID-19. I have been particularly EFL Regulations). proud of the way in which my club, Manchester United, has responded in this time of crisis.
Where professional leagues have Patrick Stewart General Counsel, Manchester United been curtailed, rankings have been Football Club determined on an average points Manchester – England per game basis. It is possible that legal challenges will be considered "The efforts of the football by some of those clubs which family have been focussed on have been disadvantaged by protecting clubs, saving jobs and this (for example, missing out on ensuring a return to football in promotion to a higher league, or a safe environment. There will being relegated). However, in the undoubtedly be longer-term case of the EFL, curtailment was ramifications, but they are unclear decided in accordance with the at the moment. EFL’s constitutional rulebook by way of member club voting, so any What has been heartening, theoretical legal challenge would however, is the manner in which have to rely on arguments based professional football clubs and on unfair prejudice or competition players have made such positive law, which will not be easy." contributions and provided such tremendous support to help their 4 www.eurosport.com 5 www.dailymail.co.uk
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Spain
Competitions in Spain were suspended on 12 March 2020 and resumed in mid-June, as the COVID-19 controls appear to be working with the players and their entourage. More than 2,500 tests were undertaken, of which only five people have been diagnosed with the virus, three of them being players. Matches are played behind closed doors, but La Liga is insisting that the last four rounds of the Championship (out of the 11 pending ones) be with spectators. This is under discussion with the Government and it seems that a possible agreement could be reached with a maximum of 30% of the stadia capacity admitted.
The decision by the Spanish FA on The decisions are not similar for the termination of the competition Segunda B, as the FA decided to in Tercera and Segunda B (the do a short play-off, different from fourth and third tiers) may end the one that is usual but for the up in front of the courts, as some Tercera, there are unhappy clubs clubs have already raised the issue, as the criteria for the finalization but we have not yet had a decision of the championship are not clear. on this issue. In this particular case, it seems Juan de Dios Crespo Pérez that the FA decision has not been Lawyer, Ruiz-Huerta & Crespo Sports Lawyers challenged. Valencia – Spain
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Germany
1. and 2. League re-started on 16 May 2020, without spectators and with clubs being required to comply with an extensive hygiene program before and during the matches, which so far has been implemented and executed quite well. 3. League re-started on 30 May 2020, but there was much more opposition to 3. League re-starting than there was for 1. and 2. League. This is because for some clubs, playing without spectators is more expensive than not playing at all, especially given that the TV money in the 3. League is only a small share of the clubs’ total revenues, as compared to that for the 1. and 2. League, where it can be - for single clubs - 50% and more of their budget.
No final decisions have been taken outcome. Even if the season can be yet about the consequences of completed in the 1. and 2. League, a premature termination of the some clubs - in case they are competitions in the lower leagues relegated - might argue of unfair and we still have to wait to see if conditions, in particular those the season in the 1. and 2. League clubs, who could re-start only with can actually be completed. a delay based on quarantine or However, some clubs have already players they could not use because Joachim Rain announced the commencement of infections. Lawyer, Schickhardt Rechtsanwälte Ludwigsburg – Germany of legal action, depending on the
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Italy
Italian football competitions were suspended on 9 March 2020, they resumed on 20 June.
Following the COVID-19 outbreak On 18 May 2020, the Italian Football and the request put forward by Federation (FIGC) suspended all the Italian Olympic Committee organised football competitions (CONI), on 9 March 2020, the until 14 June 2020 (FIGC C.U. Italian Government suspended all n. 195/A of 18 May 2020). team sports competitions. On 20 May 2020, the FIGC decided On 10 April 2020, the Italian to resume the Serie A, Serie B and Paolo Lombardi Government confirmed the Serie C championships and stated Lawyer, Lombardi & Associates suspension of all sports competitions that if it is not possible to play all the Edinburgh – Scotland and all training sessions (DPCM 10 remaining matches of the season April 2020, art. 1 par. 1, lit. g). because of a new outbreak of the pandemic, the FIGC will establish a On 26 April 2020, the Italian new method to determine the final Government authorised individual table of the relevant competition. training as from 4 May 2020 (DPCM 26 April 2020, art.1, lit. f, g). Finally, in order to allow the completion of the football season, On 17 May 2020, the Italian the FIGC postponed to 31 August Luca Pastore Government confirmed the 2020 the end date of the 2019- Lawyer, Lombardi & Associates suspension of any sport event 2020 football season (FIGC C.U. Edinburgh – Scotland until 14 June 2020 and authorised n. 196/A of 20 May 2020). team training as from 18 May 2020, provided that minimum safety rules Following a meeting with the FIGC, were respected (DPCM 17 May 2020, on 28 May 2020, the Italian Minister art.1, lit. e). On the following day, the for Sport declared that Serie A and relevant guidelines were issued. Serie B would resume on 20 June
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2020, whereas the Italian Cup to complete the competitions Government implemented a fast semi-finals and final will be played especially given the 14-day isolation track procedure - only one instance the week prior. rule and proposed to reduce before the Collegio di Garanzia the term to seven days. Another dello sport - to decide any claim All matches shall be played behind contentious aspect is the liability brought by clubs or other football closed doors. At the time of of team doctors in the event of parties concerning decisions taken writing, it is understood that if a COVID-19 infections among players. by the governing bodies. member of a team tests positive to COVID-19, the entire team shall be On 1 June 2020, the FIGC issued the isolated for 14 days. guidelines for the safe organisation of matches behind closed doors. The L.A.M.I.C.A. (association of football doctors) raised several It must be noted that by means of doubts in relation to the possibility the D.L. 19 May 2020, no. 34, the
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France
Due to the COVID-19 pandemic and following an announcement made by the French Prime Minister, the General Assembly of the Ligue de Football Professionnel (LFP) decided on 30 April 2020 to abandon the 2019-2020 season altogether. The final standings of the Ligue 1 and Ligue 2 and European spots were based on a quotient, which would consider the "number of points per game played." On the picture, President of the Professional Football League (LFP) Nathalie Boy de la Tour (R) and Executive Director General of the LFP Didier Quillot (L) during a press conference.
The LFP, which governs activity to resume in France. The professional football, decided clubs that were relegated, as well to stop a championship, whose as a club that hoped to qualify ranking was established by for the UEFA Club Competitions, calculating a “number of points claimed that they had lost an per match played quotient.” opportunity to regularly compete in order to achieve their sporting Based on this ranking, the goals. François Klein qualifying places for UEFA Club Lawyer, KGA Avocats Competitions were allocated, At the end of May 2020, three Paris – France provided that the final standings French clubs (Olympique Lyonnais, of the Coupe de la Ligue do not Amiens SC, and Toulouse FC), qualify other clubs. sought injunctive relief before an administrative court, which There have been numerous issues, declared itself incompetent and most of them relating to the referred the matter back to the decision to put the competition to interim relief judge of the Conseil an end. The LFP was criticized for d’État (Council of State) in order having anticipated this decision to suspend the decisions taken by without waiting to see whether the LFP. the evolution of the pandemic situation would allow football
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On 9 June 2020, the urgent Federation (FFF) provides for a The aforementioned decision was application judge of the Conseil limit of 20 clubs in the first division taken after an in-depth examination d’État validated the cancelation of as the said agreement expires on of the sporting stakes of increasing professional football leagues and 30 June 2020. It is noteworthy the number of Ligue 1 teams up to the final standings determined by to mention that a new agreement 20, 21, or 22 clubs for the 2020- the LFP. is expected to be ratified by all 2021 season and, in particular, the relevant parties. negative consequences that an Regarding the relegation of increased number of fixtures may Amiens SC and Toulouse FC, the As a consequence, on 23 June have for the health of footballers. Conseil d’État stated that the 2020, the General Assembly of The examination also covered General Assembly of the LFP could the LFP voted down a proposal to the financial impact of the LFP not base its binding decision to expand the Ligue 1 for the 2020- decision, including the distribution relegate the last two ranked teams 2021 season, therefore maintaining of audiovisual rights, and the legal in the 2019-2020 Ligue 1 on the the Ligue 1 format of 20 clubs for impact on contractual obligations fact that the current agreement the upcoming season. for Ligue 1 broadcasters. concluded with the French Football
"The competition in France has of. Practically, as all the matches been stopped. This decision was of the 28th matchday did not take made in a bit of a rush and it is place, it was decided to use the regrettable that the Government performance index previously decided to force the league stop implemented by the FFF for the competition. It shows that amateur competitions with tie- French football is not that well breaking rules. regarded by the French authorities but also that we do not have a Currently, there are legal challenges Victoriano Melero strong governance. from professional clubs and amateur General Secretary, Paris Saint- Germain FC clubs before the Conseil d’Etat, the Paris – France The ranking was decided, as a highest administrative Court in matter of consistency, on the France." same principles as set forth by the French Football Federation (FFF) for the competitions it is in charge
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Portugal
Professional football competitions of the Liga NOS and LigaProLiga Portugal were suspended on 12 March 2020 and restarted on 3 June. The final match week has been rescheduled for 26 July 2020.
In Portugal, the sports season doors and subject to a set of pre- starts on 1 July and ends on 30 June match procedures and initiatives By Daniela Sousa of the following year.1 In case of and limitations on access to the Marques Associate, Morais force majeure and in duly justified stadiums. Leitão exceptional circumstances, Liga Portugal may extend the deadline A contingency plan by Liga of the sports season, as well as Portugal5 has also been established, suspend any official competition providing that, in case of need for organized by it, totally or partially.2 postponement of matches, the dates of European competitions or That is exactly what happened on other available dates will be used, Diogo Pinto Associate, 12 March 2020, the date on which including dates on which national Morais Leitão Liga Portugal suspended the team matches would normally take professional football competitions place in case clubs do not release of the Liga NOS and LigaPro for an players for their commitments. indefinite period.3 Two days before Similarly, Liga Portugal (together the professional competitions with all clubs) has confirmed with José Maria Montenegro, João Lima Cluny, Managing Associates were suspended, Liga Portugal that discussions on the calendar, Dzhamil Oda, Associate published a protocol of action contracts and registration of and Filipe Sanches Mendes, Junior for the matches of the 25th match players will always be aligned with Lawyer 4 Morais Leitão week, to be held behind closed international bodies such as FIFA Lisbon – Portugal and UEFA.6 1 Article 4(1) of the League Regulation. 2 Article 4(2) of the League Regulation. 3 Official Notice no. 193. 5 www.ligaportugal.pt 4 Official Notice no. 186. 6 According to Liga Portugal’s news, available here.
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In addition, an Emergency season’s competitions. To that supporters, which promotes Response Centre (ERC), extent, FPF amended its Official compliance with Public Health coordinated by the Executive Notice no. 1 setting the official date measures, DGS norms and Board of Liga Portugal, was for the end of 2019/20 season at guidelines, as well as understanding created as part of the contingency 2 August 2020.10 the risks associated with infection plan. ERC decisions are mandatory by SARS-CoV-2, in the current for the sports clubs, following all context of the COVID-19 pandemic; the instructions of the Portuguese The competitions Public Health Authority, and are should be All competition shall take place adopted in accordance with the behind closed doors until the end held in as few national and international football of the season. Outside and in the stadiums as possible bodies. vicinity of stadiums, the circulation of people must be limited and Following the government’s conditioned, with no more than 10 decision,7 which authorised the Furthermore, the FPF received people allowed. The security forces Liga NOS and the Portuguese a technical opinion from DGS and services must, as proposed by Cup competitions to be the only on 10 May 2020 that frames the the FPF, ensure compliance with ones to be resumed in the 2019- conditions for the return of the current legislation, in particular 2020 season, Liga Portugal’s Liga NOS and the Portuguese Cup, promoting the dispersion of management determined the concerning the 2019-2020 football concentration of people, either definitive suspension of LigaPro, season. This opinion contains within the stadium perimeter, or having set the final classification the following indications which near hotels, training centres and of the competition according impact on football competitions public roads. to the criteria of sporting merit (the provisions of the opinion with recommended by FIFA, UEFA relevance for labour relationships Liga Portugal restarted on 3 June and FPF. In addition, it decided are detailed in the respective 2020 and has its final match week to promote the clubs Clube chapter below): rescheduled for 26 July 2020. Desportivo Nacional Futebol, No official dates are known for S.A.D. and Sporting Clube Farense The competitions should be held the submission of applications - Algarve Futebol, S.A.D., to Liga in as few stadiums as possible. by clubs to participate in NOS, as well as to relegate the These selected stadiums must competitions organised by the clubs Clube Desportivo da Cova be approved by the Regional Liga Portugal in 2020-2021, in da Piedade - Futebol, S.A.D, and Health Authority and shall have accordance with Article 10 of the Casa Pia Atlético Clube - Futebol, all the conditions to allow the League Regulation. There are also SDUQ, Lda., to the Campeonato implementation of measures to no official dates for the start of de Portugal (Portuguese non- prevent and control infection in a the 2020/2021 Liga Nos. However, professional third division).8 sustained manner, namely sanitary it is expected that it should start conditions in the changing rooms on the middle of September, after Liga Portugal’s management also and gymnasiums, cleaning and the Cup of Portugal’s final, which decided to approve the creation of disinfection, defined circuits of should be played in the first half of a Support Fund of EUR 1.52 million people, delimited areas inside September. As for the LigaPro, it is for clubs in the LigaPro, in order the stadiums (playground, bench, expected to start on the last half of to mitigate the effects of the early etc.) for different professional August. Finally, it is expected that ending of the competition. categories and availability of the Portuguese League Cup starts equipment and disinfection on the first half of August. Moreover, FPF, Liga Portugal, products in all these circuits. SJPF and ANTF determined, in Travel to and from stadiums must The registration period for the context of a memorandum of take place on transport used professional players was understanding of 4 May 20209, exclusively by the teams and other rescheduled to 3 August 2020 to that the end of the 2019-2020 parties involved; 25 October 2020.11 season shall take place the day after the last official match of this A communication strategy to be used by the FPF, Liga Portugal 7 According to the Reopening Plan, available and clubs for civil society and here. 8 According to Liga Portugal’s news, available here. 10 Taking into account the guidelines provided 11 According to the information available at 9 www.fpf.pt for in the FIFA Circular no. 1720. FIFA website.
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Additional measures convened for thatpurpose. adopted by the Additionally, the mandates of the Portuguese Government members of the sports federations’ in relation to sports bodies elected under these new federations terms, as of 24 April 2020, cease at the end of the next Olympic cycle.16 On 23 April 2020, the Government approved the Decree-Law Exceptional provisions are also 18-A/202012, which establishes laid down for the application of exceptional and temporary the duodecimal system provided measures in the area of sport, for in the legal regime governing withthe aim of providing an sports development programme effective response to the contracts, the equivalent of constraints generated by the continuing distance learning to current pandemic situation in this face-to-face learning (for the sector. purposes of obtaining credit units for maintaining the professional Among other measures, this title of technical director and decree extends, until 31 December physical training coach, and also the 2021, the sports federations public professional title of sports coach), interest statute, defining specific the renewal of registration in the rules for its renewal, in line with registration of high-performance the decisions adopted by the sports agents, and the renewal of International Olympic Committee medical and sports examinations. and the International Paralympic Committee.
Pursuant to this Decree-Law, the approval of amendments to any regulations of sports federations that aim to attend to constraints caused by the public health emergency caused by the COVID-19 disease may, exceptionally, produce effects during the current sports seasons13 (as provided for in Article 34(4) RJFD).14
It also provides for exceptional provisions regarding the term of office of the members of the bodies of the sports federations and of the professional leagues or territorial associations of clubs affiliated to them.15 Specifically, the elections of the members of said bodies, which were to take place in 2020, may take place in 2021, by means of a resolution of the respective general assembly, explicitly
12 data.dre.pt 13 Pursuant to Article 3 of Decree-Law no. 18- A/2020. 14 dre.pt 15 Pursuant to Article 4 of Decree-Law no. 18- 16 Pursuant to Article 4 of Decree-Law no. 18- A/2020. A/2020.
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Russia
On 17 March 2020, the Bureau of the Executive Committee of the Football Union of Russia (FUR) decided to suspend football competitions under the auspices of FUR until 10 April 2020. That decision was applicable to all kinds of football, with the exception of online competitions (so called « interactive football »). On 15 May 2020, the FUR Bureau of the Executive Committee unanimously adopted a generally welcome decision to resume competitions among football clubs of the Russian Premier Liga (RPL), as well as Russian Cup starting on 21 June 2020.
Due to the disturbing COVID-19 unanimously adopted a generally situation, on 16 March 2020, welcome decision to resume the Ministry of Sport of Russia competitions among football recommended that all Russian sports clubs of the Russian Premier Liga federations cancel or postpone (RPL), as well as Russian Cup official competitions in Russia for starting on 21 June 2020. This the period from 21 March until decision allows the determination further notice. On 17 March 2020, the of winners of the national Cup Oleg Zadubrovskiy Bureau of the Executive Committee and domestic championship Director of Legal Department, FC Zenit Saint Petersburg – Russia of the Football Union of Russia based on sporting merit, as well (FUR) decided to suspend football as determine the participants competitions under the auspices of UEFA club competitions, and of FUR until 10 April 2020. That to fulfill obligations towards decision was applicable to all kinds of broadcast and other sponsors. football, with the exception of online All other competitions have been competitions (so called « interactive either prematurely terminated, football »). Subsequently, FUR including second (FNL) and third extended the period of suspension (PFL) divisions competitions, until 31 May 2020. or suspended (e.g. women’s Anastasia Malyarchuk competitions, which are yet to Lawyer, FC Zenit Saint Petersburg – Russia On 15 May 2020, the FUR Bureau restart) until 31 July 2020. of the Executive Committee
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The organization of RPL matches Originally, it was expected that participate in knockout matches was subject to implementation official matches would be held with the 4th and 3rd clubs from FNL of numerous conditions and tight behind closed doors. Nevertheless, respectively to determine the two restrictions. FUR and RPL drafted the FUR has managed to agree lucky teams, who will get a place Regulations on the resumption of the with the Russian Government that in the top division during the next training process and organization up to 10% of seats at stadiums be season. However, this year FUR of official matches (Regulations). open to the public. has announced that there will These Regulations envisage the be no knockout matches and the gradual renewal of training and Since the domestic Cup and RPL 13th and 14th teams of RPL 2019- oblige clubs to meet the highest competitions are to be continued, 2020 will keep their places in the safety standards during their the championship title will be RPL 2020-2021. FUR also decided preparation for, and participation awarded, and the qualifying slots that after the 2019-2020 sporting in, football matches. The document for the continental cups will be season, in deviation from ordinary contains among other things, the decided, on sporting merit. rules, the last five teams in the FNL following requirements: regular standings shall not be relegated tests for players, team staff and FUR has declared that the two to the third division (PFL). At the referees; constant disinfection RPL clubs finishing last in the same time, the five top teams of and guidelines regarding due and championship table (i.e. clubs in 15th the PFL will be promoted to FNL, safe behavior during training and and 16th spots), as usual, will descend which means that in the 2020-2021 matches; observance of social to the FNL. Two FNL clubs sitting season, the second division will distance; daily health checks, etc. in the first and second spots in the likely be expanded. Whether or not As regards to the Russian Cup, standings by the date of premature this indeed happens depends on FUR stated that the FUR would termination of sporting season the number of clubs successfully determine all match venues 2019-2020, will be promoted to the passing the licensing procedure. depending on epidemiological RPL in the 2020-2021 season. situation in regions, as well as on limitations imposed by federal and Normally teams finishing 13th regional authorities. and 14th in the RPL standings
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Belgium
The Belgian Pro League (1st and 2nd division) followed the federal Government’s lockdown measures as decided on 12 March 2020 and immediately suspended its competition (just before the 30th and last round of the regular season and the subsequent playoffs). Subsequently, the Pro League’s General Assembly decided on 15 May 2020 to cancel the remainder of the 2019-2020 competition, to uphold the rankings after the 29th round of the 2019-2020 regular season, and to attribute the league title, the European cup’s qualifying spots as well as the relegation spot from division 1A in accordance with said rankings.
On 26 March 2020, the Belgian FA’s season’s termination. The General High Council stopped the amateur Assembly was originally scheduled level football competitions. for 15 April 2020. However, that meeting was postponed several On 22 May 2020, the Pro League times because, among other opted to terminate the 2019-2020 reasons, the Pro League was professional football season, with waiting for (potential) Government the exception of the Cup final decisions on the cancellation of Gregory Ernes Founder, ATFIELD (scheduled for 1 August 2020) and sports events for a long period, and Brussels – Belgium the second division’s play-off final also to seek coverage against claims (on 2 August 2020). from the right holders.
It took quite some time for this The Working Group made decision to be made. two different proposals. Both suggestions meant that the top Previously, on 2 April 2020, the Pro division’s standings after 29 games League’s Board of Directors had would be considered as the final advised the General Assembly to standings (despite one game terminate the season with immediate remaining in the regular season) effect. In addition, a Working Group and both suggestions entailed the was established to discuss the cancellation of the play-offs (which modalities surrounding the football would decide the championship
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and the distribution of European is contested by the ‘winners’ of that are unhappy with the outcome places). In both scenarios, these final both the first and the second half of the votes. rankings would be used to determine of the season. The other terms of the champion and the allocation of the Board of Directors’ proposal The decision to terminate the European places. Also, Waasland- (e.g. designating the champion, season has triggered many legal Beveren would not be relegated, allocating European places, and disputes. Amateur football clubs despite being the lowest-ranked financial compensation for harmed have challenged the termination team, given that the club still had clubs) were similar to the Working of their competitions before the the possibility of avoiding relegation Group’s suggestions. Belgian Court of Arbitration for on the final day (by being only two Sport (CBAS). points away from safety). In addition, The decisions taken a financial compensation scheme The professional football club, and the decision was proposed to compensate clubs Waasland-Beveren, which has been processes are that would (potentially) be harmed relegated to the second division currently being as a result of the decision to stop the following the Pro League’s decision, football season. challenged by a has lodged a complaint before the number of clubs CBAS after an unsuccessful request The main difference between the for mediation within the Pro League. Working Group’s two suggestions Less than a day later, the Pro The case is still pending, with a lays in the fact that the first League’s General Assembly decision expected soon. In addition, scenario envisaged next year’s accepted the Board of Directors’ one of the club’s shareholders league with 18 clubs instead of the alternative proposal by a majority has initiated a complaint with the current 16. This implied that one of 84%. The Pro League’s Belgian Competition Authority. additional team would be given management considered that, in The latter will also deal with the right to be promoted since applying the applicable bylaws, an separate complaints from other the return of the second division’s 80% majority was required under clubs (Antwerp and Virton) and title decider would not be played. a multiple voting rights system. a complaint by the owner of Sint- Under the second scenario, no The clubs with the best results Truiden’s stadium.1 The competition second division team would gain over the last five seasons had law challenges are in part related promotion and thus 16 clubs would three votes each, while the other to the termination of the current remain in the top division. teams in the highest division had season, but must be seen in a two votes per club and the clubs broader picture since the complaints On 14 May 2020, the Pro League’s from the second division only also address the licensing system, Board of Directors rather had one vote each. Thus, the top conflicts of interest in Belgian surprisingly rejected both of the clubs had a greater influence in the football and the non-respect of Workings Group’s proposals vote. In addition, the proposal was fundamental rights. As an example and formulated an alternative a “take it or leave it” offer. Some of the latter, reference can be solution concerning promotion and clubs voted for the “lesser of two made to the decision of the Pro relegation. The Board of Directors evils”, because a refusal and hence League’s General Assembly, which suggested that the top division’s a possible annulment of the season contained a provision that any club lowest-ranked team would be was even more disadvantageous challenging the decision would be relegated to the second division to them. Other clubs voted for deprived of any payment under the and replaced by the winner of the the proposal bearing in mind the solidarity scheme.2 second league’s play-off final, the financial compensation system, latter being given the “green light”. given the financial consequences That final has in the meantime of the COVID-19 crisis to football. 1 The Belgian Competition Authority decided on 2 July 2020 that the relagation of the football been scheduled for 2 August Besides that, two clubs already club Waasland-Beveren to division 1B is not 2020 and will take place behind banned from professional football prima facie incompatible with competition law. Football Legal, Belgium: the relegation closed doors. Should that final not for the 2020-2021 season due to of the club does not prima facie infringe take place due to the COVID-19 their failure to obtain a licence to competition law 2 The Belgium Competition Authority ordered crisis, then the highest-ranked compete in professional football the Pro League to suspend the provision in team from the second division’s were allowed to vote. the 15th of May 2020 decision that allowed for sanctions on Waasland-Beveren or any regular season will be promoted. other club in the Pro league for seeking legal This would actually be a different The decisions taken and the decision remedies, e.g. from the competition authority in respect of the decision of the 15th of May. club from the teams competing processes are currently being Football Legal, Belgium: the relegation in the play-off final, since the final challenged by a number of clubs of the club does not prima facie infringe competition law
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Another dispute that is likely to they should be entitled to partial signings during the final. OHL has escalate is the quarrel between compensation given the fact that several key players with contracts the Pro League and the right 94 matches could not be played. expiring on 30 June 2020. As a holders. Unlike the situation in response, the Belgian FA amended many otherleagues, the right In addition, the play-off final its rules after a decision by the holders have already paid the final is causing controversy as well. Pro League, which allows clubs installment. The Pro League has Beerschot, one of the finalists, has exceptionally to field new signings informed the right holders that it already announced legal steps in during the play-off final and the considers the Government decision the event of loss. The club first cup final. Another remarkable thing of 6 May 2020 on prohibiting sought to annul the final, eyeing about the play-off final is that it will sports games until 31 July as a an automatic promotion based take place less than a week before valid force majeure situation and on a top division of 18 rather the start of the new season on that it is not willing to reimburse than 16 clubs. However, after the 7 August 2020. Given the financial the right holders, with an alleged General Assembly’s decision, it and sporting difference between EUR 23 million at stake. The rights agreed to play the final in August the top division and the second holders are arguing there is the 2020. When the game was set for division, this creates uncertainty absence of clear force majeure 2 August 2020, the club stated for both play-off finalists. (e.g. games could be played that its opponent, OHL, must not after 31 July) and believe that be allowed to line-up any new
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Scotland
The 2019-2020 season was concluded in Scotland on 18 May 2020 following a consultation involving all 12 Scottish Premiership clubs and an agreement to end the league on a points per game basis. This followed the earlier conclusion of the Scottish Championship and Scottish Leagues One and Two, on 15 April 2020.
Football in Scotland was Board determined that the 2019- suspended by the Scottish FA on 2020 Ladbrokes Premiership 13 March 2020. The SPFL Season be concluded with immediate 2019-2020 was brought to an end effect. on 18 May 2020. Final season placings were This was a two-part process: determined on a points per game basis. This therefore determined Calum Beattie ➥➥ On 15 April 2020, the SPFL the champion club of each division Solicitor & Assistant Company announced that 81% of SPFL and the relegation places. It Secretary, The Scottish Professional Football League Limited clubs had approved a directors’ was determined that no end of Glasgow – Scotland written resolution which ended season play-off competitions be the Ladbrokes Championship, held. The only issue in relation Ladbrokes Leagues One and to the qualifying clubs for UEFA Ladbrokes League Two for competitions was that the Scottish season 2019-2020. Cup (organised by the Scottish FA) remains postponed. The winner ➥➥ This resolution also gave of that competition, in the normal authority to the SPFL Board course, is awarded a place in the to make a decision on the qualifying rounds of the UEFA Ladbrokes Premiership. After Europa League. The Scottish consulting with all 12 Premiership FA Board agreed that, in the clubs, on 18 May 2020 the SPFL circumstances, the fourth placed
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team in the Ladbrokes Premiership disparate shareholder base and The SPFL was determined to find (Aberdeen FC) should be we are very much aware of the the most equitable method of nominated to participate instead. different challenges facing each of ending the season, when it became our clubs. Some have the resources clear this would likely be necessary. This has been, and continues to to play behind closed doors and Numerous options were considered be, a hugely challenging time for cover the associated costs of but the points per game method was competition organisers, governing ensuring a safe environment, considered the fairest and ensured bodies, clubs, broadcasters and while others will find that much that the nominations to UEFA for everyone involved in football and more challenging. Ultimately, we its 2020-2021 competitions would indeed wider society. The SPFL are a members’ organisation with be on sporting merit. We recognise and the Scottish FA set up a Joint Rules, Regulations and Articles that the passing of the resolution Response Group comprising senior of Association agreed by the comprising this method has been executives and office bearers in members and we will work with difficult for the relegated clubs early March to monitor and react our members to find solutions to and their supporters to accept. to the COVID-19 pandemic. The the myriad of challenges facing the SPFL clubs have been exploring clear focus of that group was to game in Scotland. reconstruction possibilities to ensure that the Scottish football mitigate the perceived unfairness authorities were working together but no consensus has been reached to combat the virus and protect yet. member clubs. The SPFL has This has been, and 42 members and the overriding In this context, we are now in the continues to objective is to seek to ensure Court of Session contesting an be, a hugely that we have 42 members when unfair prejudice petition by Heart football returns to some element challenging time of Midlothian PLC and The Partick of normality. The SPFL has a Thistle Football Club Limited.
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Football Competitions
Denmark
Following the Danish Government’s decision to implement a wide range of lockdown measures to limit the spread of coronavirus in Denmark, it was decided on 12 March 2020 to suspend all football activities for a preliminary period of two weeks. In this regard, the clubs were also urged to send their players home with individual training programmes. From 8 May 2020, in view of the Government’s decision to gradually reopen society, clubs play-ing in the top two leagues were allowed to return to regular team training, and the Danish League (Divisionsforeningen) decided - in compliance with the Government’s guidelines - to resume the Superliga with effect from 28 May 2020.
At the time of suspending the was generally used for sponsoring Danish Superliga, a few rounds and marketing activities, including of the regular season were still not least various SoMe-related remaining, which was the case initiatives. with both the medal playoffs and the relegation playoffs, as well. From 8 May 2020, in view of the Government’s decision to
Lars Hilliger This lockdown was subsequently gradually reopen society, clubs Attorney-at-law, Advice Law Firm extended indefinitely for play-ing in the top two leagues Copenhagen – Denmark professional football and for mass were allowed to return to regular and amateur football, although team training, and the Danish players were allowed to train in League (Divisionsforeningen) small groups if adhering to specific decided - in compliance with guidelines. the Government’s guidelines - to resume the Superliga with effect A number of clubs chose to furlough from 28 May 2020. players and other employees, whereas other clubs opted to In this respect, and as part of a train alternately with their players safe and responsible resumption in smaller groups, and the period of Danish professional football,
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the Danish League issued a series At the time of writing, Thus, the protocol contains tasks of protocols which, with effect match operations are based as to access control, access lists, from 25 May 2020, were to ensure on the following rules and media access, emergency and the greatest possible safety for recommendations from the Danish evacuation plans, balls handled employees of football clubs and authorities: by ball boys, anti-doping control to minimise the risk of spreading facilities, etc. SARS-CoV-2 when training, ➥➥ No spectators because of the during external practice matches ban on large gatherings until In addition, the Danish League has and when competitive matches September 2020; introduced weekly testing of all resume. These protocols are not players, referees and club staff in definitive and are undergoing ➥➥ The Government will reopen the top two leagues in Denmark. constant revision in light of the parts of Denmark gradually; The test protocol is updated and latest recommendations and published on an ongoing basis, guidelines issued by the Danish ➥➥ Safe distance of 1-2 metres providing information on the health authorities. between people. numbers of people tested and infected with the virus.
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Bulgaria
All bulgarian mass sport activities were suspended on 13 March 2020. The competitions resumed on 5 June 2020.
On 13 March 2020, shortly after and growing reported cases of the World Health Organization COVID-19 in Bulgaria. announced the spread of the COVID-19 coronavirus as a Finally, on 14 May 2020 the global pandemic, the Bulgarian Bulgarian Government repealed Parliament declared a state of the suspension of professional emergency which was immediately football activities and allowed, followed by the Government’s as of 15 May 2020, the start of a Assen Hinov Legal Counsel, PFC Ludogorets 1945 prohibition of each and every 3-week preparation period for Razgrad – Bulgaria mass sport activity. This was one professional football players to of many anti-epidemic measures resume their training and restore implemented by the Government their physical condition with the as an attempt to contain the competitions officially resuming spread of the coronavirus. on 5 June 2020. The initial intention of the public health On the very same date, and in authorities was that the official compliance with the mandatory matches are played behind closed measures implemented by the doors with no spectators allowed. Government, the Bulgarian After careful consideration of the Football Union (BFU) temporarily epidemic situation, on 2 June 2020 suspended all domestic the Minister of Health allowed competitions effective as of live spectators under specific 13 March 2020. The initial period conditions - no more than 30% of of suspension was extended on the stadium capacity occupied, at several occasions specifically least two empty seats between considering the continuing spread spectators and compliance with
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strict anti-epidemic and safety entered its playoff phase splitting As far as the qualification for measures. the league table in two - the first six the UEFA club tournaments teams forming the “championship” is concerned, the Bulgarian The BFU issued its medical and group and the remaining eight champion automatically qualifies organizational guidelines regarding teams forming the “relegation” for the 1st qualifying round of the the 3-week preparation period group. The teams from the UEFA Champions League. and thereafter - three training “championship” group played five micro cycles of one week each rounds/matches in single round- There are three slots for the UEFA with specific guidelines for each robin schedule. Europa League where the three micro cycle (individual training, clubs taking the slots will start small group training and collective from the 1st qualifying round of the training); testing of players for Bulgaria was among tournament. The qualifying slots COVID-19; adherence to strict anti- those countries for the UEFA Europa League are epidemic measures by all parties seeking a distributed as follows: the first concerned (players, coaching and flexible approach slot is taken by the First league other club’s staff), etc. runner-up; the second slot - by the Bulgarian Cup winner; and the last The BFU already updated the The remaining eight teams forming slot is for the winner of the match fixtures with the first matches the relegation group are split in two between the club placed 3rd and kicking off on 5 June 2020 and the groups of four teams each where the club placed 7th in the final First 2019-2020 season ending in mid- each team play three rounds/ league standings (where the 7th is July 2020. The next season 2020- matches in a single round-robin in turn the winner of the playoff 2021 is scheduled to kick off on schedule. The first two teams of the phase in the relegation group as 24 July 2020. first group will then play against the specified above). first two teams of the other group Bulgaria was among those (system 1A-2B and 1B-2A) where I find the approach of the BFU countries seeking a flexible the winners will compete for the reasonable enough for managing approach while taking into account 7th place in the final standings. to achieve the fine balance the COVID-19 situation. After between the possibility to play discussions between stakeholders To cut a long story short, the regular official matches at all amidst the (Government, health authorities championship was completed by continuing coronavirus outbreak, and the BFU) it was finally decided playing the remaining 25th and and the club’s admission to UEFA to resume the competitions on 26th rounds. The playoff phase is club competitions on the basis of 5 June 2020, albeit the number of reduced by 5 rounds. Promotion sporting merit. I therefore do not rounds of the playoff phase of the and relegation playoffs, as well as anticipate any legal challenges championship was reduced by five the UEFA Europa League playoff, in this respect, of which none are rounds (35 matches). remain as per the original format. likely to be successful.
The regular season was completed The Bulgarian Cup tournament will by playing the two remaining be completed in accordance with rounds and the competition has its original format.
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Football Competitions
Argentina
The Argentine Football Association (AFA) decided to terminate 2019-2020 season, thus all competitions currently squaring off were terminated as well. This decision was published in its Official Newsletter dated 27 April 2020.
With regards to the First Division, June would not be feasible. their main tournament, the Super The possibility of any activity League had already finished. Four in the second half of the year of the six quota to the Libertadores is not foreseeable. In these Cup were already defined and the circumstances, AFA was intent on Cup of the League remained to be giving the clubs some certainty. Of disputed while only the first date course, said decision brings with it had been played. It should be said important consequences. Gonzalo Mayo Sports Legal Counsel, Club Atlético that only the first division of all River Plate clubs participate. In this edition, It is important to highlight some of Lawyer, ME&M Sports not only did a champion emerge the consequences of said decision. Buenos Aires – Argentina but also the marks scored during The first one is that relegations the tournament were computed in all categories were eliminated. for the sum of the relegation Furthermore, relegations in the averages. next season have been eliminated as well. This gives rise to the fact As for the remaining categories for that 28 teams shall integrate into promotion, one third of the season the First Division for the next still had to be finished. seasons.
I understand this decision may be But the promotion of the best- questionable, though I consider placed teams at that moment the AFA had enough reasons was not determined either. This to consider the season over introduces the first inconvenience. as the possibilities to resume Such definition will take place in the competition by the end of the second semester by means
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of a tournament, the modality of The AFA has stated that the two were covered by those teams which is yet uncertain. Thus, some remaining quotas for qualification who qualified by merit in its final of those clubs are evaluating the to the Cups shall also be determined classification in the Superliga. possibility to refer to the Court by means of tournaments to take of Arbitration for Sport (CAS) to place when the sanitary conditions However, the places for continental request a direct promotion. are appropriate before the Cups given by the National Cup and beginning of season 2021 which the League Cup will be assigned by The second issue is that the ending is to start either in February or an extraordinary competition that of the Cup of the League, where March and end in December, thus should be scheduled to play during only the First Division of the clubs matching the AFA’s calendar to the second semester of 2020, only competed, left undetermined CONMEBOL’s, abandoning the if sanitary conditions allow such a classification quota to the European format used so far. decision, as mentioned before. Libertadores de America Cup. As mentioned above, the Superliga Similarly, the Copa Argentina (the Argentina de Fútbol had already National Cup), also suspended, been terminated, thus there were left undefined another quota for no need to decide a ranking to the winning team to the Copa state a champion and 4 of the 6 Libertadores. slots for continental competitions
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Brazil
The Brazilian Championship of Series A will begin on 9 August 2020. Series B will begin on 8 August 2020. The decision was taken on 25 June 2020, in a meeting convened by CBF together with the National Club Commission (CNC) with the participation of 40 competing clubs in both series. The basic dates and the return schedule were proposed by the president of the CBF, Rogério Caboclo, and supported by the clubs. The return of football depends on authorization from health authorities. But, nineteen of the twenty Serie A clubs were willing to play outside their cities, ultimately, if their municipalities are not yet cleared by health authorities to play games.
The State championships and the Sul, a July return date has been National Cup (Brazil’s Cup), that discussed, however, without a were already in progress when concrete decision being taken. the pandemic was declared by the WHO, have been suspended until In any case, in the event the further notice. The beginning of competitions resume, they will the Brazilian Championship, on the probably take place behind closed other hand, has been put on hold. doors. Besides this, other measures
Daniel Cravo Souza to avoid the virus’ spread that are Lawyer, Cravo, Pastl e Balbuena At a national level, there is no being discussed are: the reduction Porto Alegre – Brazil information about when the of the delegations, the reduction competitions will resume (Brazil’s of time spend by the squads and Cup) or be initiated (Brazilian staff in locker rooms, constant and Championship). Nevertheless, profound sanitation of the working there is still the confidence that environments and testing of all the both competitions will be disputed persons involved in the event. until their end, which will probably occur only in 2021. Concerning the state championships, we observe that in some states, like Rio de Janeiro and Rio Grande do
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China
In China, the professional football leagues were scheduled to start by the end of February 2020. However, because of the outbreak of COVID-19 at the beginning of 2020, the Chinese Football Association - together with the General Administration of Sport of China - decided on 30 January to postpone the start of all professional and amateur competitions until further notice. Then, on 26 March 2020, the Chinese authorities temporarily suspended the entry of foreign citizens to China as from 28 March 2020, in order to control the spread of the virus within the country. On 1 July 2020, the CFA announced the starting date of the 2020 Chinese Super League season, which was announced to kick off on 25 July 2020. But the 2020 Chinese Super League could be again postponed after the resurgence of several coronavirus outbreaks in Beijing.
The outbreak of COVID-19 took competitions, without specifying place in China at the end of January their resumption dates.1 2020, with the Government issuing strong measures in order to control At that time, practically all the spread of the pandemic within professional clubs were in the the country. As a result of that, middle of their pre-season training almost all activities in China were camps (both in China and abroad), abruptly interrupted, including as the leagues were supposed Giandonato Marino sports. to start by the end of February Lawyer, Llinks Law Offices Shanghai – China 2020. However, after such The General Administration of announcement and considering Sport of China (GASC) requested the seriousness of the pandemic in all national sports federations China at that stage,2 a large number and relevant institutions to of clubs authorized their suspend their competitions, with players and coaches to return the Chinese Football Association to their respective homes after (CFA) announcing on 30 January concluding such sessions. 2020 the postponement of all 1 The football season in China runs from amateur and professional football January to December, with the leagues Tomás Pereda Rueda normally starting by the end of February and Lawyer, Llinks Law Offices ending by the end of October. Shanghai – China 2 Due to the measures imposed by the authorities to control the pandemic, the vast majority of activities and businesses in China were temporarily interrupted and all citizens were requested to remain at home until further notice.
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Then, on 26 March 2020, the then, the 4 clubs ranking in the Differently from the Chinese Government issued further first positions of each group would Basketball Association League regulations to contain the spread participate in a knock-out final (CBA League)7 - which recently of the virus, by means of which all stage for the victory of the league. obtained the approval from the foreign nationals were temporarily GASC to conclude season 2020 banned to enter into Mainland With regards to the measures to - no definitive decision has been China as from 28 March 2020. prevent infections, apart from taken as regards professional having to comply with strict football, apart from the publication As of today, although clubs health and preventive measures, of the list of teams participating to were allowed by the competent the professional leagues intend CSL, CL1 and CL2 leagues. authorities to start collective to resume competitions without training in March and to play attendance, and gradually open At this stage, the major issues for friendly games from May,3 since to spectators depending on the the clubs and the CFA are: February several clubs have not general situation in the country. been able to count on the services ➥➥ Whether season 2020 will kick- of the foreign players and/or off and the scheme that the coaches who could not return to For the time being, CFA will adopt for competitions China before the borders were we have not in this season 2020. closed.4 seen judicial actions by clubs ➥➥ Whether the clubs will manage With regards to the competitions, to have all their foreign players the relevant sports federation has and coaches back before the to submit a plan to the GASC in Nonetheless, to date there is leagues resume. As stated order to resume games, including uncertainty as to whether the before, several clubs have all relevant precautions for the professional leagues in China will all or part of their foreign spread of COVID-19. finally take place for the season employees stuck abroad due 2020, taking into account that to the ban imposed by the However, the GASC has rejected - inter alia - a large number of Chinese authorities since both plans presented by the CFA foreign players and coaches 28 March 2020 and there has so far.5 The last proposal of the are still abroad and the clock been no news about when the CFA for the Chinese Super League is ticking for the leagues to be ban will be definitely lifted. (CSL – First division) consisted concluded within the end of However, it seems that the in dividing the 16 clubs into two this year, considering that the Chinese Government is relaxing groups (there are rumours that Chinese national team will play progressively such prohibition, one group will be playing in the Qualifiers of the FIFA World as it has signed bilateral Shanghai/Suzhou and another Cup Qatar 2022 in the months of agreements for fast track one playing in Guangzhou)6 and September and October 2020. visas with several countries (including Singapore, Korea,
3 The training and friendly games were For the time being, we have not Germany, the UK and Italy subject to the compliance of strict seen judicial actions brought by among others).8 requirements established by the relevant health authorities, being allowed to play clubs or other football parties friendly games only within certain specific concerning decisions taken by the Meanwhile, the CFA and the clubs territories. For instance, there are some clubs gatherings in Guangzhou such as governing bodies (e.g. CFA). This are discussing a temporary policy Guangzhou Evergrande, Jiangsu Suning, is mainly because the CFA by mid- in case the leagues finally start, Shandong Luneng, Henan, Jianye, Dalian Pro, Guangzhou R&F, Shanghai Shenhua or June 2020 is still making efforts with the purpose of guaranteeing Shenzhen, and others in Shanghai such as to submit a suitable plan to the Shanghai SIPG, Beijing Guo’an, Tianjin, Teda, 7 The CBA League is the first division of Chongqing Yifang, Hebei China Fortune, GASC in order to obtain approval basketball in China. It generally runs from Qingdao Huanghai, or the Chinese national and start the professional football November to May of the following year. team. However, due to COVID-19 this season 2020 4 For instance, just to name a few, all the leagues for the season 2020. As was suspended from the end of January foreign players of the China Super League mentioned above, sports leagues 2020 and it resumed on 20 June 2020 in club Jiangsu Suning are still abroad, as well order to finish the season. as the technical staff of Shanghai SIPG and are only authorized to start after 8 During the month of June 2020 some clubs the head coach of Beijing Guoan. obtaining approval from the GASC have managed to have some of their foreign 5 The reasons why GASC rejected both players or coaches return. For instance, proposals have not been published. of the specific plan, including all Rafael Benitez, Salomón Rondón, Sam Larsson, 6 However, due to the recent outbreak of preventive measures to be taken, and Marcus Danielson, head coach and COVID-19 in Beijing in June 2020, the foreign players of Dalian Pro and Paulinho, authorities are considering whether to move which shall be specified by the a Brazilian player of Guangzhou Evergrande, the competition to smaller cities and/or relevant institution. landed in China in mid-June and are currently regions as Dalian. undergoing the 14 days’ quarantine period.
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a fair level of competition between In relation to the activities of the the clubs (at least until all foreign clubs, as the spread of the virus players will return to China).9 was majorly controlled in China since mid-March 2020, clubs - The arrangement for the upon authorization from the health competitions of the Chinese authorities and the CFA - started national team, as the national team training around that period and have scheduled different games then gathered in specific safe areas for the 2022 FIFA World Cup since the month of May in order to Zhao Qiwei Qualifiers during the months of Head of Competition Department, play friendly games, but always September and October 2020, and Shenzhen Football Club under the strict supervision of the Shenzhen – China it is still uncertain whether these competent authorities to avoid any games will be held in Mainland risk . At this stage, we are waiting China or in any other territory of "It is easy to understand that clubs to have all our foreign employees other countries from the same are now facing several issues, back and the proposal of the CFA group, depending on the situation considering for instance that to to be approved by the General of the pandemic at that time.10 date there is not yet certainty Administration of Sports in China concerning the start of the season in order to start the Chinese Super In this sense, the CFA will keep 2020. In addition, many clubs League 2020 edition." coordinating both with FIFA applied salaries adjustments in and the AFC in relation to any accordance with the guidelines potential change of schedule, issued by FIFA as well as the CFA with the purpose of adjusting the proposal in this regard. training and gaming schedule of the national team accordingly. For that reason, the schedule of the leagues will have to be flexible enough in order to meet the needs of the national team.
9 See footnote 4 above. 10 The Chinese national team still has three home games (against Maldives, Philipphine and Syria) and one away game remaining (against Guam).
Football Legal 95 SPECIAL REPORT
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Saudi Arabia
On 15 March 2020, the Ministry of Sports issued a decision to suspend all sports activities in the Kingdom of Saudi Arabia (KSA). Subsequently, the Saudi Arabian Football Federation (SAFF) and the Saudi Pro League (SPL) decided on the suspension of all football competitions. On 12 June 2020, the Ministry of Sports announced that the suspension of sports activity shall be lifted on 21 June 2020.
That means, with respect to Cup League and the second tier professional sports and football in division Prince Mohammed Bin particular, that training sessions can Salman Professionals First League. be resumed. The Ministry of Sports also announced that competitions On 2 July 2020, the Competitions can be resumed after 4 August Committee of the Saudi Football 2020. Though, without attendance Federation issued the schedule of of fans and with the obligation that the remaining rounds of the second Bandar Al Hamidani Lawyer, Al Tamimi & Company all clubs take all necessary health division of the sports season 2019- Riyadh – Saudi Arabia and safety measures. It will be for 2020. The league competitions will each federation to determine the resume by holding the postponed specific date of resumption of the confrontations on 13 August 2020, competitions that it organizes. with the competition ending with the 22nd round confrontations Following the announcement of the on 4 September; while the final Ministry of Sports, SAFF declared confrontation will be held between that it will coordinate with SPL to the two champions groups' on determine the most appropriate 12 September. date for the resumption of Pedro Castro Lawyer, Al Tamimi & Company professional football competitions, Riyadh – Saudi Arabia namely the first tier division Prince Mohamed Bin Salman Professionals
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UAE
On 29 April 2020, United Arab Emirates Football Association (UAE FA) announced that the UAE Pro League will be provisionally resumed in August following the latest developments related to the COVID-19 pandemic.
The Pro League and all football However, there is still a big hesitation activities are currently suspended between “postponement" and and have been since the decision “cancellation” of the league and taken by the UAE FA and the Pro there is a strong view to the contrary League on 23 March 2020. that the league of the current season should be terminated. Recently, the Pro League announced that the league will Saleh Alobeidli Lawyer, Saleh Alobeidli Advocates & resume mid-August and the next Consultants season will be deferred to the end Dubai – UAE of September 2020.
Football Legal 97 SPECIAL REPORT
Football Competitions
Cameroon
On 12 May 2020, all competitions 2020 to stop the propagation of were stopped by the Executive COVID-19, the FECAFOOT through Committee of the Cameroonian a press release announced, on Football Federation, known as the same date, the suspension of FECAFOOT, and made public championships. This was done to by a press release signed by its comply with measures banning President. events involving the gathering of more than 50 people, and to Jean-Jacques Nouyadjam Lawyer, Nouyadjam Associates But before that day and following respect social distancing. Yaounde – Cameroon the 13 measures announced by our Government on 17 March
98 Football Legal 3 Force Majeure
FIFA recognizes that the football ecosystem is in a situation of force majeure (or Act of God), a legal concept widely accepted internationally and, in particular, valid and applicable under Swiss Law - the one governing FIFA. Interestingly, however, there is no specific definition of force majeure in FIFA’s Regulations on the Status and Transfer of Players (RSTP), except for the mention of it in Article 27 of RSTP.
Football Legal 99 SPECIAL REPORT
Force Majeure
Force majeure: Swiss Law, CAS jurisprudence and the jurisprudence of the FIFA decision-making bodies
By Mario Flores Chemor and Tom Seamer Lawyers, Morgan Sports Law Lausanne – Switzerland
The COVID-19 outbreak has had a colossal impact on every aspect of life worldwide. Whilst the outbreak’s effects on the sporting world are clearly of secondary concern, it is nevertheless the case that enormous disruption has been, and will continue to be, caused to events in every country, in every sport, and at all levels. In this article, Mario Flores Chemor1 and Tom Seamer2 provide a brief introduction to the doctrine of force majeure: under Swiss Law and in the jurisprudence of the Court of Arbitration for Sport (CAS) and of the FIFA decision-making bodies (and other sports tribunals).
Given the huge impact of COVID-19 the end of the delayed football Many parties to such disputes on football, the scope for disputes season, propose guiding principles will likely argue that they must is obvious.12That is particularly which (seemingly) would (in be released from a contractual the case as the situation faced is certain cases) allow parties to obligation on the basis that the entirely novel (at least in modern unilaterally vary employment COVID-19 outbreak represents a times), such that it simply has not contracts which “can no longer force majeure3 event. been legislated for. be performed”, and recommend allowing transfer windows to be Force majeure is, at root, a civil Indeed, the degree to which altered to be in line with amended law concept. In many civil law existing football rules and season dates. jurisdictions, a force majeure regulations will likely have to be clause will be treated as an implied ‘torn up’ is reflected by the FIFA Moreover, even ignoring term4 of a contract when an guidelines “COVID-19 Football employment matters, football unforeseeable and unavoidable Regulatory Issues” published on related disputes are likely to arise event that has not been caused by 7 April 2020. Those guidelines call in relation to a huge variety of the negligence or fault of either of for players’ and coaches’ contracts legal relationships. For example: the parties has made performance to be automatically extended until impossible. ➥➥ League and club;
1 Mario is an Associate of the law firm Morgan Sports Law. He worked at FIFA for almost six ➥➥ FIFA and member association; years overseeing over 500 cases heard by the FIFA Dispute Resolution Chamber and 3 ‘Superior force’. the Players’ Status Committee. Mario also ➥➥ Sponsor and sponsored; 4 In addition, some contracts (in both acted on behalf of FIFA before the Court of common and civil law jurisdictions) contain Arbitration for Sport on numerous occasions. force majeure clauses which will define (or 2 Tom is a Barrister at Morgan Sports Law. ➥➥ Broadcaster and rights holder; at least should have defined) what amounts He represents and advises clients across a to a force majeure event for the purposes of range of sports and jurisdictions. Tom has that contract. This article does not address particular experience before the Court of ➥➥ Ticket-holder and event organiser. situations in which the contract contains Arbitration for Sport. such a force majeure clause.
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Force majeure: Swiss Law sense) by any of the regulations by circumstances not attributable of FIFA, and were that dispute to to the obligor”… As is confirmed by the CAS reach the appeals division of the jurisprudence discussed below, CAS, Swiss Law would be applied Certain key conclusions can be Swiss Law will likely be applied by the CAS (where necessary) drawn from the above: (or at least considered) when to interpret the relevant FIFA determining many of the football regulations pursuant to Article (a) Article 119 SCO does not seem related disputes that arise as a 57(2) of the FIFA Statutes,8 even if to allow for the suspension of result of the COVID-19 outbreak, a different governing national law is an obligation (as opposed to even if there is no reference specified in any applicable contract. its extinguishing) due to a force to Swiss Law in any applicable majeure type event; and, contract and if neither of the Thus, and for instance, were a parties are based in Switzerland. dispute to arise as to whether (b) under Article 119 SCO, in order That is for two reasons. a club’s COVID-19 related for an obligation to be deemed termination of a player’s contract extinguished, its performance First, if the applicable contract had been effected with “just needs to be impossible; and, does not specify any governing cause” under FIFA’s Regulations national law5 then: on the Status and Transfer of (c) under Article 119 SCO, the Players (Regulations), Swiss Law circumstances leading to such (a) were a CAS ordinary would be applied by the CAS impossibility must not be proceeding to arise in relation when considering / interpreting attributable to the obligated to such a case, Swiss Law what amounts to a “just cause” for party. would be applied by the CAS termination under the Regulations. further to Article R45 of the Whilst a defence based on CAS Code;6 and, Accordingly, Swiss Law may prove Article 119 SCO is possible, the to be of great significance to a jurisprudence of the Swiss Federal (b) were a CAS appeal proceeding football dispute in which a force Tribunal (SFT) makes clear that, to arise in relation to such a majeure argument has been raised. unsurprisingly, such a defence will case (i.e. an appeal against a However, strictly speaking, Swiss not easily be made out. decision of a FIFA decision- Law does not recognise a general making body), Swiss Law defence of force majeure. Thus, and for example, in its would very likely be applied decision 111 II 352, the SFT had to by the CAS pursuant to Article Swiss Law may decide whether a contractor could R58 of the CAS Code.7 escape its contractual obligations prove to be of great to construct a nuclear energy plant significance to a Second, were a dispute to arise because the Swiss Federal Council that is ‘covered’ (at least in a broad football dispute in which had suddenly instituted an export a force majeure embargo which made it impossible 5 As is not uncommon as regards player argument has been employment contracts. See, for example: for the contractor to comply with (1) CAS 2014/A/3735 Hapoel Tel Aviv v. raised its obligations. Nascimento at par. 80; and, (2) CAS 2014/A/3573 Manso v. Al Ittihad Club at par. 51. Nevertheless, Article 119 of the Whilst the SFT accepted that, due 6 Which provides, as is relevant, that: The Panel shall decide the dispute according Swiss Code of Obligations (SCO) to the embargo, the contractor to the rules of law chosen by the parties or, provides for a force majeure type was unable to meet its contractual in the absence of such a choice, according to Swiss law… defence, in stating that: obligations, the defence based on 7 Which provides, as is relevant, that: Article 119 SCO was nevertheless The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, “An obligation is deemed rejected. That was because the to the rules of law chosen by the parties or, extinguished where its SFT held that, as a company active in the absence of such a choice, according to the law of the country in which the federation, performance is made impossible in the field of nuclear energy, the association or sports-related body which has contractor should have recognised issued the challenged decision is domiciled or according to the rules of law that the that such an embargo could be Panel deems appropriate… 8 Article 57(2) of the FIFA Statutes provides that: suddenly instituted. Thus, given that Article 57(2) of the FIFA The provisions of the CAS Code of Sports- Statutes provides that Swiss Law is to be related Arbitration shall apply to the applied by the CAS when dealing with proceedings. CAS shall primarily apply the In addition to Article 119 SCO, Swiss appeals from the FIFA decision-making various regulations of FIFA and, additionally, bodies and/or given that FIFA is domiciled Swiss law. jurisprudence has recognised that in Switzerland, Swiss Law would very likely See further CAS Bulletin (2015/2), pp. 7-17 as sometimes there may be a change be applied by the CAS. to this issue.
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of circumstances (from those that Just as with Article 119 SCO, the case 58. …the legal concept of force existed when the contract was law of the SFT makes clear that a majeure is widely and entered into) that is so radical as to stringent test is to be applied when internationally accepted and, substantially alter the equilibrium determining whether a contract can in particular, is valid and of the contract. In extreme cases be terminated or modified on the applicable under Swiss Law… it may be unfair, and contrary basis of the doctrine of rebus sic to the principle of good faith, to stantibus. By way of example, in its Further, the Panel was clear that insist on the performance of the decision 122 III 97, the SFT held that: the principle of force majeure is original terms of the contract. In “well-established” at the CAS14 and such cases Swiss jurisprudence “…The clausula rebus sic noted that the CAS jurisprudence has recognised and developed the stantibus… very rarely leads states that: doctrine of rebus sic stantibus.9 to a judicial dissolution or adjustment of the contract, 60. …force majeure implies an The doctrine of rebus sic stantibus according to the practice of objective (rather than a provides a party with a right to be the Swiss Federal Tribunal personal) impediment, beyond discharged from an obligation (or (…) Such a solution is only the control of the “obliged even all of its obligations) under affirmed if the relationship party”, that is unforeseeable, a contract when extraordinary between performance and that cannot be resisted, and and unforeseeable events have consideration is disturbed as that renders the performance occurred which mean that a result of an extraordinary of the obligation impossible… performance of those obligations and unforeseeable change in cannot be expected by virtue of circumstances in such a way that However, it is equally clear that good faith.10 the creditor’s insistence on his the CAS has historically applied a contractual claim constitutes a stringent test when determining Typically, the following conditions downright usurious exploitation whether an event constituted force must be met for the doctrine of of the disproportion and thus a majeure. Indeed, the following rebus sic stantibus to apply:11 manifest abuse of rights.”12 comment of the sole arbitrator (Unofficial translation) in CAS 2006/A/1110 PAOK FC v. (a) a change in circumstances UEFA is often cited: must have occurred that has led to a fundamental distortion 17. …the conditions for the of the initial agreement; Force majeure: CAS occurrence of force majeure jurisprudence are to be narrowly interpreted, (b) the change in circumstances since force majeure introduces must not have been reasonably From the publicly available an exception to the binding foreseeable; jurisprudence, it appears that the force of an obligation. CAS has historically taken a civil / (c) the party seeking to rely on the Swiss Law approach when faced In accordance with those remarks, doctrine must not have accepted with force majeure arguments. the CAS panels have rejected force the risk of such a change That is to say that the CAS has majeure arguments made on each (implicitly or explicitly) at the previously considered the principle of the following grounds: time of making the contract; of force majeure to be of potential application notwithstanding the (a) a difficult financial and sporting (d) the change in circumstances (seeming) lack of any force majeure situation (asserted justification must not have been caused by clause within the relevant contract. for non-payment);15 the party which seeks to rely on the doctrine; and Thus, in CAS 2018/A/5779 (b) the club’s relegation to a lower Zamalek Sporting Club v. FIFA the division (asserted justification (e) the change in circumstances Panel considered a force majeure for non-payment);16 must have led to a significant argument without having cited any disparity between the parties’ clause in the contract,13 and having (c) the sudden resignation of obligations. held that: a number of a club’s office-
9 ‘Things thus standing’. 14 As to which, see the research of the authors 10 See SFT decisions BGE 93 II 185 and BGE 101 12 With further references to the SFT decisions below. II 17. BGE 100 II 345 and BGE 107 II 343. 15 CAS 2014/A/3533 Football Club Metallurg v. 11 See SFT decisions BGE 135 I 1 and 13 In that regard, see also CAS 2006/A/1110 UEFA. 4A_375/2010. PAOK FC v. UEFA. 16 CAS 2016/A/4692 Kardemir KD v. UEFA.
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holders which, it was argued, In dealing with the consequences Force majeure: the created “political turmoil” of that unilateral termination, the FIFA decision-making (asserted justification for sole arbitrator held that: bodies (and other sports non-payment);17 tribunals) 80. …the Egyptian civil war is an (d) the failure to secure a event of force majeure, which Of course, whilst the CAS bank guarantee (asserted is beyond the Parties’ control, jurisprudence is of critical justification for non-payment);18 which the Parties could not importance, within the world of have reasonably provided football, the decision-making (e) the alleged illegal blockage against before entering into bodies of FIFA are also crucial. of bank accounts (asserted the contract, which could not justification for non-payment);19 reasonably have been avoided Indeed, the FIFA decision- or overcome, and which is not making bodies consider hundreds (f) a “disease spreading among attributable to any of the Parties. of disputes each year. Thus, the team’s players” (asserted Under these circumstances, the unsurprisingly, they have on justification for the team’s non- Sole Arbitrator finds that the occasion been required to consider appearance at a match);20 and events which put an end to the force majeure arguments. 2012/2013 season, and which (g) the Ebola outbreak of 2014-2016 admittedly occurred on 1 April In that regard it should be noted (which led the Royal Moroccan 2013, prevented the Appellant that, similarly to the CAS, the Federation of Football to from performing all or part of FIFA decision-making bodies attempt to postpone the 2015 its contractual obligations. As have previously taken a civil African Cup of Nations).21 a result, and as of 1 April 2013, law approach to the principle of the Appellant must be released force majeure, and have therefore Indeed, at least based on from further performance of considered the principle of publicly available materials and the obligations concerned. force majeure to be of potential to the authors’ knowledge, a application notwithstanding the force majeure argument has lack of any force majeure clause only succeeded at the CAS The cited within the relevant contract.23 on one occasion,22 being CAS intervening 2014/A/3463 & 3464 Alexandria circumstances will Historically, and again similarly to Union Club v. Sánchez & Cazorla. have to be extreme if a the CAS, the FIFA decision-making force majeure bodies have stressed that a force That case concerned an argument is to majeure will only rarely succeed. employment dispute between succeed at the CAS Thus, in I v. Club B (2016) the an Egyptian football club and FIFA Dispute Resolution Chamber two football coaches. Due to (DRC) rejected the club’s argument circumstances related to political Thus, based on publicly available that the annulment of a league by events in Egypt, the 2012-2013 materials and to the authors’ the national federation amounted Egyptian football season was knowledge, an argument of force to a force majeure event such as terminated in April 2013 and the majeure has only previously to release it from its obligations to results of the Egyptian League succeeded at the CAS as a result the player. were cancelled. The coaches of the outbreak of (what the sole unilaterally terminated their arbitrator termed) a civil war. It In so doing, the DRC held that employment contracts. is therefore clear that (consistent the principle of force majeure is with the approach of the SFT) the generally (only) applicable to: cited intervening circumstances will have to be extreme if a force … unpredictable situations,
17 CAS 2016/A/4874 Club Africain v. Seidu majeure argument is to succeed at facts or circumstances that are Salifu. the CAS. extraordinary and unexpected. 18 CAS 2010/A/2144 Real Betis Balompié SAD v. PSV Eindhoven. 19 CAS 2015/A/3909 Club Atlético Mineiro v. FC Dynamo Kyiv. 20 CAS 2007/A/1264 FC Karpaty v. Football Federation of Ukraine & FC Metalist Kharkiv. 23 See for example the decision of the FIFA 21 CAS Bulletin 2016/1, p. 76. Dispute Resolution Chamber in I v. Club B 22 There may be other CAS cases that deal (2016) at par. 8 (at section I) and pars. 17-20 with force majeure arguments as not all CAS (at section II). See also Club P, / Player R and awards are made public. Club Z (2007) at par. 14 (at section II).
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Indeed, the authors are unaware COVID-19 outbreak represents a However, for this concept to of any award of a FIFA decision- force majeure event on the basis operate the Respondent needs making body in which a force of the FIFA Council’s declaration, to establish, inter alia, a causal majeure argument has succeeded.24 notwithstanding that football in link between the extraordinary, Belarus has continued as normal? unavoidable, and unforeseeable Notwithstanding the previous events and the impossibility of reluctance of the FIFA decision- Moreover, even if in due course the performance of the obligation. making bodies to hold a force FIFA decision making bodies treat Respondent has not satisfied majeure defence successful, on the COVID-19 outbreak as qualifying such requirement. In Claimant’s 7 April 2020 the Bureau of the FIFA as a force majeure event in all cases words, “the Respondent fails Council declared that (as regards concerning the status and transfer to specify what consequences the status and transfer of players): of players (in accordance with the of the pandemic make it above mentioned declaration), the impossible to fulfil the financial … The COVID-19 situation is, per consequences of the occurrence of obligation towards the se, a case of force majeure for that force majeure event as regards Claimant”. Indeed, Respondent FIFA and football.25 the particular dispute will remain to has not provided any argument be determined. or evidence whatsoever in this That declaration was made in regard. accordance with Article 27 of the FIFA has not yet published any Regulations, which provide that: decisions which consider force 96. The Club unlawfully majeure arguments related to terminated the Agreement by … cases of force majeure shall the COVID-19 outbreak, and thus letter of 14 October 2019. Such be decided by the FIFA Council guidance as to the likely approach unlawful termination was not in whose decisions are final. in relation to consequences must any way related to the Covid-19 be sought elsewhere. pandemic. An argument of Interestingly, neither that provision elemental fairness supports nor its predecessors had been In that regard it is perhaps helpful that a party that breached its utilised previously, notwithstanding to consider 1482/20 Surmacz contract should not benefit that force majeure arguments v. BM Slam Stal S.A. (Surmacz), from an extraordinary and concerning the status of players which is a recent decision of unforeseeable situation that have previously been made before the (long established and well happened only after the the FIFA decision-making bodies. respected) Basketball Arbitral breach... Tribunal (BAT). In that case, the In any event, in utilising that club had terminated the player’s In order to succeed provision, FIFA no doubt seeks to contract without justification. The in a force majeure reduce the scope for dispute as to player thus sought compensation, type argument, a whether the COVID-19 outbreak’s including a payment in respect of impact on a particular club-player the salary due under the contract, party will need to establish employment arrangement does, which had been intended to run how the intervening event or does not, amount to a force until the end of the season. Due to rendered performance majeure event. the COVID-19 outbreak, the season of the relevant had been prematurely concluded. obligation impossible However, whilst Article 27 is clear The club thus argued that, on (inter that the decisions of the FIFA alia) a force majeure basis, the The case of Surmacz would, with Council are final in that regard, it player should only be compensated respect to the club, appear to be will be interesting to see if the FIFA for the payments due under the a clear example of a party running Council’s declaration will be treated salary until the point at which the a force majeure argument on as being of universal application. season had in fact concluded. the basis of an irrelevant event. To posit a purposefully extreme Nevertheless, it serves as an example, would a Belarussian club In deciding the case ex aequo et important reminder that, in order succeed in an argument that the bono,26 the arbitrator rejected that to succeed in a force majeure argument: type argument, a party will need
24 Albeit, with respect to the parties in to establish how the intervening question, the factual bases on which such 95. …the force majeure concept event rendered performance of arguments have previously been run have, for the most part, been relatively weak. would be potentially applicable. the relevant obligation impossible. 25 See page 2 of the FIFA guidelines “COVID-19 Football Regulatory Issues”. 26 As required by the BAT Rules.
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Finally, and again as regards the majeure event,28 the extent to which All in all, it is difficult to see how a consequences that will result a party can claim relief on the basis flood of litigation will be avoided if a force majeure argument is of a force majeure type argument given the COVID-19 outbreak’s successful, we would note the in the context of a football related massive impact on the football decision of the BAT in 0529/14 dispute will inevitably depend on world. Feghali v. Cercle Sportif. That case the particularities of each case - predates the COVID-19 outbreak for instance: but concerned a situation in which a club in an employment dispute ➥➥ the impact of the COVID-19 with a player relied on the fact outbreak on the relevant region; that the basketball league had been suspended. Whilst accepting ➥➥ the economic situation of the that the suspension of the league relevant parties; amounted to an event of force majeure, the arbitrator did not ➥➥ the proportionality of any go on to hold that the club’s adjustment given the financial obligations under the employment relationship of the parties; contract were terminated as a result, but instead held, ex aequo ➥➥ the manner in which any such et bono, that that state of affairs adjustments were made (i.e. with served to reduce the damages or without warning, negotiation, that would otherwise have been consultation etc); and, payable to the player.27 ➥➥ whether parties in equivalent positions (e.g. all of the players at a club) have been treated Conclusions equally.
Thus, to summarise: It is difficult to see how a flood (a) Swiss Law recognises the of litigation will possibility of a force majeure type defence (whether by be avoided given the virtue of Article 119 of the SCO COVID-19 outbreak’s or the doctrine of rebus sic massive impact on stantibus); the football world
(b) The CAS and the FIFA decision- Accordingly, there is likely enough making bodies also recognise to encourage a party to a football the principle of force majeure related dispute which is subject to (and the CAS has on occasion Swiss Law or before the CAS or deemed such a defence to be a FIFA decision-making body to made out); make a force majeure argument, but there is also likely enough to (c) However, parties can expect encourage the corresponding that the test that will be applied party to dispute29 or, at least to in determining whether such a seek to mitigate, the point. defence is made out will be a
stringent one. 28 Particularly given FIFA’s recognition that the COVID-19 outbreak is a force majeure event (at least in the context of the contractual While it may seem difficult arrangements and transfer of players). to characterise the COVID-19 29 Albeit disputing that COVID-19 constitutes a force majeure event is likely to be much pandemic as anything but a force more difficult in disputes concerning the contractual arrangements and transfer of football players given that the FIFA Council has declared that, in those contexts, the COVID-19 outbreak does amount to a force 27 See pars. 44 to 50 of the award. majeure event (as explained above).
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England
(a) makes it impossible to For example, if the League Two perform the contract or makes season is curtailed then it would performance so radically seem that various contracts (for different that the obligations example in relation to matchday are effectively incapable of sponsorship) will be impossible to being performed; perform.
(b) was not caused by either of the Tom Seamer Barrister, Morgan Sports Law parties; and, The common London – England law doctrine of (c) was not foreseen by the parties. frustration is the closest English Law There is no doctrine of force Unsurprisingly, the doctrine equivalent to the majeure under English statute or of frustration is rarely invoked civil law doctrine of English common law. However, it successfully. force majeure is not unusual for contracts subject to English Law to include a force As regards the COVID-19 pandemic majeure clause which will (or should) and the resulting lockdown, it is Finally, it should be noted that define the events or circumstances clear that the second of the above where a contract is deemed to which amount to force majeure listed criteria is met, and it may have been frustrated, one of the such as to excuse a party from very well be that the third of the parties may be able to make performing their obligations. Such above criteria is met in a particular a claim under the Law Reform contractual clauses clearly cannot case. (Frustrated Contracts) Act 19431, be considered in the abstract, and in order to ensure that the other thus cannot be considered here. That thus leaves the first criterion. party is not unjustly enriched as a The impossibility (or incapability) result of such frustration. The common law doctrine of test obviously represents a high frustration is the closest English Law hurdle. Whether it can be cleared equivalent to the civil law doctrine will depend on the facts of a of force majeure. A contract will be particular case. However, one can held to be frustrated when an event imagine circumstances in which it occurs which: may well be deemed to be met. 1 www.legislation.gov.uk
Spain
Force majeure needs to be proven Roughly speaking, the Spanish Civil when it comes to legal relationships Code states, in Article 1105, that a but the so-called “state of alarm” force majeure event is an event that that the Spanish Government is extraordinary, unpredictable and declared on 13 March (that started that even if it could be predicted, on 16 March and ended on 21 June) would be impossible to avoid. The and the subsequent lockdown of Supreme Court, as far back as most of the markets, services and 1965, decided that the event must Juan de Dios Crespo Pérez industries but for the necessary be unpredictable and unavoidable. Lawyer, Ruiz-Huerta & Crespo Sports Lawyers ones (hospitals, pharmacies, Valencia – Spain canine centers, food distribution, etc.) should be seen as a force majeure event.
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Germany
Actually, under German Law (both can be held liable for), whereas the in state law as well as in football consequences of such categorization regulations), we do not have an are different, depending on the type exact definition of force majeure, of contract. In some contracts, in even though, basically, we know and particular including employment apply this legal principle. At least in contracts, the risk of force majeure is terms of existing contracts (for new burdened to one party, which is why - ones, the view might be a different despite the temporary inability of the Joachim Rain one, since now we know about the clubs to employ the players - they Lawyer, Schickhardt Rechtsanwälte Ludwigsburg – Germany possibility of such pandemic with are not released from their obligation the effect that its return may not be to pay the players’ salaries. considered as an unforeseen fact any more), the COVID-19 pandemic will be considered to be force majeure (i.e. an impact on the ability of the parties to fulfil their contractual obligations that none of the parties
Italy
First and foremost, it must be When the impossibility is only emphasised that the Italian Civil temporary, pursuant to Article 1256, Code does not define the concept par. 2 of the Italian Civil Code, the of force majeure, which is left to debtor cannot be considered liable the interpretation adopted by the for the delay. The debtor shall jurisprudence, according to which fulfil the obligation as soon as the force majeure must be understood relevant impossibility has ceased, as “an objective impediment unless the enduring impossibility Paolo Lombardi which determines an event that is results in the creditor no longer Lawyer, Lombardi & Associates Edinburgh – Scotland not attributable to the debtor (not being interested in the performance. even by way of fault), is inevitable and unpredictable” (Cass. Civ. Furthermore, Article 1258 of the no. 6213/2020). Nonetheless, Italian Civil Code states that if the Italian civil system provides only part of the obligation has different remedies if cases of force become impossible, the debtor is majeure occur. released from the whole obligation by performing the part that has In particular, according to Article remained possible. In such a case, 1256, par. 2 of the Italian Civil the consideration shall be reduced Code, when the performance of accordingly. The creditor is also Luca Pastore Lawyer, Lombardi & Associates a contractual obligation becomes entitled to terminate the contract Edinburgh – Scotland impossible for reasons not if he has no interest in such a attributable to the debtor, the partial performance of the original obligation shall be considered obligation, as per Article 1464 of extinguished. In such a case, the the Italian Civil Code. counterparty cannot request any consideration, as per Article 1463 An additional remedy provided by of the Italian Civil Code. the Italian Civil Code is contractual termination, which may be
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invoked when a contractual makes the performance of the debtor. On the contrary, any obligation becomes too onerous contractual obligation impossible, such temporary impossibility or due to extraordinary causes that regardless of the conduct of the excessive onerousness shall be were not predictable when the party obliged” (Cass. civ. sez. II, proved by the party who wishes to parties undertook the original 11 January 1982, no. 119). rely on such remedies: the debtor obligations. If the party obliged should therefore prove how the to fulfil the obligation that has The jurisprudence has also impediment has affected the become “excessive” demands confirmed the applicability of performance - or the performance the termination of the contract, the above-mentioned provisions tout court - of the contractual the counterparty is allowed to to employment-related disputes obligations. In addition, the Judge avoid such termination by offering (Cass. civ. sez. lav., 1 June 2009, would consider the conduct of the an equitable adjustment of the no. 12721). debtor in relation to the contractual contractual conditions which have obligations and the degree of become excessively burdensome Without prejudice to the above, diligence used by the debtor once (Article 1467 of the Italian Civil it must be emphasised that under the event has occurred. Any such Code). Italian Law the interruption of assessment would be performed football activities due to the on a case-by-case basis. According to the case law, “the COVID-19 emergency does factum principis, suitable to not automatically determine exclude the liability for the breach, the impossibility to execute can be identified in a legislative the contractual obligations or administrative order, dictated and therefore the exemption by general interests, which or limitation of liability for the
France
sportsmen/coaches and their conclusion of the contract and clubs, states that: “(...) the contract whose effects could not be avoided (...) may be terminated before the by appropriate measures, prevents end of the term only in the event of performance of his obligation by serious misconduct, force majeure the debtor. (...).” This constitutes a legal ground that authorizes contractual The legal effect of force majeure parties to terminate a fixed-term is set out in section two of François Klein contract before its expiry date. Article 1218, which presents two Lawyer, KGA Avocats Paris – France different situations in which force Although the Labor Code majeure clauses can be triggered mentions force majeure, it does if the prevention is temporary, Force majeure is notably mentioned not define it, nor does it provide the performance of the obligation 28 times in the French Labor criteria to clarify its legal nature. is suspended unless the delay Code, in particular concerning the Notwithstanding this, “contractual which results justifies termination early termination of fixed-term force majeure” is specified, in of the contract. If the prevention employment contracts. It should Legislative Order no. 2016-131 of is permanent, the contract is be noted that these force majeure 10 February 2016, which created terminated by operation of law, provisions also apply to the a new version of Article 1218 of and the parties are discharged employment contracts of players the French Civil Code, which says from their obligations. and coaches, as stated in the that in contractual matters, there French Sports Code. For instance, is force majeure where an event Article L. 1243-1 of the French beyond the control of the debtor, Labor Code, which governs the which could not reasonably have employment relationship between been foreseen at the time of the
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Belgium
criterion, i.e. whether the factual or “fait du prince” will more likely situation could be qualified as be deemed a valid exoneration of an “irresistible” event? In that the performance of parties’ mutual respect, it is to be noted that an contract obligations. event that renders the execution of a contractual obligation more This explains why all sports difficult yet not impossible, does governing bodies in Belgium have not qualify as a force majeure event. made their decision (to suspend Sébastien Ledure Lawyer, Cresta Firm Therefore, the application of the or cancel the remaining part Brussels – Belgium force majeure theory depends on a of the 2019-20 season) subject factual assessment and hence has to a prior decision by Belgian There is a wide-spread consensus a strong jurisprudential character, federal Government to forbid the to consider that the civil law-based whereby the appreciation of the organisation of sports events. principle of force majeure applies judge or panel is paramount. These factum principis decisions to the outbreak of the COVID-19 were taken on 12 March and 13 May crisis in March 2020 in Belgium. In particular, if the absolute 2020 by the Belgian National Belgian case-law requires the impossibility to pursue the Security Council. existence of an unpredictable and execution of contract obligations irresistible event that is not due to is imposed on parties by means the parties’ behavior. Obviously of a decision of a superior in March 2020, the most relevant authority (in this case the federal question related to this second Government), this factum principis
Scotland
Force majeure is not generally When Scotland was placed in provided for in Scottish Law, and lockdown due to the pandemic it requires a specific clause to be was anticipated that the restrictions included in a contract. The common would last from mid-March for at law doctrine of frustration can apply least 12 weeks, possibly longer. This when a contract does not contain a meant that football, even behind suitable force majeure clause. closed doors, would not be possible during this time. This impossibility Ian Laing Frustration has traditionally been to fulfil fixtures during this period Lawyer, Lombardi Associates Edinburgh – Scotland interpreted narrowly by the led to discussions that in order to Scottish courts. A party’s ability restore certainty for clubs, it may to perform their obligatons must be sensible to conclude the season be rendered impossible through and not attempt to start playing circumstances unforeseen by the the remaining fixtures from the parties and not as a result of a unknown date when restrictions breach of an agreement by a party. are lifted.
James Mungavin Lawyer, Lombardi Associates Edinburgh – Scotland
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Force Majeure
Denmark
Force majeure is a recognised with the relying party. If a party principle of Danish Law which to a contract seeks to rely on the implies that a party to a contract occurrence of a force majeure event will not be liable for any failure to which terminates or suspends the perform its contractual obligations party’s contractual obligations, the if the performance of the party must notify the other party obligations is rendered impossible hereof as soon as possible. by the occurrence of extraordinary Lars Hilliger Attorney-at-law, Advice Law Firm events which the party concerned There are no apparent examples of Copenhagen – Denmark neither could nor ought to have Danish clubs that have sought to foreseen, prevented or resisted. rely on the force majeure clause as Typical examples of force majeure an excuse for deferring or cutting events are outbreak of war, riot, players’ salaries. embargo and natural disasters.
In general, the threshold of seeking to rely on force majeure is very high, and the burden of proof lies
Brazil
There is no provision concerning In my opinion, the COVID-19 force majeure in the CBF’s pandemic can be considered as Regulations, nor in the Law no. a hypothesis of force majeure. 9.615/1998 (known as “Lei Pelé”, However, the party who invokes the which institutes general rules on occurrence of force majeure should sport and makes other provisions). not use this argument in generic terms. For this reason, when the The principle of force majeure legislator set forth the “necessary Daniel Cravo Souza Lawyer, Cravo, Pastl e Balbuena is set forth in the Article 393 of fact”, this fact must be linked with Porto Alegre – Brazil the Brazilian Civil Code, which the absolute impossibility which provides: affected the chance to comply with the obligations established “Art. 393. The debtor shall in the contract. In short: in this not be liable for damages line of understanding, there is the resulting from unforeseeable necessity to combine elements circumstances or force majeure such as the normal diligence of if he has not expressly been the party; the impossibility and held liable for them. unpredictability of the event; the untying with the activity exercised; Sole Paragraph. Unforeseeable and, not least, the specific situation. circumstances or force majeure occurs in the necessary fact, which effects could not be avoided or prevented.”
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China
In addition, it is also required that Following the issuance of such FIFA a party who cannot perform the Guidelines on 8 May 2020, the CFA contract due to a force majeure also published a document, the so event shall immediately notify called “CFA Proposal” addressed such circumstance to the other to all Chinese football stakeholders, party, in order to reduce the aimed at inter alia guaranteeing the potential damage that might be contractual stability between clubs occasioned, as well as provide and employees, the financial stability Giandonato Marino evidence about such impossibility of football clubs and a fair procedure Lawyer, Llinks Law Offices Shanghai – China within a reasonable deadline. for salary reductions of players and coaches (CFA Proposal).3 Bearing this in mind, although pandemic or lockdown are not In the CFA Proposal, which is in line expressly mentioned in the law, with the FIFA Guidelines, the CFA it is common practice that those firstly encourages football clubs events tend to fall under the to inter alia negotiate and reach umbrella of events of force majeure agreements in good faith with - provided that they comply football players and coaches for the with the requirements above. adjustment of remuneration during
Tomás Pereda Rueda However, unless there is a specific the suspension period. As of today, Lawyer, Llinks Law Offices clause in the contract listing such in China there is neither a players’ Shanghai – China particular events as well as the union nor any mechanism for consequences, each case should collective bargaining. Therefore, be analysed independently in clubs, players and coaches, Under Chinese Law, the concept order to determine if it actually under the instructions given in of force majeure is regulated falls under the scope of force the CFA Proposal, are advised under Articles 94, 117 and 118 of majeure and, therefore, if a party to adopt salary adjustments the “Contract Law of the People’s (or the parties) may be partially or through negotiation according to Republic of China”.1 According entirely relieved from contractual the procedure regulated under to this regulation, a force majeure liability. “Chinese Labour Law”. scenario refers to the occurrence of an event which objectively On the other hand, in the event Such procedure consists in the complies with the following criteria: a party is late in performance parties holding a negotiation before a force majeure event procedure based on the principle ➥➥ The event could not reasonably occurs - even though such force of equal representation. In such have been foreseen or provided majeure then prevents that party process, the club may have all its against; to perform its obligations, it is very players and coaches present at likely that such party will not be the negotiation (or they can select ➥➥ The event must be beyond released from the liabilities that representatives to participate on the reasonable control of the might be triggered by the delay in their behalf) and the two sides affected party, so the effects the performance. will then negotiate the clubs’ therefore could not be avoided; proposal for the adjustment of and, It is a common fact that many clubs remuneration. at a worldwide level are negotiating ➥➥ The event materially affects or have already adjusted the In addition to that, the CFA goes the ability of one or more of contracts (i.e. remuneration, term, further and recommends to clubs the parties to perform their loans, etc.) of their employees, in the amounts and duration of the contractual obligations, and/or accordance with their national salary reductions: reductions from makes the performance of the regulations, collective bargaining 30 to 50% of remuneration for the contract impossible.2 agreements (on a club or league period starting from 1 March 2020 basis), and/or the FIFA COVID-19 3 English name: “Proposal for Professional 1 www.gov.cn Guidelines issued on 7 April 2020 Football Clubs, Players and Coaches 2 In China, the economic risks are not included (FIFA Guidelines), among others. for Salary Adjustment and Overcoming within the force majeure events. Difficulties”, link in Chinese: www.thecfa.cn
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until one week before the kick- In light of the above, we consider the regulations of the country. off of the professional leagues in that it would be very complicated Bearing this in mind, considering China for the season 2020. Another for players - both national and that Chinese clubs follow the health option available for football clubs foreigners - to refuse salary requirements requested by the would be to postpone the payment reductions and then obtain CFA and competent authorities, of remuneration - to amounts no compensation before tribunals, as if a player and/or coach refuses higher than 30% - until 90 days after long as the measures applied are to provide services for the club, the start of the relevant league.4 reasonable and made in accordance (unless the player/coach proves with the CFA Proposal (and/or FIFA any deficiency committed by the According to statements provided Guidelines). So far, according to the club) the club could impose the by the President of the CFA, media, quite a few Chinese clubs pertinent disciplinary sanctions Chen Xuyuan, it seems that the have applied salary adjustments to according to the contracts and/or content of such CFA Proposal players and coaches. internal regulations of the club, as has been coordinated with FIFA, the case might be. which somehow is supporting With regards then to a refusal to the initiatives taken to safeguard train and/or participate in matches, contractual stability in Chinese under some circumstances players football, as well as the financial and coaches can refuse to train viability of Chinese football clubs. 5 or play over security concerns. According to Article 54 of the 4 The CFA also set some limitations to these “Labour Law of the People’s reductions and/or delays in payment, stating that remuneration should not be adjusted Republic of China”, an employer for players/coaches with monthly salaries shall provide its workers with a lower or equal to RMB 10,000 net (approx. EUR 1,300), nor delayed to those parties safe labour environment, hygienic with monthly salaries lower or equal to RMB conditions and necessary articles 20,000 net (approx. EUR 2,600). 5 www.chinadaily.com.cn for protection in conformity with
Saudi Arabia
Force majeure is recognized under and players/coaches) have initially national laws of KSA, namely anticipated in the respective Sharia principles. Under Sharia employment agreements. This principles, force majeure can be is not attributable to any of permanent with regards to the the parties, but is rather an impossibility of performing the unforeseeable situation. relevant obligations and results in the termination of the contract. Although force majeure needs to be Bandar Al Hamidani Also, Sharia principles foresee assessed on a case-by-case basis, Lawyer, Al Tamimi & Company situations of a temporary state it is our opinion that in principle Riyadh – Saudi Arabia of emergency which results in the COVID-19 pandemic and the the suspension of the relevant lockdown can be deemed as a contractual obligations during a situation of temporary emergency certain period of time. under Sharia principles, which is similar to (temporary) force Currently, football competitions are majeure in other jurisdictions. suspended in the Kingdom of Saudi Arabia and training sessions are prohibited. Circulation of people is Pedro Castro also very limited in the country due Lawyer, Al Tamimi & Company to the lockdown imposed by the Riyadh – Saudi Arabia Saudi Government. Accordingly, contractual obligations cannot be performed as the parties (i.e. clubs
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UAE
Force majeure in its widest Article 151 of the UAE FA states that definition is a clause or a provision the board of directors has the right in a contract or regulations that to decide regarding the cases of excuses a party from not performing force majeure. its contractual obligations that become impossible or impractical, COVID-19 was clearly considered due to an event or effect that the as a case of force majeure as it parties could not have anticipated led to the postponement of the Saleh Alobeidli or controlled. The COVID-19 competition and affected the Lawyer, Saleh Alobeidli Advocates & Consultants pandemic most likely constitutes contracts between the players Dubai – UAE a case of force majeure under the and the clubs, the sponsorship UAE national laws, specifically contracts, the ticketing side as Article 273 of the National Civil well as every other aspect related Law: “if a force majeure occurs, to the sport of football. This made it makes the implementation of FIFA issue Circular no. 1714 and the the obligation impossible, and the UAE FA decide to issue a letter contract is dissolved on its own. containing the steps to be taken And If the impossibility is partial, due to coronavirus. the debtor is excused of the amount corresponding to the impossible portion.”
Cameroon
be reasonably foreseeable at permanently. The COVID-19 issue the date of conclusion of the will therefore be examined on a contract; and (3) irresistibility, it case-by-case basis according to must be unavoidable and render the realities experienced by each the performance of the contract country. The cumulative conditions impossible. raised are generally strictly evaluated by courts. Thus, clubs Currently, views are diverging as that have decided to suspend their Jean-Jacques Nouyadjam far as the qualification of COVID-19 activities or payments based on the Lawyer, Nouyadjam Associates Yaounde – Cameroon as a case of force majeure is qualification of the pandemic as concerned. This is grounded by the force majeure, are likely to be held fact that the three aforementioned liable when the above conditions The Cameroonian Civil Code conditions are not cumulatively are not met. In the domain of recognizes force majeure as an met. The condition of externality football, this issue has been settled event that can make the execution and unpredictability are met by FIFA, which has qualified it as a of contracts difficult. Generally, for for contracts concluded before case of force majeure. In contrast an event to be qualified as force December 2019 at the start of to ordinary law, force majeure majeure, three conditions must the crisis in China, on the one does not automatically lead to be cumulatively fulfilled, namely: hand. But on the other hand, the the termination of the contract (1) exteriority, the event must be condition of irresistibility requires between clubs and players. beyond the control of parties; that performance of the contract (2) unpredictability, it must not is impossible, either temporarily or
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In order to guarantee some form of salary payment to players and coaches, avoid litigation, protect contractual stability and ensure that clubs do not go bankrupt due to the financial impact of COVID-19, FIFA strongly encourages clubs and employees to work together to find appropriate arrangements for the period when competitions are suspended. Said agreements must address aspects related to: remuneration and other benefits, government assistance programs and conditions related to contract extensions, amongst others. In Circular no. 1714, FIFA also adresses the importance of the proposed adjustments being made in the sphere of collective law, with agreements that include a plurality of players. On the other hand, unilateral decisions will only be recognized or validated when so permitted by specific national legislation or under the aegis of collective labor agreements. it is necessary to emphasize that one of the guiding principles of FIFA is that the domestic laws of each member state must be observed in the resolution of conflicts, especially in relation to labor rights. In fact, by bringing together a complex mosaic of 211 affiliated nations, each with its own legal system emanating from its national State, it is impossible for FIFA to monitor each country individually or interfere in local legislative realities.
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The percentage of professional footballers reporting sympots of depression has doubled
Interview with Jonas Baer-Hoffmann General Secretary, FIFPRO Hoofddorp – The Netherlands
The number of professional footballers reporting symptoms of anxiety and depression has risen sharply since measures to reduce the spread of the coronavirus COVID-19 caused the suspension of professional football activities, according to a survey carried out by FIFPRO and Amsterdam University Medical Centre. Between 22 March and 14 April, FIFPRO and affiliated national player associations surveyed 1,602 professional footballers in countries that had implemented drastic measures to contain the spread of the coronavirus such as mass home-confinement. 1,134 male players, with a mean age of 26, and 468 female players, with a mean age of 23, took part in the survey. 22% of women players and 13% of men players reported symptoms consistent with a diagnosis of depression. 18% of the women and 16% of the men reported symptoms consistent with a diagnosis of generalized anxiety.
What is the state of mind of reported symptoms consistent Players feel the responsibility of football players at the moment? with a diagnosis of depression. putting on a great performance. Maintaining their fitness while Generally players are under a lot of Players want to play, but they are in lockdown is challenging, and stress and pressure: most of them also concerned about their health without proper facilities or the have not received the salaries due and the health of their loved ones. ability to compete against others it to them, either in part or in full; is impossible to be match fit. Yet there is a lack of clarity in many The open-ended questions they know when football begins countries, federations and clubs around the economy, competition again, they’ll be expected to as to what is expected from the calendar, and job security are issues perform at an elite standard. This players; players have not been all players are contending with. adds mental and physical pressure able to perform their work as they to an already challenging and are used to, only training alone There is a wide disparity in how stressful situation. until very recently (and in many players are receiving information countries it is still the case). about the ever-changing situations Naturally, the health of the players in their countries and their football and everyone in the game comes The percentage of players reporting club. Some get frequent updates; first. FIFPRO has developed a symptoms was significantly higher some get almost none. Leaving return to play protocol that it has among those worried about their such key people isolated at shared with all its members, in future in the football industry, such a perilous time is not only order to provide guidance on what the survey found. In a separate disappointing, but also extremely should be the minimum standards survey of 307 players, with a short-sighted in the development and what aspects should be taken similar mean age, in December of a just and sustainable long-term into consideration. 2019 and January 2020 - before industry. most football competitions were Players are by far not the only ones suspended – 11% of the female One thing all players have in being exposed by return to play players and 6% of the male players common is that they love to play. scenarios. Specific considerations
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must without a doubt include mentioned above, overloading may, football industry itself to develop club staff, match officials, third- amongst other health concerns, a new deal for solidarity and parties and the general public. lead to stress on the immune income redistribution to safeguard However, there is also no question system, making players possibly a diverse and rich footballing that players are at the centre of more vulnerable to COVID-19. landscape across countries, must any return to play protocols as Therefore, even given the economic be created. they are exposed to specific risks and sporting urge to finish sporting in both training and competition seasons, a responsible stakeholder A significant environments. agreement for the scheduling of number of clubs, matches with appropriate rest in more than half Any return to play scenarios for periods needs to be found. training and competitions must a dozen countries, have be developed in coordination begun to immediately with the player unions and in In many countries, players are lay off players or close consultation with players. suffering unilateral salary cuts? unilaterally reduce Fortunately we have some good Can you give us your thoughts on their salaries examples of good cooperation. this? What caught our attention was If minimum requirements for return Many players are being put under that, in some countries, the to play cannot be guaranteed by pressure to accept salary cuts, decision to have a salary reduction clubs and competition organizers, sometimes even applicable after was just a couple of days after the footballing activities cannot the resumption of the tournament. stoppage of football. So, without resume in order to protect the any financial impact yet, some health and safety of everyone These proposals must be considered clubs were unilaterally deciding to involved, including the public. in the true context of football. reduce the salary of the players, According to the 2016 FIFPRO and already ceasing to pay the FIFPRO is engaged in expert Global Employment Report, 45% monthly salary of March (half dialogue with the World Health of professional male footballers of which was played). This was Organization, independent medical had a monthly salary of USD 1,000 very worrying. Decisions like this experts, player union officials from or less, with 41% receiving late pay cannot be taken unilaterally, and other sport codes and especially at some point in the previous two also, in order to study whether international football stakeholder years. The average contract length they are necessary, there needs to bodies in an effort to establish was less than two years. For female be transparency, which is normally common best practice and players, the situation is even worse: not there. The key question is guidelines for domestic application. the 2017 FIFPRO Women’s Global whether it is necessary to do it. Employment Report found 60% of The situation and timelines to female professional players earned While we are encouraged by gradually lift current restrictions less than USD 600. So, contrary to football stakeholder cooperation of public life and the economy what is sometimes suggested, it is at an international level, we are are country specific. It is therefore not an easy decision to accept a extremely concerned that a a task for national football salary reduction, it is not really an significant number of clubs, in more stakeholders to identify tailored option sometimes. than half a dozen countries, have return to play protocols at a begun to immediately lay off players domestic level. It must be considered as well or unilaterally reduce their salaries. that players are workers first and The health of the players needs to professional athletes second. We call on clubs with short- be looked at not only in relation to As much as clubs provide for term financial difficulties to meet the COVID-19, but also to prevent an economic activity and are with national player unions to injuries caused by player workload therefore businesses first and social negotiate fair and proportionate and match calendar congestion. enterprises second. There are arrangements which respect their responsibilities of the employers legal obligations, and equally The “At the Limit Report”, released that cannot just be lightly put on address the interests of both by FIFPRO in 2019, makes a series the employees’ shoulders. employer and employee. of key recommendations to protect the health of players, and make sure On top of applicable government There are various examples of they can perform at their peak. As support, dedicated action from the abuse. In Indonesia, two weeks
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after suspending the top two professional leagues, low salaries, leagues on 15 March, the Football narrower scope of opportunities, Association of Indonesia (PSSI) uneven sponsorship deals and less passed a resolution which allowed corporate investment, the fragility clubs to reduce player salaries of the women’s football eco- by 75% from the start of March. system is exposed by the current The PSSI took this decision after situation. The lack of written discussions with the league and contracts, the short-term duration the clubs, but without informing of employment contracts, the lack the union, let alone inviting it to of health insurance and medical negotiate on behalf of the players. coverage, and the absence of basic During this crisis, we have seen that worker protections and worker’s in many football associations the rights leaves many female players governance of football is not fit for - some of whom were already purpose. They completely ignore teetering on the margins - at great players while issuing resolutions risk of losing their livelihoods. It would be that affect basic labour rights. inhumane for players The PSSI resolution in particular like Troy Deeney to intervenes in employment relations Do you think that players can face disciplinary sanctions without even having the decency refuse to train or play over if they refuse to return to invite the player union to the security concerns? to action amid the table. pandemic in order to The idea that someone may be protect their family Moreover, we have seen even potentially punished in such a harsher approaches to women’s pandemic for trying to protect a football (as in the case of some family member’s health is inhumane clubs in Colombia) where the and not acceptable to us. current situation is likely to present an almost existential Each specific case should be threat to the women’s game if no considered, but health should be specific considerations are given above everything else. to protect the women’s football industry. Due to its less established
"A number of clubs and their many top players have made very players have engaged in very significant donations to charities constructive discussions leading and funds set up to support efforts to players accepting not to be paid to fight COVID. for a number of months, deferring wages or accepting significant One of the things this crisis is wage cuts. This is a sign that demonstrating is the opportunity, players understand the magnitude and the need, for clubs and players Charlie Marshall of the crisis and the impact it has to collaborate in a different way Chief Executive Officer, European on their clubs. When I talk with going forwards. This can be a very Club Association (ECA) Nyon – Switzerland ECA Member Club, many have progressive and beneficial thing been very complimentary about for the future of football." how players have reacted at this time. I should also highlight that
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The Netherlands
No Club(s), no Glory Lowering players’ salaries due to the COVID-19 crisis: a football club’s right or a player’s duty?
By Jaimy Vanenburg Attonrey-at-Law, Holla Advocaten And Sjoerd Vincenten Paralegal, Holla Advocaten Eindhoven – The Netherlands
Due to the effects of the COVID-19 virus, there was uncertainty as to whether the Dutch football season could be completed and if so, when those matches would be played. On 21 March 2020, the Dutch Prime Minister announced that all events requiring a permit - including official football matches, even if played behind closed doors - would be prohibited until 1 September 2020. Not only does COVID-19 affect hundreds of football players, training staff and other employees, who are currently unable to do their job, it also puts pressure on the general financial stability of clubs. Necessarily, questions are being raised about possibilities to compensation for losses suffered and expected, e.g. by lowering players’ salaries. This article discusses the possibilities of such actions in the Netherlands: “Do football clubs have the right to lower player salaries or can this only be initiated by the players themselves?”
FIFA Guidelines regarding member associations.2 In terms ➥➥ Unilateral decisions to change COVID-19 of making amendments to employment contracts shall players’ employment contracts only be recognised when these Several clubs in other European regarding salaries, FIFA are in line with national laws countries - who face similar recommended the following and collective agreements.4 challenges due to the virus principles (among others): - have already lowered their The above principles are general, players’ salaries. 1 However, due ➥➥ Clubs and employees are non-binding and interpretative to to differences in national laws, it encouraged to jointly agree on member associations. Although differs from country to country the terms of employment during FIFA “expects the necessary level whether a club can do so. As a the period that the competition of cooperation and compliance prominent football governing is suspended. Preferably, this is with this document from the body, FIFA drafted guidelines to done in the form of collective mitigate the potential problems agreements on a club or even 4 If clubs and workers do not agree and national caused by COVID-19 and to competition level.3 law does not provide a definitive answer to the situation, unilateral decisions to change harmonize the response of different the terms and conditions employment contracts will only be recognised if they are 2 COVID-19 Football regulatory issues version taken in good faith and if the agreements 1.0, FIFA.com, p. 2. are reasonable and proportionate; COVID-19 3 COVID-19 Football regulatory issues version Football regulatory issues version 1.0, FIFA. 1 https://nos.nl 1.0, FIFA.com, p. 6-7. com, p. 6-7.
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Member Associations and other Acquiring players’ This term can be included in the football stakeholders”, the Royal permission employee’s individual employment Dutch Football Association contract or in the collective labour (KNVB) is under no obligation The preferred route for employers to agreement (which in turn applies to follow these guidelines since lower salaries is to obtain approval to the individual employment players’ employment contracts are from its employees. An interesting contract). It is important to note - as mentioned in the principles example was set by German club that the Dutch Supreme Court has cited - subject to national law.5 Borussia Mönchengladbach, where indicated that a “written term”, as players themselves suggested lower stipulated in Article 7:613 DCC, refers salaries.9 At the time of writing, to collective rather than individual initiatives like these - both at the changes to employment contracts Dutch Employment Law individual or collective level - have (thereby contrasting with Article not happened in the Netherlands 7:611 DCC, which will be addressed In discussing the possibilities of (yet). In this regard, the chairman below).12 On a more practical note Dutch employment law regarding of the Dutch Players’ Union, Evgeniy regarding the application of Article lowering players’ salaries, it is Levchenko, underlined that the idea 7:613 DCC, it is not a given that a important to keep in mind the of lowering players’ salaries must football club’s business interests will emergency measures the Dutch not turn into a moral duty imposed be considered ”substantial”, since government has taken so far by society: “Not all footballers the club’s interests are to be weighed concerning the COVID-19-crisis. have contracts like Lionel Messi or against the players’ interests.13 An Companies - and thus football Cristiano Ronaldo (…). Dutch first employer will be allowed to proceed clubs as well - may apply for the division players [the second tier in with his suggested collective, NOW-regulation, should they the Netherlands] sometimes only unilateral amendment, based on expect to lose a minimum of 20 % have salaries of a few thousand an application of the principles of of their turnover compared to euros.”10 Although this principle reasonableness and fairness, the last year. As a result, when a club is understandable for the lower- employees’ interests are to be expects this decrease in turnover, earning group, a voluntary pay-cut regarded as inferior to those of the a percentage of the clubs’ (net) could turn out very helpful if those employer.14 In short, it depends on salaries will be compensated by players with (much) higher salaries the situation of a particular football the government.6 Notwithstanding contribute when their respective club and their players’ interests the above, it could still very well be clubs run into financial difficulties. whether a unilateral, collective that clubs - even after they receive For the sake of argument, this does amendment of player contracts due government support - want and/ not only apply to football players, to the effects of the COVID-19-virus or need to lower players’ salaries. but to high-earning employees in is reasonable. In principle, employment contracts many other sectors all over the cannot be amended without the world as well. approval of the employee, due to In the absence of unilateral the fact that salary is one of the option clauses primary terms of employment Based on contractual terms under Dutch Law: it is considered In the absence of the aforementioned an essential working condition.7 Article 7:613 of the Dutch Civil term in the employment contracts, Therefore it is not self-evident that Code (DCC) provides another two possibilities to lower players’ players’ salaries can be lowered legal opportunity to lower players’ salaries remain. An employer unilaterally.8 Still, a number salaries. This article provides a legal can try to force a reasonable of possibilities exist to lower basis for employers to include a amendment upon a player’s players’ salaries - collectively and specific, written contractual term individual employment contract by unilaterally - under Dutch Law. in their employment contract means of applying the standard of that allows it to make unilateral being “a good employee” (Article
5 COVID-19 Football regulatory issues version amendments to employment 1.0, FIFA.com, p. 2. contracts when “substantial 6 The total amount of compensation depends 11 on the amount of turnover losses compared business interests” require this. to last year. 12 E. Verhulp, in: T&C Burgerlijk Wetboek, art. 7 HR 11 July 2008, ECLI:NL:HR:2008:BD1847 7:613 BW (online, bijgewerkt tot 4 februari (Stoof/Mammoet), r.o. 3.3.3. 9 https://nos.nl 2020). 8 W.A. Zondag, in: Sdu Commentaar Burgerlijk 10 Freely translated (by authors interpretation): 13 HR 29 November 2019, ECLI:NL:HR:2019:1869. Wetboek Boek 7, Art. 613 (online, bijgewerkt https://nos.nl 14 E. Verhulp, in: T&C Burgerlijk Wetboek, tot 22 februari 2019); N. Zekic, ”All is fair 11 E. Verhulp, in: T&C Burgerlijk Wetboek, art. art. 7:613 BW (online, bijgewerkt tot 4 in love and crisis? Loonoffers en goed 7:613 BW (online, bijgewerkt tot 4 februari februari 2020); HR 29 November 2019, werknemerschap”, TAP 2016/77. 2020). ECLI:NL:HR:2019:1869.
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7:611 DCC).15 The Supreme Court given circumstances will have together in a spirit of cooperation considered that a good employee an unacceptable outcome (here: and togetherness with the overall is generally obliged to respond the obligation to continue salary well-being of the European game positively to reasonable proposals, in payments to players despite always in mind”, more relevant which the employer takes account of a crippling financial situation than ever.21 the changed circumstances and the caused by COVID-19), the court employee’s interest in maintaining may disapply (employment) the contract unaltered.16 Whether the agreements.19 However, on the employer’s proposal is reasonable basis of reasonableness and depends on criteria established fairness alone, employment in case-law over the years and is contracts can only be amended or very situation-specific.17 However, partially excluded in exceptional generally speaking, the author cases, due to really strict judicial believes it is difficult to lower players’ assessment.20 salaries given that salary is one of the primary terms of employment under Dutch Law: where a unilateral amendment on the basis of the Conclusion “good employee” standard concerns base pay, the employer’s proposal In this article, the author has has to be reasonable by all counts. analyzed different options for The employer might want to offer Dutch football clubs to lower a transitional arrangement for their players’ salaries due to the the suggested pay-cut or simply effects of COVID-19. Legally, there a (partially) extended payment are some options, but the rules instead. When a reasonable proposal require a tailor-made approach is refused by the employee, this does as to whether the lowering of not lead to an amendment of the salary unilaterally is considered employment contract by operation to be reasonable under Dutch of the law and thus the employer Law. Therefore, unfortunately, would need to get a court order to no general statements are safe amend the employment contract.18 to make. The preferred route to Besides, it is questionable whether lowering players’ salaries is having this is the best solution considering players and clubs join forces the effects on the relationship to deal with the effects of the between clubs and players. COVID-19 crisis. Initiatives similar to the one initiated by the Borussia Lastly, the employer can take Mönchengladbach players are the matter to court, trying desirable (if a club really gets in to collectively change the financial trouble), although - like employment contracts solely Mr Levchenko mentioned - not based on reasonableness and every player in Dutch football is fairness: if a club can demonstrate able to accept a big cut to his/ that unaltered performance of her salary. Time will tell whether the employment contract in the player initiatives are needed and will happen in the Netherlands
15 P.A. Hogewind-Wolters en W.A. Zondag, in: in the (near) future. These Sdu Commentaar Burgerlijk Wetboek Boek considerations make last year’s 7, Art. 611 (online, bijgewerkt tot 1 september 2019); N. Zekic, ”All is fair in love and crisis? UEFA strategy, where they call for Loonoffers en goed werknemerschap”, TAP “all football stakeholders to work 2016/77. 16 W.H.A.C.M. Bouwens, M.S. Houwerzijl & W.L. Roozendaal, Schets van het Nederlandse 19 W.L. Roozendaal, Werk en privé (diss. arbeidsrecht 2019/3.2.4, Deventer: Wolters Nijmegen), Kluwer 2011, p. 255; W.H.A.C.M. Kluwer 2019. Bouwens, M.S. Houwerzijl & W.L. 17 S.S.M. Peters (red.), Arbeidsovereenkomst, Roozendaal, Schets van het Nederlandse aant. 8.3, Deventer: Wolters Kluwer arbeidsrecht 2019/3.2.4, Deventer: Wolters (losbladig en online). Kluwer 2019. 18 E. Verhulp, in: T&C Burgerlijk Wetboek, art. 7:613 20 W.L. Roozendaal, “Werk en privé” (diss. BW (online, bijgewerkt tot 4 februari 2020). Nijmegen), Kluwer 2011, p. 434. 21 www.uefa.com
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The Netherlands
Even though individual players The player therefore has an might rightfully be hesitant and interest to retain a well-supported reluctant to agree upon alternative profile both within and outside of a (financial) terms, refusing to football club. do so could potentially hamper the professional career of the When national health departments individual player. First of all, the allow training or matches to player still has an employment be conducted, refusing to take Willem Thijssen relationship with the club, and part in training or matches is Legal Counsel, PSV NV Eindhoven – The Netherlands that club is a stakeholder when it obviously perceived as a refusal comes to the discussion whether to work. In accordance with Dutch COVID-19 has had a major a player is able and allowed to employment law, such action impact on the football industry. pursue his/her career at a higher could provide the club with a Even though COVID-19 is to be level, by transferring to a new pressing reason to terminate the regarded as a force majeure, club. Furthermore, COVID-19 has employment agreement with Dutch employment law does not had a major financial impact on immediate effect. simply allow an employer to alter society in general. Taking into employment agreements. It is account this impact and the call for therefore advisable that football solidarity, the public would most clubs enter into an agreement likely disapprove any reluctance with their employees to alter by a player to contribute to the certain (financial) terms of the preservation of the club the player employment agreement. is employed by.
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France
Wage agreement in French men’s professional football
As soon as competitions stopped, French football stakeholders1, under the aegis of the French Professional Football League (LFP), began discussions aimed at proposing economic support measures to clubs due to the difficulties generated by this exceptional period. The combined analysis of these difficulties led clubs and players’ representatives to agree incredibly early on a new system, as well as on adjustments to facilitate its implementation.
Rapidly, a number of significant proportion of television rights stakeholders were unable to aspects of the problem were already collected and assigned to agree on long-term solution; highlighted: 1 them for the 2019-2020 season, but also on its financial situation ➥➥ The concerned parties were ➥➥ The impossibility of a precise before the pandemic started; advised to follow these quantification of the financial recommendations, which losses that clubs may suffer ➥➥ The particularly complex were considered balanced by regarding an eventual turnover situation faced by professional both players’ representatives reduction, particularly given the players of all salary levels, and clubs. However, the lack of knowledge concerning making it impossible to recommendations could not the moment in which the approach the subject from an replace individual agreement situation would improve; exclusively joint angle. for each individual situation, nor could they supersede ➥➥ It was impossible to reunite It was thus determined that proposals from the clubs that every employee to involve them the agreement reached would might be more beneficial for in the process of a temporary incorporate the following the involved players. Similarly, or permanent reduction of their principles: clubs were not obliged to employer’s salary costs; propose the aforementioned ➥➥ It was a fixed-term agreement, recommendations to their ➥➥ The situation between the with a first agreement players. Each player would various professional clubs was proposing a solution for April have to ratify his agreement in particularly heterogeneous. 2020 salaries only: as the writing, according to the forms Every club depended on the duration of the pandemic defined by the social actors, situation remained unclear and approved by the LFP. at that moment, the relevant 1 Including clubs and player’s representatives.
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➥➥ At the time of the discussions, receive later when the club’s would be paid within the usual the clubs’ financial difficulties financial situation should have time limits - 40% at the end of were mainly due to a lack of improved. the football season; cash flow, since the negotiating parties were convinced that the As a reminder, this deferral in the - When 70% of the player’s gross payment of a majority of the player’s salary did not give rise to monthly salary corresponded to expected revenue would only any discrepancy in the withholding an allowance of more than EUR be deferred; of taxes, either on their rate or 100,000: 50% of the monthly calculation. The computation allowance would be paid within ➥➥ Instead of their contractual carried out by the tax authorities the usual time limits - 50% at salary, players would receive was based on the total partial the end of the football season. a partial activity allowance activity compensation to which paid directly by their club each player was entitled, without - The balance of the partial (corresponding to 70% of considering the partial deferral activity allowance would be their gross salary). As well, at of compensation (différé partiel paid to the players at the latest the same time, clubs took all d’indemnisation). Therefore, this in the month following the the necessary steps to obtain reduced, even more significantly, binding decision determining the partial activity allowance the net sum actually received the final standings for the (allocation d’activité partielle), by players, after all taxes were 2019-2020 season. Therefore, paid by the French state, within deducted. clubs would be able to pay all the legal limits, and taking into outstanding monies after the account as far as possible the “After each player individually revenues from the new TV rights count of hours during which agreed to the proposal, the contract would be allocated to the employees were not on payment of April’s salary was them.” (free translation). furlough. In concrete terms, made in the following manner: there was an automatic loss of To facilitate the application of the earnings for players amounting - When 70% of the player’s aforementioned agreement, the to between 16 % and 28% of gross monthly wage was social stakeholders also agreed on their net salaries, depending on inferior to EUR 10,000: 100% a less formal kind of arrangement, the amount of their pre-COVID of the allowance would be paid while assuring that the conditions salary. This was the first stage within the usual time limits; for obtaining the informed consent that enabled clubs to benefit of the player could be met. The from state aid, both for the - When 70% of the player’s lockdown conditions did not allow payment of the partial activity gross monthly salary clubs and players to sign standard allowance to which clubs were corresponded to an allowance amendments to their contracts. In entitled, like any other company of between EUR 10,000 and other circumstances, this would and for the exemption from EUR 20,000: 80% of the have been necessary because the social security contributions on monthly allowance would be parties’ financial obligations were the entire amount paid to their paid within the usual deadlines modified. However, both parties employees; - 20% at the end of the football proposed the use of regular season; emails, which should include all ➥➥ Cash-flow difficulties were the required information, and be ideally alleviated during the - When 70% of the player’s submitted to the LFP for approval. second stage of the financial gross monthly salary effort made by the players, corresponded to an allowance thanks to a temporary between EUR 20,000 and deferment of part of their €50,000: 70% of the monthly partial activity allowance. The allowance would be paid within proportion of the amount of the usual time limits - 30% at the partial activity allowance the end of the football season; received on a deferred basis would depend on the amount - When 70% of the player’s gross of a player’s pre-COVID salary. monthly salary corresponded Thus, the higher the pre- to an allowance between EUR COVID salary was, the more 50,000 and EUR100,000: the player could agree to 60% of the monthly allowance
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cannot decide, like any employee, the provisions of the Labour Code to refuse to be on “Chômage and the national recommendations technique” as it is a matter of law. aimed at protecting the health and safety of its staff, and has With respect to the possibility informed and prepared its staff, to refuse to train or play, it in particular in the context of is not possible save under staff representative institutions,
Victoriano Melero Articles L. 4131-1 et seq. of the the individual right of withdrawal General Secretary, Paris Saint- Labour Code whereby a worker cannot in principle be exercised. Germain FC may withdraw from a work Paris – France situation which he has reasonable A very strict health protocol has grounds to believe presents a been put in place by the Club and "Concerning the players and serious and imminent danger to his we can see that in the European staff, they were put automatically life or health. championships which took the into “Chômage technique” since time beforehand to decide to stop all sport activities were stopped. It should be stressed that the right or continue their competitions, Practically, it means that the to withdraw is aimed at a specific that cases of infection are well- players had a reduction of their net work situation and not at a general managed and do not raise salary of approximatily 30%. pandemic situation. problems."
Like any employee, a player can In the current context, insofar as refuse a salary reduction but it the employer has implemented
"During the lockdown, footballers can refuse a pay cut because could no longer provide the the lack of performance during service which their employment the lockdown was not their fault contract required of them, due to and, on the other hand, they can the lockdown measures imposed refuse to train or play if their by the Government. Therefore, club does not provide adequate these contracts were not health conditions and safety performed by the players because measures, which are required for François Klein there was a crisis beyond their all companies." Lawyer, KGA Avocats employers’ control. My opinion Paris – France is, on the one hand, that players
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England
or (while the danger persisted) refused to return to his place of work… or
(e) in circumstances of danger which the employee reasonably believed to be serious and imminent, he took (or proposed Tom Seamer Barrister, Morgan Sports Law to take) appropriate steps to London – England protect himself or others1 from the danger. (Emphasis added) The consequences on the working relations between clubs and S.44 of the ERA does not apply players are potentially numerous. I where the detriment in question will therefore focus on the specific is a dismissal of the employee.2 questions posed. However, s.100 of the ERA provides for a corresponding Under English Law, any salary protection against dismissal. reduction must be agreed by the employee (normally expressly, but Thus, if a player refused to on occasion there can be deemed train or play due to health and to have been implied agreement) safety concerns and if their club if it is not to amount to a breach withheld or reduced their pay as a of contract. Accordingly, players consequence, the player may have can certainly validly refuse a salary a valid claim for compensation reduction. under s.44 of the ERA. Similarly, if a player was dismissed as a However, such an approach may, result of their refusal to train or of course, have a negative impact play, that may give rise to a claim on the player’s relationship with for compensation for an unfair the club going forward, and, dismissal under s.100 of the ERA. in an extreme situation, could contribute to the club going under, Whether such a claim is likely to which would be unlikely to be in succeed will, of course, depend on the player’s interests. the particular facts. For instance, if a player can evidence that a club was As to the second question, s.44(1) failing to implement the applicable of the Employment Rights Act health and safety guidance3 as 1996 (ERA) provides that: regards social distancing, cleaning, testing, etc., then their belief that (1) the danger posed by a return to by any act, or any deliberate training was “serious” may well be failure to act, by his employer held to be reasonable. done on the ground that– […]
(d) in circumstances of
danger which the employee 1 S.44(1)(e) would therefore potentially apply reasonably believed to be where a player refuses to train or play on the basis of risks to another person (for example serious and imminent and a vulnerable family member who lives with which he could not reasonably the player). 2 See s.44(4). have been expected to avert, 3 The health and safety guidance applicable he left (or proposed to leave) to the post-COVID-19 return of elite sport in England is available here.
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salary reductions can only be made If a club has a taken all reasonably if agreed to by both the clubs and practical steps to protect the individual players. health of players (including by complying with all government Player safety has been front and Premier League guidance and centre of all steps leading and protocols) but a player towards resumption of the Premier nevertheless refuses to return to Patrick Stewart League. Clearly this is the correct training or play in a match due to General Counsel, Manchester United approach and, in any event, from health concerns this may constitute Manchester – England a legal perspective a club owes a a breach of contract on the part duty of care to its players which of the player. However, each case "Contracts between Premier includes ensuring that, so far as it is must be assessed on its merits. League clubs and their players are reasonably practicable, the health, For example, if a player informs based on a standard form template safety and welfare of players is a club of a previously unreported which was agreed between the protected. The UK Government underlying health condition, then Premier League and Professional and the Premier League have the club should treat that player’s Footballers Association at the issued stringent guidance and situation differently from a player inception of the league in 1992. The protocols for Premier League for whom there are no known standard form contract does not clubs to follow in order to protect reported underlying health issues." contain a force majeure provision players returning to training and and it is generally accepted that then competitive matches.
Spain
more or less, depending on the some testing and results - which family status of the player. This have already been done - and thus is called an ERTE (Expediente de there is no legal basis for players to Regulación Temporal de Empresa) refuse to train. which means that the contracts are temporarily suspended. It is the same idea where players are afraid to fly and nonetheless, The ERTE must be requested and a club in accepting this behaviour Juan de Dios Crespo Pérez Lawyer, Ruiz-Huerta & Crespo the Administration can accept or only has the player play within bus Sports Lawyers deny it. or train connection to the place of Valencia – Spain the match. There is no obligation to go for In Spain, there is a legal possibility an ERTE but then, if you want to for employers to put their reduce a salary, you must agree employees on suspension, so with the players and they can their contracts are not paid, but refuse it. the State pays an amount of 70%. For football players, that As for the refusal to train based amount is not their “real” salary on security concerns, the Spanish but the minimum that might be Government has accepted that around EUR 1,200 and EUR 1,400, the League can resume providing
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starting 1 July, extension of tax different to do this in practice with residence, loan situations; normal workers than with football players. ➥➥ Obligation of players to train and to play under conditions I think that players can refuse to that may not be entirely safe; train, to travel, to play if they have well founded security concerns. José María Cruz ➥➥ Impact on agent`s fees as a It seems to me difficult to know CEO, Sevilla FC result of a reduction of player´s in advance what a Labour Court Sevilla – Spain salaries; might decide in such cases.
"There are many potential ➥➥ Legality of requiring players to Even if Spanish clubs are operating consequences of the COVID-19 be tested for coronavirus; under very strict protocols crisis on the contracts between approved by the Health Authorities clubs and players. Some of them ➥➥ Application to players of and the Sporting Bodies and without being exhaustive may be: Temporary Reduction or prevention measures controlled Suspension Measures. by Health Prevention Suppliers ➥➥ Extension of contracts after 30 are being applied, I do believe June for those players whose I believe that players can refuse that clubs as employers may have contract finishes on that date a salary reduction, except in responsibility in cases of infection to make it possible to conclude cases where the regulations of our players." the 2019-2020 competitions: provide special procedures to salaries, insurances, new do this without negotiating with contract with a new club the players. However, it is quite
bodies, this being done to create put in place, and raise their concerns the safest possible environment to which the club can then provide possible for all our employees. an adequate answer. Having said that, there is no such thing as a zero-risk environment As to the question whether players and a zero-risk environment did not can refuse a salary reduction, we exist before the world got to know understand this questions is aimed Román Gómez Ponti COVID-19 nor will it exist once a at situations in which unilateral salary Chief Legal Officer, FC Barcelona vaccine is found for this specific reductions would be pushed through Barcelona – Spain virus. What we have done is reduce as opposed to salary reductions risks substantially for the players that are mutually agreed upon or and employees in their work-related imposed by means of a specific legal environment, an environment which procedure, such as the ERTE’s in now is undoubtedly much safer than Spain or the “chômage technique” the non-work-related environment. in France. Now, when it comes to Keeping in mind all the protocols unilateral salary reductions, and put in place and that a zero-risk stressing that this is not what we environment does not exist, we are working on in our club, we
Wouter Lambrecht do not see why players, once all understand that clubs could have the Attorney-at-law, FC Barcelona such mechanisms are put in place, right to impose such proportionate Barcelona – Spain should or could refuse to play. Of reductions whilst players, if they do course, in the process of bringing not agree, would have the right to players back to play, it is key to challenge such unilateral reductions "At the club, the health of our have a transparent, proactive, and in front of the competent bodies. At players and staff trumps all else. open line of communication with the end of the day, what is important In fact, we have put in place even them explaining to them in advance is the judicial control of unilateral more stringent safety and hygiene of the protocols that have been put reductions and whether they would protocols than the ones developed in place. This allows the players to comply with the applicable legal by regulatory and governmental better understand all the measures framework."
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Germany
their salary, sometimes combined increases his risk of suffering with deferrals or payments under an infection (or a more severe certain conditions (for example, infection). non-relegation or receipt of TV payments by the clubs). In the case where a player refuses his participation without falling In terms of players that refuse under these two exceptions, it will to train/play, in general, I would be up to the club to determine Joachim Rain say that they have no such right whether or not the club accepts Lawyer, Schickhardt Rechtsanwälte Ludwigsburg – Germany (similar to that of a doctor/nurse this player’s attitude nevertheless, who is working in a hospital who considering that a player who is does not have that right either, afraid of playing will probably not Players can refuse a salary even though they are exposed to a be of too much use for the team. reduction, at least as long as much higher risk). Moreover, even if refusing to the club is not immediately train/play might be considered a facing insolvency. In the case Such right to refrain from providing breach of contract in the absence of insolvency, there might be his services may only be awarded of exceptional circumstances, it exemptions. The fact that unilateral to a player if: would still to some extent be an salary cuts are not acceptable understandable stance. Hence, it under German Labor Law and ➥➥ The club does not provide/ would be questionable if under Standard Football Contracts is comply with the hygiene these conditions, a breach of confirmed by the existence of standards forwarded by the contract could trigger the same agreements between clubs and League and the State Health harsh consequences as Article 17 of players that have been concluded Authorities; or the FIFA Regulations on the Status recently all over the league. In and Transfer of Players (RSTP) these agreements, players have ➥➥ The player has a personal provides for as a general rule. accepted certain reductions of health predisposition which
However, in new contracts, clubs (that has been established in will certainly try to implement close contact with state health clauses that allow to share the authorities) that sets very high economic consequences in a more standards and is considered to be balanced manner. a pattern for international leagues and other sports. The second According to German Law, players case, in which a player might be even in the COVID-19 situation do entitled to refuse participation Jochen Schneider not have to accept a unilateral is if he has a specific risk for an Head of Sports and Member of the Board, FC Schalke 04 reduction of their salary nor is there infection, i.e. to have a severe Gelsenkirchen – Germany a law that would allow employers reaction to such infection based on to reduce the employee’s salary a pre-existing condition. Another (this seems to be the view of the question is whether or not a player "As long as clubs and players do greater part of legal doctrine). To who - without falling within one not agree on a modification to an the best of my knowledge, no court of these exceptions - is afraid of existing contract (as most clubs decisions have been rendered yet being infected during training in Germany managed to negotiate regarding this topic. and matches can be of much use with the teams), there is no direct to the team. Therefore, at the consequence, in particular no right I think a player can only refuse end of the day, it is a question of to unilaterally reduce the players’ training if a club does not comply communication between the club salary during the lockdown or to with the requirements of the and the player and what will be send them for part-time work. German League’s hygiene concept best for both parties in the specific
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circumstances of each case. We, Even though no hygiene concept violation of any requirements of as Schalke 04, took the decision can guarantee a 100% safety, I think the hygiene concept, which we of not to force any of our players to the risk of an infection on the pitch course try to avoid by all means train/play against their will and is no bigger than anywhere else, and with the highest diligence, we received a 100% acceptance in particular since our players are I don’t see a legal liability in the and appreciation for this stance regularly (especially before each unlikely event of an infection of one from the team’s side who, without match) tested and quite strictly of our players whilst he renders his exception, decided to offer their quarantined. As long as an infection employment services." services. cannot be blamed on a negligent
Italy
On 6 April 2020, Lega Serie A into the Guidelines issued by FIFA issued common guidelines aimed on 7 April 2020 FIFA by means of at reducing the salaries of players, the Circular no. 1714. coaches and members of the first teams. In particular, the guidelines As to the possibility for players to provide for a reduction equal refuse to train or play over security to 1/3 of the total gross annual concerns, we believe that if clubs salary in the event that sporting and leagues will be able to follow Paolo Lombardi activity cannot be resumed, and a the safety guidelines provided by Lawyer, Lombardi & Associates Rome – Italy reduction of 1/6 of the total gross the Italian Government, it would annual salary if the remaining be difficult for a player to legally matches of the 2019-2020 season justify a refusal to train or play can be played in the coming over safety concerns. months. Without prejudice to the above, each club shall negotiate any such agreement with their players.
In the last few weeks, SS Lazio, Luca Pastore AS Roma, Parma Calcio 1913 and Lawyer, Lombardi & Associates Rome – Italy Cagliari Calcio reached agreements for the reduction of their players’ salaries. It must be noted that the Italian legal system does not provide In order to be in a position to the clubs with the possibility to resume the 2019-2020 season, unilaterally reduce the players’ we believe it is absolutely salary. As a result, in order to crucial for Lega Serie A and the reduce salaries without having to Italian Players’ Union (AIC) to initiate legal proceedings - which encourage agreements in relation would have an uncertain outcome to fundamental issues such as - clubs negotiate the relevant the extension of employment reduction with every single player. contracts expiring on 30 June 2020. In addition, a gentlemen’s At the end of March, Juventus FC agreement shall be reached among was the first club that reached an clubs for loan agreements expiring agreement with its players for the on the same date, in order to reduction of the salaries. implement the principles enshrined
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management of personnel, such as Our club is one the first Italian clubs the use of social security benefits. that adopted a specific protocol and supported the FIGC and other Our club has reached a financial competent bodies in drafting the agreement with the players of protocols and guidelines approved the first team, the coach and his by the Italian Government for the staff, relating to the rest of the resumption of training sessions
Gianluca Cambareri 2019-2020 season, aimed at the and of the Serie A Championship. Board Member, AS Roma renunciation of salaries related to As of today, we have not registered Lawyer, Tonucci & Partners the months of March, April, May any cases in our club but, if any Rome – Italy and June 2020, for a total gross player turns out to be positive for amount of around EUR 30 million. coronavirus - a circumstance never "The issue of player’ salaries is 100% avoidable - we are ready to certainly one of the thorniest As for the issue of players’ safety, adopt all the protection measures issues for many clubs, similarly in group training sessions have been provided by protocol." Italy. It’s true that players, from a resumed according to the rules set legal point of view, are employees, out in the protocol drafted by the but the special nature of the work FIGC and approved by the Italian they do makes it very difficult to Government, so no player runs any use the classic measures for the risk to their health.
Portugal
SJPF and ANTF determined, in were discussed between FPF, Liga the context of a memorandum Portugal and the health authorities. By Daniela Sousa Marques of understanding of 4 May 2020, Associate, Morais the impact on the professional This opinion contains the following Leitão players employment agreement or indications: training contract, signed by clubs that participate on Liga NOS and (i) FPF, Liga Portugal, football coaches and professional players, clubs participating in Liga NOS and other sports agreement, that and the players recognize expires at the end of the current and assume the existing risk
Diogo Pinto sport’s season. Moreover, FPF of infection SARS-CoV-2 Associate, received technical opinion from and COVID-19, during all the Morais Leitão DGS on 10 May 2020 that frames practice and competition the conditions for the return of stages. They also assume the Liga NOS and the Portuguese the responsibility for all the Cup, concerning the 2019-2020 medical consequences of that with José Maria Montenegro, João football season, as detailed on the disease and public health risks. Lima Cluny, Managing Associates following section. Dzhamil Oda, Associate (ii) This commitment/assumption and Filipe Sanches Mendes, Junior Lawyer of responsibility must be Morais Leitão subscribed, through a code of Lisbon – Portugal Technical opinion from conduct duly signed, by the DGS sports agents and FPF and Liga Portugal and any other Following the Government’s The technical opinion from DGS necessary party. decision which authorizes the frames the conditions for the return of Liga NOS and Portuguese return of the Liga NOS and the (iii) The referred to code of Cup (please see above the chapter Portuguese Cup, concerning the conduct must foresee, for about Portugal), FPF, Liga Portugal, 2019-2020 football season, which instance, the measures related
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to lockdown and public health to be given on the signature (a) Laboratory tests must be duties mentioned in the date of the code of conduct, rRT-PCR, in accordance with technical opinion. in respect of athletes’ privacy Orientation DGS 015/2020. and applicable legislation. All tests must be notified to (iv) Lockdown duty: to decrease Whenever required to track and SINAVE, under the applicable the risks of infection and identify the nearest contacts of legislation. contamination, the athletes SARS-CoV-2 confirmed cases, (i.e., professional football the data of those systems The following rules are players), technical teams and should be delivered to the applicable: football referees must be in Health Authorities. lockdown, from the beginning (i) Before the start of the of the resumption of training’ (vi) Clubs should support the competition’, all athletes, until the end of the season for athletes and their families to technical teams and football all the competitions. prevent unnecessary travel referees must undertake two (outside of travel necessary to tests rRT-PCR 14 days apart Lockdown implies the fulfillment sports practice) by resorting for SASR-CoV-2. During of restrictive measures of to home deliveries of goods this period, the athletes social distance. If the above- and services. must maintain a social mentioned parties need to distance between them by travel, it must be restricted (vii) Health state control: the performing exclusive and to the following routes: club’s medical departments individual training. home-club/competition-home. must ensure a daily medical assessment and correspondent (ii) After this period of 14 days, The only social contact that registries to be able to all athletes, technical teams is permitted is contact with identify early symptoms of and football referees with cohabitants and club’ members COVID-19, in accordance to two negative tests that are (staff strictly necessary to Regulation DGS 004/2020. If considered clinically fit, sports practice). For this a person develops suspicious after the assessment of the purpose, the club members symptoms of COVID-19, during club’s medical department, (which must be reduced to a the season, he/she must be can begin collective training minimum) and the cohabitants isolated and tested according and participate in official of athletes, technical teams to the Club’s contingency competitions. and football referees must plan and Regulation DGS also be in lockdown under 004/2020, making sure (iii) During the competitions, the same conditions that are that the case is notified for all the football matches, applicable to the athletes as to the National System of there must be two tests for above-mentioned. Epidemiological Surveillance SARS-CoV-2, per week: one (SINAVE - Sistema Nacional de must be run 48 hours prior Lockdown also implies, in Vigilância Epidemiológica). to the match and another all circumstances, a physical must be run closer to distance of two meters, hand (viii) Other obligations: scheduled match. and respiratory hygiene, in accordance with the DGS’s ➥➥ FPF, Liga Portugal and clubs (b) The identification of a norms and guidelines, as well must implement a strategy to positive case for infection as the use of masks in close test athletes, technical teams (symptomatic or not) spaces, while travelling and in and football referees and determines the isolation of other activities not related to other parties involved and that case and disenables the sports practice. allow early identification of the player from participating positive cases for SARS-CoV-2 in competition until the (v) To verify if the lockdown is (although asymptomatic, he/ determination that the player being carried out properly, the she can transmit the virus) tests negative, in accordance technical opinion states that and possible isolation in order with Regulation DGS information and monitoring to interrupt a transmission 004/2020 (symptomatic) or systems of contact between chain as quickly as possible, by Regulation DGS 010/2020 athletes must be used, against following these guidelines: (asymptomatic), including the athletes’ express consent contact tracks by the Health
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Authority, without prejudice athletes’ and technical teams’ Sport employment to clinical follow-up by the symptoms, by guaranteeing agreement and other club’s medical department. an accurate follow-up and contracts respective registry; (c) Athletes and technical teams In Portugal, according to Liga in which positive cases are ii. Training spaces; Portugal’s statement measures, identified are considered as several proposals were submitted contact of a confirmed case. iii. Hygiene and safety conditions to SJPF, under CCT Professional Note: the implementation of for the training spaces, Players, and SJPF accepted the confinement measures and tests including maximum capacity, following: 1. Extension of the indicated in the technical opinion sanitary installations, employment agreements until the decreases the risk of contamination changing rooms and gyms, as end of the season, considering between the athletes and other well as the respective cleaning its duration until the last official interested parties, thus the and sanitizing procedures; match of 20190-2020; 2. Extension identification of a positive case does of loan transfer agreements and not imply a mandatory collective iv. Training sessions about permanent transfers until the isolation of the entire team. COVID-19; end of the season, considering its duration until the last official match (d) The decision of confinement v. Communication plan to of 2019-2020; 3. Acceptance that of athletes and other parties’ ensure that the supporters part of the vacation days will be nearest contacts is made by comply with the contingency determined by the club’s indication; the Local Health Authority plan rules and DGS 4. Agreement that none of those in coordination with the regulations and orientations; measures constitutes just cause Regional and National Health for termination of the employment Authority, depending on vi. Identification of the agreement. Please bear in mind that the risk assessment. The professional designated, the above-mentioned statement clinical surveillance of the and a substitute (in case of recognizes the need to formalize nearest contacts must be impediment), duly qualified those measures through proper executed by the club’s to coordinate the necessary legal mechanisms, notwithstanding medical department, by actions with the competent the memorandum referred below. assuring the correspondent Health Authority. clinical follow-up and daily Furthermore, according to Liga registries, without prejudice b) Definition of the organization Portugal’s statements on unilateral to the Health Authority’s and circuits/paths to be termination at the Liga NOS and intervention. followed inside the stadiums LigaPro, the club’s presidents for each area (technical area, decided that none of the clubs ➥➥ FPF must draft a field, benches, including press will hire a player that unilaterally structured document with areas), namely conditions, terminates an employment recommendations and rules access and use of individual agreement with grounds related to for the resumption of official protective equipment (IPE). questions or any other exceptional competitions Liga NOS and decisions resulting from the effects Portuguese Cup, to be shared c) Definition of the organization to of COVID-19 pandemic, namely with the public, that includes: be followed inside the lodgings the extension of the sports season. and transportation to and from Meanwhile, AdC imposed an interim a) Obligation to draft a training and competitions, measure on Liga Portugal that contingency plan for each namely circuits/paths, accesses suspended this no-poach agreement football club that must be and use of IPE, in accordance - the above-mentioned agreement submitted and reviewed with DGS regulations and by which the clubs won’t hire a by the Regional Health orientation, by complying with player that unilaterally terminates Authority. the cleaning and sanitizing an employment agreement with The contingency plan for measures. grounds related to questions or each football club must any other exceptional decisions include the following: d) Code of conduct to be resulting from the effects of subscribed to by all sports COVID-19 pandemic – arguing that i. Clinical follow-up plan and agents and FPF and Liga this agreement may have a potential, monitoring system of the Portugal as above-mentioned. serious and irreparable impact on
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the practice and it could be harmful ➥➥ The end of sports season 2019- be automatically extended as to competition rules. Through this 2020 will occur on the day prescribed in number one above. interim measure, the above-referred following the last official match Liga Portugal’s resolution ended of this season competition; Regarding the concrete situation its effectiveness with immediate of Portugal, it is relevant to say effect, did not enter into force nor ➥➥ The employment agreements that according to Liga Portugal’s produce any effects. The AdC further and training contracts, signed statement measures, two of the decided that Liga Portugal must by clubs that participate in proposals presented by Liga communicate to all its member clubs Liga NOS and coaches and Portugal to SJPF that were not the suspension of such agreement professional players, and accepted by SJPF are related to and issue a press release giving other sports agreements that financial measures. In particular, the notice of that fact. For each day expire at the end of the current parties did not reach an agreement, of delay in adopting the interim sport’ season, as defined in the until now, on the possibility to: 1. measure, the Liga Portugal could be applicable regulations, must Accept that players and clubs agree ordered to pay 6.000 euros. be automatically extended to reduce salaries; 2. Agree that, until the end of the season in in the absence of an agreement More recently, following the accordance with the definition between the players and clubs, Liga Government’s decision which only stated on the previous number. Portugal and SJPF can determine a authorizes the return of Liga NOS percentage reduction of the player’s and Portuguese Cup for season ➥➥ Likewise, the permanent annual salaries, with repercussions in 2019-2020 (please see above the transfers and respective sports April and following months until the chapter about Portugal), FPF, contracts - in which the clubs end of the season. It is also referred Liga Portugal, SJPF and ANTF participating in Liga NOS are that the parties are free to resort determined, in the context of a the assignees and that are due to another alternative mechanism memorandum of understanding of to expire during the current foreseen in the applicable legislation. 4 May 2020, the following measures: season, as defined in the applicable regulations - must
in remuneration - namely by mere imposing a salary reduction. In this agreement with the worker - is not regard, and considering the above- allowed by law and constitutes a mentioned principle, most of the very serious administrative offense. clubs opted for a transition from full-time work to part-time work as However, due to the COVID-19 permitted by law. As matter of fact, pandemic the Government has with the suspension of the league, Nuno Santos Rocha created a “Simplified Lay-Off” the players have seen their work Head of the Legal Department, FC Porto procedure in order to support automatically reduced by reasons Porto – Portugal employees and companies beyond the club’s control. In this disrupted by the COVID-19 crisis. scenario, technically, clubs will In summary, if an employer can not be decreasing players’ salary "In Portugal, the principle of demonstrate that his company per se but merely amending it to irreducibility of the remuneration was affected by the pandemic, he a smaller amount in proportion to constitutes one of the guarantees can unilaterally suspend (totally or the decline of their working hours. of the employee in the context partially) his employees’ contracts. Therefore, the ratio value per of the employment relationship, In this case, players cannot oppose hour paid by the club remains the resulting from the impossibility this mandatory wage cut by law. same. Nonetheless, most of these of reducing the employees’ temporary cuts will be paid back remuneration, except for the cases Of course, bearing in mind the to the players in the future, so the provided for in the labor code or projected resumption of the consequences in most of the cases in a collective labor regulation league, clubs that still have sporting will be temporary." instrument. Outside these cases, objectives for this season favored players can indeed refuse a salary reaching amicable agreements with reduction. Actually, the decrease their players instead of unilaterally
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Russia
it represents no just cause for duties, etc.). The issue gets even the unilateral early termination of more complicated since the labor agreement by either clubs or President of Russia declared the by players. days from 30 March through to 30 April 2020 as well as the days FUR has also called on parties from 6 May through to 8 May 2020 to labor agreements to conduct to be nonworking days during negotiations regarding ‘adequate which employers must maintain Oleg Zadubrovskiy and lawful decrease of clubs’ employees’ current salaries. It is Director of Legal Department, FC Zenit Saint Petersburg – Russia expenses on salaries in view no wonder that, judging by reports of suspension of all football in Russian media, most Russian competitions’. There has been, clubs seek to obtain their players’ however, no social dialogue or consent to salary reductions rather negotiations between players and than to decrease it unilaterally. clubs at the national level. This is due, in part, to the fact that there As regards the players’ refusal is no players’ union in Russia that to resume training over security could unite and/or represent concerns, we note that the Labor the majority of footballers. Code of Russia entitles an employee Anastasia Malyarchuk Accordingly, it all has come down to refuse working if it threatens Lawyer, FC Zenit Saint Petersburg – Russia to talks and arrangements at the her/his life or health. At the same club-team level. time, local governments oblige employers to adopt protocols Generally speaking, the Russian The Labor Code of the Russian ensuring safety of work activities Federation (FUR) has so far shared Federation has provisions about in order to prevent the spread of FIFA’s approach. The FUR has downtime caused by reasons the COVID-19 infection. So the declared that it has no authority beyond the parties’ control. In clubs are expected to ensure the to oblige parties to prolong such cases, employees shall be best possible conditions for their their employment relations. Any paid two thirds of their monthly players and to act in accordance extensions of labor contracts position salary. Without going with the highest safety standards. (as well as loan agreements) into too much detail, we will In our opinion, if a club acts in line are subject to the contractual note that there are discussions with local and federal legislation autonomy of the parties. That, among practitioners whether the and in strict compliance with in theory, could seriously provisions on downtime could safety requirements, it would be threaten the sporting integrity of be applied in the case of the hard for players to find arguments competitions, but fortunately, the suspension of competitions. Some in order to stay away from training. majority of Russian clubs, players lawyers argue that there is no true We also note from what we read and coaching staff are acting downtime as players continue to in Russian media, that the majority reasonably and in good faith, train individually at home thereby of players at RPL clubs are happy so they normally extend labor performing their employment to get back to the usual football and loan agreements by mutual duties (a counter-argument to routine and are looking forward to consent. that, of course, would be noting playing official matches again. that in a team, individual sport Moreover, the FUR Bureau of the training without a ball cannot be Executive Committee has stated considered proper training). Other that the COVID-19 pandemic shall practitioners argue that the Labor be considered an extraordinary Code provisions could apply only and unavoidable circumstance to fixed position salary, whereas under the given conditions (so the major part of athletes’ income called “force majeure”). FUR also at football clubs is made up of declared that temporary work incentive and other conditional interruption at football clubs is bonuses (bonus for loyalty, bonus beyond the parties’ control, but for compliance with contractual
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Belgium
This being said, not all Belgian For clubs, it appears to make professional football teams have sense to create a shift in its player invoked contract suspension as and staff compensation policy, a result of a force majeure event. whereby salaries are even more A minority (of the elite clubs) linked to the effective revenue have continued to fully honour generated by the club in particular contracts towards players and or the league in general. Major staff, whilst many others have US sports have a decade-long Sébastien Ledure Lawyer, Cresta Firm chosen to negotiate amendments tradition when it comes to capping Brussels – Belgium to the employment agreements salary expenditure in relation to on the basis of salary reduction. the aggregate league’s sports As a result of the application of force Witnessed examples range from related revenues (i.e. just below or majeure, employment agreements a single, one-month salary waiver above 50% under the current NFL between employees (players, to a 50% reduction of the gross and NBA Collective Bargaining coaches…) and employers (clubs) are monthly salary. Players were Agreements). suspended, meaning that reciprocal not obliged to agree to such obligations are temporarily ceased: contractual amendments, but often For players, even though in clubs are no longer required to pay have done so, as the alternative Belgium it is legally possible to salaries and players/coaches are no would be the club invoking force include a contract clause whereby longer required to perform services. majeure which would have led the right to invoke force majeure is This also means that clubs are not employment contracts to be waived, we don’t expect any team entitled to impose individual training suspended and players left with to go along with such request. schemes on their players. no other compensation than a Under general employment law, capped temporary unemployment employees (players) are protected As such, the temporary suspension allowance of 1,646.55 € per month. against any attempt by their of the employment agreement does employers (clubs) to unilaterally not entitle the players and coaches With respect to safety diligence, reduce salaries. Any club doing so to use this event as triggering cause mandatary health and safety would entitle the player to consider for contract termination. Obviously, legislation applies which entitles his or her contract terminated usual contract termination options players to refuse to pick up work, in with immediate effect without just under Belgian employment law cases where the required standards cause, i.e. at the club’s tort, and to (being the general Act of 3 July for a safe and healthy work claim corresponding termination 1978 on employment contracts environment have not been met. indemnities. and the more specific Act of 24 February 1978 on paid sportsmen) still apply.
The Ministerial Decrees of 18 and 20 a gross unemployment allowance March 2020 foresaw a mandatory of EUR 1,646.55 per month, plus a closure of sports infrastructure. COVID-19 supplement of EUR 5.63 Consequently, football clubs could per day. Clubs that have made use not organise training sessions at of the temporary unemployment their club premises. Most of the system could no longer impose an clubs provided their players with individual training schedule on the an individual training schedule players given the suspension of Gregory Ernes Founder, ATFIELD that the athletes have had to do the employment contract. Brussels – Belgium at home. Some football clubs have opted to enter into a system of The Belgian Pro League temporary unemployment that has recommended that clubs not meant that players have received to rely on this system because
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Belgian football clubs pay very led to a remarkable decision by the in a context where the employer limited social contributions. The Pro League’s General Assembly, fulfills all its legal obligations recommendation must be seen as under which clubs that have opted (e.g. observing workplace health, an attempt to safeguard the much- for the temporary unemployment safety and welfare precautions criticised system under which scheme have been prohibited from and specific COVID-19-measures) the social security payments for receiving any solidarity payment. could be seen as a refusal to football players are calculated on work. However, it should be noted a capped salary of EUR 2,352.21 Under Belgian Law, players are that few clubs would be eager per month and thus not on their in a position to refuse a salary to terminate the employment actual salary. Some politicians reduction since this constitutes relationship with a player for such have been keen to criticise an important unilateral change a reason, given the risk of thus clubs for using the system of of an essential element of the missing out on a potential future temporary unemployment since employment agreement. Such an transfer fee. football clubs’ and their players’ important unilateral change is not contribution to social security is allowed. By contrast, the refusal to very limited. The criticism has even train or play over security concerns
Scotland
The SPFL standard contract of adequately demonstrate that their employment provides a clause clubs have not taken all reasonable whereby the employment contract measures, e.g. adequate testing can be suspended in the event that and hygiene protocols, to ensure a football is suspended, as happened safe working environment. If a club at the outbreak of the pandemic has taken all reasonable measures, in Scotland. Rather than enforce a player refusing to train would this provision, many clubs took be considered in breach of his
Ian Laing advantage of the government’s obligations. Lawyer, Lombardi Associates furlough scheme which saw the Edinburgh – Scotland government provide employers with 80% of an employee’s salary up to a maximum of GBP 2,500 (approx. EUR 2,800) per month. This has been extended until July.
As the 2019-2020 season has been brought to an end, clubs are not yet training, and Scottish Government James Mungavin restrictions do not yet allow Lawyer, Lombardi Associates training sessions to take place Edinburgh – Scotland anyway. Once these restrictions are eased, players refusing to return to training will have to
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Denmark
in question, and the general risk This means that the vast majority assessment in the wider community. of general issues are negotiated at the collective bargaining level, In view of the positive developments which has also been observed in Denmark, we are witnessing throughout the COVID-19 crisis, at the present stage combined during which the Danish FA, with the many guidelines that are the Danish League and the being proposed for clubs with a Danish Professional Footballers Lars Hilliger Attorney-at-law, Advice Law Firm view to protecting players and Association have been constantly Copenhagen – Denmark other staff members, it is probably liaising with each other. doubtful whether a player’s general uncertainty about the spread of Future negotiations, including Denmark has found no specific infection etc. is sufficient to justify those conducted at the collective grounds for addressing these the player’s decision not to attend bargaining level, are expected to issues, and neither the Danish training and games, at least without pay more attention to consequences League nor the Danish Professional a salary cut. and regulatory options in the event Footballers Association has of future pandemics and other expressed an official position on In Denmark, employment law is extraordinary circumstances. the issue. extensively regulated by collective agreements, and gap-filling rules, How such considerations are going The issue will probably have to be defined as the general default rules to be dealt with in specific terms decided on the basis of general that apply unless otherwise agreed, will largely depend on the actual principles of labour law, in which are relatively comprehensive and negotiations. connection attention will be detailed. focused on, among other aspects, the specific situation of the player
Bulgaria
precisely - could a club unilaterally Law, it could be hard for a club to suspend payment of salaries or successfully rely on an event of unilaterally reduce the amount force majeure like the COVID-19 of the originally agreed salaries pandemic vis-à-vis a player when during the suspension period it comes to payment of salaries caused by the COVID-19? under an employment contract. Bulgarian employment law, unlike From my perspective, any firm Bulgarian commercial law, does Assen Hinov answer to the question whether not recognize the institution Legal Counsel, PFC Ludogorets 1945 Razgrad – Bulgaria the COVID-19 pandemic could be of force majeure applying as considered as an event of force between employers (i.e. clubs) majeure in the context of the and employees (i.e. players). The Is the COVID-19 pandemic an event employment relationship between Bulgarian employment law is of force majeure in the context players and clubs, and specifically more or less “employee-friendly” of the employment relationship so as to justify the suspension of and any measures which could be between players and clubs and players’ salaries, proved to be hard. detrimental to employees as the the specifics of the parties’ rights The doctrine of force majeure exists “weaker” party in the employment and obligations? Could a party in the Bulgarian legal system as a relationship (increasing their to an employment contract rely specific provision in the Bulgarian obligations or diminishing their on COVID-19 to justify non- Commercial Act, but in the context rights) cannot be unilaterally performance of contractual of other types of relations. As such, imposed by the employer (with obligations and how? And more from the perspective of Bulgarian certain exceptions exhaustively
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provided for in the law). This where a club has been compliant player during his absence from applies specifically to unilateral with the minimum mandatory work (the conservative approach), reduction of the employee’s salary safety measures introduced by or the player could resort to the or release of the employee by the competent authorities. In any national health security system the employer into unpaid leave case, refusals on the part of the to receive compensation, or without the employee’s consent. players to train or play should be combination of both could be carefully considered on a case-by- applied. Again, this may vary In this sense, a player may case basis to avoid negative legal depending on the specifics of each eventually successfully challenge consequences - for both the clubs case. any unilateral salary reduction and the players. even during the suspension of normal working activities due to The question about the possible the COVID-19 pandemic. infection of one of our players reminds me of the 2nd leg match I was therefore convinced enough of the UEFA Europa League round and advised my club to avoid of 32 between FC Internazionale any unilateral reductions of the (Milan) and Ludogorets which was players’ salaries during the period played in Milan on 27 February of suspension. As a result, in 2020 - a moment before the order to maintain the contractual COVID-19 took over Northern Italy. stability, our club’s management I remember that all our players initiated good faith discussions were given the opportunity to with all players which resulted voice any concerns travelling for in concessions on their side and the game - we were happy to see ultimately - in the temporary that no one raised concerns and the reduction of their salaries by entire group departed for Milan as mutual consent. planned. It is to say that even back then Ludogorets implemented As regards to the players’ refusal unprecedented safety measures to to train or play over security safeguard the health of its players concerns, I am glad that we have and staff during the trip to Milan. not been experiencing such a As a result, no one was infected sensitive issue so far. However, and the team returned to Bulgaria from local law perspective, the in good health. suspension of football related activities and the specific anti- Unfortunately, no one is protected epidemic measures for the and there are always concerns, period after such suspension was especially considering the lifted, were implemented by mechanism of infection and the Bulgarian Government and transmission of the coronavirus. It the competent authorities by is therefore of primary importance means of special categories of to do the utmost to safeguard the administrative acts. Of course, the health of players, staff and officials legal system in Bulgaria allows involved in trainings and official such administrative acts to be matches by strictly observing the challenged before courts, but until safety measures and regularly such challenge is successful, the monitoring the health condition administrative acts are mandatory of each individual concerned. It is and must be complied with. In the obligation, responsibility and this sense, a player may refuse to awareness of all of us. train or play over security reasons, but in the presence of acts of the As regards eventual infection Government already allowing of a player occurring during such activities, any refusal could performance of his employment be treated as a breach of the duties, my view is that the club employment contract especially should continue remunerating the
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Brazil
The Effects of the COVID-19 Pandemic on Football Players’ Employment Contracts
By Rodrigo Steinmann Bayer1 Lawyer Florianópolis – Brazil The purpose of this article is to analyze which tools already existing in Brazilian legislation can be used in the context of the COVID-19 crisis, especially, which emergency measures of a general nature would be applicable and compatible with the footbal players legal relations.
In a scenario1 of reduced financial the recess of sports activities.3 this period of recess of revenues by professional clubs competitions, not least because due to the stoppage2 of sports The general Brazilian labor code - it is not known for certain what competitions, it is essential to Decree-Law no. 5.452/1943, named the new calendar for Brazilian analyze the legal measures that “Consolidation of Labor Laws” - football in 2020 will be, it being can be adopted by Brazilian clubs establishes that holidays can be possible that the traditional in order to reduce labor costs granted individually or collectively, period of concession of vacations or better use the labor force of covering a certain category or (December to January) will be athletes under current contracts. the totality of employees of a used for matches. company.4 Such a measure would avoid the It is essential to need to grant vacations amid Collective vacation (or the dispute of departures, or not analyze the legal collective holidays) grant them and run the risk of an measures that can accusation of not granting annual According to Law no. 9.615/1998, be adopted by Brazilian vacations. known as “Lei Pelé”, professional clubs in order to reduce athletes are entitled to annual labor costs or better use paid vacation of 30 days, plus the the labor force vacation bonus, coinciding with of athletes under Temporary renegotiation current contracts 1 Doctorate in Law at Universidad de Alicante of image rights contracts (Spain). Bachelor and Master in Law at Universidade Federal de Santa Catarina Thus, a first advisable measure Image rights contracts between (Brazil). President of the Sports Law Commission of the Brazilian Bar Association of would be the concession of athletes and clubs, despite being the State of Santa Catarina. Attorney-at-law. collective vacations to athletes in an adjunct to the employment 2 Up until the date of completion of this article (17 May) there was still no confirmationon the contract, have a civil legal nature, return of professional football competitions 3 Article 28, §4º, V. as long as it is paid within the limit in Brazil. 4 Articles 134 e 139.
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of 40% of the total remuneration Suspension of transfer of Postponement and agreed between club and athlete.5 “Arena Rights” Installment of “Severance Pay Guarantee Fund” As they have a civil nature, image Arena Rights consist of the rights contracts are not limited prerogative guarantee to sports The “Severance Pay Guarantee by the constitutional rule of wage entities to negotiate, authorize or Fund10”, known as “FGTS”, reductions6, and it is possible prohibit the use of the image of a regulated by Law no. 8.036/1990, to negotiate their reduction or spectacle or sporting event in which is a reserve fund formed from increase bilaterally during the term both the institution and, obviously monthly deposits that the employer of the employment contract. its linked athletes, participate. must make in a bank account at Caixa Econômica Federal11 in the However, the pandemic crisis The legal institute, therefore, employee’s name. attracts the so-called “theory of focuses on the global sporting imprevision” to civil contracts, that spectacle, and correlates with The amount of each deposit is, legal clauses for the force majeure the right to use the image as the corresponds to 8% of the hypothesis that give the contractor athletes, as a whole, make up the employee’s salary and is a suffering the financial losses of the dynamics of the sports spectacle; guarantee for the employee state of calamity, the opportunity however, it should not be confused against involuntary dismissals. to postulate the contractual review with the previous institute for the in order to balance the losses right of the arena to emphasize This deposit is an extra charge, so arising from the extraordinary and the collective, global and unitary it cannot be deducted from the unpredictable situation7. activity of the sports show, which employee’s salary, as this is an has its own reality, and not the obligation of the employer. This It is notorious, in the Brazilian individual exploration of the image obligation extends to contracts for case, of the under-utilization of the of each sports player. professional athletes. image rights of the vast majority of athletes by the clubs, who The Arena Right is supported by Provisional Measure no. 927/2020, use image rights contracts with the Brazilian Federal Constitution, one of the emergency laws the sole objective of eliminating which guarantees “the protection issued due to the COVID-19 labor charges, which normally of individual participation pandemic, brought the possibility represent an increase in 35% of the in collective works and the of postponing and splitting the amount agreed in the employment reproduction of the human image “FGTS” payment for the months of contract. However, at the present and voice, including in sports April, May and June of 2020. moment, the absence of sports activities” 8, and it is regulated by competitions, alone, drastically “Lei Pelé”, being fixed at 5% of the In this way, the football clubs will reduces the image exposure of revenue from the exploitation of be able to pay the land surcharge athletes in favor of their clubs. audiovisual sports rights, which for those three months starting in must be passed on to professional July, in six installments, without Therefore, the author believes it athletes unions, who will distribute incurring monetary restatement is plausible to use the “theory of amounts, in equal parts, to and interest. imprevision” for football players’ professional athletes spectacle image contracts, which allows the participants, as part of the civil parties to negotiate a temporary nature.9 reduction during the duration of Suspension of the state of calamity or, if there The author suggests, regarding this employment contracts is no mutual consent, the clubs right, the possibility of suspending postulate unilaterally the reduction transfers not yet made until the “Lei Pelé” sets the duration of of the civilly agreed values. return of sports competitions, the sports employment contract, since the recess of such activities being a minimum duration of three also interrupts the exposure of months, and never exceeding five the voice and image of athletes in years.12 These limits, on the one matches, which is the generating hand, guarantee the athlete event for payment of such funds.
5 Article 87-A, single paragraph, Decree-Law 10 Fundo de Garantia por Tempo de Serviço. 5.452/1943. 11 Caixa Econômica Federal is a Brazilian 6 Article 7º, VI, Federal Consitution. 8 Article 5º, XXVIII, “a”, Federal Constitution. Federal public bank. 7 Article 478, Brazilian Civil Code. 9 Article 42, Law no. 9.615/1998. 12 Article 30, Law no. 9.615/1998.
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the minimum time necessary to the middle of the shutdown, or at amounts will also be subject to demonstrate his technical quality, the beginning of their resumption. mutual agreement. If this happens, not least because in this space of In this sense, it is necessary to there will be no charge on social time the number of training and emphasize that the Brazilian security contribution or FGTS on games is relatively low, and make Law does not allow an additional this amount, and it may also be it clear that there is no chance of hiring of less than three months, deducted from net income for an experience contract13 being which would, therefore, hinder purposes of determining corporate the common labor applicable to the situation of contracts that income tax and Social Contribution professional athletes. would end, for example, a month on Net Income of legal entities or a few weeks before the end of taxed by real profit. On the other hand - with regard the competition. For this reason, to the maximum term of five years the importance of having the The professional club that has - it makes it possible for clubs to attention to include the clause for earned, in the calendar year of enter into longer-term contractual suspending the contractual term 2019, gross revenue exceeding BRL links with the athlete, assuring the during the agreed suspension 4.8 million (approx. EUR 850,000), player greater stability and security period is emphasized. can only suspend the employment in the exercise of his activity, and a contract of its employed greater guarantee of power count The individual written agreement athletes by paying a monthly on these athletes for a longer is not sufficient to establish the compensatory aid amount of 30% period - or at least, for the players suspension of the employment of the player’s salary, during the to receive fair compensation for contract in all cases. If the athlete period of temporary suspension of the breach of contract. receives more than three minimum work agreed, and in this case, the wages15 union participation, Federal Union will pay 70% of the Provisional Measure no. 936, agreement will be required unless monthly amount of unemployment of 1 April 2020, heralded the the player has a salary greater insurance. introduction of temporary than double the maximum social suspension of the employment security benefit16 and holds a contract, long awaited by Brazilian higher education diploma. employers. Proportional reduction of The maximum term of the labor journey and wage The application of the measure contractual suspension is 60 depends on an individual written days, which can be divided into Provisional Measure no. 936 also agreement between employee and two periods of 30 days or applied created the important measure of employer. The tool seems to be uninterrupted, being anticipated if proportional reduction in hours perfectly applicable to professional the state of calamity ends in the and wages, which also depends on football players and, if it appears face of the pandemic. an individual written agreement in this individual agreement, it between employee and employer. is possible that the suspension In this case, the athlete will period does not enter into the receive exclusively the value of Union participation in this calculation of the determined term the Employment and Income agreement is also required for of the contract.14 Preservation Benefit, whose wages above 3 minimum wages, calculation basis is the monthly with the same exceptions as This suspension, including amount of unemployment insurance contractual suspension. suspension of the counting for that the employee would be entitled the final term of the contract, is to if dismissed. This value varies The maximum term of the measure essential for athletes hired for a between BRL 1,045 (approx. EUR is 90 days, being anticipated if the few months, exclusively for a short 185) and BRL 1,813.03 (approx. EUR state of calamity ends in the face or medium duration, and who are 320), depending on the salary range of the pandemic. paralyzed with the expectation of of the professional player. resumption. The salary reduction will be It is possible to supplement complemented by the Federal If there is no suspension of the with compensatory aid, free of Government, through the contractual term, it is possible charge, in order to mitigate this Employment and Income that these contracts will end in loss of salary of the athlete. The Preservation Benefit, whose calculation basis is the monthly 13 Article 445, Decree-Law no. 5.552/1943. 15 BRL 3,135 (approx. EUR 550). amount of unemployment 14 Article 472, §2º, Decree-Law no. 5.552/1943 16 BRL 12,202.12 (approx. EUR 2,150).
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insurance that the employee would Conclusion Bibliography be entitled to if dismissed. The present study brought the BASTOS, Guilherme Augusto Caputo. Direito Thus, three options were created: definition and the peculiarities Desportivo. 2ª Edição. Vincere: Brasília, 2018 existing in an employment contract BAYER, Rodrigo Steinmann, “A Autonomia das Organizações Internacionais Esportivas”, Mas- a) Reduction of 25%, where the signed between the professional ter’s dissertation defended in the post-gad- employer pays 75% of the salary, football athlete and the employer uation program of the Universidade Federal being complemented by 25% club in Brazil amid the COVID-19 de Santa Catarina (PPGD/UFSC). Available at: of the monthly unemployment pandemic crisis. repositorio.ufsc insurance amount; BRAZIL, - Decreto-Lei no. 5.452, de 1o de março The article sought to analyze the de 1943. b) 50% reduction, where the measures applicable to professional - Decreto no. 53.820, de 24 de março de employer pays 50% of the clubs within this worrying scenario 1964. salary, being complemented of abstinence from sports and a - Lei no. 5.939, de 19 de novembro de 1973. by 50% of the monthly dramatic reduction in revenues, - Lei no. 6.251, de 08 de outubro de 1975. - Lei no. 6.354, de 02 de setembro de 1976. unemployment insurance and the possibility of cuts or - Constituição da República Federativa amount; and, reductions in expenses resulting do Brasil de 1988. from the employment contract of - Lei no. 8.672, de 06 de julho de 1993. c) Reduction of 70%, where the their athletes. - Lei no. 9.615, de 24 de março de 1998. employer pays 30% of the - Lei no. 9.981, de 14 de julho de 2000. - Lei no. 12.395, de 16 de março de 2011. salary, complemented by 70% The study leads to the conclusion - Lei no. 8.036, de 11 de maio de 1990. of the monthly unemployment that emergency legal measures - Medida Provisória no. 927, de 22 de insurance amount. lead to very viable solutions for março de 2020. professional clubs that employ - Medida Provisória no. 936, de 1º de abril For example, in a situation where athletes earning up to three de 2020. CASSAR, Vólia Bomfim.Direito do Trabalho. the employee earns a salary of minimum wages, as in this case, 6. ed. Niterói: Impetus, 2012. BRL 2,000 (approx. EUR 350), Government subsidies successfully DELGADO, Maurício Godinho. Curso de and a 50% reduction is adopted eliminate the damage from contract Direito do Trabalho. 16. Edição. LTr: São (hypothesis “b”), we would suspension or wage reduction. Paulo, 2017. have the following scenario: the DELGADO, Gabriela Neves. “A matriz do trabalho na Constituição de 1988 e o atleta employer would pay BRL 1,000 Emergency legal profissional de futebol”, Novidades em (approx. EUR 175), and the Federal measures lead to direito e processo do trabalho: estudos em Government would complement homenagem aos 70 anos da CLT, São Paulo: very viable with BRL 739,94 (approx. EUR LTr, p. 19-32, nov. 2013. 130). In other words, the employee solutions for FIFA Regulations for the Status and Transfer of Players, 2020. would receive a total of BRL professional clubs FIFA guidelines to address legal conse- 1,739.94 (reduction of BRL 260,06 quences of COVID-19. [S.I] [2020]. Available - approx. EUR 46) to work half the For clubs with higher payrolls, in at: www.fifa.com current day. spite of the advantage of paying GARCIA, Gustavo Filipe Barbosa. Curso de their payroll without direct labor Direito do Trabalho. Forense: São Paulo, 2017. Remember also that it is possible charges, the author believes that MARTINS, Sérgio Pinto. O atleta profissional for the employer, if he wishes, to this measure will not alleviate the de futebol e seus direitos trabalhistas. Revis- supplement this wage loss and, if potential economic crisis that will ta de Direito do Trabalho, São Paulo: Revista this happens, this charge will not be triggered at the end of this dos Tribunais, v. 26, n. 98, p. 142-149, abr/ incur any charges, INSS17 or FGTS, unpredictable and extraordinary jun/2000. - Direitos trabalhistas do atleta profission- and may still be deducted from situation that plagues not only sport, al de futebol. São Paulo: Atlas, 2011. the net profit for the purposes of but the entire world economy. - Direito do Trabalho. 28. ed. São Paulo: determining the tax on corporate Atlas, 2012. income and Social Contribution on MÁXIMO, Leonardo de Oliveira. “COVID-19: Net Income of corporate entities A Circular Fifa nº 1714 e o tratamento dos contratos cuja execução será frustrada pela taxed by taxable income. pandemia”. Available at: ibdd.com.br ZAINAGHI, Domingos Sávio. “Os atletas profissionais de futebol no direito do tra- balho”. 2 ed. São Paulo: LTr, 2015.
17 National Security contribution.
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Income), recently approved by consent to individual agreements the Federal Government, allows or salary reduction is not necessary the reduction of employees’ with respect to the application of salaries. Also, some authors defend the Provisional Measure 936/20. this possibility based on the Consolidation of Brazilian Labor As to the refusal to train or play Laws. Within this perspective, it over security concerns, it should Daniel Cravo Souza would be possible for a club to be noted that the return of Lawyer, Cravo, Pastl e Balbuena adopt unilateral decisions in this activities will occur only with the Porto Alegre – Brazil sense. On the other hand, some authorization of the Government jurists affirm that these rules are and with a health security protocol, "Concerning salary reductions, not in harmony with the Federal to avoid placing the players and the answer will certainly depend Constitution, which prevents wage other persons at risk. If these on which side you are. On one reduction unless it is negotiated conditions are met, I do not believe hand, in favor of the validity of the and agreed with the Union’s that refusal could be considered reduction, clubs could maintain participation. It is worth mentioning legitimate." that the Provisional Measure that the Brazilian Superior Federal 936/20 (Emergency Program Court, in its plenary composition, for Maintaining Employment and has recently ruled that the unions’
the Government in order to make return to training - which already labour relations more flexible, with occurs with all health security a focus on maintaining economic protocols - and matches. stability. Everything we have done has been done in accordance with In the event of any detection of the Law, preserving the mutual contagion from any of our players agreement between the parties. and/or any members of the Our players are very aware of their technical staff, we will promptly Marcelo Feijó de Medeiros President, Sport Club Internacional social function and we had no comply with the health protocols Porto Alegre – Brazil problem in establishing a healthy with the immediate isolation of and well-founded composition. the infected player for a period This composition even started of 14 days, during which time the "I believe that this particular from the intention of the players contractual relationship will be moment that has been experienced themselves. I have the opinion stopped." by the entire world population that the return of activities will should be treated in a special way only occur if the health security from the perspective of contractual is established for all, which is relations. At the Brazilian level, the reason why I do not see any measures have been taken by possibility of refusal by players to
"Although negotiations were Clubs are taking into account the started between the clubs and directives authorized under the the national union, it was not Provisional Measure no. 967/2020, possible for a common / general edited by the President of Brazil, agreement to be reached between authorizing the increase of the the players and clubs. Clubs then reduction from 30% to 70%, started to negotiate with its group with some prerequisites, such José Carlos Peres of athletes, for ratification after the as contractual stability express President, Santos Futebol Clube negotiations before the respective consent and ratification by the Santos – Brazil state unions. union, among others."
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Argentina
Furthermore, in contrast with first date of the League Cup which the legal framework of other it was to play as home-field team south American countries such against Atlético Tucumán. as Uruguay or Chile, in Argentina, clubs do not have the possibility River Plate’s decision was initially to unilaterally impose salary interpreted by the Super League reductions nor send their players authorities as a breach of the to unemployment insurance. competition rules; thus a file Gonzalo Mayo Sports Legal Counsel, Club Atlético was lodged before the AFA’s River Plate In light of all the elements above Disciplinary Court, which is still Lawyer, ME&M Sports mentioned, I strongly believe that pending resolution. Buenos Aires – Argentina it is very important for clubs, as much as possible, to reach the River Plate’s decision was based best agreement with its players on several issues. The first and In my opinion, regarding those (collective agreements or individual most relevant, having an impact contracts with an expiration date agreements in those cases that the on sports, was that of not agreed for 30 June, there is no collective agreement could not showing up to play, requesting doubt that said contracts definitely been reached) because, in another the postponement of the match expire on 30 June, even more with scenario, players could refuse on 14 March; and second, the total the decision issued by AFA of the to accept a salary reduction and closure of the club from 0:00 early termination of this season. I also refuse to train, which could on 14 March until further notice. consider that, even if the season generate big troubles for the club. Furthermore, a distance training had continued, those contracts plan was established as of said date. with an expiration date agreed Finally, the football player´s Likewise, all the activities of the for 30 June, should expire on said Union (Futbolistas Argentinos club were suspended. This implied date, except for those cases were Agremiados) and AFA entered that over 5,000 people who daily the parties agree to extend the into an agreement in order to practiced sports activities within term. allow clubs to extend the term of its premises could not enter. The those contracts that were about educational institution belonging Having said that, in order to to finish on 30 June 2020 and to the club was equally affected. explain the legal remedies that also to conclude new contracts clubs could use to mitigate the with players whose contracts with The remaining matches for the conflict that the pandemic and others clubs also finish on 30 June first date of the Cup of the League the early conclusion of the season 2020. took place. However, a few days could cause, it is important the later, AFA determined the total explain this pandemic impact on Since the beginning, nobody has suspension of the activities for all the employees and employers in been exempt from the possibility of tournaments. Shortly afterwards, the framework of the Argentinian contagion, but this question gives the Argentine Government decided labour regulations. In first place, me the basis to tell River Plate’s on the Statutory Quarantining for Argentine’s Government banned experience and the beginning of the entire population. (by issue an extraordinary Decree) the pandemic. to fire or suspend employees for a In this sense, River Plate’s sixty-day period. On 13 March 2020, the club made attitude has been outstanding, a drastic decision which, at the in anticipation of the situation In this context, said Decree has an time, generated for and against to come, prioritizing health care exception and what employers are positions. What was that decision as the main pillar, even above able to do is to suspend employees about? The club, being informed any eventual sports risk and the under Article 223bis of Labour that one of its reserve players was economic consequences it could Contract Law, this means that being tested for having symptoms also bring about. employers can reach an agreement similar to those of the COVID-19, with an employee and pay an decided jointly with its professional agreed amount in compensation team to prevent contagion risks, to the suspension. so did not show up to dispute the
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China
In the CFA Proposal, which is in line According to statements provided with the FIFA Guidelines, the CFA by the President of the CFA,Chen firstly encourages football clubs Xuyuan, it seems that the content to inter alia negotiate and reach of such CFA Proposal has been agreements in good faith with coordinated with FIFA, which football players and coaches for the somehow is supporting the adjustment of remuneration during initiatives taken to safeguard the suspension period. As of today, contractual stability in Chinese Giandonato Marino in China there is neither a players’ football, as well as the financial Lawyer, Llinks Law Offices 3 Shanghai – China union nor any mechanism for viability of Chinese football clubs. collective bargaining. Therefore, clubs, players and coaches, In light of the above, we consider under the instructions given in that it would be very complicated the CFA Proposal, are advised for players - both national and to adopt salary adjustments foreigners - to refuse salary through negotiation according to reductions and then obtain the procedure regulated under compensation before tribunals, as “Chinese Labour Law”. long as the measures applied are reasonable and made in accordance Tomás Pereda Rueda Such procedure consists in the with the CFA Proposal (and/or FIFA Lawyer, Llinks Law Offices Shanghai – China parties holding a negotiation Guidelines). So far, according to the procedure based on the principle media, quite a few Chinese clubs of equal representation. In such have applied salary adjustments to It is a common fact that many clubs process, the club may have all its players and coaches. at a worldwide level are negotiating players and coaches present at or have already adjusted the the negotiation (or they can select With regards then to a refusal to contracts (i.e. remuneration, term, representatives to participate on train and/or participate in matches, loans, etc.) of their employees, in their behalf) and the two sides under some circumstances players accordance with their national will then negotiate the clubs’ and coaches can refuse to train regulations, collective bargaining proposal for the adjustment of or play over security concerns. agreements (on a club or league remuneration. According to Article 54 of the basis), and/or the FIFA COVID-19 “Labour Law of the People's Guidelines issued on 7 April 2020 In addition to that, the CFA goes Republic of China”, an employer (FIFA Guidelines), among others. further and recommends to clubs shall provide its workers with a the amounts and duration of the safe labour environment, hygienic Following the issuance of such FIFA salary reductions: reductions from conditions and necessary articles Guidelines on 8 May 2020, the CFA 30 to 50% of remuneration for the for protection in conformity with also published a document, the so period starting from 1 March 2020 the regulations of the country. called “CFA Proposal” addressed until one week before the kick- Bearing this in mind, considering to all Chinese football stakeholders, off of the professional leagues in that Chinese clubs follow the health aimed at inter alia guaranteeing China for the season 2020. Another requirements requested by the the contractual stability between option available for football clubs CFA and competent authorities, clubs and employees, the financial would be to postpone the payment if a player and/or coach refuses stability of football clubs and a fair of remuneration - to amounts no to provide services for the club, procedure for salary reductions higher than 30% - until 90 days after (unless the player/coach proves of players and coaches (CFA the start of the relevant league.2 any deficiency committed by the Proposal).1 club) the club could impose the pertinent disciplinary sanctions 2 The CFA also set some limitations to these according to the contracts and/or reductions and/or delays in payment, stating that remuneration should not be adjusted internal regulations of the club, as for players/coaches with monthly salaries the case might be. 1 English name: “Proposal for Professional lower or equal to RMB 10,000 net (approx. Football Clubs, Players and Coaches EUR 1,300), nor delayed to those parties for Salary Adjustment and Overcoming with monthly salaries lower or equal to RMB Difficulties”, link in Chinese: www.thecfa.cn 20,000 net (approx. EUR 2,600). 3 www.chinadaily.com.cn
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cooperated with Chinese clubs It is true that in our club there in order to reach agreements. In are some concerns in the event my opinion, players and coaches that some of our players could should not refuse the proposals get infected and the infection made by the clubs unless they are eventually affects his performance grossly unfair. At the end, the aim and/or health status even after of these negotiations is to protect his recovery. In such a case, there the future relationship of all parties are certain questions that we Zhao Qiwei involved, as clubs in this situation deem challenging to answer. For Head of Competition Department, cannot bear high expenses for instance, how such scenario could Shenzhen Football Club Shenzhen – China salaries while not receiving any affect the employment relationship income due to the suspension of between the parties? What the competitions. remedy may the club have in this "In general, clubs have faced and situation? Could a club be entitled are still facing long negotiations Our club has been taking all to terminate a contract with just with their employees to temporarily protective measures recommended cause if this situation takes place? adjust their remunerations in order by the competent national and to guarantee the financial viability local authorities of our province of This situation is new for all parties of clubs, while in other cases the Guangdong, in order to protect all our in the football industry, and it is parties had to reach agreements employees and avoid any potential clear that each single issue shall be for the termination of their infection. Also, we issued specific dealt with on a case by case basis employment contracts, due to the guidelines and recommendations in order to find the most suitable uncertainty on the return of some to the players and coaches that are solutions for everyone." players and/or coaches to China temporarily abroad with the purpose during this season 2020. of guaranteeing their safety in the meanwhile. In fact, we are proud to On the other hand, we should say that to date there has not been remark that in general, players any confirmed infection of any player and coaches have positively or coach of our team.
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Australia
The effect of the COVID-19 lockdown in Australia on the A-League – Recent legal implications for clubs and players
By Peter Paleologos Player Agent & Lawyer In response to Foxtel’s non- LIBERO Consulting payment, the FFA is threatening Melbourne – Australia legal action against Foxtel as it expects the A-League matches will return and be televised in the future once the Australian lockdowns are lifted and as the binding Foxtel Pay TV contract runs for another three seasons. The current A-League season has only 3-4 rounds to play plus finals.
Nevertheless, the move by Foxtel is a bigger strategic play to get out of its A-League broadcasting contract in that “there’s little doubt The impact of COVID-19 on the Australian A-League and its professional that Foxtel wants out of the Pay clubs has had a significant legal effect on a twofold basis. Firstly, Australian TV contract and the relationship,” clubs are heavily reliant on Pay TV funds which have been affected by the as football has not rated, and it withholding by Foxtel (the Pay TV broadcaster of the A-League) of its next hasn’t seen football as one of its instalment payment which covers most of the AUD 3.2 million salary cap major assets for some time.2 payments which are used to pay players. Secondly, as no funds are now being derived from Pay TV rights nor from gate receipts, merchandising, In fact, despite having three years or sponsorships, most A-League clubs have stood down their professional left to run on its contract, senior players from their employment contract.1 club and FFA sources anticipate Foxtel will seek to end its $57 million per-year deal with the A-League, which has been postponed due to In fact, since the last A-League The Pay TV broadcast the COVID-19 pandemic. 3 match occurred on 23 March 2020, rights contract dispute 7 of the 11 A-League clubs have With the A-League unable to stood down players and staff due to The impact of no games and no provide matches due to the a lack of revenue. At this stage, the product resulted in the A-League pandemic, the deal could potentially A-League remains suspended until broadcaster Foxtel effectively be deemed a “frustrated contract” 31 May 2020 and the Australian walking away on 15 April 2020, under Australian Law as both the Federal Government will revisit the halfway through a six-year deal in legal concept of force majeure and current strict lockdowns on 11 May broadcasting the A-League, when the law of frustration are common 2020.1 it reportedly failed to transfer a law concepts recognised by the scheduled instalment payment of Australian Courts. nearly AUD 12 million to FFA for the last part of the A-League season. This has had a flow on effect that 2 ABC News Australia website, Ben Knight, 26 April 2020,“‘A-League future hangs in the FFA has not paid A-League the balance after Foxtel walks away from TV 1 Foxtel reached agreement with Football clubs about AUD 900,000 each as deal” www.abc.net.au Federation Australia on a new broadcast 3 Sydney Morning Herald, Dominic Bossi, deal through to the end of July 2021. The part of their salary cap funding. 30 March 2020, ”A-League looking for new new agreement means the A-League 2019- broadcast partner with Fox Sports set to 2020 will resume on 16 July 2020. walk” www.smh.com.au
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At time of writing this article, it The standing down of risk of allowing entire squads to is not known if Foxtel included professional players by become free agents if players go this type of clause in its contract A-League clubs unpaid for an extended period, with the FFA for broadcasting despite FFA regulations allowing the A-League. As the doctrine The COVID-19 lockdown has free movement for unpaid players of force majeure is a principle of also had a significant impact on through the FFA national dispute contract law in Australia, it must be A-League clubs and players. 7 of resolution chamber if a player is expressly referred to and defined the 11 A-League clubs have stood owed money under contract for in a contract as it has no settled down their entire rosters while the over two months. Further, the meaning in Australian common competition is suspended and this FIFA regulations will not apply at law. Parties are free to agree on includes clubs such as Western this stage to the seven A-League the allocation of risk between Sydney Wanderers, Newcastle clubs that stood down their them when their transaction Jets, Perth Glory, Central Coast players indefinitely, while the is affected by circumstances Mariners, Adelaide United, Western season remains suspended due to beyond their control and to United and Brisbane Roar. All these the COVID-19 pandemic. determine what circumstances seven clubs have informed their are to be treated as a force players, coaches and staff they will majeure event4 like a pandemic. not be paid until the competition resumes due to significant cash Free agency risks Further, the common law doctrine flow problems caused by the of frustration which is the same in A-League suspension and no The Australian players’ union, the Australia as it is in England, may current Pay TV money coming into Professional Footballers Australia also apply. To apply, “there must their accounts. (PFA), has warned “that it will help be a supervening event (frustrating players gain free agency and walk event) that is not the fault of either At this stage only the top clubs away from contracts if they go party, which significantly changes like Melbourne Victory, Melbourne unpaid for an extended period of the nature of the contractual rights City and Sydney FC who have time, urging clubs to find a middle and/or obligations and makes major investors and rely less on the ground to solve their revenue it unjust to hold the parties to Pay TV payments have not stood problems instead of standing the contract.”5 The event must down their players or staff and can down entire squads without be critical and have far reaching survive the pandemic shutdown. consultation.”6 Under normal consequences. In this instance, circumstances, players who are a Court must assess whether not paid for more than two months the COVID-19 pandemic has just at any club in the world are free to delayed the A-League season or The Australian walk away from their contracts has altered the whole landscape of Government Job Keeper after giving their employer 15 days’ A-League football in Australia. Program notice.
Whether force majeure or the law The Australian Federal Government However, the A-League clubs of frustration can be used as a has announced a nationwide ensured that their stand-down reason to exit the Pay TV broadcast program from 1 May 2020 to notices “were filed under the contract by Foxtel would likely help businesses to retain staff Australian Fair Work Act and result in a contested legal dispute during the COVID-19 lockdowns in protect the clubs against losing and the FFA and A-League Australia. players under [FFA or/and most clubs have readied themselves likely] FIFA regulations – even if for litigation as the sum of $57 These measures have allowed the they are not paid again until June.”7 million per year in Pay TV rights is seven A-League clubs to apply fundamental to the survival of the for the Federal Government’s Job Australian A-League competition. Keeper relief package scheme which allows clubs to claim AUD 750 a week to pay each of their stood down players. 6 Sydney Morning Herald, Dominic Bossi, 1 April 2020, “Players could leave as free 4 Baker Mackenzie law firm, 11 March 2020, agents after Wanderers stand down entire Joachim Delany and Alex Hartmann, By moving to this scheme, the squad” www.smh.com.au “Force Majeure and the Doctrine of 7 Sydney Morning Herald, Dominic Bossi, Frustration: An Australian Perspective” seven A-League clubs that have 2 April 2020, “FIFA laws allowing free www.bakermckenzie.com stood down staff will not be at agency won’t apply to unpaid A-League 5 Ibid. players” www.smh.com.au
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How “coronavirus Those criteria include the clause” could infiltrate sustainable provision of player and future A-League player staff health and safety threshold contracts requirements including:9
With Foxtel attempting to remove ➥➥ State and Federal border itself from the expensive A-League restrictions being lifted; Pay TV deal (which it has not seen a suitable return on investment), ➥➥ large gathering restrictions it is likely that in future when allowing for the required the A-League is to return, player squads and support staff to salaries will go down and clubs gather being lifted; will be tempted to delay re-signing players or recruit new players. It is ➥➥ social distancing protocols also likely that matches may also being agreed with governments be played behind closed doors to allow the holding of that will also curtail match day professional games; and, revenue which further impacts future player salaries. Further, ➥➥ having an initial period of as COVID-19 may still affect training and conditioning for future seasons due to possible club squads in order to ensure mutations or further pandemics both the health and safety of it is likely that future “A-League the A-League’s elite players. player contracts could include a ‘coronavirus clause’ exempting Although there is now a plan clubs from player payments should in place to recommence the recurrent COVID-19 outbreaks A-League, the legal issues such as provoke ongoing competition contesting the termination of a TV shutdowns.”8 It is evident that the rights contract and circumstances legal implications that arise under surrounding the ability of clubs COVID-19 lockdowns may impact to pay player wages, will have the player contracting landscape a huge impact on the A-League in the future. going forward. In order to limit the effects of the possible cessation of the Foxtel contract concerning the A-League Pay TV rights and the Restarting the football uncertainty as to the restart of the season may save the A-League season, there must be A-League from a current strong dialogue and collaboration legal minefield across the game to ensure that Australian football does not fall FFA has reconfirmed its intention into a deep downturn and become to resume the A-League 2019-20 entrenched in a legal quagmire season as soon as possible and it between the FFA and Foxtel. has identified several fundamental criteria that need to be satisfied before a possible resumption date can be scheduled.
8 SBS - The World Game website, Dave Lewis, 18 March 2020, “How ‘coronavirus clause’ 9 Football Federation Australia, FFA Media, could infiltrate future A-League player 23 April 2020,” Update on the Hyundai contracts” theworldgame.sbs.com.au A-League 2019/20 season”, www.ffa.com.au
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UAE
them overcome this difficult stage, country is not back to normal. So, which has negatively affected their players can refuse to train or play financial resources, mainly from over security concerns, but the club ticketing, sponsorship agreements will never resume training and the and broadcast rights. official matches without a decision from the Government of the The decision of salary reduction country and the national federation. became official due to the But the issue of the player that can Saleh Alobeidli instructions contained in the refuse to train is very critical. And Lawyer, Saleh Alobeidli Advocates & Consultants COVID-19 FIFA guidelines and hosting training shall be decided by Dubai – UAE was taken into consideration by the Government after making sure all the national federations, which that it is safe. makes it difficult for a player to The current legal debate boils contest such decision. A player Therefore, as long as a club down to the extent of the cannot refuse the decision of complies with the requirements legitimacy of reducing the players’ salary reduction, but can contest of the Government in preparing salaries due to the great financial the amount of reduction if he finds training, a player cannot refuse difficulties that the clubs are facing it excessive. And of course, the to train as it will be considered a as a result of suspending football player signs his acceptance on the breach of his obligations.It has activity indefinitely. reduction. As a result of the FIFA to be mentioned that the UAE Guidelines, the UAE FA has issued Government is setting a great In fact, and in the absence of the a similar circular to regulate the model in fighting the coronavirus “force majeure” clause, many clubs situation to provide the basis and and assisting many other countries work to find amicable solutions criteria for salary reductions. around the world. Having said that with players to convince them the UAE FA will strictly follow the of the necessity of accepting a A club cannot force any of its guidelines of the UAE Government. salary reduction procedure to help players to train if the situation in the
the control of the club.The club There is a possibility that one of the has been directly affected, and we players may be infected with the must take this data into account COVID-19 virus, and the source of when asking a player to reduce his the infection may be a teammate, monthly salary. The player has the the opposing team, or match right not to agree to participate officials, and players’ life insurance in training or matches, but such policies should be modified to Sharjah Football Club a kind of claim actually means cover these cases. I suggest that Sharjah – United Arab Emirates breaking the contract due to the the player sign an appendix to the disappearance of the reasons on contract with the club that includes "There is a direct and profound which it is based. modifying his insurance policy impact of the COVID-19 epidemic and to permit understanding and on the contractual relationships As for the reason for the player’s accepting the possible dangers of between clubs and players and in right to refuse training and playing, exercising football in light of the football management around the it is that the player’s contract is current health conditions. world. based on a consensual agreement between the two parties, and it In the absence of such an appendix, The contractual balance will be is not permissible to generate I believe that the player’s claim for severely disrupted if the player does compulsory support outside of compensation will be a legitimate not accept a reduction in his agreed what is agreed upon under the compensation, especially if he salary because the agreement same circumstances and the can prove that the source of the was based on legal, financial and reasons surrounding the contract COVID-19 virus infection is the economic conditions that changed at the date of its signing. result of practicing, training and/or dramatically for reasons beyond participating in games."
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Saudi Arabia
Players have the right to refuse the particular, can be resumed that salary reduction proposed by clubs, would mean, in principle, that all especially if clubs have not acted in health and safety conditions have good faith and reasonably. However, been met. as mentioned above, clubs in the Kingdom of Saudi Arabia might be If players do, for any reason, decide able to impose a salary reduction otherwise, they should voice their unilaterally in case of force majeure concerns so that such concerns Bandar Al Hamidani or temporary state of emergency. can be discussed and addressed by Lawyer, Al Tamimi & Company Riyadh – Saudi Arabia In addition, clubs might also clubs and the relevant authorities. impose unilateral decisions to vary Among other situations to take terms of employment contracts into consideration are insurance according to FIFA guidelines and coverage and medical tests recommendations. Particularly, available. In cases where players and among other requirements, maintain a decision to refuse to if the economic situation of clubs train and/or to play where all was affected by the COVID-19 concerns have been addressed, pandemic and the same terms have players need to be aware that clubs been proposed to the entire squad. might be entitled to terminate the employment contracts with just Pedro Castro Lawyer, Al Tamimi & Company Nonetheless, it is important to cause. Riyadh – Saudi Arabia stress that each situation needs to be assessed on a case-by-case basis as circumstances might National laws of KSA and not be similar for all clubs, which Sharia principles recognize the ultimately will be decided by the principles of force majeure and relevant resolution forum, e.g. state of emergency. In addition, FIFA, the Court of Arbitration it is very important to take into for Sport or the national dispute consideration the FIFA Circular resolution chamber, as applicable. no. 1714 dated 7 April 2020, with certain guidelines and On a separate note, it is important recommendations. to emphasize that the salary reduction should be equal or While FIFA recommends that progressive. That means either the clubs and players/coaches should same reduction is applicable to all negotiate collective agreements, players or it will increase for higher generally speaking, considering salaries. On the contrary, and that there are no football unless agreed by the entire squad, competitions or training sessions, situations in which players with clubs may be entitled to impose low salaries are subject to a salary salary reductions particularly cut bigger than high paid players noting that players cannot perform should not be acceptable. their contractual obligations. Also important to consider is that, due In relation to the possibility of to the long period of suspension players refusing to train or play of football competitions, clubs are over security concerns, this likely to suffer significant financial situation does not currently losses. Under these circumstances, apply in the Kingdom of Saudi it would be deemed unfair that Arabia as all sports activities are clubs need to pay full salaries as if suspended. However, once the nothing had happened. Saudi Government decides that sports activities, and football in
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Cameroon
Salary reduction are envisaged contractual obligations and they with regards to the bad economic shall be liable to sanctions. Since situation of clubs. In Cameroon, due to the fact that FECAFOOT’s the economic motive is considered disciplinary code is silent in the to be one of the main reasons face of such situations, most of for contractual rearrangement our clubs in the elaboration of between an employer and his their internal management texts, employee. Clubs’ admittedly notably their code of ethics, have Jean-Jacques Nouyadjam negative balance sheets will justify provided for sanctions. Some Lawyer, Nouyadjam Associates Yaounde – Cameroon this economic motive. In order to of those sanctions include the avoid dismissal on this ground, deduction of up to 10% of a salary. Article 40 of the Labour Code But if despite taking these safety As we now live in step with the obliges companies to seek for all measures, a player or coach shall pandemic, forcing populations possible means to avoid it. These consider his health fragile, and that to confine themselves against may include the reorganization of resuming training shall constitute their will, and making it almost bonuses, allowances and benefits a threat to his safety or that of impossible to carry out contractual of all kinds, or even the reduction his family, he shall be required to relations; companies and clubs’ of salary. Based on the principle provide some evidence. financial circumstances have of freedom of contract, a player suffered a great blow. They are can refuse the salary reduction However, those specific cases no longer able to meet their proposed by the club, in which are still not possible in Cameroon obligations, particularly in terms case he will be dismissed with for two main reasons. The first of salary payments for players. payment of severance pay. being the interdiction till now, of As such, an emphasis has been groupings of more than 50 people put on contract renegotiation If it happens, as is the case in in one place, and the obligation to adapt them to the current some countries, that appropriate to observe social distancing, situation and ensure the continuity measures allowing the resumption representing a minimum of one of contractual relations. Most clubs of games and training sessions metre; which does not allow players went for salary reduction. But have been put in place by the to return to training. The second those which had anticipated force sporting authorities, players and reason being the cancellation of majeure when signing contracts, coaches may not, on the grounds competitions by the Federation; simply apply the relevant provision of force majeure, refuse to take which makes impossible the of their contracts. part in them. Because if they do so, organization of matches. it shall constitute a breach of their
152 Football Legal Disputes 5 Resolution
The global crisis has affected the functioning of sports justice. However, it is rapidly adapting to manage the flow of potential legal remedies that will likely need to be managed in the near future.
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The CAS users will probably realize that they can save significant money with the use of electronic filing and with hearings by video-conference
Interview with Matthieu Reeb Director General, Court of Arbitration for Sport Lausanne – Switzerland
How has CAS adapted to the To date, has CAS received appeals Will the COVID-19 crisis push COVID-19 health crisis? related to COVID-19? On what CAS to be more flexible in the issues? application of regulations to Our adaptation was very quick, consider the difficulties that some thank to the fact that all electronic Yes, in football. In a few countries, parties may encounter? means of communication were such as Mexico and Switzerland, already in place prior to the clubs have challenged the decision The CAS emergency guidelines, start of the pandemic. First, all of their national association/league in force since 16 March 2020, CAS employees in charge of to adopt special measures in have been now lifted but, since procedures could work from home relation to the COVID pandemic. In 1 July 2020, the new CAS Code without any disruption in the particular, the championship in some has incorporated some of these management of cases. Second, on leagues has been annulled without guidelines in order to maintain an 16 March 2020 already, our Board any promotion/relegation. We can easy access to the e-filing platform could adopt emergency guidelines expect other similar disputes in other and a swift management of our in order to facilitate the use of our leagues or sports in the near future. procedures, without affecting the e-filing platform where all written rights of the parties. I can add that, submissions and exhibits could from 1 July too, Spanish is officially be uploaded. And third, we have Our procedures recognized as a working language also improved the management have not been of CAS, which will also reduce of hearings by video-conference affected translation problems. during the time when in-person so much by the meetings were impossible. COVID-crisis I cannot say whether CAS panels will be more flexible in the In some situations, parties application of the law/rules to have requested extensions of Cases having an indirect relation settle disputes. This, I assume, will time to file submissions or the to the pandemic may also be among the issues that each postponement of hearings, but appear soon, especially when the CAS Panel will have to consider, generally speaking our procedures enforcement of contracts will be depending on the circumstances have not been affected so much disputed due to financial problems of each individual case. by the COVID-crisis. caused by the COVID-19.
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In the long term, what elements of CAS’ daily operations will be changed? Do you think this will affect how sporting justice is rendered?
The CAS users will probably realize that they can save significant money with the use of electronic filing and with hearings by video- conference. I am particularly thinking of the arbitrations with a low value in dispute. The benefit will be the reduction of the procedures’ average duration. But the video-conference is not ideal in procedures involving many witnesses and experts or in complex matters. Arbitrators generally prefer to have the persons in front of them and I fully understand that. In-person hearings also increase the possibility for CAS panels to encourage settlements between parties, something that is much more difficult when the persons concerned are in different locations.
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Mediation and Football: CBF System Conflict Management in the COVID-19 Setting
By Rafael Terreiro Fachada1 CBF National Dispute Resolution Chamber (CNRD) General Coordinator & Roberto de Palma Barracco2 CBF National Dispute Resolution Chamber Neutral and Head of Research Rio de Janeiro – Brazil
This paper aims to look into mediation as a sports industry tool, especially regarding Brazilian associative football, to overcome COVID-19-related hurdles. Nowadays, “CBF Family” dilemmas are a dire challenge to its stakeholders’ future, and mediation arises as a helping tool to alleviate the consequences of this crisis. That is, mediation serves as an associative policy, as an associative procedure, and as a technique tool to steward the Brazilian football industry towards a new dawn.
Brazilian Associative international transfers for Germany Emergency of International Football’s Dilemmas12 and Italy combined.3 Concern (PHEIC)6 with 2019-nCoV as its provisional name. COVID-19, Brazilian football is, by its nature, From a purely financial perspective, as a PHEIC, changed sport’s routine global. Wherever we have the Brazilian men’s football league and forced that industry to adapt in football in the world, there is a Série A, which the Brazilian Football order to resume its competitions. Brazilian athlete on the field. In Confederation (CBF) organizes, It is likely that this restart will take 2019, 306 Brazilian clubs were had close to BRL 5 billion (at the place in a very different financial either the origin or destination time, around EUR 1 billion) revenue context and with a routine filled for 1,779 international transfers. in 20184 - showing a financial with protocols yet to be defined - To get an idea of the significance strength only smaller than the Big from training sessions to events, all of that number, it is equivalent Five when compared to Europe.5 aimed at protecting the well-being of all Concacaf clubs that took However, its financial outlook is of everyone involved in the sport. part in international transfers deeply connected to and heavily and is greater than the sum of all reliant upon the global economy In particular, how will football as as well as its impact on football entertainment adapt itself?
1 Sports Law Master’s in Law and Ph.D. finances throughout the world. candidate (PUC-SP). Social and Legal Clubs, athletes and associations Sciences’ LL.B. (UFRJ). CBF National Dispute Resolution Chamber (CNRD) On 30 January 2020, the can and should have dialogue to General Coordinator. World Health Organization 2 LL.B., Master’s in Law, Ph.D. candidate (FD/ 6 PHEIC, in accordance to WHO’s IHR USP). ADR LL.M. (University of Oregon (WHO) declared a Public Health procedures and implementation, is a School of Law). Entertainment management serious and extraordinary health event and marketing’s (UCLA Anderson School) 3 Global Transfer Market Report: men that endangers international public health and Sports business’ (FIA) extensions. professional football – a review of - in other words, it brings public health Sports labor relations’ (FD/USP), IP’s (WIPO international football transfers worldwide. implications beyond the affected State’s Academy), Mediation’s (UofO), Finance’s Zurich: FIFA, 2019. resources.fifa.com national borders. That is, it constitutes a (UPenn/Wharton), and Sports industry’s 4 Grafietti, Cesar; Di Caterina, Pasquale, “Análise public health risk to other States through (Columbia) certificates. CBF CNRD Neutral Ecônomico-Financeira dos Clubes Brasileiros the international spread of the disease and Head of Research. IBN | S&E CIO. de Futebol”, São Paulo: Itaú BBA, 2019. and requires a coordinated international LawInSport Editorial board, IB|A Académie 5 Jones, Dan, “Annual Review of Football response due to its serious, unusual, or du Sport Executive Board, and GEDD- Finance 2019”. Manchester: Delloitte, 2019. unexpected situation. For more information, FDUSP Advisory Board member. www2.deloitte.com www.who.int
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find collective solutions to the In this short contribution, we resolution means12 - including interests at hand together. This present mediation as a tool within mediation. is where mediation (re)appears the “CBF Family” from three behind the scenes of sport. perspectives: mediation as an In turn, the 2017 CBF Statute Mediation is a way of managing associative policy, mediation as provides that: conflicts and can be very useful a procedure, and mediation as a when facing the resulting PHEIC’s technique. “Art. 12 – CBF’s goal is: […] economic and financial meltdowns. XLV – prioritize mediation and It is a way to steward through the arbitration as dispute resolution sports fallout of this grayish swan.7 procedures, recognizing the CBF and its Associative Arbitral Tribunal’s jurisdiction Yet a question remains, what is Policies for Amiable and authority." mediation? Its classic definition is Composition Methods “a method of non-binding dispute In addition, the 2017 CBF resolution involving a neutral third Sport has enough specificity that it Statute reinforces that message party who tries to help the disputing is able to create its own regulations, when affirming that the parties parties reach a mutually agreeable render its own decisions, and submitted to its jurisdiction must solution”8 and divides itself into two enforce its own sanctions. From seek to resolve any associative kinds:9 evaluative10 and facilitative.11 a State’s perspective, sport’s dispute through dialogue: Although quite complete, this “jurisdiction” is a de facto classic definition does little when alternative dispute resolution “Art. 122 – In the event of thinking about how mediation may system. Given this perspective, divergences, controversies, help Brazilian sport and football as and in line with its autonomy, sport disputes, discrepancies, or a conflict management and crisis develops instrumental associative conflicts of any nature between prevention tool. policies aimed at maintaining its football-involved parties, they members’ cohesion as well as should make their best effort harmonizing its community with to resolve it through an amiable 7 As N. Taleb points out, a Grey Swan is others - such as the State. and good faith composition. relatively scientifically treatable (a.k.a, can be turned into a model) - having knowledge [§] Art. 123 – When disputing of its effects reduces its surprise effect; it is In Brazil, the FIFA 2.0 Agenda parties fail to reach an amiable a rare but expected event (mandelbrotian randomness) that encompasses the and the 2017 CBF Statute guide composition, any conflict or randomness that produces phenomena such associative policy. In other dispute shall be mandatorily commonly known by terms such as scalable. Taleb, Nassim, “A lógica do Cisne Negro: o words, there is a dialogue between submitted to Arbitration in impacto do altamente improvável”, 14. ed. dispute resolution systems at the accordance with this Section.”13 Rio de Janeiro: BestBusiness, 2018, p. 68. The author expands this point on a recent transnational level (“FIFA Family”) (free translation) article published by The New Yorker on and at the national level (“CBF 21 April 2020; www.newyorker.com 8 Garner, Bryan, “A. Black’s Law Dictionary”, Family”). The 2017 CBF Statute provides 10th edition. St. Paul: Thomson Reuters, guidance for mediation’s possible 2014, p. 1130. 9 It is arguable that there are actually three Enacted in 2016, the FIFA practical application for associative categories of mediation, the third one being 2.0 Agenda affirms that Brazilian football, even if in a transformative. “Transformative mediation, by contrast [to evaluative and facilitative “collaboration” is the essence of mediations], focuses on the disputants associative football, that is, “FIFA 12 FIFA COVID Guidelines (COVID-19 themselves and on their interactions, rather Football Regulatory Issues v 1.0) highlights than on the specifics of a particular dispute Family” members must maintain collaboration as one of its proposed (no matter how broadly defined). In the an open dialogue. This dialogue guiding principles when states: “[c]lubs words of Bush and Folger, transformative and employees (players and coaches) be mediation seeks to enable ‘moral growth’ for incentive shows up in the 2018 FIFA strongly encouraged to work together to the participants”. Moffitt, Michael L.; Schneider, Statutes, as well as its regulations, find appropriate collective agreements on a Andrea Kupfer. Dispute Resolution. 3rd Edition. club or league basis regarding employment New York: Wolters Kluwer, 2014, p. 89. which recognizes its dispute conditions for any period where the 10 “Evaluative mediation. Mediation in which resolution system connected competition is suspended due to the the mediator may direct the parties’ thinking COVID-19 outbreak”. and communications to some extent to the Court of Arbitration for 13 In its original: “Art. 122 – Na ocorrência by evaluating the merits, strengths, and Sport’s (CAS) jurisdiction as the de divergências, controvérsias, disputas, weaknesses of each party’s position”. p. 1130. discrepâncias ou conflitos, de qualquer Garner, Bryan A. Black’s Law Dictionary. 10th go-to place to resolve disputes. natureza, que surgirem entre partes edition. St. Paul: Thomson Reuters, 2014. However, this associative policy envolvidas com o futebol, deverão elas 11 “Facilitative mediation. Mediation in which envidar seus melhores esforços para the mediator helps the parties communicate is a bit too shy when considering solucioná-los por meio de acordo amigável and negotiate but does not offer advice amiable composition as a dispute e de boa fé”. “Art. 123 – Caso as partes or comments on the merits or otherwise desavindas falharem em chegar a um intervene in the dispute”, p. 1130. Garner, consenso amigável, os conflitos ou litígios Bryan, A. Black’s Law Dictionary. 10th deverão ser submetidos, em caráter cogente, edition. St. Paul: Thomson Reuters, 2014. à Arbitragem, como estipulado nesta Seção.”
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programmatic, directive manner. principles: informed consent, self- statement by the mediator,20 by It provides general guidelines for determination, and good faith one of the parties or by all parties adopting mediation as a proper participation of all parties. In other for that specific purpose. It is worth means of conflict management words, the mediator chooses noting that the CBMA Mediation in its associative sphere as well the way in which the mediation Regulations suspend any term as in dialogue with institutions procedure takes place, while related to the statute of limitations and people outside of its realm. It the parties bring its content and to file a claim while the parties also encourages parties to choose meaning. undergo a mediation procedure. mediation as a procedure directly, a procedure administered by the A first step to request mediation Furthermore, aside from CBMA, Brazilian Center for Mediation and is to do so in writing.15 Thereafter, CBF’s amiable composition system Arbitration (Centro Brasileiro de CBMA holds a pre-mediation does not provide in its associative Mediação e Arbitragem - CBMA).14 meeting to discuss the procedure’s policies for any other specific work methodology, the parties’ mediation procedure. Therefore, shared responsibilities, and the CNRD (CBF’s National Dispute the mediators’ responsibilities. Resolution Chamber) does not “CBF Family’s” Amiable The parties, then, consensually have any mediation procedure, Composition System appoint a mediator, or CBMA as it lacks a basis associative Design and its Mediation shall designate a mediator from policy as a programmatic rule Procedure its mediators’ list when the parties as well as a pre-determined cannot reach consensus.16 specific mediation procedure Aside from associative policies, regulation. However, the CNRD mediation is also a procedure that The parties and the mediators uses mediation as a technique serves as an instrument designed accept the mediation procedure by encouraging parties to have to resolve a specific dispute or by signing the Term of Mediation17 dialogue and seek agreement. to manage particular conflicts. as soon as the mediators sign Hence, as an instrument, mediation the Term of Independence and shapes itself according to the basis Impartiality. Then, the mediation associative policy and adapts itself procedure starts,18 in which Amiable Composition and to each case. In accordance with lawyers may assist the parties. the CNRD: Mediation as a the 2017 CBF Statute, the CBMA The mediation procedure comes Technique Mediation Regulations govern to an end when the parties and mediation as an associative the mediators sign a Term of In addition to an associative policy procedure. Agreement19 or with a written and an associative procedure, mediation is also a technique. As a CBMA-based procedure, 15 A mediation request must include: initial Mediation as a technique is a costs’ payment proof; parties names and 21 any “CBF Family” member may qualifications; disputed issues’ brief report; method of dialogue. This method request mediation before, during, pre-mediation meeting’s suggested date assumes the existence of a conflict and place; disputed amount’s estimate; or after a judicial or arbitral mediation procedure’s language; indication and not necessarily a dispute. proceeding. In such a procedure, of up to 5 names as suggested mediators (and whether it should be a co-mediation). 20 When a mediator understands that there a mediator acts as a neutral and In addition, the parties may send documents is no more negotiating room between impartial third party in order to pertinent to the conflict at hand. parties and/or their representatives during 16 These are the same steps for when there is a a mediation procedure, the mediator (if facilitate communication and case for a mediator’s de jure (doubt as to the advisable) may offer the parties a proposed negotiation between parties - mediator’s impartiality or independence) or solution in individual meetings (caucus). If de facto impossibility. parties agree, the mediator offers a proposal preserving confidentiality. The 17 A Term of Mediation must include: and a reply deadline. If the parties accept it, mediator does so based on three a. the parties’ and the mediators’ names the mediator informs each of the parties that (and representative, when necessary), there is an agreement. If not, the mediator qualifications, addresses, telephones, and informs each party that there was no 14 Free translation: “Art. 125 – Disputes that e-mails; b. tentative schedule; c. mediators’ agreement. Either way, the mediator shall no are not under the Sports Justice (Justiça fees; d. apportioning costs method; longer be able to serve on the case. Desportiva) or the National Dispute e. mediation procedure’s seat and language; 21 “Dialogue is a process, not an event. Resolution Chamber (CNRD) subject-matter f. any other relevant note. Once signed Dialogue takes place over time. It requires jurisdictions shall be mandatorily submitted and prior to the mediation procedure’s a commitment on the part of participants to to Arbitration in lieu of any State-level beginning, the parties must deposit the listen, challenge, reflect, and continue to talk Court”. In its original: “Art. 125 – Em lugar mediators’ fees. with one another.” Schoem David, Hurtado de recorrer aos órgãos da Justiça ordinária, 18 It is relevant to note that mediation as Sylvia, Sevig Todd, Chesler Mark, Sumida os litígios que não forem de competência a CBMA-based procedure follows the Stephen H. Intergroup Dialogue: democracy da Justiça Desportiva ou da Câmara CONIMA Code of Ethics. at work in theory and practice. In Hurtado Nacional de Resolução de Disputas – CNRD, 19 The Term of Agreement may be either a Sylvia, Schoem David. Intergroup Dialogue: deverão, obrigatoriamente, ser submetidos complete or a partial amiable composition deliberative democracy in school, college, à Arbitragem”, in addition to its Articles 128 between parties, and both parties and community, and workplace. Ann Arbor: and 158 which refer to the CBMA. mediators must sign it. University of Michigan Press, 2001, p. 6.
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Conflicts are part of everyday while creating room for constant The search for dialogue is a beacon life and the essence of sport - and close dialogue. Its online in this period of crisis. As such, it is after all, there is no sport without hearings and meetings alleviate noteworthy to mention that each competition. travel-related tensions, such as CBF community member has the time consumed moving across same goal: strengthening Brazilian At the associative level and as a continental distances as well as football during this PHEIC in order technique, mediation is useful to associated financial costs. to face its challenges together. sport as a tool in managing conflicts and preventing crises.22 Its dispute Furthermore, personal and less resolution system, which focuses bureaucratic communication solely on laws and regulations as helps lawyers to see the CNRD Final Remarks a single criterion, refocuses into a as an institution that understands macro perspective, analyzing the the issues at stake as well as the In short, in order to face the issue as a whole. In other words, challenges involved in solving them PHEIC, we must re(think) the mediation as a technique seeks to - thus, crafting together a CNRD sport dispute resolution structure identify what generates conflict beyond a simple decision-making and the possible mediation roles so that participants may reconcile machine. It is the technique applied in its three perspectives: as an and/or re-signify those dilemmas.23 to its procedure management. associative policy, as a procedure, and as a technique. The football In this sense, mediation is part The CNRD judges cases brought community should take this time of the CNRD’s routine, which by parties under its personal- to expand its associative policies uses mediation techniques in matter jurisdiction and according on mediation beyond mere its procedures to help disputing to its subject-matter jurisdiction, programmatic rules, and enact parties to have dialogue over their that is, it does not act before specific mediation procedures. It is conflicting perspectives in order every case. Therefore, for instance, time for reflection. A time in which to seek amiable composition’s we do not envision the CNRD we shall build dialogue together possibilities. Moreover, it does so as a bridge between clubs and as a coordinated action in which at every hearing and at every step athletes during the PHEIC, unless mediation serves as a tool that of its procedures. It is the design in a pending litigation - that is, the helps sport overcome this moment of a proper conflict management CNRD cannot use mediation as a of crisis arising from COVID-19 as and crisis prevention system procedure to create a solution to a a PHEIC and its consequences in during litigation, and not just the non-litigated fact. that industry. mere resolution of a dispute. It is the technique applied in each procedure. We must re(think) the sport dispute As another example, the CNRD resolution structure seeks to mould the steps of its and the possible procedures with the parties’ mediation roles lawyers, so that everyone involved converges at an appropriate pace Within the “CBF Family”, the
22 “Contrary to debate, where parties are trying CNRD has a fair settlement-making to persuade, convince, or win, dialogue history as it has bridged parties to operates as a safe space to explore difficult issues and honor multiple perspectives”, an agreement for approximately Tint Barbara, Koehler Julie, Lind Mary, of its cases. Moreover, the CNRD Chirimwami Vincent, Clarke Roland, Johnston Mindy. Dialogue. In Tint Barbara. Diasporas relies on its credibility and in Dialogue: conflict transformation and reliability within its market, as its reconciliation in worldwide refugee communities. Chichester: Wiley Blackwell, case docket adds around 200 new 2017, p. 64. procedures each year. Thus, albeit 23 “Revela-se importante a noção de ‘transformação do conflito’. Sendo o conflito informally, the CNRD may, once constituído pela percepção da relação again, be a go-to place to foster vivida, alterar o modo de visualizar os fatos reputados conflituosos pode gerar uma dialogue between apparently mudança de comportamento e, com isso, opposing parties in the search for repercutir no andamento da controvérsia, transformando-a em uma nova experiência”, a joint solution to a conflict. Tartuce Fernanda. Mediação nos conflitos civis. São Paulo: Método, 2008, p. 33.
Football Legal 159 How 6 could the Football Industry Change?
Beyond the first repercussions, the consequences of the COVID-19 crisis on the football industry will be numerous, although it is too early to know the extent of the impact. This last section gathers a collection of testimonies, views, questions from stakeholders who provide their first intuitions.
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“It is certain that governmental measures as regards international travel and How quarantine, as well as the economic impact on the travel industry, will need to be considered by international competition organisers. This will inevitably impact on competition design and format. At a time of great expansion for could the international football, it will be interesting to see if this model of continued expansion is sustainable in the coming years.” — Andrew Mercer Football Acting General Counsel & Legal Director, AFC Industry "Fixture scheduling will be a huge challenge “We will first need to redefine our for all competition organisers. One unknown products inventory, reschedule some is the attitude of UEFA towards matches being of the competition and/or modify their Change? scheduled ‘up against’ UEFA matches. Clearly, formats. Many of the confederations, this would provide much needed dates for federations, leagues and clubs are tak- domestic competitions. ing that path. This will in essence im- pact the contractual relations between In our opinion, the most unexpected properties and their partners.” consequence is the distance between clubs and their supporters that the pandemic forces — Achta Mahamat Saleh upon the industry. Yes, there have always Director, Legal Affairs & Compliance Division been ups and downs in professional football, CAF clubs have constantly been appearing and disappearing due to financial reasons, but one could hardly imagine, say, six months ago, "I consider that many changes will take that professional football all over the world place in what we used to see: changes could be deprived of the fans and be forced to play behind closed doors. The crisis has in the way sports events are organized. showed us clearly that football is not the same Clubs and players should change game without spectators at the stands." their way of training and travelling. Furthermore competition’ calendars will
— Calum Beattie not remain the same." Solicitor & Assistant Secretary Company — Gonzalo Mayo The Scottish Professional Football League Sports Legal Counsel River Plate
"Football will lose mass crowds in the stands. On the contrary, the TV follow-up of the matches will increase. The tournaments that require many times of plane travel will be reviewed, and the orientation for matches may be in close geographi- cal locations. If scientists fail to find a cure or vaccine for COVID-19, special rules for the upcoming World Cup should be taken into consideration."
— Sharjah Football Club
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“I think the pandemic raises the issue of the incredibly packed international match calendar in football. Clearly, we have to recognize that creating more and more international competitions with more and more cross border matches is probably not sustainable. Ideas such as an expanded European clubs’ competition, or the Club World Cup should probably be reassessed in light of this medical crisis.”
— Mathieu Moreuil Director of International Football Relation and EU Affairs The Premier League
“Referring only to the impact on Europe, this crisis has shown us that perhaps what we took for granted, after all, was not so certain. First, at a political level, the different countries of the European Union have adopted different strategies and responses to face the crisis caused by the COVID-19 pandemic. Further, regardless of the different strategies taken, they were not coordinated, for example, with the closure of borders occurring in a lagged way within the countries of the Union. This lack of coordination was then reflected at a professional football competition level where it was never possible to find a transversal solution for the future of the competitions within Europe. In this way, and regardless of the various national interests underlying the different domestic decision-making, I believe that the crisis has demonstrated the fragility of the European vision with regards to football.”
— Nuno Santos Rocha Head of Legal Department FC Porto
“As a consequence of the COVID-19 crisis, it can not only be observed that debtors both inside and outside the football family fail to respect their financial obligations, but to some extent, the situation also gives rise to club partners to legitimately reduce their payments to clubs. For example, if the season is prematurely stopped as in France or the Netherlands, the TV money due to the clubs would be reduced pro rata. Moreover, as long as matches take place without spectators, we of course lose revenues for tickets (including VIP lounges) and may have to partially reimburse sponsorship fees, insofar as we are not able to provide the services and benefits that the sponsor’s consideration paid for (unless we manage to negotiate another way of compensation).
I expect budgets in general will decrease. Due to the general impact of the crisis on all economic branches, it will be more difficult to generate significant sponsorship revenues. In Germany, we have already had a discussion - in light of the insolvency risk some clubs seem to be facing already, that the crisis only takes some months - whether certain sustainability mechanisms should be introduced that, for example, require clubs to retain a higher amount of equity.”
— Jochen Schneider Head of Sports and Member of the Board FC Schalke 04
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“We are working on two critical aspects, as we are thinking about including women in the transfer regulations to create a particular legal regime for women’s football. They need a different kind of protection. Therefore, we need to adapt our regulations to this reality, to the reality of 2021. We are currently working on a document that we would like to present to the football stakeholders soon. If an agreement is reached, we will move forward in or- der to implement some amendments vis-à-vis women’s football in 2021. Another capital aspect is the protection of coaches. The Players’ Status Committee is dealing with coaches. However, this is not perfect as the FIFA Transfer Regulations are not adapted to coaches. In a nutshell, we would like to reform and improve the legal protection to coach- es, provided that we reach an agreement with all the stakeholders (FIFPRO, ECA, and the World Leagues Forum). Hopefully, these two changes will be implemented in 2021.”
— Emilio Garcia Silvero Chief legal & Compliance Officer FIFA
“An issue to be mentioned is the actual “The worst risk is no fans instability of the competitions structure attending matches at the and the fact that several foreign coaches stadiums. and players are abroad at this moment without any idea of when they will be able I personally believe that it to return to China.” is possible that clubs may decide not to invest in new or — Zhao Qiwei reformed stadiums with many Head of Competition Department seats. FC Shenzen We will probably see new improved technologies to watch football on TV like in the stadiums.” — José María Cruz CEO FC Sevilla
"Closed stadiums are very relevant and frustrating, considering how important fans are for players’ motivation. Who would have ever imagined having a match without spectators? This will also have considerable economic consequences. The absence of fans at the stadium, or - in the best-case scenario - their limited presence, will have a negative impact of the financials of the clubs."
— Gianluca Cambareri Lawyer & Board Member AS Roma
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DHowisputes could the Football Industry Change?
“Bigger clubs will have to pay ever more attention to their digital presence and try to diversify their revenue streams. For example, at the beginning of June, FC Barcelona lodged the first ever club OTT streaming service called Barça TV+. This is a key part of the club’s new digital strategy and will allow the club to reach its millions of followers around the world and offer them exclusive content.
The most obvious and desirable change is that clubs become more sustain- able businesses, show more financial discipline, and aim at breaking-even from an operational perspective. Governing bodies may also want to think of helping / forcing clubs in this direction by introducing changes to the licensing regulations by, for example, introducing mandatory salary caps, similar to the ones already seen at Serie B in Italy and the Rugby Union.”
— Wouter Lambrecht & Román Gómez Ponti Attorney-at-Law & Chief Legal Officer FC Barcelona "We have to encourage, even more, the training system of clubs. Then, we will have to find ways to consolidate the contractual links between those clubs who merely “The first point is certainly the reorganization benefit from training new of football system and the Financial Fair Play players and clubs that have (FFP) rules. Some FFP rules have already been committed themselves to made more flexible but a deep rethinking of the “grow newer talent.” current rules is needed.
— François Klein The spread of the virus and the cessation of Lawyer the Serie A caused a legal dispute with the broadcasters. Many clubs - especially in the minor series - who base their financial capacity on the revenues expected from broadcasting of TV rights and sponsors risk not having the possibility to restart the next sporting season.”
— Gianluca Cambareri Lawyer & Board Member AS Roma
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"The truth is that when questioned, the “To bring fans back to European model ended up failing and it will the stadium should be a be certainly interesting to watch the impact of the different decisions on the return of top-priority goal for all European Competitions this year and the next. football actors. The crisis Let us not forget that with the arbitrariness has showed us clearly that of the divergent decisions taken by national associations in each country, namely as football is not the same regards the classification criteria to be game without spectators at adopted, the number of disputes and litigation the stands.” will be high and will certainly impact the pronouncement on which clubs will be able to eattie access European competitions." — Calum B
— Nuno Santos Rocha Solicitor & Assistant Company Head of the Legal Department Secretary FC Porto The Scottish Professional Football League
"It’s no exaggeration to say that the professional game is faced with an existential threat. Many of our clubs are in financial peril. As I said previously, we continue to do our best to find ways to alleviate the pain by looking to facilitate liquidity flowing through the system by adapting the regulations that govern our game. The brutal truth is that this may not be enough to save all clubs. Perhaps moving forward, as an industry we need to reflect on the economic model around which the game is built. We need to ask ourselves whether the model is robust enough to weather storms and periods of crisis. For example, are we taking too many risks when clubs pay such high proportions of their revenue on player wages? Are we setting enough aside during the good times to protect ourselves in periods of crisis? Does the model put pressure on clubs to take on too much risk? Are there ways to create smoother paths and reduce the financial cliff edges within the game? Are our governance models best suited for the 21st century and leading to optimal decision-making for the long-term benefit of the game? Are stakeholders working together enough in designing the future of the game? These are all questions that football will need to consider and find answers to and which will inevitably lead to changes."
— Charlie Marshall Chief Executive Officer ECA
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“The loss of commercial revenue (sponsorship, gate receipts, broadcasting rights, etc.) is an aspect that clubs should tackle by wisely reconsidering their financial policies. In these times of turbulence and uncertainty, clubs, players and agents should probably lower their financial expectations to stabilize football as a money-making industry, prevent clubs collapsing and bridge the growing gap between clubs. On the other hand, new horizons will likely open for younger players to shine.”
— Assen Hinov Legal Counsel PFC Ludogorets 1945
"In my opinion, the highest consequence of all this crisis caused by COVID-19 will be the need for the clubs and all those affected to seek the optimization of professional management in order to include in the scope of contractual relations, as well as in daily corporate practices, a greater level of financial and legal security of existing relationships linked to professional football, so that we are prepared in the future to face a(nother) force majeure.
I believe that the football industry should start rethinking the levels of financial commitment related to all its aspects, since the external factors of force majeure, as in the case of COVID-19, show us every day how dependent we are on the economic turnover of each match and transfer period. Therefore, we have to follow a path of constant search for economic balance of the relationships in the football field, preserving the stability of all and paying more and more attention to the possible consequences coming from a force majeure situation."
— Marcelo Fejió de Medeiros President Sport Club Internacional
“The economic impact on “Without income from match-day, revenues is astonishing. broadcast fee, transfer fee, investments TV Rights payments were from investors and sponsors, COVID-19 has already seriously affected the daily suspended, and they are the most operation of all clubs in China and all relevant income for Brazilian over the world. We believe that, in the clubs. Moreover, the market short and medium term, many clubs are facing very serious financial problems. for transfer of athletes will be In addition, intermediaries are facing the severely affected. same difficulties. In Brazil, this unfortunate The stakeholders should take this chance to realize that investments in circumstance might open the the football industry should become flood gates for companies to more reasonable, with a view to financial invest in football clubs, changing stability in the long term. In line with this, the CFA started to seriously the ownership model of clubs.” implement different measures in the past few years in order to improve the — José Carlos Peres viability of clubs and financial results in President their accounts (e.g. financial caps, salary Santos Futebol Clube caps, etc.).”
— Zhao Qiwei Head of Competition Department FC Shenzen
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“Standardized employment terms - preferably "This crisis underlines how fragile pay obtained via collective bargaining agreements - and conditions are in general, and and greater interest shown by players in the need especially outside of the professional for qualified contract and legal assistance, would football’s elite European leagues. It has likely contribute to a more secure framework showed how poorly some clubs treat for players, at least for those who are not seen their employees as soon as money is as stand-outs and hence suffer from a weaker short. Football stakeholders urgently position at the negotiation table.” need to tighten judicial process and enforce contracts and governance — Sébastien Ledure regulations on a domestic level to Lawyer protect employees and their families. Football needs to protect its people.
The fact that, after a couple of days of suspension of football, a club is already in a situation where it “needs” to reduce salaries or even fire players “As regards insurance, the cost of and staff, shows that the controls on the finances of clubs are either not in insuring against future disruption caused place or working, and the club licensing by the COVID-19 outbreak (for instance system has showed that it needs by a ‘second wave’) may well be revision in general." prohibitively high. However, pandemic — Jonas Baer-Hoffmann insurance of the type reportedly held by General Secretary the organisers of Wimbledon and the FIFPRO British Open could well represent a wise (but likely significant) investment going forwards.”
— Tom Seamer Lawyer
"The change in competition schedules and the fact that in the coming months (if not years), matches will be played behind closed doors, will have a major impact on the way fans con- sume football. In order to stay connected and maintain the in- terest of fans in sports competitions, we will have to innovate the ways of interacting and in particular, on a digital level. We must be able to respond to their appetite by offering interest- ing and interactive content that will make up for the lack that the current situation has created."
— Achta Mahamat Saleh Director, Legals Affairs & Compliance Division CAF
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“In employment contracts, it might be advisable to insert clauses that allow short-time work (which can only be ordered by the employer if there is a legal basis in an individual or collective agreement) or clauses that allow better sharing of the club’s risk of collecting enough revenues to pay the players.
For example, one could consider decreasing the basic salary in future contracts and instead pay a bonus (regardless of an appearance of the player and regardless of the result of the match) subject to the match taking place (and thus being broadcasted), with a further bonus if the match is held with spectators.”
— Joachim Rain Lawyer
"This crisis will have a direct effect “Accelerate the shift toward so called on the values of the players’ smart contracts, which are structured to contract - at least for the next few reward on pitch performance, with the seasons - and on the sale prices incentives providing the bulk of a player’s remuneration. This avoids a situation where of their federative rights, which a club is forced to negotiate a temporary I estimate will be affected by a reduction in the base salary of its players.” noticeable fall in the transfer values." — Paolo Lombardi
— Gonzalo Mayo Lawyer Sports Legal Counsel River Plate
“In the short term, I strongly advise clubs and players to work together to overcome the difficulties related to COVID-19, without taking unilateral decisions, ofany kind, without a very deep and detailed previous assessment of the risks involved. I believe that FIFA’s decision-making bodies will have a more lenient and flexible approach in the application of the provisions of Articles 12bis, 14bis and 17, but only time and jurisprudence will tell. Besides this, FIFA has anticipated that its judicial bodies can eventually consider valid unilateral decisions adopted in good faith that are shown to be reasonable and proportional, even without the support of a national law or a valid collective agreement endorsing such practice.”
— Daniel Cravo Lawyer
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“In the months to come, we will see the impact of the crisis on investments in structures, player salaries and transfers. A potential shrinkage of the transfer market would not be good news for football. The general public misses the positive impact of the transfer system on football. They only see the 8-digit-figure transfers and call it abnormal. The reality, however, is that many clubs rely on transfers to finance their training academies. Without them, training young players would not be possible. Even 8-digit transfers, through solidarity mechanisms, finance grass roots. This trickle-down effect is essential to the industry. ”
— Jérôme Perlemuter General Secretary “In France, the crisis emphasized World Leagues Forum the problem of governance and it must be an opportunity to review it to be more in line with what is professional football today, i.e. “We hope that this crisis will be unique, but who could really guarantee that nothing similar an industry with clubs managing will happen in the future? Will the risk of yet budgets of hundreds of millions of another pandemic forever cast a shadow over euros. the industry? Football must be prepared. It is time to stop the relentless “arms race”, which It also reveals that the current has led to inflated transfer prices and players’ regulations must be reviewed as salaries. It is time for all football actors to focus they do not take into account the more on sustainable development of the industry different clubs’ business models and allowing all of its members, whether big clubs or limit the investments so that we can small clubs, whether leagues in tiny markets or leagues in markets with global exposure, to meet increase the number of top clubs at challenges, like the one we are facing right now.” the European level while considering a solidarity mechanism.” — Calum Beattie Solicitor & Assistant Company Secretary — Victoriano Melero The Scottish Professional Football League General Secretary Paris Saint-Germain FC
"The economic impact of the coronavirus, in fact, will negatively affect the transfer value of the players of the European teams, which is one of the main drivers of the business for many clubs/leagues. It was estimated that the revenues are expected to drop by around 20-25%, while the costs will decrease only slightly (about 10%). Therefore, the clubs that have an economic model based on player trading, which in our Serie A is adopted by a large number of clubs, will have to reconsider their investment plan. For medium-large teams, however, the strategy will be divided between those who decide to keep the champions, betting on a rapid recovery and the teams that will have to sell to support costs."
— Gianluca Cambareri Lawyer & Board Member AS Roma
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"I have serious doubts that this crisis in itself will change the football industry as it is. I do not argue that it will certainly have an impact in the short and medium term, namely in the next transfer window where clubs will have more difficulty in selling players, at least at the prices that were being offered. At this point in particular, it seems to me that the loans will have an even greater prominence than before. More so now that FIFA has agreed with the postponement of the announced restrictions in this regard. The reality is that the crisis has come to demonstrate what was already known but had not yet been tested in practice. Most clubs were not and are not financially prepared to survive a period without direct and immediate sources of income. In this sense, it is perhaps important to rethink the actual transfer system (including players’ salaries and signing fees amounts) since the values that are being offered today reach unaffordable sums for most clubs, distorting competition and creating a greater gap in terms of competitiveness between the bigger and the smaller clubs. This, coupled with the continued restrictions that have been lifted by FIFA on the entry of third party investors in the industry, make it very complicated for clubs to access alternative sources of investment and create high barriers for the competitive development of smaller clubs due to their continuous financing difficulties. Thus, it is urgent that concerted action is taken at all levels of decision making so that FIFA, together with all stakeholders, enforces sustained regulatory measures to deal with the impact that this crisis has had on the various clubs worldwide. Not knowing whether easing the ban on third party ownership can be one of the solutions, I have no doubt that measures of a comparable dimension have to be implemented in the short term. Not only to save clubs that are on the verge of bankruptcy due to the pandemic, but essentially to aid the recovery of the football industry as a whole and ensure that, in the future, this industry may be better prepared than we have seen it now, so that it has effective tools to fight a similar adversity."
— Gonzalo Mayo Sports Legal Counsel River Plate
“The crisis will force the revision of salaries of players, staff reduction, and more importantly, moralization and accountability of “We believe that clubs and governing administrations. It is of the utmost bodies should adopt different and more importance that a severe change careful models of business, possibly in the common practices of establishing protection funds and managing football takes places.” grant to protect the most vulnerable categories of the football industry.” — José Carlos Peres
President — Paolo Lombardi Santos Futebol Clube Lawyer
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"We believe that the governance structure of football will be re-assessed following this crisis. Football clubs are the only stakeholders in football who take and carry the entrepreneurial risk and they are the ones, more than any other stakeholder in professional football, who have been badly affected by this crisis. That is to say, clubs had to scramble to put in place wage deals and other agreements on the expense side of their P/L in order to manage their exposure as well as possible whereas the discussions regarding a large part of its income, as reflected in their P/L, are being conducted by and between other entities, i.e. rights holders and competition organisers, with less or no direct involvement of clubs. This status quo is considered problematic even though cooperation between the different stakeholders, including FIFA and UEFA, has generally been quite good. However, whilst cooperation has generally been good, probably even better between different stakeholders than between clubs in certain domestic leagues, the exchanges have also exacerbated the different opposing interests of the different stakeholders. To quote just a few: the international match calendar and the recovery of international dates including the question what to do with the September date, the (commercial) rights of clubs following competition format changes, the transfer windows, the rule of 5 substitutions or inscription of new players on competition player lists etc. The one size fits all approach of the current regulations to all clubs, no matter their size, clearly showed its limits. This may lead all stakeholders to re-visit the existing governance structures and its regulatory framework and seek optimisations in the system going forward."
— Wouter Lambrecht & Román Gómez Ponti Attorney-at-Law & Chief Legal Officer FC Barcelona
“We have discussed the opportunity to establish proper unions that might represent the interests of all football stakeholders within the country. We remind again that to date, there are no players’ unions in China, which could have assisted or represented the players in negotiations of the CFA Proposal or any other related matter.”
— Tomas Pereda Rueda & Giandonato Marino Lawyers
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“In the short term, the only advice we would give to clients is to re-negotiate in good faith the ongoing contracts with players, coaches, other clubs, sponsors and suppliers, in order to find amicable solutions and avoid disputes, which would have an uncertain outcome.
In addition, we believe that all the stakeholders shall show responsibility and implement as much as possible the principles provided by the Guidelines issued by FIFA on 7 April 2020 by means of the Circular no. 1714, even if such Guidelines are not binding. Such attitude would ensure the application of a common set of rules adapted to the new factual circumstances, which would result in the protection of the regularity and integrity of competitions.
It would be useful to provide any contractual relationship with clauses that regulate the respective obligations in the event of the occurrence of another event of force majeure, in order to address all the issues that the current regulatory and legal framework do not address. In addition, it will also be useful to protect the interests of the clubs with collective or individual insurance policies that provide coverage for financial losses resulting from events that are outside of the control of the clubs.”
— Paolo Lombardi Lawyer
"In the long term, I think that the drafting “We recommend renegotiating of new contracts will set forth, or describe contracts (clauses) or concluding in a more precise manner, provisions settlements to secure damage concerning the occurrence and the control. A more intense focus contractual consequences of force majeure, on prevention and thus proper and, also, other legal principles that might contract drafting is becoming be useful to be applied in exceptional apparent. Collecting evidence situations cases such as the one presented of the specific circumstances by the current pandemic. The principle of of a force majeure event is a rebus sic stantibus, for instance, is one clear attention point. An often- of them. Contingent payments in regards overlooked aspect is that, under to transfer fees and bonuses linked to Belgian Law, you should notify the the objectives established for the player, force majeure event to the other will also be addressed more accurately, parties to a contract. since the reduction or the cancelation of a Players should be more attentive competition - which can lead to relegation about their fate. The COVID-19 or promotion - as we can clearly see now, crisis has heightened awareness can have a substantial financial impact of the importance of solid force on the contractual terms agreed by the majeure clauses.” parties." — Gregory Ernes — Daniel Cravo Lawyer Lawyer
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Déjà vu of a Practical Experience: from the 2019 Social Outbreak to the COVID-19 Crisis in Chilean Football
By Gonzalo Bossart and Francisco Moya Naulin Lawyers, BMS Sport Legal Santiago – Chile
The social crisis that occurred at the end of 2019 in Chile had severe consequences on football. The Chilean experience can serve as a model or trial to find solutions to manage the crisis that the COVID-19 pandemic is generating in the world of football.
2020 will be a year that the whole leagues of the Old Continent, in The social upheaval, whose kick-off world will not forget soon, and Chile, the COVID-19 outbreak meant took place two months before the this will not be thanks to Lionel a kind of déjà vu to our football. end of the national championship Messi’s or Cristiano Ronaldo’s goals, (held on 18 October 2019) - that or the Video Assistant Referee Indeed, even though professional we will never forget - was of such (VAR), but due to the eruption of football, women’s football, magnitude that it not only paralyzed, a new protagonist, unwanted - but amateur football and futsal were suspended and postponed relentless -, that has brought not completely stopped by a decision obligations and local sporting only professional football to its of the Chilean FA (Asociación events, but also forced cancellation knees, but health systems around Nacional de Fútbol Profesional - of national teams matches and the the world: coronavirus or COVID-19. ANFP)1 shortly after the state of early termination of the national sanitary emergency was stated, tournament/local leagues. The health emergency provoked by this standstill rather seems to the COVID-19 pandemic has taken be the second half of a previous As it usually happens when an the lives of thousands around the crisis that occurred in Chile at event does not end as planned or world and has pushed governmental the end of 2019 being the social designed, or ends earlier or in an authorities to take quick and drastic crisis that, amongst other things, untimely fashion, the rights and action, in order to prevent further forced the paralysis of football and obligations of the participants, as spread of the disease. necessitated drastic action on the well as of interested third parties, future of tournaments, contracts are altered, resulting in economic, Professional football has naturally and previous commitments. sports, and legal damages, been involved in these measures, amongst other damages. given the number of people who 1 “Due to the entry into force of Phase 4 of the pandemic caused by COVID-19 and, in gather around this contagion accordance with the instructions given by And while we continued to suffer facilitating activity. the national authorities and the measures the aftershocks of the earthquake decreed by CONMEBOL and FIFA, the National Association of Professional that the social outbreak of 2019 had Although the health crisis exploded Football has determined the suspension of on football, COVID-19 immerses the competitions in professional leagues and in Europe before that in South women’s football for a period of 14 days, us again in what we seemed to be America, paralyzing the main starting on Wednesday March 18, 2020. overcoming. The difference now lies www.anfp.cl
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in the fact that Chile is not the only under similar circumstances, with Prior to this determination, perhaps country that has to face an external Chile being the only “laboratory” one of the turning points that impediment that does not allow it to where some solutions (which are tipped the scales in that direction, continue with professional football. still fresh), such as those planned was that the Chilean Professional It is currently happening throughout today as alternatives in various Footballers Union (SIFUP), in the world and, in short, the ball parts of the world, could be tested. the face of serious threats to the has stopped rolling practically security of its members and the everywhere on the planet. We will examine next a synthetic lack of sufficient guarantees for account of the main situations that the normal development of the The consequences for football professional football had to face in activity, voted on 26 November have been severe and, as if it were a Chile, so that the similarity of the 2019 to an indefinite strike, as long relapse, these are repeated in Chile, problems that are being repeated as security conditions were not this time with greater severity, in Chile, but now for the first time guaranteed.2 causing again the paralysis of in the rest of the world, is revealed. leagues and games, with players at The difficult decision of the ANFP, home unable to train properly, TV although the only one possible in without football, etc. those circumstances, meant the Anticipated termination modification of the regulations of the aforementioned tournaments. It is useful to see of the tournaments Its complexity derived from what has happened interests and transcendental elsewhere, Competition determinations at stake, such under similar as promotions and relegations, circumstances Given the serious situation of premature termination of insecurity experienced in Chile, due professional footballers’ contracts As we mentioned previously, to the violence with which social (which are agreed until “the end of all the events and decisions protests broke out in the country the season”), and participation in adopted based on these events in October 2019, the national international tournaments in 2020. have brought with them a series tournaments organized by the This, with the pressure in this case of of legal, economic and sports ANFP represented a serious risk to a deadline imposed by CONMEBOL consequences which, in the Chilean the physical and mental integrity to designate the participants in case, are very similar to those of the public, football players and the Copa Libertadores de América experienced during the social crisis workers in that industry. and Sudamericana, under pain of of 2019, and therefore, the Chilean being out of competition and, with experience can serve as a model A first measure was to try to play it, ceasing to receive significant or trial to find solutions to manage football behind closed doors economic income). the crisis that the COVID-19 (without spectators), however, pandemic is generating in the various factions of demonstrators In the first instance, the ANFP world of football. In so doing, the - including the most radical Council of Presidents agreed Chilean experience can reduce the hooligans - invaded football fields, to the early termination of unwanted impact which will surely posing a real danger to the safety of professional tournaments, taking be generated, of the solutions that all football players. Having played sole responsibility for determining will be applied worldwide in the 24 matches out of the 30 that the respective champions of each face of this unforeseen event that make up the national tournament tournament, ruling out, for their has paralyzed football overnight. of the First Division, and after part, promotions and relegations several weeks of uncertainty, the during the 2019 season. This paper does not intend to Council of Presidents (a higher provide what would be “the” body composed of the professional However, days later, given the solution to the problem, but rather, clubs of First Division and First evident impact on competition to contribute from the practical B) of the ANFP, by extraordinary 2 In a similar position, following the COVID-19 experience of Chile to the design of session of 29 November 2019, pandemic, French soccer players have solutions that are being considered were forced by the circumstances expressed through the National Union of Professional Soccer Players (UNFP) their for the return of football and the to decide to end the tournament refusal to return to the fields for health problems that will arise from it. in advance, as well as all ongoing reasons. In addition to the latency of the contagion, they fear before the tight schedule In other words, it is useful to see First B and Second Professional proposed by the League, a higher incidence what has happened elsewhere, Division tournaments. in player injuries. Other unions across Europe are expressing the same fears.
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generated by the absence of This new decision was not easy, played, promoting Club Deportes promotions and relegations, and the not only because of the economic La Serena to the First Division, just consequent economic damage that aspect that it involved for all First one day before the first game of the results from it, the First B clubs and Division and First B clubs, but 2020 First Division tournament. even local authorities from the cities also because it had to be decided of origin of these clubs, pressed within sporting criteria, who would A major stumbling block at that for a revision of the said decision, occupy these promotion places, time, the determination adopted particularly in relation to promotions, considering that in December 2019 by the ANFP with respect to the which opened a new problem: what the radicalization of social protests clubs that would represent Chile if clubs were promoted without did not allow the development of in international tournaments, has those occupying those positions football, as explained above. turned out to be the unfinished being relegated? Another problem story. Although we pointed out was the televisions rights income: In an identical formula to that of that the Council of Presidents how would the television rights the First Division, it was decided to decided which clubs would income received by the clubs be determine that the leading club of participate in the international distributed monthly, this being the the First B (Santiago Wanderers) cups (Copa Libertadores and Copa income on which the vast majority should be promoted, when there Sudamericana), one of the places in subsist financially?3 were three matches left until the the Copa Libertadores was awarded end of the tournament and at that to the champion of the Copa Finally, after intense negotiations, time, it was 3 points ahead of its Chile,6 tournament that depends the Council of Presidents modified closest opponent. on the Chilean Football Federation the decision regarding promotions (FFCH) and not of the ANFP, so and relegations, agreeing that there Although the determination of the question was raised as to who would be no relegation, but that two the champion, who in its own would correspond to that place. clubs would be promoted to First right is promoted, was not Division and one to First B (with without controversy, the greatest The Copa Chile stopped when it the exception that the latter had to complexity was experienced with was in the semifinals, but which resign money from the television respect to the other 9 teams that clubs were entitled to that place if income)4, and implemented a table had mathematical options to be able the season was over? Among the of averages for the relegation, to ascend to the First B according semifinalists were Colo Colo and so that in the next two years the to the established regulations, in Universidad Católica, both of which First Division would have 16 teams particular, with respect to those have already qualified for the Copa (instead of 18) and in First B, 16 teams clubs that were fighting for the Libertadores for their position in the (instead of 17). In this regard, it is position of runner-up.5 Not being national tournament. However, the worth noting that the legitimization able to make differences in this other two semifinalists, Universidad of this solution was not only due to regard, the ANFP solomonically de Chile and Unión Española had the high quorum required by the decided that a mini tournament opposite realities: the first struggled ANFP statutes for the adoption of would be held between 11 and with promotion and the second was this type of agreement, but also to 23 January at the National Stadium struggling to enter the qualifying the fact that the tournaments were of Santiago between the nine teams zone of the Copa Sudamericana. in their final stage, in the case of the previously referred to in the next First Division, with only six games modality: the teams that finished After intense debates about which to play and a leader (Universidad between 3rd and 10th place would play criteria should prevail for one Católica) with a 13-point advantage. a single-game single-elimination or the other club to go to Copa tournament, and the winner would Libertadores, and after CONMEBOL 3 First Division clubs receive a higher amount play a final against the team that made the deadlines more flexible to of money for televising than those of First nd B. For their part, Second Professional clubs had finished 2 in the leaderboard deliver the name of the participating (third category) do not receive money for at the end of the tournament team, the FFCH, together with this concept. 4 It was agreed that the First B Clubs that were (Club Deportes La Serena). Finally, the ANFP, opted for a sporting promoted would continue to receive the with high security measures in criterion and decided to make a television income corresponding to that division and that contribution would be complemented the stadium, the tournament was unique match on neutral grounds with the income from a solidarity fund that was (and outside of Santiago) to formed among the other First A clubs, which contributed 6% of their monthly income from 5 The First B runner-up was determined decide the last international place. television to increase the income of the newly with the winner of the knock-out matches promoted, until the First A championship had between the team that finished in 2nd place 16 teams again. Still, newcomers do not get the after 30 games and the winner of a league same amount of TV income as other teams in between 4 teams (teams that finished 6 A simile to the FA Cup, Copa del Rey or the same division. between 3rd and 6th place in the table). Copa Italia.
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The story ended with FIFA, as classifying Universidad de Chile to consequences have been of such Unión Española, considered that the international tournament. severity that whatever the chosen this place belonged to it by statute, outcome, whether to postpone or after which, in accordance with However, due to the inability of terminate a tournament early, the its interpretation of the facts, the Unión Española to resort to the readjustment of the effects derived ANFP Council of Presidents would CAS, the club filed a complaint from the end of the tournament, have ended all the tournaments in with the FIFA Disciplinary namely, employment contracts, dispute, including the Copa Chile Committee against the ANFP for promotions and relegations, 2019. In this way, they argued that not recognizing the jurisdiction of television contracts, sponsorship, when the season was over, and the CAS in its statutes, something etc. will be impacted. In some in the event that the champion that according to Article 59 of the cases, the experience lived by us of the First Division tournament - FIFA Statutes, member associations a few months ago will be of use. Universidad Católica - could not must contemplate, recognize and In others, it will be necessary to use the international place granted guarantee. appeal to the ability and goodwill by the Copa Chile, the place should of the parties involved, since we be applied to the best positioned As can be seen, even if 2019 was a are no longer faced with a security in the table of this last tournament. difficult year for sports, 2020 with threat or public disorder in which, the COVID-19 pandemic, carries with its solution depends on the people The solutions can be it new and unpredictable difficulties. (their rationality and passions), However, the solutions this time but before an unprecedented glimpsed with can be glimpsed with much more and very serious contingency of much more experience and vision, especially health that makes everything more experience and vision as to the likely consequences and unpredictable and the casuistry collateral difficulties. fruitful. What would happen, for In response to the position example, if a player tests positive adopted by Unión Española, the The pandemic has managed for coronavirus when resuming ANFP argued that it could not have to infect the competition.7 The football? Should the entire team decided the early termination of be quarantined? What will happen 7 Given the interests at stake and considering the the Copa Chile 2019, since this was evolution of the pandemic in their countries, to the competition for that club a tournament organized by the some leagues have decided to resume their that will have no players? What will competitions. Particularly in Europe, where FFCH, of which the ANFP is only a the pandemic is declining, the Bundesliga is happen to the tournament table member, so the decision regarding competing again with strict sanitary measures, if that team cannot continue in such as playing with no public, permanent the outcome of said tournament, it COVID-19 testing to players, among others. competition? corresponded to the first one. The Premier League and La Liga have resumed the training sessions and have set dates in June for the re-start of their competitions, with The casuistry, without a doubt, will Unión Española manifested that strict sanitary protocols as well. The Italian surpass our capacity to foresee Serie A - first big European league to stop its it would resort to the Court of tournament -, urged by a huge economic loss, the problems and, therefore, the Arbitration for Sport (CAS) for has been the last to decide the re-start of its corresponding solutions. Football competitions in June as well. the ANFP decision regarding The other side of the coin is represented by faces a huge challenge, with many the way to resolve the place for the leagues that have decided to prematurely different interests at stake, where finish competitions. Such is the case of French Copa Libertadores. However, the Ligue 1, Dutch Eredivisie, the Belgian League the concepts of force majeure, club found itself confronted by and the Scottish Premier League. These specificity of sport, the pyramid decisions have certainly included - although the problem that the statutes of not without difficulties - the classification structure of sport and harmonious the ANFP do not recognize the to European club competitions, such as the conjugation of federative vs. promotion and relegation of clubs. jurisdiction of the CAS to challenge South America has seen much of its leagues national laws, it seems to us, will its decisions, for which reason Unión in a complete standstill. Brazil had not play a key role in solving problems. started before the pandemic outbreak, Española formally requested the Bolivia, Chile, Colombia, Ecuador and ANFP to recognize the jurisdiction Uruguay have not even decided whether to resume or finish their competitions, given the of the said court’s arbitration clause harshness of the pandemic. While Argentina T.V. Rights to allow for the resolution of this and Venezuela decided to end their leagues. Same as occurred in Chile during the issue before the sports justice. The social crisis, Argentina is experiencing The national First Division answer to that request did not problems with the early termination of its tournament is broadcasted competitions. Promotion system decided come, and therefore Unión Española has generated discontent among “Primera by Canal del Fútbol (CDF), a chose not to show up for the B” - second division - clubs, so the first T.V. broadcaster created by claims have been lodged before CAS. semifinal match for the international Mexico - North America - has followed ANFP itself, whose rights were place of the Copa Chile, definitively Argentina’s steps. They decided to finish transferred in late 2018 to Turner their competitions as well.
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Broadcasting System (Turner), an expected at the beginning of the can find the live and delayed operation that allowed the latter to season to solve the differences of broadcast of certain Chilean acquire the broadcasting rights of the previous one. soccer matches such as Primera local football for the next 15 years. División and Primera B, every week (CDF Premium and HD), based on According to press sources, given Probably with the a special payment according to the confidentiality of the television new stoppage the level of access desired. agreement, the contract signed by of football, with the parties obliges the ANFP to regard to COVID-19, the As the CDF has not been able to provide CDF with 30 weeks or 10 negotiations will be deliver its main product offered to months of football. much more complex customers, i.e. the live broadcast of the matches of the Chilean Consequently, the anticipated tournament, the Undersecretariat termination of the First Division And in this same vein, for this new of Telecommunications tournament would have season, any compensation system (Subtel), an agency under caused the ANFP to breach the will probably be much more the Ministry of Transport and aforementioned contract, since, as complex, whether by prolonging Telecommunications of the mentioned above, only 26 games the duration of the contract or Central Government, intervened or 8 months of football were by other formulas. But what is in the matter and officiated to played, however the minimum clear is that in the center of that the pay television operators to programming commitment was 30 negotiation will be the concept of compensate their users who have weeks of football, for at least 10 force majeure, there the discussion contracted for the Premium CDF months. will be fixated to resolve the and CDF HD and who could not position of one or the other side. access the contracted product. The above would keep the parties in negotiations, in order to determine Indeed, FIFA has found that the Taking into account that the the extent of the damage and its effects of the pandemic are framed contractual relationship of the eventual compensation to the CDF. within the concept of force majeure, final consumer is with the cable And although, with the advent of to which the ANFP, as a member operators, the latter accepting COVID-19, both parties have been association, should adhere, as a the call of the authority, made financially weakened, the already matter of hierarchy. However, the the respective discounts on their battered coffers of the ANFP due television rights contract signed customers’ invoices, equivalent to the effects of the 2019 social between the ANFP and the CDF to the time when the contracted outbreak put it at a disadvantage, is governed by Chilean Law, product was not delivered to given that any discount to be therefore, in case of any conflict or the subscribers, which evidently effective during the 2020 season, breach, the competent court will brought about a decrease in CDF could mean fatally injuring Chilean not be per se compelled to adopt income. football, especially its clubs. the theses proposed by FIFA, even less, its regulations in the present Predicting this paralysis of But, in a long-term relationship, case. If this thesis is accepted, it the sports activity that we are such as this, knockouts can will do so in accordance with the experiencing now as a result of mean the collapse of both interpretation and application of COVID-19, the CDF has already parties. Thus, the parties would Chilean laws. announced creative ways to keep be in conversations to verify the audience (after the repetition the eventual non-compliance in of games and more classic games question and its consequences. Pay-T.V. will no longer be enough) to And, along the same lines, it would begin broadcasting e-sports be sought that the compensations Much of the content generated by championships that are being be left for the future - say 2022 -, the CDF is distributed to viewers organized within the ANFP, or so as not to harm the ANFP, ergo: through third parties, specifically televising club training. Although the football product. cable operators. this may be an emergency measure to avoid the massive leakage of Probably with the new stoppage of They offer the product “football” income, as well as the pressure football, with regard to COVID-19, within their channel grid through from the authority to compensate the negotiations will be much different packages designed clients, perhaps with this new more complex than what could be by the CDF, among which you programming it will be possible
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to capture a new audience that of the agreements. In this way, almost at the same time as it until now was not within the mass the clubs would be “suspending” had originally been agreed, and of consumers, becoming a real the effects of the season-tickets therefore, although the players business opportunity. agreements, committing to reserve played fewer games, the contracts their seats for the season-tickets were extended practically for holders until football returns to the the same duration as they were stadiums with the public again. originally projected. Thus, the Season-ticket Holders clubs fully complied with the payments of the contracts. Despite having football as its main source of income in television Contractual Situation of However, this end of the season broadcasting rights, the sale of Footballers has resulted in other kind of tickets or season-tickets continues repercussions for footballers, as to represent an important form of The early termination of national many contracts set performance- income for clubs. And it is not just tournaments evidently affected based bonuses related to the about income, it has an important the employment contracts of number of games played, or element in terms of loyalty and professional footballers. even contract renewals that were sense of belonging with the colors subject to a minimum number of of the clubs. According to Chilean labor games played, which when they legislation, the employment were suspended, evidently had an In order to compensate and care contracts of professional football economic impact on footballers, for their followers, various clubs players and workers who carry either because they could not committed to their subscribers of out related activities (coaches, generate the income that they the 2019 season (their most loyal technical assistants, physical would naturally generate, or they fans) to compensate them for the trainers) must be agreed for a could not renew their employment anticipated end of the national specified time, i.e. for a fixed period relationship with a contract that First Division tournament. or until the end of the season. benefited them. But in terms of salaries, there were no major The compensation consisted, Specifically, Article 152 bis D of mismatches, since the clubs paid among other things, of gift tickets the Chilean Labor Code provides the footballers correctly according for the national First Division on the extent of the employment to the employment contracts, tournament, discounts on 2020 relationship, that “The employment and until the date when they season-tickets and discounts contract of professional athletes were originally supposed to be on different products (shirts, and workers who carry out terminated. merchandising, etc.). related activities will be held for a specified time. The duration of the The only major conflict with The above, as we noted earlier, first employment contract that can employment contracts in and given the particular situation be held with a sports entity may connection with the social crisis, that the country was going not be less than one season, or the arose with Club Deportes La Serena, through, was done more in remainder of it, if it has started, which had agreed performance- compliance with a loyalty policy or nor longer than five years.” based bonuses for promotion with simply obeying to good practices, its players and coaching staff, and given that, in many cases, like With the early termination of the that together with the anticipated the employment contracts of season, those contracts that ended end of the season (without it being professional footballers, season- at the end of the 2019 season, clear yet which would be the second tickets normally comprehend a which were the vast majority, club that would be promoted to whole season and not a specific were not significantly impacted, the First Division) many of the number of matches. since the season stopped when footballers they had in the 2019 24 of a total of 30 matches had season ended their contracts. Then, Currently, due to the stoppage been played and the ANFP Council when Club Deportes La Serena was resulting from COVID-19, Chilean of Presidents ended the 2019 promoted to the First Division in the clubs have already been contacting season on 29 November 2019, mini tournament organized by the their respective season-ticket under circumstances where it had ANFP in January 2020, many of the holders. The position adopted, originally been projected to end players who were no longer on the with some nuances, has been the weekend of 7 and 8 December. squad invoked the bonuses agreed unanimous: honor the provisions In other words, the season ended, in the 2019 employment contracts,
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but the club indicated that those 31 December), it is very possible the labor regulations that have who obtained the promotion were that we will face the problem of been issued due to the health the players of the 2020 season the contract expiring before the emergency such as Law no. 21,227, team (in the mini tournament end of the season, if we fail to on Employment Protection, have played in January 2020), and not resume the national tournaments allowed many clubs to begin to look those of the 2019 season, therefore, with the necessary anticipation to at the possibility of seeking pacts those who were not part of the finish them by the original date, to reduce the remuneration of their squad in 2020 were not entitled to affecting the competition and the footballers and workers in general. the promotion bonus. This dispute players who are in this situation. Other clubs have implemented will most likely continue in the labor different alternatives provided courts. These eventualities could lead the for in the new Employment clubs to modify the regulations Protection Law, such as availing Notwithstanding the foregoing, the of the tournaments, as happened themselves of the suspension of labor problems of the footballers in 2010 regarding the earthquake the employment contract, which looming on occasion of COVID-19 that struck the central part of the allows the suspension of the will undoubtedly be deeper, due to country, in order to find a solution employment relationship in the the intensity of the contingency, as to this problem. Notwithstanding event of a “total impediment or well as its prolongation. the foregoing, this time at least we prohibition” of the provision of are not alone in the world, because services resulting from an act of If the prohibition of the health unlike the 2019 social crisis, the the health authority, and with it, authority to hold professional and problem of deadlines to finish the sending the workers to collect amateur sporting events, which tournaments is now global, and unemployment benefits while the has been in force in Chile since therefore, both CONMEBOL and impediment or prohibition lasts. 21 March 2020, extends for many FIFA are facing the same problems months, we will probably face and delays, and surely these The latter has raised certain problems regarding the duration entities will provide solutions and doubt and apprehension among of employment contracts that recommendations, such as those specialists in labor law. It turns finish at the end of the season that FIFA has already preliminarily out that the aforementioned or on 31 December 2020, and in issued on 7 April 2020. “impediment or total prohibition”, leagues that end in the middle of necessary to benefit from the the year; this is already happening. Another major difference suspension of the employment between what happened at the relationship, in the case of football, end of 2019 and this COVID-19 does generate debate as to The labor problems crisis is that in the first, the clubs whether this prohibition affects of the footballers did not alter contracts or seek other aspects of the provision of looming on reductions in remuneration, on football services, such as training. occasion of COVID-19 will the understanding that it was an The foregoing, therefore, would undoubtedly be deeper, impediment that did not have not allow in principle a “total due to the intensity of the a long-term impact unlike with prohibition” on the provision of contingency, as well the COVID-19 crisis, let alone the the services of the footballer. But as its prolongation financial impact that this crisis on the other hand, it is true that the has had on football. The financial sole cause of hiring a footballer is impact has seen a significant for sports competition, so, without In this regard, in the cases of decrease in income from tickets, the possibility of developing that contracts that expire at the end season-tickets, sponsors, main and essential activity, the of the season, surely there will be merchandising for the clubs. The employment contract has no no problems with the duration only “assured” income has been purpose, and from this point of of the contracts, but clubs will that coming from television, which view, the prohibition on holding probably have cash problems to has been maintained by the “good professional sporting events would fulfill their labor obligations, since will” of the parties, however, no indeed imply a total prohibition on that contract will be extended one knows for sure how much the provision of the service hired. beyond what was provided in their longer this will hold. Clearly the issue generates debate, budgets. On the other hand, in and will likely end in the Chilean the cases of those contracts that This prolongation of the threat labor courts. Will the labor courts have defined a certain date for the of COVID-19 and its consequent be willing to hear arguments such end of the contract (for example, economic impact, together with as the “specificity of sport” when
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determining the nature and scope Unfortunately, social pressure “New circumstances of force majeure of the contracts of professional went beyond local league games, and public order, analyzed and football players and, therefore, of and even crossed borders. Faced evaluated with caution, considering their services? It will undoubtedly with a scenario that sought to the safety of the players, the public be a challenge for lawyers. stop everything, the players of and the delegations, motivated the the Chilean team, in a decision decision to bring the final of the The situation becomes even behind closed doors, agreed not 2019 CONMEBOL Libertadores Cup more complex if we add the fact to play the game in support of to Lima, Peru, and maintain the date that in Chile social distancing has the prevailing social demands, just of November 23.” been sought through quarantine 6 days from the date scheduled for by area and not nationwide as in the meeting (19 November 2019). This was the statement dated other countries, which would allow 5 November 2019 issued by certain clubs to benefit from the The ANFP, which had previously CONMEBOL, announcing that suspension of the employment suspended the friendly match the final of the Copa Libertadores contracts, also protected in that against Bolivia to be played on changed venue within a few days situation, a possibility that only 15 November 2019 against Bolivia of being played, attributing it to some would have and not others. in Santiago, will probably have to circumstances classified as force pay a fine for breach of contract, majeure, namely, the disorder At any rate, the discussion is open. the amount of which we do not yet caused by the social outbreak, What we are clear about is that the know. threats from the hooligans laws issued during the pandemic themselves from the most popular have not been specially designed On the other hand, due to the clubs in Chile seeking to boycott to make it compatible with the impossibility of getting a rival for the event, and the consequent problems that arise in the services the friendly match, the Peruvian impossibility of ensuring its peaceful of the professional footballer’s Football Federation had to pay the development. All this forced the employment contract. money back for the tickets that organizing confederation to adopt had already been purchased by the drastic decision to remove the In short, although the professional thousands of fans. venue of the 2019 CONMEBOL relations of professional football Libertadores Cup final from players were affected to some Santiago de Chile, less than 20 days extent during the social crisis of before its celebration. October 2019, the problems and Copa Libertadores impacts that we are facing due to The governing body of South COVID-19 are immensely deeper, In the month of August 2018, American football adduced reasons where surely the concept force CONMEBOL announced with great of force majeure to terminate the majeure, specificity of sport and fanfare that Santiago de Chile had signed contract early, which, at contractual stability will all play been ratified as the venue for the least from a theoretical point of a key role in the decisions and Final of the Copa Libertadores de view, would exempt it from paying solutions to be adopted. América, being the first time in the any damages derived from said history of the tournament that it decision, both to the host city would define the champion in a and the providers of goods and single match. services contracted for the event, Celebration of National as well as local sponsors. Team Matches This involved a significant public investment to renovate and At the time of the change of On 19 November 2019, on the modernize the main colosseum venue, the stadium was practically occasion of the FIFA International in Chile, the National Stadium, sold-out, therefore, CONMEBOL Match Calendar arranged for the and thus meet the high standards promised to return the money for celebration of friendly matches in required by CONMEBOL for the the tickets purchased so far and preparation for the South American historic sporting event that it give priority to those who bought qualifiers for Qatar 2022, the friendly should host. in the first instance, for the final in match between the teams of Peru the new host venue. CONMEBOL and Chile was to have taken place in However, October 2019 arrived would also work so that those who the capital of the Inca country. and with it the social crisis, already invested their money in tickets mentioned so many times... or tourist packages in Chile had facilities in Lima.
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Conclusion Transfer of Players of contractual in the labor field limited to stability, has sought to provide its termination with just cause, not As has been seen in this brief members with formulas aimed at so to suspension or modification account, an unimpeachable, respecting contracts. of contractual obligations, unpredictable and irresistible event without prejudice to the new such as the social crisis unleashed We can outline legal mechanisms that are being in October 2019 in Chile, and implemented in different countries some lessons from which affected the entire country to deal with the emergency. our experiences socially and economically, had consequences that far exceeded from the social crisis, The specificity of the sport must sports (and football). The effects which can be useful be observed in decision-making, and damages that originated with for the future both at the level of government this disruption to the sport activity solutions such as enactment of have been diverse in consideration FIFA has described the pandemic laws that regulate the activity and scope. as a force majeure event, which and, particularly, at the level of hinders and/or prevents, as we said, contractual solutions between Barely after emerging from the the fulfillment of labor contracts for players and clubs, in order not to main problems left by the social professional footballers. But it has distort competition, since many crisis last season, and just as the limited itself only to “advising” its times the legal elements in the 2020 season started, Chile again members, aware that employment common sphere affect the integrity faced another irresistible event or contracts, given the importance of competition in the sports field. force majeure, being the COVID-19 they have, are governed by pandemic, with which we will again national legislation where each of For better or for worse, have to face some of the same its members has their seat. This, untouchable labor rights have problems that already originated however, has been circumvented been relativized during the crisis, in 2019, albeit with more severe in some way or another with either through non-observance dimensions. indirect measures, such as the of clauses or suspension of announcement of the flexibility employment contracts, which The well-known globality of the granted for the establishment of probably requires their future pandemic has the most relevant transfer and registration windows, revision and will contemplate parties in the world of football under, certainly, the reinforcement contractual clauses related to focused on finding solutions to of the season concept by virtue of force majeure or unforeseeable the problems that have been which football is organized by FIFA. circumstances. generated. Special attention has been paid to labor relations, the Although the future will tell us The resolution of these conflicts vulnerability of which has been what the solutions were and the requires the will and flexibility of revealed, in view of the difficulty errors in their implementation, it all stakeholders, since promotion and/or impossibility of the parties is essential to try to draw lessons and relegation systems must be (clubs and players) to fulfill their from the past, as a tool that allows made more flexible, as well as obligations, attributable to force us to act strategically. In this sense, the early end of the season, with majeure. As well as, given the we can outline some lessons from the consequent sports impact purpose of this type of contract, our experiences from the social on participation in international the extent and modality of which is crisis, which can be useful for the tournaments and the income especially influenced by the nature future. distribution. and particularities of the activity being carried out namely football, Force majeure has gone from Considering the supremacy being the specificity of sport. being an exceptional argument of national regulations over and almost excluded from practical that emanating from a sports FIFA itself, in its role as the head application, to being a central organization, be it a federation, of world football, and aware of the argument in conflict resolution and association or club, they should central value that footballers have therefore a key solution to face the always seek to harmonize their juris in this activity (not only as the crisis. corpus with national regulations. main players match by match, but And since, this can sometimes mean also as club assets) in line with the Undoubtedly, it will be used to certain regulatory sacrifices on the inspiring principle established in justify many of the breaches of part of sports organizations that they the Regulations on the Statute and contract, but we see its scope cannot afford, this in accordance
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with the aforementioned specificity in emergencies and crises, very casuistry and the different national of the activity that football entails, recently had to face situations of regulations make it impossible to sports organizations must find force majeure similar to those that think of a single formula. We also ways for the State to recognize the rest of the world will now face do not know what the best solution its particularity and, in this way, for the first time in many decades. for the upcoming problems in incorporate in its regulations those And therefore, reviewing the each country will be. We simply of sports organizations. recent Chilean experience, in the wish to expose and describe the context of this study and analysis Chilean practical experience, as Although the COVID-19 pandemic of alternative solutions, may yield an empirical reference of the is far from dissipating in the some useful information on the paralysis of football by force short term, which will keep all the possible scenarios and side effects majeure, to help those who face governing bodies of football and of one or other measures. this for the first time, and thus help its protagonists speculating and to minimize in part the margin of studying the best solutions to We would like to clarify that we do error of the effects of the decisions resume activity when possible, the not intend to elevate the Chilean or solutions adopted in one truth is that Chile’s professional experience as a unique model to direction or another when the ball football, which is already a specialist follow, since the diversity of the rolls again.
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International - FIFEU A
The General Court of the European Union Dismisses the Decision of the European Commission on State Aid to Valencia Club de Fútbol
By Ivan Bykovskiy Lawyer, Ruiz-Huerta & Crespo Sports Lawyers Valencia – Spain
➔➔ European Court of Justice (ECJ) – European Commission – State aid – European law – Competition law
ECJ, 12 March 2020, Case T-732-16, Valencia Club de Fútbol, SAD v. European Commission On 12 March 2020, the General Court of the European Union annulled the European Commission’s decision in relation to Spanish club Valencia CF.
The preamble of the case goes clubs were ordered to reimburse Furthermore, in the view of the back to 2009 and 2010 when the the money. Valencia CF was General Court, the conclusion of Instituto Valenciano de Finanzas ordered to reimburse the amount the European Commission that no (IVF) - the financial establishment of EUR 20,381,000 plus interest. financial establishment would act of the Generalitat Valenciana However, the club did not agree as a guarantor for a firm in such (Regional Government of Valencia, with the decision of the European a difficult situation as Valencia CF Spain) - issued several guarantees Commission and filed a claim to the and, consequently, that no to the associations related to General Court in order to annul it. corresponding guarantee premium three Spanish professional football benchmark could be found on the clubs, Valencia CF, Hércules CF In March 2020, the General market, was not correct and did not and Elche CF. The main purpose Court annulled the European assess several main circumstances. of those guarantees was to cover Commission’s decision on aid the bank loans that were taken by measures implemented in favor First of all, the evidence that the associations to participate in of the Spanish football clubs Valencia CF could have obtained the share capital increase of these Valencia CF and Elche CF. The comparable instruments from three clubs respectively. In the case decision of the General Court stands private investors was not of Valencia CF, such guarantee was on several main pillars. Basically, completely analysed by the also increased in 2010 due to the the number of manifest errors in European Commission. Secondly, necessity to cover the increase in the assessment of the European the European Commission did not the bank loan. Commission was underlined by the sufficiently support the allegation decision of the General Court. that there was no market price The decision of the European for a similar non-guaranteed loan Commission of 4 July 2016 stated The first mistake of the European “due to the limited number of that the above-described measures Commission in the assessment observations of similar transactions constituted unlawful State aid of the facts of the case was on the market.” incompatible with the internal related to a wrongful conclusion market in favor of the three football that the IVF loan given to the Lastly, the General Court examined clubs1. As a consequence, the Fundación Valencia was not a the facts related to the increase unique guarantee premium, which in the guarantee made in 2010. 1 P. Paepe, Football and EU state aid law: How state aid law shapes the relationship between could not be found in the market In the opinion of the European public authorities and football clubs - Some observations on the Commission decisions of (contrary to the statement of the Commission, the shares of 4 July 2016, Football Legal # 6 (November European Commission). Valencia CF that were acquired 2016), p. 100
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by Fundación Valencia and that were considered as a counter- guarantee, were priced “close to zero” on such date of acquisition, as Valencia CF was in a difficult financial and was operating at a loss. Contrary to that, the General Court reverted such allegation based on the following evidence: the existence of the significant equity of the club was not taken into consideration by the European Commission. Furthermore, the fact that the generation of profit before taxes in the fiscal year preceding the grant of the increase of the guarantee, permitted the General Court to state that the assessment of the European Commission was wrongful and thus, the value of the counter-guarantee was not calculated in a proper manner. As a consequence, the decision of the European Commission was annulled.
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International - FIFEU A
ECtHR Points Out a Systemic Problem regarding the Settlement of Football Disputes in Turkey
➔➔ Turkish Football Federation (TFF) – Arbitration – European Court of Human Rights (ECHR) – European Law – Fundamental rights – Independence/Impartiality
ECHR, 28 January 2020, nos. 30226/10 and 4 others, Ali Riza and Others v. Turkey
The executive body of the Turkish Football Federation (TFF) - the Board of Directors - which has always largely consisted of members or executives of football clubs, has too strong an influence over the organisation and functioning of the Arbitration Committee. Nor do TFF Regulations provide appropriate safeguards to protect members of the Arbitration Committee from any outside pressure. This case reveals a systemic problem as regard to the settlement of football disputes in Turkey. Under Article 46 of the European Convention on Human Rights (binding force and implementation), the Turkish State must take measures to ensure the structural independence of the Arbitration Committee.
Facts of the cases 2011 and he has since brought an assistant referee to “provincial application (no. 74989/11) against referee”. The committee dismissed The applicants were Ömer Kerim Switzerland with the European his objection, finding that his Ali Rıza, a dual British and Turkish Court, which is ongoing. downgrading had been in accordance national, and Fatih Arslan, Ş aban with the law and procedure. Serin, Mehmet Erhan Berber, and The second to fourth applicants Serkan Akal, Turkish nationals. are amateur football players. Proceedings were brought against Mr Rıza was a football player for them with the TFF when they were Complaints and Trabzonspor Kulübü Derneğ i, a accused in 2010 of match-fixing Procedure club in the top Turkish professional during an important end of season league. He returned to England, his match for their team, İ çmeler Relying on Article 6 § 1 (right to a home country, in 2008 and the club Belediyespor Kulübü. In a first- fair hearing and access to court) brought proceedings against him instance decision by the Amateur of the European Convention on with the Turkish Football Federation Football Disciplinary Committee Human Rights (Convention), (TFF) for breach of contract. In his of the TFF, it was found that the all five applicants alleged that defence, he submitted that the applicants had committed the the proceedings before the club owed him salary arrears and disciplinary offence of “influencing Arbitration Committee had lacked match appearance fees. The TFF the match result” and were independence and impartiality. Arbitration Committee ultimately banned from any football-related They alleged in particular that found in 2009 that he had activities for a year. This decision the members of the Arbitration wrongfully terminated his contract was then unanimously upheld by Committee who had decided on and fined him approximately the Arbitration Committee. their cases were biased towards EUR 61,596. He applied against this football clubs because they had decision to the Court of Arbitration Mr Akal, the fifth applicant, is a football been appointed by the TFF’s for Sport, but his application was referee. He lodged an objection with Board of Directors, which was declared inadmissible for lack of the TFF Arbitration Committee in predominately composed of jurisdiction. An appeal to the Swiss 2015 about the Federation’s decision former members or executives of Federal Court was dismissed in to downgrade him from top-level football clubs.
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The application was lodged with to provide the same safeguards as the Board of directors, predominantly the European Court of Human guaranteed under Article 6 § 1 of composed of former members or Rights (Court) on 20 April 2010. the Convention. executives of football clubs.
However, the Court considered Similarly, the wide powers given to Decision of the Court that there were inadequate the Board of Directors had to have safeguards to protect the members been at work in Mr Akal’s dispute, of the Arbitration Committee from which was of a regulatory nature. Amateur footballers’ outside pressure, notably from The board set the rules governing complaints the TFF’s executive body, the the composition, principles and Board of Directors, which had an procedure of the functioning of the The Court rejected the applicants’ undeniably strong influence on the Central Referee Committee of the complaints under Article 6 § 1 way the Arbitration Committee TFF, the first-instance body which as inadmissible because that was organised and functioned. had decided on his case. Indeed, provision was not applicable to the TFF rules required that the list of proceedings against them. In particular, the Board of Directors, referees prepared by the Central who appointed the members of the Referee Committee had to be In particular, at the time of Arbitration Committee, had always submitted to the Board of Directors the events under Turkish Law, largely consisted of members or for prior approval. influencing a match result was a executives of football clubs. Those disciplinary offence involving the who represented the interests of In sum, the applicants had had risk of a three-year ban and did football other than those of clubs legitimate reason to doubt that the not concern the determination of were in the minority. Arbitration Committee members a criminal charge under Article 6. would approach their case with The Arbitration Committee, the necessary independence and Nor could the proceedings come composed mostly either of lawyers impartiality. There had therefore under the scope of civil rights and or academics who specialised in been a violation of Article 6 § 1. obligations. Domestic law stated sports law, were not bound by any that amateur football players were rules of professional conduct. They not remunerated and therefore their neither had to swear an oath or Article 46 (binding force right to exercise a profession was make a solemn declaration before and implementation) not at stake. Furthermore, although taking up their duties. Moreover, it might be common practice in they were not protected from civil The Court noted that the violation Turkey for amateur football players liability actions. found revealed a systemic problem to receive a salary or other benefits, regarding the settlement of football the applicants had not provided Furthermore, TFF Regulations had disputes in Turkey. It considered proof of receipt of such payments no fixed term for members’ term that the State should take measures or of any kind of contract with their of office. Their mandate was the to reform the system for settling club. They had thus failed to prove same as the Board of Directors’, such disputes under the auspices of that the dispute had involved any unduly aligning their tenure with the TFF, such as restructuring the kind of pecuniary right. the executive body. In addition, Arbitration Committee so that it members did not have to disclose was sufficiently independent from circumstances affecting their the Board of Directors. Professional footballer’s and independence and impartiality and referee’s complaints there was no specific procedure to deal with challenges to a member Article 41 (just satisfaction) The Court noted that at the time on those grounds. of the applicants’ proceedings The Court held that Turkey was to the Arbitration Committee As concerned Mr Rıza, who was pay Mr Rıza and Mr Akal EUR 12,500, had exclusive and compulsory involved in a contractual dispute, the each, in respect of non-pecuniary jurisdiction over the respective Court therefore considered that the damage. It awarded Mr Rıza EUR football disputes brought by balance had been tipped in favour 6,975 in respect of costs and Mr Rıza and Mr Akal, and stressed of the football club, given that at expenses. It dismissed, by six votes that that body’s rulings were the time of the proceedings again to one, the remainder of these two final and not amenable to judicial him, all members of the Arbitration applicants’ claim for just satisfaction. review by any court. As such, it had Committee had been appointed by
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International - Swiss Federal Tribunal
Recent Jurisprudence of the Swiss Federal Tribunal on Football Matters
By Dr Jan Kleiner & Francisco Rapp1 Lawyers, Bär & Karrer AG Zurich – Switzerland
➔➔ European Court of Justice (ECJ) – European Commission – State aid – European law – Competition law
This article provides a short overview on selected recent case law rendered by the Swiss Federal Tribunal (SFT) concerning civil law appeals filed against arbitral awards of the Court of Arbitration for Sport (CAS). The decisions of the SFT cover important matters such the right to appeal the decision of a national sporting body to CAS or some of the legal remedies available in the context of CAS proceedings. Some statements by the SFT specifically deal with particularities of sports arbitration. Other decisions, not related to sports arbitration, concern the consequences of an incomplete notification of an arbitral award and the requirements of independence and impartiality of arbitrators.Sports law practitioners are, as always, well advised to carefully follow developments in the case law of the SFT, in order to understand the full extent of the parties’ rights and the legal remedies available in the context of arbitration proceedings.
Decision1 4A_268/2019 of After having exhausted the regard to its legal aspects, the SFT 17 October 20192 legal remedies granted by the confirmed the conclusions of CAS statutes of the Algerian Football and dismissed the appeal. Federation (AFF), to which the Overview contract between the Player The conclusions of both CAS and and the Club referred, the Player the SFT are interesting because The decision 4A_268/2019 of sought a decision by CAS. they analyze (and reject) different 17 October 2019 concerned an bases on which parties may seek employment dispute between an In its award CAS 2018/A/5881, to argue for CAS jurisdiction: Algerian football player (Player) and CAS denied having jurisdiction. an Algerian football club (Club). The Panel concluded that no valid ➥➥ A right of appeal to CAS arbitration agreement in favor of directly based on the FIFA CAS existed between the parties Statutes; and, and that neither the FIFA Statutes
1 Francisco Rapp is a Junior Associate at Bär & nor the AFF Statutes provided for ➥➥ A right of appeal to CAS based Karrer, Zurich, Switzerland; Dr. Jan Kleiner is a sufficient legal basis to establish on a wide interpretation of a Partner at Bär & Karrer and co-heads the firm’s Sports Law Department. the jurisdiction of CAS. the statutes of the national 2 The English translation of the decision is federation. available on www.swissarbitrationdecisions. com The authors are as always grateful for Called upon to decide on this issue the excellent translations provided by the with full power of review with team of swissarbitrationdecisions.com.
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Underlying facts and The decision by CAS The Panel also analyzed whether procedural history the provisions of the AFF Statutes The key question in these could establish the jurisdiction proceedings was whether CAS had of CAS, if not explicitly, applying The dispute before the national jurisdiction to decide on the case. the principles of interpretation instances The Panel had therefore to decide under Swiss Law and the case law on its own jurisdiction based on of the SFT.7 In particular, while In 2017, a contractual dispute arose Article 186 of the Swiss Private interpreting the statutes of sports between the player and his club. International Law Act (PILA). federations, the SFT applies similar Due to outstanding wages and other principles as those used for the alleged contractual violations, the First of all, the Panel excluded interpretation of state law.8 player lodged a claim against the that neither the Club nor AFF had Club before the National Chamber accepted the jurisdiction of CAS Although Article 10.3 d) of the of Dispute Resolution (NCDR) as by participating in the proceedings AFF Statutes requires all AFF provided in the AFF statutes and and answering on the merits of the members to recognize the as mentioned in the employment case without a reservation of lack of jurisdiction of CAS, the (im) contract. In its decision, the NCDR jurisdiction (so-called “Einlassung”).4 possibility to lodge an appeal awarded the Player outstanding to CAS against decisions of the salaries and financial compensation The Panel then analyzed whether ATRSD is regulated at Article 69 for breach of contract. a valid arbitration agreement of the AFF Statutes: establishing the jurisdiction of CAS The Player lodged an appeal could be derived directly from the “Decisions of the Algerian to the Algerian Tribunal for the FIFA Statutes or from the relevant Tribunal for the Resolution Resolution of Sports-related provisions of the AFF Statutes. of Sports-related Disputes Disputes (ATRSD) in accordance concerning clubs and players with Article 68 of the AFF Statutes. The existence of an arbitration are final and cannot be subject agreement must be examined of an appeal to any foreign Subsequently, within 21 days from in light of the requirements of arbitral institution. the notification of the decision Article 178 PILA and the extensive by ATRSD, the Player filed a case law of the SFT with regards Nevertheless, the AFF statement of appeal to CAS. to this provision in the context of reserves the right to appeal sport related arbitration.5 decisions of the Algerian Tribunal for the Resolution Proceedings before CAS Concerning the direct application of Sports-related Disputes of the FIFA Statutes for establishing before the CAS in Lausanne.”9 As basis for his appeal to CAS, the the jurisdiction of CAS, the Panel Player referred to Articles 57 and 58 confirmed its case law, according Based on this provision, in an earlier of the FIFA Statutes and to certain to which: decision10, CAS had concluded that CAS precedents.3 The statement of granting to AFF the right to lodge appeal lodged by the player listed “Even in cases where the FIFA an appeal to CAS but not to players the club and AFF as respondents. statutes compel the national and clubs would have resulted federations to provide for a right of in an unacceptable disparity of Since the answer of the club was appeal, CAS jurisdiction will only be procedural rights. In that case, CAS filed after expiration of the deadline possible upon insertion of a provision therefore accepted its jurisdiction set by CAS and the player did in the statutes of the national for the appeal lodged by a club not agree to its admissibility, the federation. In other words, the FIFA against a decision of AFF.11 It must answer by the club was deemed regulations (in particular Art. 58 of be noted that, in said case, the inadmissible. AFF simply stated the FIFA Statutes) do not constitute club was denied the opportunity that it had never been a party in the an alternative or a direct ground for to appeal to the ATRSD. In its proceedings and did not respond CAS jurisdiction in the present case.”6 decision on jurisdiction, the to the merits of the appeal. 4 CAS 2018/A/5881, par. 53, with references to the case law of the SFT. 7 See id., par. 56, 57 and 70, with further The Panel had therefore to decide 5 See ex multis SFT 4A_246/2011, consid. 2.2.2 references. only based on the documents and and SFT 4A_640/2010, consid. 3.2.2; the 8 Id., par. 70, with further references. English translation of both decisions is available 9 Free translation of Article 69 of the AFF arguments provided by the Player. on www.swissarbitrationdecisions.com. Statutes, edition 2018, emphasis added. 6 CAS 2018/A/5881, par. 74, with further 10 CAS 2008/A/1631 3 CAS 2008/A/1631 references. 11 CAS 2008/A/1631, par. 10 f.
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Panel thus also considered the appeal. Let. b of Article 190 par. 2 AFF Statutes, AFF would have fact that the club was wrongly PILA provides the possibility to therefore had a right to file deprived of its right to have its seek the annulment of an arbitral an appeal to CAS against the case reviewed by an independent decision where the arbitral tribunal decision of the ATRSD. For this (arbitral) tribunal, i.e. the ATRSD.12 “wrongly accepted or denied reason, in order to ensure equal jurisdiction”. procedural rights to all parties, In the present case, the Panel the Player must be granted the stated that it agrees with the view Under Article 190 par. 2 let. b PILA, same right to lodge an appeal expressed in the mentioned Award the SFT has full powers of review to CAS. CAS 2008/A/1631.13 However, with regard to the legal aspects of according to the Panel, Article 69 the case, whereas, on the facts, the c. In addition, since the ATRSD par. 2 of the AFF Statutes can SFT is bound by the determination cannot be considered an only be applied as the basis for of the arbitral tribunal.18 The independent arbitral tribunal CAS jurisdiction when AFF is a interpretation of statutes and due to lack of representation party in the proceedings, i.e. when regulations to determine the and participation of player the appeal is directed against existence of a valid arbitration associations in the election a decision by AFF (“vertical” agreement is a legal question and process of arbitrators (unlike dispute14). Conversely, when a can thus be freely reviewed by the the election of CAS arbitrators) dispute between AFF members SFT.19 and due to the exclusion of (“horizontal” dispute15) is decided any appeal to state courts, the by the NCDR and an appeal is filed Regardless of the power of review Player must be granted the to the ATRSD, AFF is not a party of the SFT, the appellant still needs right to have his case reviewed and the decision by ATRSD is final to substantiate its reasoning and by an independent (arbitral) and cannot be subject of an appeal legal arguments.20 tribunal, i.e. by CAS. to any foreign arbitral institution.16 The fact that the Player directed It appears from the decision of the The SFT rejected these arguments his appeal also against the AFF SFT that the Player brought the with the following reasoning:21 had no impact on this conclusion.17 following arguments to argue in favor of a wrong interpretation by a. The AFF Statutes do not The Panel concluded that it had no the CAS Panel: refer to the provisions of the jurisdiction to review the decision FIFA Statutes relating to the by the ATRSD, which was therefore a. Due to the references in the possibility to appeal to CAS with final. The only option left to the AFF Statutes to the rules and the required explicitness. On Player was to file a civil law appeal principles of the FIFA Statutes, the contrary, the AFF Statutes with the SFT, arguing that the Panel Article 58(1) of the FIFA even contain a provision wrongly denied its jurisdiction. Statutes had to be applied excluding the possibility of an directly granting the Player the appeal to CAS. In this regard, right to appeal to CAS. the SFT also referred to a The civil law appeal filed by legal doctrine according to the Player b. Alternatively, since the NCDR is which, under Swiss Law, the a body of AFF, the latter must statutes of an association (in In cases of international arbitration be considered a party in the this case, of FIFA) are binding proceedings under the PILA, a civil present proceedings. Based on exclusively for its members law appeal with the SFT is possible Article 69 par. 2 of the and only exceptionally produce under the conditions set forth in effects with regard to third Article 77 SFTA in conjunction parties such as members of an with Article 190-192 PILA. affiliated association (in this 18 An exception to this principle is the case the Player as member of possibility to introduce new evidence under Article 190 par. 2 PILA lists the the conditions of Article 99 of the Swiss AFF). possible grounds for such an Federal Tribunal Act (SFTA). Furthermore, the SFT may review the factual findings of the arbitral award under appeal when b. Same as CAS, the SFT also 12 Id., par. 9. dealing with certain grievances provided in considered that the reasoning 13 CAS 2018/A/5881, par. 85. Article 190 par. 2 PILA (ex multis: SFT 138 III 14 For the distinction between horizontal 29, consid 2.2.1, with further references). developed in CAS 2008/A/1631 and vertical dispute see ex multis CAS 19 Stefanie Pfisterer, Commentary on could not be applied in the 2016/A/4837. Article 190 PILA, in Basler Kommentar 15 See FN 12. Internationales Privatrecht, 2013, N 48. present case. This because in 16 Id., par. 89 f. 20 Article 77 par. 3 SFTA; SFT 4A_268/2019, 17 Id., par. 93. consid. 3.2. 21 SFT 4A_268/2019, consid. 3.4.2.
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CAS 2008/A/1631, AFF was not confer an immediate right of champion Sun Yang, who was a party in the proceedings, appeal to the CAS against decisions accused of an anti-doping rule whereas, in the present case, rendered by a body of a national violation for having destroyed AFF had no standing to be sued federation. Without an explicit rule blood and urine samples during an or to be called as respondent in in the applicable regulations of unannounced doping control at his the appeal proceedings before the national federation or another house. CAS. For this reason, in the agreement, arguing for CAS present case, AFF would not jurisdiction only based on the FIFA Due to some irregularities during have had any right to file an Statutes appears virtually impossible. the testing procedure that could appeal to CAS and therefore, have justified the athlete’s behavior, no inequality of procedural the Anti-Doping Commission rights could exist which would The FIFA Statutes of the International Swimming have justified granting the do not confer an Federation (FINA) dropped the player a right to appeal to CAS. immediate right of charges against the athlete. WADA appeal to the CAS against appealed against this decision c. Finally, the argument decisions rendered to CAS and requested a ban of concerning the lack of by a body of a between two and eight years. independence of the ATRSD national federation was not admittted, since this The subsequent CAS proceedings issue was not the subject of attracted widespread media the proceedings before CAS. This is also in line with R48 of the coverage and public attention. One Regardless of this fact, the SFT CAS Code, which requires for a of the reasons for this was that, reminded that the guaranties specific provision in the applicable based on the procedural reform of the European Convention on regulations or in a contract to triggered by the decision of the Human Rights (ECHR) cannot confer jurisdiction upon CAS. European Court of Human Rights be invoked directly to the SFT, (ECtHR) in the Pechstein case23 but only in connection with the However, it must not be overlooked and upon request by the athlete, a guarantees of Article 190 par. 2 that in CAS 2008/A/1631, the Panel public hearing in the form of a live PILA (such as the guarantee based its jurisdiction on a provision video broadcast24 was held by CAS. of the right to be heard and in the statutes of the national the right to equal treatment). federation, which granted to the Eventually, in CAS 2019/A/6148, Furthermore, far-reaching federation the right to file an appeal the Panel upheld WADA’s appeal guarantees in connection to CAS. The Panel considered that and sanctioned Sun Yang with a with the ECHR can only be it had to accept its jurisdiction in period of ineligibility of eight years. invoked in cases of so-called order to avoid a disparity in the “forced” arbitration. In cases procedural rights of the parties. During the proceedings before of “voluntary” arbitration, in In the present case, both the CAS CAS, Sun Yang’s counsel filed three which consent has been freely Panel and the SFT supported this civil law appeals to the SFT against given, “no real issue arises reasoning inprinciple. The non- different procedural orders and/ under Art. 6 ECHR”.22 application of this precedent to the or interim decisions. All appeals present matter was based on the where dismissed by the SFT. In light of the above, the SFT specific constellation of this case. confirmed the decision of CAS Although not being a football that the latter had no jurisdiction related case, we will shortly to review the case at hand and illustrate these three decisions dismissed the civil law appeal Decisions 4A_265/2019 of the SFT because they address lodged by the Player. of 25 September important doctrinal and practical 2019, 4A_413/2019 questions regarding the legal of 28 October 2019 remedies available in the context Conclusion and comment and 4A_287/2019 of of CAS proceedings. 6 January 2020 Based on the considerations of the SFT, the FIFA Statutes do The matter at the centre of these 23 Mutu and Pechstein v Switzerland 22 See the Judgment of the European Court three decisions concerned the (Applications no. 40575/10 and no. of Human Rights in Mutu et Pechstein v. swimmer and three-time Olympic 67474/10) (ECHR 324 (2018)). Switzerland of 2 October 2018, par. 96. 24 Available on www.youtube.com
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Decision 4A_265/2019 of reasoned judgment or after the last the association, the Panel had 25 September 201925 day on which any other party in the not yet taken a final decision on case could have appealed. its jurisdiction. Consequently, all This first decision concerned comments by the athlete on the a challenge filed by Sun Yang The procedural act appealed question of representation were towards the arbitrator appointed against was the dismissal by CAS of deemed inadmissible. by WADA. Said challenge was the athlete’s application, according rejected by the International to which WADA’s submissions had Ad abundantiam, the SFT drew Council of Arbitration for Sport to be disregarded since WADA’s an interesting analogy with its (ICAS). The athlete lodged a civil counsel had no capacity to act as case law on Swiss internal civil law appeal against the decision to its representative due to a conflict proceedings under the Swiss the Challenge Commission of ICAS. of interest. Civil Procedural Code (CPC) and concluded that, in the absence of Since, in the meantime, the First of all, the SFT had to decide capacity to act as a representative, challenged arbitrator had resigned, whether the decision on the the arbitral tribunal (in this case the SFT considered that the appeal capacity to represent a party could the CAS) must in principle set had become void of purpose be directly appealed to the SFT, or a time limit to designate a new within the meaning of Article 32 only together with the first directly representative satisfying the legal par. 2 SFTA. appealable decision.28 requirements.33
In order to determine the repartition Pursuant to Article 186 par. 3 PILA, Finally, the SFT stated that the of costs, the SFT also highlighted when dismissing a jurisdictional question of whether WADA had that the appeal filed by the athlete objection, the arbitral tribunal respected the time limit to file was manifestly inadmissible. In fact, should – in principle – issue a the appeal has to be considered according to settled case law, the separate award. The arbitral tribunal a condition of admissibility which respective decision of ICAS cannot may derogate from this principle if does not affect the jurisdiction of the be directly appealed to the SFT it considers that the jurisdictional arbitral tribunal.34 This is important and may only be contested with an objection is too closely linked to because it clarifies that the question appeal against the first appealable the facts of the case to be judged of compliance with the time limit for arbitral award.26 separately from the merits.29 filing an appeal to CAS is in principle not a problem of jurisdiction ratione When a jurisdictional objection is temporis. Consequently, Article 190 Decision 4A_413/2019 of dismissed with a separate award, par. 2 let. b PILA is not applicable 28 October 201927 the latter usually constitutes an and the SFT does not have full interim award30, which is directly powers of review with regards to This second civil law appeal filed by appealable to the SFT, but only the question of admissibility due to the athlete was based on the same on the grounds of an irregular the respect of a time limit for filing legal grounds as in the decision composition of the panel or a lack an appeal to CAS.35 4A_268/2019 mentioned above, of jurisdiction.31 i.e. on Article 190 par. 2 let. b PILA. The considerations above are Sun Yang argued that CAS had From this, the SFT qualified the of clear relevance for future wrongly accepted its jurisdiction Panel’s decision on the dismissal CAS proceedings both for CAS because the appeal by WADA of the athlete’s application as a arbitrators as well as practitioners had to be considered as filed preliminary ruling on a procedural defending the rights of their clients. outside of the time limit set forth question not related to the question in Article 13.7.1 of the FINA Doping of jurisdiction.32 In other words, Control Rules, i.e. twenty-one days the SFT considered that deciding 4A_287/2019 of 6 January after receipt of the complete and on the question of capacity of 202036 WADA’s counsel to represent 25 SFT, 4A_265/2019, 25 September 2019. This last decision deals with the 26 See SFT 4A_146/2019 and our commentary 28 See SFT 143 III 462, consid. 3.1, with further hereto in Jan Kleiner/Francisco Rapp, Recent references. See also Jan Kleiner/Francisco same legal question as the decision Jurisprudence of the Swiss Federal Tribunal Rapp, Op. cit., p. 113. on Football Matters, Football Legal #12 29 SFT 4A_287/2019, consid. 3.3, with further (December 2019), p. 108 ff.; see also SFT references. 4A_282/2013, consid. 5.3.2, not published in 30 SFT 143 III 462, consid 2.1, with further SFT 139 III 511. references. 27 SFT, 4A_413/2019, 28 October 2019. The 31 Article 190 par. 3 PILA in conjunction with 33 Id., consid. 3.3.2. English translation of the decision is available Article 190 par. 2 let. b and b PILA. 34 Ibid. on www.swissarbitrationdecisions.com. 32 SFT 4A_413/2019, consid. 3.3.1. 35 See above, comment to 4A_268/2019.
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4A_413/2019 mentioned above, Decision 4A_264/2019 of This decision is certainly also whereas this time, the appeal 16 October 201939 relevant for sport related was directed against the decision arbitration if ever an incomplete of CAS dismissing the plea of In its decision 4A_264/2019, the notification of a CAS Award (by inadmissibility due to the late filing SFT concluded that an allegedly email, fax or similar) occurs. of WADA’s Appeal Brief. incomplete and unsigned notification of an award by the Once again, the SFT had to International Chamber of Commerce Decision 4A_292/2019 of determine the nature of the (ICC) can still trigger the time limit 15 January 202041 decision or procedural act the of thirty days to appeal the award subject of the civil law appeal. in accordance with Article 100 In its decision 4A_292/2019, the SFT par. 1 SFTA. Since the appeal was rejected an appeal against an arbitral As seen above for 4A_413/2019, filed more than two months after award based on the allegation of lack the SFT qualified the CAS letter the (incomplete) notification of the of impartiality and independence of dismissing the inadmissibility arbitral award, the SFT rejected the one of the arbitrators. objection based on the alleged late appeal as inadmissible. filing of the appeal as a preliminary In the case at hand, the claimant ruling on a procedural question not The appellant argued that the time and appellant in the proceedings (directly) related to the question limit of Article 100 par. 1 SFTA before the SFT argued that the of jurisdiction.37 In other words, could not have expired since the arbitrator appointed by respondent the SFT considered that the Panel arbitral award sent by courier was did not meet the requirements of had not yet taken a final decision incomplete, as some pages were impartiality and independence at on its jurisdiction. The appeal was missing, namely also the pages with least for two reasons: therefore deemed inadmissible. the operative part and the signature. Article 100 par. 1 SFTA explicitly ➥➥ The arbitrator and respondent’s Referring to 4A_413/2019 states that the time limit starts legal representative worked in commented above, the SFT with the issuance of the complete the same law firm in Zurich for repeated that that the question body of the decision (“Eröffnung three years; of whether WADA had respected der vollständigen Ausfertigung des the time limit to file the appeal Entscheids” / “notification complète ➥➥ In addition, there were some ex does not constitute a matter of de l’ expédition” / “notificazione del parte contacts (by telephone) jurisdiction of the arbitral tribunal, testo integrale della decisione”). between the arbitrator and but rather a question of the right respondent’s legal representative to submit the decision to judicial According to the SFT40, the appellant at the outset of the arbitration review (standing to appeal).38 could not argue in good faith that proceedings. the notification of the decision was defective so as to justify the According to settled cased law, delayed filing of the appeal. It must partiality and bias are assumed Decisions 4A_264/2019 be noted that the full decision if circumstances exist which are of 16 October 2019 had also been notified by email. In objectively able to cast doubt on and 4A_292/2019 of addition, the SFT considered that the independence and impartiality 15 January 2020 the appellant was not only able, of a challenged arbitrator. Actual but also obliged, to immediately bias is not required.42 Finally, we wish to comment on report the incompleteness of the two recent decisions not related decision to the Secretariat of the In the present case, however, to sports arbitration, since some ICC and request a correction. the SFT rejected the appellant’s principles developed in these After failing to do so, the appellant arguments with the following decisions may be applied by analogy forfeited its right to request the reasoning:43 also to proceedings before CAS. delivery of the complete award. ➥➥ The fact that the challenged arbitrator and respondent’s
41 SFT, 4A_292/2019, 15 January 2020. 42 See SFT 4A_236/2017, consid 3.1.2, with further references, the English translation of the decision is available on http://www. 37 SFT 4A_287/2019, consid. 4.2. 39 SFT, 4A_264/2019, 16 October 2019. swissarbitrationdecisions.com. 38 Ibid. 40 SFT 4A_264/2019, consid. 1.4. 43 SFT 4A_292/2019, consid. 3.4.
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legal representative worked in the same law firm for several years alone did not give rise to any objective doubt as to the independence and impartiality of the arbitrator. However, this element could be considered in connection with further evidence such as proof of far reaching ex parte communication between the arbitrator and respondent’s legal representative.
➥➥ Moreover, the mere existence of ex parte communication is per se not sufficient to give rise to any objective doubt as to the independence and impartiality of the arbitrator. For example, it is customary and in principle unproblematic to contact a potential arbitrator to determine his suitability and availability or to discuss the appointment of a chairman of the arbitral panel. In the present case, it appeared that the phone conversation of approximately twelve minutes only concerned the topic of the law applicable to case and exclusively served the purpose of choosing a suitable chairman of the panel. This matter had also been pre-discussed between the challenged arbitrator and the arbitrator appointed by the appellant.
In light of the foregoing, the SFT concluded that, in the present case, no circumstances existed which were objectively able to cast doubts on the independence and impartiality of the arbitrator.
Also this decision provides additional guidance with regard to the requirements of independence and impartiality of arbitrators applied by the SFT which may clearly be relevant also for sports arbitration.
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The Creation of the Dispute Resolution Chamber in Colombia
By César Giraldo, Cristina Delgado and Carlos Buitrago Lawyers, GHER & Asociados Abogados Bogotá – Colombia
➔➔ Court of Arbitration for Sport (CAS) – Training compensation – Domestic dispute –Jurisdictional competence – Procedural guarantees – Independence/Impartiality – National courts – National regulations
TAS 2019/A/6228 Club Deportivo Juventud las Américas c. Club Deportivo Popular Junior F.C. S.A.
The case of Juventud Las Américas - an amateur football club of Santa Marta, Colombia - began in 2014 and ended in April 2020 before the Court of Arbitration for Sport (CAS).
How did it start? arbitration agreement. Given these The judgement issued by the Court1 constraints, it had to go before the on the proceedings for the claim In 2014, Juventud las Américas (JA) Constitutional Court to claim its for the protection of constitutional requested from Club Deportivo right to access justice, established in rights was a transcendental Junior (Junior) - one of Colombia’s the Colombian Constitution. point within the entire training wealthiest clubs - the payment compensation claim for the player of the training compensation, in mentioned above. accordance with the Player Status Regulations of the Colombian The creation of the NDRC The Court decided the following: Football Federation (CFF) in the amount of COP 38,000,000 The case was reviewed by the ➥➥ JA filed a claim for the (approx. EUR 9,000). In the Constitutional Court (Court), protection of its constitutional player’s passport, Junior registered which is the highest constitutional rights before the Colombian the player as professional for the court in Colombia. The review Tribunals, arguing the denial of first time on 12 March 2013, so was undertaken because of the justice by CFF; according to CFF Regulations, importance and the complexity JA was entitled to receive that of the matter. The legal issue that ➥➥ The Court stated that the NDRC amount. was brought to the attention of was the natural judge to hear the Constitutional Court was the the matter, but since the NDRC Since 2013, the Colombian Player possibility of the real existence of was not yet established, the CFF Status Committee (CPSC) has been a denial of justice, infringing the did not have reasons to deny in charge of settling all training fundamental right of a training the administration of justice. compensation disputes between club to access the administration amateur and professional clubs. of justice committed by the CPSC According to the final judgement, of the CFF, rejecting the claim there was a denial of justice, for Consequently, JA had no place to for the training compensation, the following reasons: claim against Junior because of the waiving its jurisdiction as the protection of the CFF over one of its principal and exclusive reason and ➥➥ JA did not have the possibility clubs. JA could not go before FIFA arguing that the competent body to use all the instruments either, since it was a national dispute was the NDRC that had not been 1 The decision issued by the Constitutional or even CAS, for JA could not file an established at the time of filing the Court of Colombia is registered under number ordinary proceeding without the claim. T-550/2016: www.corteconstitucional.gov. co
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contemplated in the regulations possibility was to go before CAS The CAS arbitrator studied (among within the procedures; with all the expenses, but it would others) the Statutes of FIFA and require JA needing to issue a the CFF, the Regulations on the ➥➥ JA was not allowed to file lawsuit for no less than USD 15,000 Player’s Status, the Regulations the claim and start the (approx. EUR 13,500). Moreover, about the NDRC’s proceedings, proceedings. It should be taken due to the peculiar regulation of and the CFF’s Disciplinary Code into consideration that there the CFF, at that moment JA did (DC), and concluded that the DC was no possibility to obtain not know if the CAS would have as the relevant applicable law for a judgement regarding the the jurisdiction to take this case. the dispute – since the dispute was legal matter discussed, since brought by two Colombian parties there was not an existing and – taking into consideration that competent judicial body to there was no express reference issue such judgement; CAS’ award to CAS’s jurisdiction within the Regulations on the Player’s Status ➥➥ There was an unjustified delay On 1 April of the same year, an or even the Regulations about the in the proceedings; appeal was filed before CAS in proceedings of the NDRC. This was relation to the judgement issued brought to the attention of CAS’s ➥➥ The claim was rejected, and JA by the NRDC. In compliance with arbitrator, who found the need did not have any procedural the Code of Procedural Rules, CAS to determine if there was a rule protection. The CFF should sent a letter asking the CFF if it about the jurisdiction from CAS, take all the necessary steps to wanted to be a party, as well as as appeal court, stated in the DC. establish such judicial body in requesting a copy of the appealed As can be seen, the jurisdiction of a term that could not exceed decision. The CFF denied the CAS was not direct, so CAS had to six months after the final jurisdiction of CAS, stating it was study if it could indirectly assume judgement was in force. not the competent body to decide and decide the case. the appeal, and requesting CAS to waive its jurisdiction and therefore, It was also necessary to define dismiss the appeal. Junior and the what the nature of NDRC NDRC’s first case CFF also mentioned that there was, as the entity issuing the was only one way to challenge appealed judgement. CAS found After the constitution of the NDRC the decision issued: by using the that the NDRC is one of the by the CFF, the proceedings extraordinary appeal for annulment dispute resolution bodies of the before this chamber on behalf of of the arbitration awards, before CFF, meaning that it is not an JA started. the ordinary courts in Colombia. independent arbitration court outside of FIFA, the CFF and in JA complied with all the The relevant point, when CAS general of the football regulations requirements to claim for the accepted the appeal, was to and therefore, the decisions training compensation, but establish if the CAS was indeed issued by the NDRC should be surprisingly, at the final hearing, the judge with jurisdiction to ruled exclusively by the sports the NDRC rejected JA’s claim, on decide. Junior alleged that the regulations. the basis that it did not file the decision issued by the NDRC was Good Standing certificate for the an arbitral award and should not To sum up, there was no expressed years when JA trained the player be reviewed by another arbitral provision according to the rules from 2007 to 2011, even though, court and revoked through another of CFF. The CAS arbitrator according to NDRC, “it wasn’t arbitral award. The key argument of considered that such jurisdiction mandatory”. It is worth asking, Junior was that the NDRC was not a had to derive from a complete why was the NDRC applying a judicial body belonging to the CFF, analysis of all the sporting rules of regulation that was not in force at but instead that the NDRC was an CFF. The argument had its basis in the time of the facts? independent and ad hoc arbitral the Colombian football regulations, court. The CAS arbitrator found that specifically in paragraph 20 of JA had the chance to go before the arbitration agreement signed Article 13 of the Statutes of the the National Tribunals to ask for between the parties determined CFF: it is a statutory clause that an annulment of the decision (as if that, in case of any controversy, the compels its members to submit to it was an arbitral award), however applicable law would be the Laws the CAS “(…) all of the disputes in once again JA was denied the of Colombia, as well as the rules of which the affiliate [to the FCF] or training compensation. The other FIFA and the CFF. one of its members, related to the
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Statutes, regulations, directives and decisions of the FIFA, CONMEBOL, or the FCF, …”2
CAS’ arbitrator concluded:
➥➥ JA was entitled to training compensation due to the following:
o JA trained the player;
o The player signed a contract as a professional player before his 23rd birthday;
o The regulation in force by the time of the dispute was the Regulations on the Status of Players 2015 (and before), and therefore, it was not necessary to exhibit the Certificate of Good Standing issued by the administrative authority in order to obtain the training compensation.
➥➥ Furthermore, prevailing proof was the player’s passport, issued by the CFF, being a superior authority in the first national entity that had issued it and FIFA itself had provided the information.
On the question of whether or not Junior should obey disciplinary measures, the CAS arbitrator considered that he had no authority to adopt those decisions, since such measures should be a consequence of the lack of payment of the amounts established on the award.
In the authors’ view, this is one of the most important sports law cases in Colombia. This is the first time that a case with these types of issues was decided in a number of different courts but in the end, it promotes sports law development which is really important worldwide.
2 Colombian Football Federation Statutes fcf.com.co
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The application of loss of chances, player’s market value, replacement costs, and specificity of sport criteria under Art. 17 RSTP in CAS jurisprudence
By Georgi Gradev Partner, SILA International Lawyers Sofia – Bulgaria
➔➔ Court of Arbitration for Sport (CAS) – Breach of contract – Just cause – Player transfer – Compensation – Liability – FIFA – FIFA RSTP
CAS 2018/A/5607 SA Royal Sporting Club Anderlecht v. Matías Ezequiel Suárez & Club Atlético Belgrano de Córdoba
CAS 2018/A/5608 Matías Ezequiel Suárez & Club Atlético de Belgrano de Córdoba v. SA Royal Sporting Club Anderlecht
A noteworthy award rendered by the Court of Arbitration for Sport (CAS), which was recently published in the CAS Bulletin 2019/02, somehow went unnoticed by scholars until now. In this case, the player claimed force majeure to terminate the contract outside the “Protected Period, which did not convince both FIFA and CAS. The former club claimed compensation for breach of contract based on an offer it had sent to the new club, which both FIFA and CAS did not deem a compensable damage head under Article 17.1 of the FIFA Regulations on the Status and Transfer of Players (RSTP). Finally, the Panel invoked the specificity of sport doctrine against the player to increase the compensation due to the former club by 25%.
Brief Facts On 13-14 November 2015 and 22 outside the “Protected Period” March 2016, a series of terrorist (according to Definition 7 of FIFA In January 2008, CA Belgrano attacks occurred in Paris and RSTP), because of (i) the terrorist transferred Matías Ezequiel Suárez Brussels, respectively. bombings in Brussels of March 2016 (Player) to R.S.C. Anderlecht (RSCA) (which followed those in Paris by for EUR 2.6 million. The Player and In June 2016, CA Belgrano a few months), which had left him RSCA signed a contract, which was expressed an interest in acquiring and his family living in constant renewed twice until 30 June 2017. the Player on loan for the 2016-2017 fear and anxiety, (ii) his need to To reach this last extension with the season. RSCA replied, “RSCA is not be closer to his ailing mother, and Player, RSCA signed an agreement opposed to transferring the player (iii) his dissatisfaction with RSCA’s with the Player’s agent, in which the but not as a loan. If CA Belgrano coaching staff, who no longer club agreed to pay the agent EUR is interested in Matías Suárez it viewed him as a starting player. 1.050 million in three installments of should pay the price: 4,000,000 EUR 350,000 each due on 1 July of Euros (4 million Euros).” Ultimately, Two weeks later, the Player signed 2013, 2014, and 2015. neither the free loan proposed by a three-year deal with CA Belgrano. CA Belgrano nor the definitive In September 2012, RSCA and transfer for EUR 4 million proposed In July 2016, RSCA demanded CSKA Moscow agreed to transfer by RSCA was eventually agreed; EUR 4 million in damages for the the Player to the Russian club for hence, the Player remained under Player’s unjustified termination of EUR 10.773 million. However, CSKA contract with RSCA. the contract. Moscow ultimately canceled the transfer, with no legal objections On 1 July 2016, the Player unilaterally In August 2016, RSCA acquired from RSCA or the Player. terminated the contract with RSCA the Belgian player, Massimo Bruno,
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as a replacement for the Player. health, and (c) the lack of playing Also, the Panel stated that “there RSCA had to pay RB Leipzig time, considered separately and is an established consensus in CAS EUR 500,000 as a loan fee and cumulatively, were insufficiently jurisprudence that the “positive to Mr Bruno EUR 1.270 million as severe to justify that termination. interest” principle must apply in salary and sign-on fee, plus other calculating compensation for an benefits, for which RSCA paid Moreover, the Panel added that unjustified, unilateral termination EUR 156,232.89. The contract with “pursuant to the Swiss Supreme of a contract under Article 17, Mr Bruno also included certain Court’s jurisprudence, a party para. 1 RSTP.”3 performance bonuses, which generally may not, in order to justify ultimately yielded EUR 164,787. the termination of an employment As there was no liquidated damages contract, rely on circumstances clause stipulated in the litigious which the terminating party was contract, the Panel, first, said that aware of at the time of termination there were no lost earnings or The FIFA Decision but did not then invoke (ATF 127 third party offers to consider. In III 310 consid. 4 a); it may only do particular, “CA Belgrano never made In July 2016, RSCA filed a claim for so under restrictive conditions any financial offer to RSCA. It only damages against the Player and CA (…). Considering that the Player, inquired about possibly obtaining Belgrano before the FIFA Dispute by his own account, knew about the player on a free loan and then, Resolution Chamber (DRC). the alleged oral agreement but once RSCA made a EUR 4 million did not mention it at all in the request, sent no response at all, During the DRC proceedings, the Termination Letter or at any point thereby implicitly manifesting its Player added another ground for leading up to the termination (and lack of interest in acquiring the the termination of the contract, not until the DRC proceeding), it Player at that price. Therefore, it which was that the RSCA’s Club is highly doubtful that the Player cannot be said that RSCA lost out Manager allegedly orally agreed to may now under Swiss law rely on on a transfer fee of EUR 4 million, facilitate the Player’s departure at said agreement as a valid reason as such hypothetical price was set the end of the 2015-2016 season. to terminate the Employment out by RSCA itself with no evidence Contract.”1 In any case, the Player on the record that in the market The DRC (i) ordered the Player did not sufficiently substantiate there could be any club interested to pay RSCA compensation for that an oral agreement existed. in spending that amount for the breach of contract of EUR 540,350 Player. Moreover, the Panel does not plus 5% percent interest p.a. as As to the issue of quantum, consider the EUR 4 million proposal of 14 July 2016, and (ii) held CA the Panel held: “As repeatedly to be relevant in determining Belgrano jointly and severally liable confirmed in CAS jurisprudence, the value of the Player, i.e., more for the said payment. As the breach the list of criteria set out in A r ticle 17, precisely, what RSCA would occurred outside of the Protected para. 1 RSTP is illustrative and not have had to spend on the market Period, the DRC concluded that the exhaustive. Other objective factors to contract the services of an Player and CA Belgrano were not can and should be considered, such analogous player. In the Panel’s view, subject to any sporting sanctions. as the loss of a possible transfer only a third party offer made in good fee and the replacement costs, faith may be a relevant indicator of provided that there exists a logical the Player’s value, because only that nexus between the breach and type of offer confirms the amount The CAS Award loss claimed (CAS 2010/A/2145, that a club would actually be willing 2146 & 2147, at para. 66; see also and ready to pay for acquiring the All three parties appealed to CAS. CAS 2008/A/1519 & 1520 and Player’s services. [...] the Panel The appeals were consolidated. CAS 2009/A/1880 & 1881). CAS considers that an offer made by precedents also indicate that, in the damaged club, even if made in As to the issue of liability, the Panel the analysis of the relevant criteria, tempore non suspecto, does not concurred with the DRC that the the order by which those criteria necessarily reflect the true player’s Player had terminated the contract are set forth by Article 17, para.1 value.”4 with RSCA without just cause. In RSTP is irrelevant and need not particular, the Panel ruled that the be exactly followed by the judging Then, the Panel said that it did three grounds invoked by the Player body (see CAS 2009/A/1880 & not have to consider the Player’s in the termination notice, being (a) 1881 at para. 79).”2 remuneration under the CA the terrorist attacks (eventual force majeure), (b) his mother’s ailing 1 Par. 99 of the CAS award. 3 Par. 111 of the CAS award. 2 Par. 109 of the CAS award. 4 Par. 116 & 117 of the CAS award.
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Belgrano contract, because “the compensation for RSCA. In According to CAS jurisprudence, Player’s remuneration with CA awarding replacement costs, the one of the factors to consider when Belgrano does not provide any Panel has already determined deciding whether the specificity of insight on the value of his services. the lost value of the Player.”7 sport requires a correction in the As the Player admitted, he Therefore, the average residual amount of compensation awarded sacrificed a considerable amount value of the old and new contracts is the behavior of the parties, in of remuneration to move back to was not considered by the Panel. particular, of the side that failed to Argentina.”5 respect its contractual obligation In continuation, the Panel (CAS 2008/A/1519-1520, at para. However, the Panel deemed considered that it “must subtract 168).”10 In this respect, the Panel the replacement costs to be a any costs that RSCA saved in the considered that “Not only did compensable damage head under Player’s departure (CAS 2008/ the Player wait until the first day Article 17.1 RSTP in this case. In A/1519-1520, at paras. 123-124; CAS after the Protected Period to this respect, the Panel notes that 2009/A/1880 & 1881, at para. 102).”8 send the Termination Letter (as “for RSCA to successfully claim As RSCA saved EUR 1,424,239.70 is undisputed by the parties), replacement costs, RSCA must from the Player’s departure, the but the reasons for his departure substantiate that Mr. Massimo Panel decided to deduct that have been rather inconsistent.”11 Bruno was hired to replace the amount from EUR 2,394,019.89 The Panel criticized the Player’s Player. Only then can Mr. Bruno’s (i.e. the replacement costs plus conduct for “lack of consistency, acquisition costs be claimed as unamortized agency fees) to total transparency and correctness on compensation under Article 17, EUR 969,780.19 as compensation his part, tainting the justifications para. 1 RSTP. Following Matuzalem, under Article 17.1 RSTP. he advanced as excuses to do this requires the RSCA to prove (i) what he wished, disregarding his that the players played in more or As to the “law of the country contractual commitments.”12 CA less the same position on the field, concerned” (i.e. Belgian Law), the Belgrano’s contact with RSCA and (ii) that there is a link between Panel held that “it is irrelevant if before the termination to acquire the Player’s premature termination under Belgian law RSCA could have the Player on loan was held to of the Employment Contract and allegedly been entitled to a greater the detriment of the former. In the hiring of the new player (CAS amount than under Article 17, para. addition, the Panel considered 2008/A/1519-1520, at para. 136). 1 FIFA RSTP. That circumstance that “neither the Player nor CA The Panel finds that RSCA satisfied alone does not warrant an increase Belgrano did anything to attempt both requisites.”6 The Panel of the amount determined as to mitigate RSCA’s damages.”13 calculated the replacement costs compensation here. On the other For these reasons, while referring for the Player at EUR 2,131,519.89. hand, the Panel finds that Belgian to Article 99.3 and Article 42.2 law is relevant in establishing the of the Swiss Code of Obligations, remuneration due to the Player the Panel decided to apply a 25% The Panel deemed under the old contract with RSCA increase (i.e. EUR 242,445.04) to the replacement and, in fact, has taken it into the compensation for breach of costs to be a account for calculating the costs contract, which was finally set at compensable damage saved by the Belgian club with the EUR 1,212,225.23 plus interest as of head under Article 17.1 Player’s early departure.”9 4 July 2016 as per RSCA’s request. RSTP in this case Finally, the Panel laid particular As to the liability of CA Belgrano, emphasis on the “specificity of the Panel stated that “the Chelsea- Further, the Panel granted RSCA sport” doctrine. In particular, “the Juventus precedent does not EUR 262,500 in damages for the Panel [was] not convinced that apply to the present case because unamortized agency fees for the the replacement costs incurred the two cases can be easily extension of the contract with the plus unamortized agency fees distinguished. Here it was the Player. minus costs saved (amounting to Player that prematurely terminated a total of EUR 969,780.19) would his contract and signed a contract Then, the Panel said: “Awarding fully compensate RSCA for the with CA Belgrano.”14 Therefore, the average residual value of the loss it suffered as a result of the Article 17.2 RSTP is applicable, contracts on top of replacement Player’s breach of Article 16 RSTP. costs would create a double 10 Par. 147-148 of the CAS award. 11 Par. 150 of the CAS award. 7 Par. 138 of the CAS award. 12 Par. 151 of the CAS award. 5 Par. 121 of the CAS award. 8 Par. 140 of the CAS award. 13 Par. 153 of the CAS award. 6 Par. 124 of the CAS award. 9 Par. 145 of the CAS award. 14 Par. 163 of the CAS award.
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and CA Belgrano “is jointly and severally liable for the amount of EUR 1,212,225.23 awarded to RSCA, plus five percent interest p.a., irrespective of whether CA Belgrano was involved in or induced the Player to terminate his Employment Contract.”15
As a result, the appeal filed by RSCA was partially upheld, and the Player and CA Belgrano were ordered to pay RSCA, jointly and severally, EUR 1,212,225.23, plus five percent interest per annum on this sum from 4 July 2016 until effective payment.
15 Par. 166 of the CAS award.
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Strict Liability of Football Clubs for their Supporters’ Misconduct Special Focus on the Boca Juniors v. River Plate & CONMEBOL case
By Luis Torres Montero Lawyer, Pintó Ruiz & Del Valle Barcelona – Spain
➔➔ Court of Arbitration for Sport – CONMEBOL – CONMEBOL Disciplinary Tribunal – Liability – Supporters – Security – Hooliganism
CAS 2018/A/6040 Club Atlético Boca Juniors v. CONMEBOL & Club Atlético River Plate
Anyone who is a sports fan should be entitled to enjoy a sporting event without any concern for his/her safety. This basic idea, that one would think is rather obvious, has been threatened on many occasions by individuals that use sport as an excuse to alter the public order and the integrity of the competitions. Of course, the “Beautiful Game”1 is not an exception to this rule, but quite the opposite. Football is arguably the most popular sport in the world with an estimated 3,500 million fans2 and sadly, not all of those supporters behave as true sports fans when it comes to enjoying a football game. This article analyses how football organizations decided to tackle the misbehavior of football supporters by implementing a mechanism of strict liability that has a direct impact on clubs and national associations in cases of misconduct of their supporters (“the strict liability system”).
Introduction.12 to establish the responsibility for bodies imposing sanctions on an Approach to the Concept the wrongdoing. In those cases, the individual who is not under their of Strict Liability of so called “strict liability principle” jurisdiction, which is precisely the Football Clubs for their is applied that places the central case with hooligans. In view of this Supporters’ Misconduct focus of such responsibility on situation and in order to achieve the offense itself, resulting in the legitimate goal of preventing In general terms, the responsibility unfavorable consequences for the supporters’ misconduct, as well as attributable to someone who is offender despite the possible lack to create a deterrent effect for both non-compliant or an offender of fault or negligence in its conduct, supporters and clubs, the sport is based on fault. The field of as it happens for instance with the authorities decided to implement international sports law is no responsibility of a football club for the principle of strict liability of exception to this general rule the acts committed by its fans. clubs for the acts committed by and thus, in different disciplinary their supporters. regulations of international sports In this sense, the rationale behind entities, such as FIFA’s or UEFA’s, the implementation of such a The strict liability system has not one can find provisions referring strict rule in the international been free of criticism over the to the negligence or fault in the sports law field is none other years, especially by those directly conduct of the offender. than the lack of disciplinary affected by said principle, i.e. power of the sport governing the clubs that are repeatedly Nevertheless, there are exceptions authorities over the fans.3 The sanctioned for acts committed by to this general rule where the fault of very private nature of the sports- their fans regardless of the greater the offenders will not be necessary law system prevents the deciding or lesser extent of diligence they applied to each particular case. 1 Pelé, Robert L. Fish, Shep Messing (2007). 3 Van Kleef R., “Liability of football clubs for Therefore, as a controversial issue, “My Life and the Beautiful Game: The supporters’ misconduct. A study into the Autobiography of Pelé”. interactions between disciplinary regulations the strict lability of football clubs 2 “Top 10 Most Popular Sports in The World of sports organizations and civil law. Leiden has given rise to a great number [Updated 2020]” sportsshow.net University”, 2016, p. 116 and 117.
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of pronouncements by the Court Through the multiple cases The main incident took place of Arbitration for Sport (CAS) over heard by CAS, clubs and national when some River Plate fans threw the years. associations have put forward an different projectiles to Boca extensive range of legal arguments5 Juniors’ microbus causing the As a matter of fact, the appeal in order to contest the imposition shattering of windows and serious filed by Club Atlético Boca of disciplinary sanctions. Despite injuries to some of the players. Juniors (Boca Juniors) before CAS the aforesaid, it remains clear that, Most of the microbus’ passengers against Club Atlético River Plate according to CAS jurisprudence,6 also experienced breathing (River Plate) and CONMEBOL, Panels have not only not hesitated and vision problems, as well as as a result of the incidents that to validate the strict liability system dizziness and nausea, due to tear occurred in the second leg of the established by the international gas that together with the other Copa Libertadores 2018 final,4 football associations, but also injuries were duly reported by constitutes a recent example of and whenever the circumstances Boca Juniors’ doctors. the debate that such principle giving rise to the liability have has generated, and this article been duly proven, it has been strict As the reader will understand at a will analyze its reasoning and its in its application. later stage, it is especially relevant consequences. for the understanding of this case One of the most recent examples to bear in mind that the most under CAS’ glossary of awards serious attack suffered by Boca on this topic is the Boca Juniors Juniors’ microbus occurred at the The Strict Liability v. River Plate & CONMEBOL case intersection of Av. Del Libertador, System before the Court that was mentioned before. This Av. Monroe and Av. Lidoro J. of Arbitration for Sport. case constitutes a very interesting Quinteros (Intersection); this is only Special Focus on the Boca and recommended read as far 700 meters away from the Estadio Juniors v. River Plate as the strict liability principle is Monumental, where the game was Case - CAS 2018/A/6040 concerned and is likely to become supposed to take place and right a leading case on the subject on the edge of the (third) security CA Boca Juniors v. matter as this CAS award perfectly ring deployed by the police. It is CONMEBOL & CA River illustrates the importance of the worth mentioning that the location Plate regulatory framework of the strict of the security rings was agreed by liability of football clubs. the competent authorities in the The application of the strict liability security meetings held days before system has led to many clubs As the reader may be aware, the the Match, where the clubs and (or national associations) being case is the result of the incidents CONMEBOL were also present. severely sanctioned over the years that took place during the second by disciplinary bodies due to actions leg of the Copa Libertadores 2018 After the above-mentioned perpetrated by their supporters. final on 24 November 2018 (Match), incident occurred, River Plate To avoid such an outcome, many when the microbus of Boca Juniors fans also carried out different acts offenders have contested the was approaching River Plate’s of vandalism, such as robberies, decisions of disciplinary bodies stadium, the Antonio Vespucio fights, damage to vehicles, of international sports entities, Liberti Stadium (colloquially destruction of urban furniture, giving rise to a relatively large known as “Estadio Monumental”). etc. which took place inside the body of jurisprudence before CAS security ring designed by the concerning this particular matter. police in the security meetings. 5 The arguments put forward by the clubs are diverse and go from frontal attacks to the validity of the entire strict liability system to, accepting Once Boca Juniors’ bus arrived at the its validity beforehand, against its applicability This CAS award and objective nature; some have also tried to stadium and in view of the incidents perfectly illustrates discuss the condition of “supporters” of the experienced outside and inside the fans committing the infringement; or even the importance of the have questioned the severity of the sanctions, stadium, the Match was postponed requesting its attenuation based on different for a few hours. Later that same regulatory framework criteria and circumstances depending on each of the strict liability of particular case. afternoon, CONMEBOL announced 6 See inter alia the findings of the following the agreement of both clubs and football clubs landmark cases: TAS 2002/A/423 PSV Eindhoven vs UEFA; CAS 2007/A/1217 CONMEBOL itself to postpone the Feyenoord Rotterdam v. UEFA; CAS Match until the following day with 2013/A/3139 Fenerbahçe SK v. UEFA; TAS 4 CAS 2018/A/6040 CA Boca Juniors v. 2017/A/5340 US Ouakam vs Fédération the aim of guaranteeing that the final CONMEBOL & CA River Plate (also referred sénégalaise de Football & Ligue sénégalaise would be played on equal terms. to as “Boca Juniors v. River Plate case”). de Football professionnel.
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The following morning, Boca O-212-18, the security perimeter One week after the appeal was Juniors informed CONMEBOL that designed in the meetings between filed, on 6 December 2018, and their players were not in a position clubs, police and government only a few days before the final to play the Match and filed a authorities of Buenos Aires, was (rescheduled to 9 December 2018 complaint before the CONMEBOL of the utmost relevance for the in Madrid), the Appeal Committee Disciplinary Unit to denounce the Tribunal, since it concluded that issued its Decision no. A-21-18, in events that occurred the previous River Plate’s responsibility would which it established that it would day, requesting River Plate’s only begin precisely after the only decide on the allegations disqualification from the Copa Intersection, which was the exact made by both clubs in relation Libertadores 2018, in application point where the security rings to procedure O-212-18 (incidents of the principle of strict liability commenced and therefore, the that occurred outside the security set forth in Articles 8 and 13(2) incidents denounced by Boca rings) and not with regards to the of the CONMEBOL Disciplinary Juniors were to be considered procedure O-213-18 (incidents Code (ed. 2018)7 (CDC). Thus, outside the scope of the strict occurred inside the security rings), the Disciplinary Tribunal initiated liability principle that arises as the latter was an independent the said procedure at the request from Article 8 of the CDC and procedure and Boca Juniors was of Boca Juniors (Disciplinary consequently, River Plate could not considered a party. Proceedings no. O-212-18). not be punished for such acts of its fans (Decision O-212-18). As far as Boca Junior’s allegations River Plate had the opportunity regarding the procedure O-212-18, to present its allegations and On the other hand, in parallel the Appeal Committee rejected CONMEBOL’s Disciplinary Tribunal to the initiation of the aforesaid each and every one of the finally decided that River Plate was procedure, the CONMEBOL arguments presented, confirming not strictly liable for the events Disciplinary Unit initiated ex the first instance decision in its that occurred at the Intersection, officio a different disciplinary entirety and ruling inter alia that since according to the Tribunal’s procedure against River Plate (i) it would be absurd to sanction findings, it was “fair to think (Disciplinary Proceedings no. a club for an incident occurring that Club Atlético River Plate is O-213-18), exclusively considering more than 700 meters away objectively responsible for events the acts of vandalism that took from a stadium, particularly if the exclusively related to its actions place within the security ring (see responsibility laid with the police; that may occur within the security supra). The decision adopted by and (ii) “the strict liability shall have rings and not those that occurred the Disciplinary Tribunal in this certain limits, that is, it can only outside the controlled area procedure was to sanction River be applied to incidents occurring established for this purpose.”8 Plate with a fine of USD 400,000 inside or in the immediate vicinity (approx. EUR 355,000) and with of the stadium. There is no doubt In other words, considering two games behind closed doors that point 2 [of Article 8 of the CDC] the content of CONMEBOL’s to be served in Copa Libertadores determines that there have to be a Disciplinary Tribunal Decision 2019 (Decision O-213-18). clear proximity for strict liability to 9 7 ARTÍCULO 8º - RESPONSABILIDAD apply.” Therefore, in the opinion of OBJETIVA DE LOS CLUBES Y Boca Juniors, after being made CONMEBOL’s Appeal Committee, ASOCIACIONES MIEMBRO.- 1. Las Asociaciones Miembro y los clubes aware of the decisions and given River Plate was not strictly liable son responsables del comportamiento the utmost urgency of the case, for the bus attack because it de sus jugadores, oficiales, miembros, público asistente, aficionados así como immediately appealed both occurred at a distance that could de cualquier otra persona que ejerza o decisions (i.e. Decisions O-212-18 not be imputed to the club, i.e. pudiera ejercer en su nombre cualquier función con ocasión de los preparativos, and O-213-18) before CONMEBOL’s at a distance that was not be organización o de la celebración de un Appeal Committee, specially considered as the “surroundings” partido de fútbol, sea de carácter oficial o amistoso. 2. Las Asociaciones Miembro y emphasizing the fact that the of the stadium, in accordance clubes son responsables de la seguridad y bifurcation of the proceedings was with Article 8 of the CDC. del orden tanto en el interior como en las inmediaciones del estadio, antes, durante y totally artificial and unnecessary as después del partido del cual sean anfitriones both proceedings were dealing with The day after the notification of u organizadores. Esta responsabilidad se extiende a todos los incidentes que de the potential strict liability of River Decision A-21-18, Boca Juniors filed cualquier naturaleza pudieran suceder, Plate derived from the behavior an appeal to CAS and requested, encontrándose por ello expuestos a la imposición de las sanciones disciplinarias y of its fans as a whole, considering as an urgent provisional measure, cumplimiento de las órdenes e instrucciones that all the reprehensible the suspension of the second leg que pudieran adoptarse por los órganos judiciales. events occurred under the 8 Cf. Par. 3.8 CONMEBOL Disciplinary Tribunal scope of Article 8 of the CDC. 9 Cf. par. 3.13 - CONMEBOL Appeals Decision O-212-18. Committee Decision A-21-18.
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of the final that was rescheduled for instance, in Article 17(1) UEFA Another interesting legal debate of for that same Sunday 9 December Disciplinary Regulation11 - applied the case that was emphasized by in Madrid. After studying in CAS 2007/A/1217 and CAS the Panel in the award relates to the allegations presented by 2014/A/3578 - or Article 67(1) the spatial delimitation of the strict CONMEBOL and by River Plate, FIFA Disciplinary Code (ed. 2017)12, liability concept. Both River Plate on 8 December 2018, the CAS such exception was not foreseen in and CONMEBOL agreed in their President of the Appeals Division the specific case of the CDC (ed. submissions that said responsibility rejected Boca Juniors’ request and 2018), since CONMEBOL left no could not be unlimited and the consequently, the second leg of the discretion to its judicial bodies to term “surroundings”15 referred Copa Libertadores 2018 final took sanction or not sanction a club to in Article 8 of the CDC should place at Santiago Bernabéu, with depending on the particular facts be interpreted differently in a favorable result to River Plate, and elements of each case. each country in accordance with who was proclaimed champion of the relevant national law and the Copa Libertadores 2018 after Therefore, bearing in mind the consequently, such local legal winning the game 3-1. aforesaid, the Panel concluded that framework would delimit with unlike the aforementioned CAS precision where the strict liability of The appeal initiated by Boca cases, the CDC did not consider clubs begins. It is important to point Juniors before CAS continued its the absence of fault or negligence out that in the version of the CDC course and finally, on 4 February as an exceptional factor to be applicable to this case (i.e. the 2018 2020, CAS communicated its final taken into account in establishing edition) there was no definition of decision pursuant to which it set the club’s responsibility under the term “surroundings” as it does aside the Appeal Committee’s Article 8 of the CDC and hence, in the 2020 edition16 and therefore, Decision A-21-18 and partially River Plate was strictly liable for it was a term that should be upheld Boca Juniors’ appeal, the misconduct of its supporters interpreted by the Panel. deciding that River Plate had indeed regardless of whether or not the violated Articles 8 and 13(2) of the club was negligent or at fault.13 On The Panel concluded that the CDC. The Panel confirmed that the other hand, according to the coexistence between sports River Plate was strictly liable for the Panel, the degree of negligence regulations and national legislation incidents caused by its supporters or fault can be taken into account is perfectly compatible since at the Intersection (outside the to moderate the sanction, as it both pursue different objectives security rings) and sanctioned the precisely did in this case.14 and are applied in different club with two games behind closed contexts. Although it has become doors to be served in the next River Plate was clear that the legislation of each edition of Copa Libertadores. strictly liable for the country in relation to security misconduct of its or the organization of events is The CAS award10 is likely to supporters regardless of not relevant for the purposes of become a leading case regarding whether or not the establishing whether or not there is the strict liability system since club was negligent strict liability of a football club for it contains a very detailed and incidents caused by spectators on complete analysis of such principle the federative level, this does not
- the strict liability of the clubs for 11 Artícle 17(1)1 UEFA Disciplinary Regulations: imply that such internal law may be their supporters’ misconduct - and “subject to article 6 para 1 of the present relevant, for example, as a criterion regulations on strict liability for fan its interpretation. missconduct, no disciplinary measures may to determine the proportionality be imposed in cases wehre the party charged of the sanction imposed.17 bears no fault or negligence”. (emphasis First of all, the Panel, in addition added) to underlining that CONMEBOL’s 12 Article 67(1) FIFA Disciplinary Code (ed. In this sense, the Panel rejected 2017): “The home association or home bifurcation of disciplinary club is liable for improper conduct among the interpretations proposed procedures O-212-18 and O-213-18 spectators, regardless of the question of by River Plate and CONMEBOL culpable conduct or culpable oversight, and, was erroneous and inappropriate, depending on the situation, may be fined. and confirmed that the term established that although the Further sanctions may be imposed in the “surroundings” was not arbitrary case of serious disturbances.” (emphasis legislator has the possibility to added) and its interpretation should include an implicit or explicit 13 See CAS 2018/A/6040 CA Boca Juniors v be made in a functional way CONMEBOL & CA River Plate, par. 113 et seq. exception in cases of absence of It shall be noted that this exception has been (“functional approach”) to avoid no fault or negligence, as provided included in the latest edition of CONMEBOL Disciplinary Code (ed. 2020), specifically in 15 Originally in Article 8 of the CDC: its new Article 9. “inmediaciones”. 10 CAS 2018/A/6040 CA Boca Juniors v 14 See CAS 2018/A/6040 CA Boca Juniors v 16 See Section 3 infra. CONMEBOL & CA River Plate. CONMEBOL & CA River Plate, par. 147. 17 Ibid, par. 130.
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an unwanted situation where stadium), was sufficient to obtain (now, Article 9 of the 2020 CDC).22 hooligans could identify with the desired outcome. On the precision where the strict liability contrary, the Panel was of the This definition specifically of the club begins. In order to opinion that the disqualification of delineates the spatial scope of achieve this objective, the Panel River Plate would be excessive and strict liability for football clubs, proposed three cumulative criteria inappropriate.19 and seems to contradict not only that shall be considered by the the line of reasoning followed by deciding bodies when determining the Panel in CAS 2018/A/6040 CA whether an incident occurred in Boca Juniors v CONMEBOL & CA the “surroundings” of the stadium The New CONMEBOL River Plate and the well-established and therefore, to verify whether Disciplinary Code CAS jurisprudence on this matter, the strict liability of a club applies:18 (Ed. 2020) but also the spirit and rationale of the strict liability principle itself. ➥➥ whether the incident took place On a separate note, it is interesting in a reasonable geographic to analyze the impact that the This regulatory change comes as proximity to the stadium; Boca Juniors v. River Plate case has shocking, especially when CAS had on CONMEBOL’s approach to has ruled precisely on this issue in ➥➥ whether it was directly linked the strict liability principle. In this terms as clear as those contained to the match; and regard, it shall be noted that, right in CAS 2018/A/6040, par. 126: before CAS issued the award of “[…] the only way to ensure the ➥➥ whether it had a direct negative the case, CONMEBOL introduced preventive and deterrent function impact on the match. a regulatory change in the 2020 of article 8 CDC [now, Article edition of its Disciplinary Code 9 2020 CDC] is to avoid any In its analysis of this specific case, (2020 CDC). The amendment predetermination of the meaning the Panel thoroughly assessed introduced by CONMEBOL is of “inmediaciones” and of the and applied the three above- extremely significant, especially triggering of strict liability, at mentioned criteria and concluded considering the findings of the the same time allowing some that the incident occurred in the Panel in CAS 2018/A/6040 CA predictability of the sanctions by surroundings of the stadium and Boca Juniors v. CONMEBOL & CA developing and applying some consequently, River Plate was to River Plate addressed above. reasonable criteria to assess the be considered as strictly liable for circumstances of each case.” its supporters’ acts, as provided for in Article 8 of the CDC. Right before It would appear that, by establishing CAS issued the such specific boundaries to the When it came to determining award of the case, strict liability principle of football the appropriate sanction, the CONMEBOL introduced a Panel considered the principle regulatory change in 22 ARTÍCULO 9. RESPONSABILIDAD of proportionality and held that, OBJETIVA 1. Salvo que el presente código the 2020 edition of disponga lo contrario, las Asociaciones considering (i) the magnitude its Disciplinary Code Miembro y los clubes son responsables del of the attack and the injuries comportamiento de sus jugadores, oficiales, miembros, público asistente, aficionados, así caused to Boca Juniors’ players, como de cualquier otra persona que ejerza (ii) the deterrent effect pursued CONMEBOL decided to o pudiera ejercer en su nombre cualquier función con ocasión de los preparativos, by the strict liability principle, include a definition of the term organización o de la celebración de un partido (iii) the undeniable responsibility “surroundings”:20 “Surroundings: it de fútbol, sea de carácter oficial o amistoso. Se sancionarán también las infracciones of the police in the incident and is the space between the security cometidas tanto intencionalmente como River Plate’s lack of real control ring(s) determined for each match por negligencia. 2. La tentativa también será sancionada. 3. Las Asociaciones Miembro y 21 in such area, two games behind and the Stadium.” The South- clubes son responsables de la seguridad y closed doors, in conjunction with American football Confederation del orden tanto en el interior como en las inmediaciones del estadio, antes, durante y the sanction already imposed by has also slightly amended the después del partido del cual sean anfitriones the Decision O-213-18 (i.e. two provision regarding strict liability u organizadores. Esta responsabilidad se extiende a todos los incidentes que de additional games behind closed cualquier naturaleza pudieran suceder, doors plus a USD 400,000 fine encontrándose por ello expuestos a la imposición de las sanciones disciplinarias y for incidents occurring inside 19 Ibid, par. 141 et seq. cumplimiento de las órdenes e instrucciones the security rings and inside the 20 Originally: “Inmediaciones”. que pudieran adoptarse por los órganos 21 Originally: “Inmediaciones: Es el espacio judiciales. 4. Asimismo, podrá ser sancionada comprendido entre el/los anillo/s de toda persona que participe en la comisión de 18 See CAS 2018/A/6040 CA Boca Juniors v seguridad determinados para cada partido y una infracción o induzca a alguien a hacerlo, CONMEBOL & CA River Plate, par. 125 & 126. el Estadio.” See p. 4 of 2020 CDC. ya sea como instigador o como cómplice.
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clubs, CONMEBOL has introduced “inmediaciones”. As explained Hence, it can be concluded that a dangerous guide to hooligans, above, the new definition included the application of strict liability to allowing them to identify with in the regulations specifically football clubs for their supporters’ certainty where they may act delineates the spatial scope of the misconduct is the only way in without causing any negative club’s’ strict liability and therefore, which football associations may consequences to their clubs, which it seems to directly contradict achieve their objectives. Without is precisely one of the undesired not only the CAS jurisprudence’ the application of the strict liability outcomes that this principle tries line of reasoning on this topic - principle, associations would be to avoid and prevent. see CAS 2018/A/6040, par. 126 literally powerless to deal with supra -, but also the spirit and supporters’ misconduct if a club rationale of the principle itself. refuses to take responsibility Thus, it can be concluded that for such behavior and all efforts Conclusion the concept of strict liability in to simply enjoy a football game the 2020 CDC may have certain without any concern for anyone’s In light of the above, one can difficulties in accomplishing one of safety would be useless. conclude that the strict liability of its main objectives, i.e. serving as football clubs for their supporters’ a deterrent effect and preventing misconduct is fully confirmed either supporters’ misconduct. by the international federations (e.g. CONMEBOL, UEFA or FIFA), Having said that, some may argue but also by CAS itself, which has a that the strict applicability of this long and settled jurisprudence on principle may be too punitive this regard. occasionally, especially in those cases where clubs have no option In this sense, the award CAS to even mitigate the misconduct of 2018/A/6040 CA Boca Juniors their fans. However, cases like the v. CONMEBOL & CA River Plate one analyzed in the present article shows us that clubs should be reveals that this principle still plays aware of the difficulty in avoiding a fundamental role in preserving the responsibility derived from the integrity of the “Beautiful the strict liability system and the Game”. As mentioned above, the imposition of potential sanctions primary goal of the strict liability when there is a case of misconduct principle is clearly aimed at from its supporters. Nonetheless, ensuring that clubs shoulder the what is accessible to these clubs responsibility for their supporters’ is the possibility to mitigate the conduct, since associations have consequences of the strict liability’ no direct disciplinary authority principle. It shall always be taken over club’s supporters, in order into consideration that sanctions to safeguard the objectives may be reduced by duly assessing pursued, which respond to the and proving some criteria, for most elemental principles of instance: (i) the degree of brutality integrity and fair play in sports.24 of the fans’ behavior and the harm Indeed, the application of strict caused; (ii) the club’s behavior liability is not unknown in other to prevent those actions; (iii) the areas of sports, since it has been chances of such incidents being commonly used and developed avoided; or (iv) the sporting by the anti-doping system, consequences caused by such where health, fairness, equal conduct.23 opportunities in competition, even evidentiary difficulties, have been Finally, it is worth giving some admitted as valid justifications consideration to the amendment for the application of such carried out by CONMEBOL principle in doping-related cases.25 in its 2020 CDC of the term
24 CAS 2002/A/423 and CAS 2007/A/1217 23 As a clear example, see Article 16 of FIFA 25 USA Shooting and Quigley v Union Disciplinary Code (ed. 2019). Internationale de Tir - CAS 94/129
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Payment of Outstanding Salaries and Team Performance Bonuses
By Eugene Krechetov Lawyer, Eksports Law Moscow – Russia
➔➔ Court of Arbitration for Sport (CAS) – FIFA Dispute Resolution Chamber (FIFA DRC) – Labour disputes – Salaries – Overdue payables – Time limit – FIFA Regulations – Swiss Law – National Law
CAS 2018/A/6045 Manuel Henrique Tavares Fernandes v. FC Lokomotiv Moscow CAS overrules the FIFA DRC decision by finding that the claim of the player was not time-barred by application of Articles 86-87 SCO and, once again, confirms that players shall be equally treated in terms of a team bonuses system.
The dispute between Manuel Facts of the Case received amount did not correspond Henrique Tavares Fernandes with the total amount in Euros that (Player) and FC Lokomotiv On 1 June 2014, the Club and the was stipulated by the contact. Moscow (Club) arose after: (i) the Player entered into an employment Player realized that during the first contract valid for five years. Moreover, as the Club’s team won contractual year, the Club paid the Cup of Russia season 2014- him less than was agreed upon According to the contract, the 2015, in May 2015, all of the Club’s by the contract; and (ii) when Club had to pay the Player certain players were rewarded by the the Player was not paid the team salaries that were stipulated in bonus, except for the Player. performance bonus for the win Euros but had to be paid in Russian of the Cup of Russia, while all his Rubles “at a rate of the Central Bank During the years 2015 and 2016, teammates were duly rewarded. of Russia on the day of charge”. the Player filed several warnings with the Club, asking to be paid The interesting fact of this case is The parties did not further define the remittance of his salaries and that the Player lodged his claim or specify the term “day of charge”, the team performance bonus. The before the Dispute Resolution however, according to the Player, Club rejected the claims, however, Chamber of FIFA (FIFA DRC) after he was orally informed that it had without a clear explanation of the the 2-year limitation period had always to be the last day of each reasons thereof. expired in relation to his salaries respective month. (that had to be payable monthly) On 30 April 2017, the Player lodged and therefore, the FIFA DRC Throughout the duration of the a claim before the FIFA DRC. rejected his claim as time-barred. contract, the Club paid the Player’s However, the Court of Arbitration salaries in installments, normally 1 On 24 August 2018, the FIFA DRC for Sport (CAS) overruled the to 3 installments per month. rejected the Player’s claim, having decision, as it found that the claim noted the following: was not time-barred on the basis In June 2015, the Player calculated of Articles 86-87 of the Swiss Code the total amount that he received “In this context, the Chamber of Obligations (SCO). for the first 12 months of his first referred to art. 25 par. 5 of employment and found that, after the Regulations, according to application of the Russian Central which the Dispute Resolution Bank’s exchange rates set for the Chamber shall not hear any last days of respective months, the case subject to the Regulations
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if more than two years have salaries “accrued before the date of from obtaining payments for the elapsed since the event giving 30 April 2015” was time-barred. In salaries accrued for the period from rise to the dispute. Considering fact, the salaries that were accrued 1 June 2014 until 30 April 2015 in full, that the claim of the Claimant before the date of 30 April 2015 irrespectively of any calculations. was lodged in front of FIFA were paid. The only outstanding on 30 April 2017 only, the amount corresponded to the salary As to the Player’s reference to Chamber found that it could of May 2015, which accrued on 31 Article 87 of the SCO, the Club not enter into any claim for May 2015, in keeping with Article 87 believed that it was inadmissible salaries and bonuses that fell of the SCO. Since the claim before since this legal provision governs due prior to 30 April 2015.” the FIFA DRC was filed on 30 April situations when the debtor 2017, it was not time-barred. acknowledges the existence of a On 7 December 2018, the Player debt, while in the case at hand the filed a Statement of Appeal with As for the unpaid team bonus, the Club always disputed the debt in CAS against the Club with respect Player stressed that a decision to its correspondence with the Player. to the DRC decision. reduce bonuses or to deprive a Player of bonuses could not be As to the bonus payment, the Club arbitrary made by the Club, without confirmed that all other players a reason, expressly stipulated into were rewarded with the bonus, Position of the Parties the contract or internal regulations. however it stressed that any bonus payments were discretionary taking As to the monthly salaries’ issue, While all his teammates were into consideration such criteria the Player noted that the Club rewarded the bonus for the win of as personal contribution of the never made its monthly payment in the Cup of Russia, the Player (who employee, absence of a disciplinary one instalment, instead varying the was one of only two players who offence, etc. As a result, the Player payment over 1 to 3 instalments. played in all five matches of the did not have an unconditional right Cup of Russia and in four of which to receive the bonus. During the first year of employment, he was the first-eleven player) did the Club made payments without not get his bonus payment. specifications. It was, therefore, impossible for the Player to know According to well-established CAS Considerations of CAS for which respective month a jurisprudence, the Club’s refusal payment was made. to pay the bonus to the Player, First of all, the Panel decided without a valid reason, constitutes that the FIFA Regulations were Moreover, according to Article a form of discrimination under applicable principally and were 136 of the Labor Code of Russia, Russian Law, according to which subject to Swiss Law with respect an employer must inform each “The employer is obliged: (...) to to their interpretation and employee, in writing, of the salary provide workers equal payment application where they seek to set amount accrued in that certain for work of equal value; Any uniform standards internationally. month, the deductions that were discrimination at establishment Russian Law, more generally, was made to the salary amount and and change of terms of payment to be considered as applicable the total amount that is due and for work is forbidden.” subsidiarily to the issues not owing. The Club, however, did not addressed by the FIFA Regulations, do this and therefore the Player The Club’s position on the monthly such as the specific calculation of could not verify the accuracy of salaries’ issue was limited by the salary and bonus amounts owed. the salary calculations. assertion that it was up to the Club to decide on what day to accrue Then, the Panel’s considerations When, in June 2015, the Player salaries and, respectively, what were focused on the following calculated the total amount that exchange rate to apply. issues: he received for the period from 1 June 2014 to 31 May 2015, he found Thus, the Club believed that it paid ➥➥ Was the Player’s claim that certain amounts were missing. the Player all that it had to pay and time-barred? the Player’s claims were groundless. According to the Player, in the ➥➥ Exchange rate on the “day of appealed decision, the FIFA DRC Nevertheless, the Club stressed charge”; unreasonably concluded that that the claim was time-barred and, the claim relating to outstanding therefore, the Player was precluded ➥➥ Bonus.
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Was the Player’s claim debt is due or, if several are evidence or explain its variations time-barred? due, to the debt that first in monthly payments sufficient to gave rise to enforcement upend the Player’s calculations, Considering the issue of the proceedings against the so the Club simply failed to time limitation, the Panel first debtor or, in the absence explain which debts it intended noted that, on the one hand, the of such proceedings, to the to discharge when making the Player acknowledged receipt debt that fell due first.” payments in question. of the salaries accrued before 30 April 2015 but asserted that On this basis, the Player contended With this, the Panel was minded an outstanding amount remains that the amounts due as unpaid, or to take a broad approach to due and owing for May 2015 and, rather insufficient, salaries should application of the statute of therefore, as he filed his claim be considered as having arisen in limitations and followed the before the FIFA DRC on 30 April May 2015. He asserted that the Club position of the Sole Arbitrator in 2017, his claim was not time-barred. failed to specify which of its debts CAS 2016/A/4858, which provided it was paying and how the payment that: On the other hand, the Club had been allocated. Thus, the believed that the alleged unpaid Player’s approach led to a deficit “According to article 87 SCO, salaries and bonuses accrued remaining owed in May 2015, which when the debtor does not before 30 April 2015 and, therefore, was to be considered as the event specify which of its debts it the Player cannot assert any claim giving rise to the dispute. is paying to its creditor and for remuneration that fell due prior the payment receipt does not to this date. According to the Panel, the indicate how the payment has Player’s arrival at the outstanding been allocated, it is allocated In consideration of the foregoing, amount in May 2015 was rather to whichever debt is due or, if the Panel noted that both shrewd. The Panel held that the several are due, to the debt that parties referred in their written Player cannot be faulted for not first gave rise to enforcement submissions to Articles 86 and 87 having tried to raise the issue in proceedings against the of the SCO. In this respect, the a timely manner (which he did debtor or, in the absence of Panel remarked that these articles multiple times) and for seeking an such proceedings, to the debt stipulate the rules of attribution of explanation as to which exchange that fell due first.” payments as follows: rate was applied to his payments, and on what date precisely. He While the Player argued that the “Article 86 never received a satisfactory debt owed had to be considered answer, and these were important as having arisen in May 2015 1. A debtor with several debts questions at a time when the value if previous payments were to the same creditor is of the RUB was falling significantly systematically applied to the debt entitled to state at the time against the EUR. having arisen first, the Panel found of payment which debt he that this was not a whimsical means to redeem. While it was unclear why the Player approach as it was simply based waited until the end of the two- on the application of Article 87 of 2. In the absence of any year limitation to bring his claim the SCO. statement from the before FIFA, his argument that it debtor, the payment will was difficult to understand which In opposition, the Club reasoned be allocated to the debt payments corresponded to which that Article 87 of the SCO can indicated by the creditor in months was valid given that he only be applied with respect to his receipt, unless the debtor apparently was never given further uncontested debt, and that the objects immediately”. explanation or payment slips debt was contested in this case. despite having requested them. Article 87 The Panel decided in this respect, In this respect, the Panel underlined that only by looking at a full year’s that Article 86 of the SCO provided 1. Where no valid debt compensation in retrospect could “[I]n the absence of any statement redemption statement has the Appellant determine the total from the debtor, the payment will been made and the receipt amount of the debt he was owed. be allocated to the debt indicated does not indicate how the by the creditor in his receipt, unless payment has been allocated, The Panel further noted that the the debtor objects immediately”. it is allocated to whichever Club did not provide any contrary In the case at hand, the Panel did
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not have either a statement from As explained, Appellant’s The Panel noted the Player’s the debtor, a receipt from the accrual of debt approach has declaration whereby he stated creditor, or indeed an immediate been found valid under the having been informed at the time objection from the debtor. Article 87 SCO rationale. It is of signing the contract that the last not wholly irrelevant, however, day of each month would be the Accordingly, the Panel decided that pursuant to Article 128.3 day of charge. that Article 87 of the SCO had to SCO, the statute of limitations apply and the Panel, therefore, for workers bringing claims is Moreover, the Player substantiated accepted the Player’s position five years while Article 129 SCO this position with the BDO auditors’ regarding the time at which the provides that this is mandatory letter, which stated that “according debt accrued. Therefore, the Panel law that cannot be modified to the current law of the Russian concluded that the Player’s claim contractually. It would appear Federation, employee’s salaries was not time-barred. therefore that the validity of shall be charged on the last day of a limit on a workers’ right to each month.” Finally, the Panel found it bring a claim which first fell due noteworthy that the FIFA DRC between five and two years In this respect, the Panel concluded that the Player’s prior is questionable. However, observed that the Club did not request for the salaries and as this issue is not determinative contest the plain language of bonuses accrued before the date in the instant case, the Panel the auditor’s letter in its written of 30 April 2015 was “barred refrains from further analysis, submissions or otherwise offer a by the statute of limitations in namely how this issue is to be counter-interpretation. accordance with Article 25 par. 5 assessed in the context of the of the FIFA Regulations.” applicable regulations (see Based on the foregoing, the Panel supra § 66).” considered the Club’s silence in According to the Panel: response to the evidence placed before it a tacit agreement with the “The Panel’s rationale used to Exchange rate on the “day Player’s argument on this point. reach its conclusion on this issue of charge” was grounded in the relative In this respect, the Panel noted as merit of the parties’ arguments. The next question was if there was follows: This said, it was debatable indeed a remaining debt in favour whether Article 25 par. 5 of the of the Player; the answer was fully “It is not sufficient to remain FIFA Regulations constitutes a dependent on the Panel’s decision quiet on this pivotal issue, true statute of limitations with regarding the “day of charge” in the face of countervailing the meaning that a claim cannot issue, as the Player believed evidence, and expect the be brought to before any that the outstanding amounts of Panel to apply (yet alone competent tribunal after two salaries arose due to an improper substantiate) a contrary years. In fact, Article 25 par. 5 application by the Club of the application of this accounting of the FIFA Regulations seems currency rates during the first year principle. The Panel finds to be specifically addressed of the contract. that the Respondent did not to the internal bodies of FIFA: establish on what grounds the PSC, the DRC, the Single First of all, the Panel noted that in the Russian legislation Judge or the DRC Judge. Articles 1.2 and 1.3 of the contract the ‘day of charge’ should FIFA’s intent is clear in that it set out the Player’s salaries in not be ‘the last day of each has determined, perhaps for Euros. In this respect, the Panel month’. Consequently, the reasons of expediency and reasonably inferred that the Player Respondent did not succeed resource management, that the was more interested in the amount in substantiating its position FIFA DRC will not hear a claim he would be paid in Euros, rather and failed to prove the Parties if it is filed two years after the than the one in Rubles, namely in intended to apply the exchange event giving rise to the dispute. consideration of the international rate on the ‘day of charge’ The question remains whether dimension of the employment as simply determined by the this limitation also applies relationship, and noting that the employer.” outside of the scope of FIFA’s Player was a foreigner to Russia. internal dispute resolution The fact that he was being paid mechanisms. in Rubles, was clearly the result of local requirements.
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On the basis of the mentioned In fact, the Panel made the decision above, the Panel concluded that the on the bonus issue in line with the day of charge had to be the last day previous jurisprudence of CAS in of each month. Respectively, the more or less similar cases.1 Player’s calculations were accepted.
Conclusion Bonus In light of the foregoing, the Panel As for the team bonus issue, the upheld the Player’s appeal. The Panel referred to Article 22, par. FIFA DRC decision was set aside 2 of the Labour Code of Russia, and the Club was ordered to pay which specifies an obligation for to the Player the unpaid salaries the employer to provide workers and the bonus, together with the with equal payment for work of interest at 5% p.a. as from 25 July equal value. 2015 until the date of final payment.
In this respect, the Panel noted that in the course of season 2014-2015, the Club won the Cup of Russia, the team played a total of five matches during this tournament and the Player was one of only two players in the team who took part in all five matches. All other players played fewer matches.
The Panel also noted that, at the end of the season 2014-2015, all players of the team, except for the Player, were rewarded with bonuses for the win of the Cup of Russia.
The Club failed to provide any specific reason to justify why the Player did not receive similar bonuses to those received by his teammates
At the same time, the Club failed to provide any specific reason to justify why the Player did not receive similar bonuses to those received by his teammates, while the Club’s statement that the amount is purely “discretionary” seems wholly insufficient.
On this basis, the Panel decided that the Player had the right to be 1 See E. Krechetov, “Conditional Bonuses: rewarded with the bonus. When should they be paid”, Football Legal # 12, December 2019.
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Repeated offence: the case “SC Internacional v. Udinese Calcio S.p.A & FIFA”
By Diego Eidelvein do Canto Lawyer, Cravo, Pastl e Balbuena Advogados Associados Porto Alegre – Brazil
➔➔ Court of Arbitration for Sport – Player transfer – Transfer fee – Overdue payables – FIFA Players’ Status Committee – FIFA proceedings – Repeated offence – Proportionality
CAS 2019/A/6263 & 6264, SC Internacional v. Udinese Calcio S.p.A & FIFA FIFA cannot consider the existence of a repeated offence when it decides, in the same session, on two separate contractual disputes relating to the same debtor and the same creditor
Facts and Procedures for the definitive transfer of the claims before the FIFA Players’ player. After some conditions were Status Committee (FIFA PSC), the On 17 July 2016, SC Internacional met, the Brazilian club exercised first one regarding the transfer of (Brazil) and Udinese Calcio (Italy) the “option right”. However, due the player Mr López Alonso (the signed an agreement for the to its financial difficulties as stated “First Case”) and the second one definitive transfer of the player before, SC Internacional was related to the player Mr Andrade Nicolás Federico López Alonso to also prevented from paying the dos Santos (the “Second Case”). the Brazilian club. Nevertheless, amounts due on time regarding due to a financial crisis, the Brazilian the definitive transfer of the player. The two cases proceeded at club was not able to comply with the same time. In both cases, its financial obligations set forth in Similar to the negotiations for the Brazilian club presented the agreement signed between the the transfer of Mr López Alonso, its response with the following parties. an “acceleration clause” was arguments: a) stating that its also contained in the contract in financial crisis prevented the club It should be noted that the contract the event that SC Internacional from performing the payment of contained an “acceleration clause” failed to pay Udinese Calcio the amounts due in accordance in the event of the failure, delay or on the due dates, any of the with the contracts; b) presenting a partial payment by the Brazilian amounts specified in the transfer proposal, considering its financial club of any of the instalments of agreement. Moreover, it would situation, to settle the matters; the transfer fee for a period of apply the interest rate of 15% p.a. c) impugning the application of the more than 15 days. Furthermore, on the overdue amounts. interest rate as requested by the an interest rate of 10% p.a. on the Italian club, since it was abusive. overdue amounts was set out in On 21 November 2018, the the agreement. Italian club sent two letters to After the investigation-phases the Brazilian club, in connection closed, on 7 March 2019, the Single Separately, on 28 March 2017, SC with both transfer agreements, Judge of the FIFA PSC issued a Internacional and Udinese Calcio putting the latter in default for decision in both cases. (i.e. the same clubs involved in the purposes of Article 12bis of the transfer cited above) signed FIFA RSTP. Taking into account The Single Judge of the FIFA PSC an agreement for the temporary that SC Internacional was not able decided, in the First Case, to accept transfer of the player Edenilson to pay the amounts due on time, the claim of Udinese Calcio in order Andrade dos Santos, with an option Udinese Calcio filed two different to order SC Internacional to pay
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the overdue amounts, plus interest offence. That is, in the unfortunate (I) Did SC Internacional violate at the rate of 15% p.a. Additionally, event that the Brazilian club had Article 12bis of FIFA RSTP in the Single Judge considered that SC any other open debt in the future, both cases? Internacional violated Article 12bis of SC International needed to avoid FIFA RSTP. Taking into account the being in a higher level of sanctions (II) Could FIFA consider the existence of two disputes involving as a result of the application of the existence of a repeated SC nternacional and Udinese Calcio cases under consideration. offence, cf. Article 12bis par. and that both concerned overdue 6 of FIFA RSTP, when two payables of the Brazilian club to In both cases, the Brazilian club separate contractual disputes the Italian club, the Single Judge requested CAS to issue a new related to the same debtor are took into account the Second Case decision to replace the challenged decided in the same session? and imposed on SC Internacional a decisions, in order: (a) to reduce the warning and a fine of CHF 15,000 interests provided in the appealed (III) Are the sanctions imposed on (approx. EUR 14,000). decision to the default interest rate SC Internacional, in the two applied by FIFA (5% p.a.); (b) to cases, disproportionate? In the Second Case, the Single set aside the disciplinary sanctions Judge also accepted the claim imposed (warning and fine) on the of Udinese Calcio, ordering SC Brazilian club; (c) alternatively, and in Internacional to pay the overdue the event that the previous point was Analysis of the arbitral amounts, plus interest at the rate rejected, to set aside the sanction of awards of 15% p.a. As to the disciplinary the fine imposed on the Brazilian matter, the Single Judge club considering the absence of a (I) As to the consideration of considered that SC Internacional repeated offence in the present case whether or not SC Internacional violated Article 12bis of FIFA by it; (d) alternatively, and in the violated Article 12bis of FIFA RSTP and, due to the existence of event that the previous point was RSTP, the CAS Panel took note another case involving the same rejected, to substitute the sanction of that in both cases the Brazilian parties (the First Case), the Single the fine imposed on the Brazilian club club failed to comply with its Judge took into account the First with a reprimand; (e) alternatively, financial obligations and that the Case to impose on SC Internacional and in the event that the previous Italian club duly complied with a warning and a fine amounting to point was rejected, to substantially its obligation to put the debtor in CHF 15,000. reduce the fine imposed. default in writing and provided the latter with a deadline of at Considering the content of Both proceedings were submitted least 10 days to comply with its these two decisions, the interest to the same CAS Panel. obligations prior to commencing rate set forth in the contracts proceedings before FIFA. For and the fact that the Single Additionally, it should be noted this reason, the CAS Panel Judge considered both cases as that, during the proceedings considered that SC Internacional aggravating factors, in order to and before the CAS Panel issued violated Article 12bis of FIFA in impose a more severe disciplinary its awards, SC Internacional both cases, which is why the measure on the Brazilian club, and Udinese Calcio reached an CAS Panel considered that the SC Internacional decided to agreement and asked the CAS club could be sanctioned on appeal both proceedings to CAS, Panel to include the terms and such basis. making Udinese Calcio and FIFA conditions in a Consent Award. For as Respondents (the First Case this reason, it was only required (II) As to the question of the received the reference number for the CAS Panel to assess the repeated offence, it should be CAS 2019/A/6264 and the Second disciplinary dispute between noted that SC Internacional Case, CAS 2019/A/6263). SC Internacional and FIFA. stated to the CAS Panel that the Single Judge of FIFA PSC It should be noted that among other unjustifiably took into account factors that led SC Internacional to the existence of a repeated file an appeal in both cases was the Points of Law offence as an aggravating fact that the club would have the factor to decide, in the same right to remain in the lowest level Considering the above, these two session and on the same day, of the scale table of sanctions of proceedings basically discussed the two cases regarding the Article 12bis of FIFA RSTP, since the following points of law: claims filed by Udinese Calcio it had not committed a repeated against SC Internacional.
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It should be further noted In light of the above it tried to settle the matter that the Brazilian club argued, conclusions, the CAS Panel with Udinese Calcio, had more during the proceedings, that, found that the proportionality relevance, since the rationale in accordance with CAS of the sanctions imposed behind Article 12bis of FIFA Jurisprudence1, a decision by means of the appealed RSTP is identical to Article 15 of issued in the first instance of decisions should be assessed FIFA Disciplinary Code (edition a financial nature is incapable without taking into account 2019), i.e. ensuring that clubs of enforcement when the the aggravating factor that it comply with their financial outcome of an appeal is still concerned a repeated offence, contractual obligations. pending. i.e. the proportionality of the sanction should be assessed as The CAS Panel found that the This argument can lead to the if it were a first offence in both Single Judge could obviously conclusion that, if one decision cases. not have taken into account the cannot be enforced, because conclusion of the settlement all its effects are suspended by (III) Concerning the proportionality agreement, because it was only the appeal, this same decision, of the sanctions imposed on concluded after the appealed cannot be used as an aggravating the debtor club in the two decisions were issued. circumstance in order to lead cases, the CAS Panel stated However, considering the fact to the application of a graver that it could only replace a that CAS adjudicates appeal disciplinary sanction by FIFA. disciplinary decision of FIFA if proceedings on a de novo basis, For this reason, since none of the the sanction concerned were the circumstances arising after decisions rendered in both cases considered evidently and grossly the issuance of the appealed were final and binding (since the disproportionate to the offence. decisions could be taken into club appealed to CAS in both account. cases), the Brazilian club argued As to the cases at hand, the CAS that it should be presumed that Panel had no doubt in concluding Therefore, the CAS Panel was it does not have any previous that the imposition of a warning of the opinion that, if FIFA can disciplinary sanctions imposed and a fine of CHF 15,000 consider whether a settlement/ on it. on SC Internacional, in both payment has been concluded in cases, for failing to respect imposing disciplinary sanctions Based on the arguments contractual obligations vis-à- relevant, then the CAS Panel presented by the Brazilian vis Udinese Calcio could hardly can also take this into account club, the CAS Panel found it be considered disproportionate, in their assessment in appeals inappropriate that the Single especially considering the arbitration proceedings. Judge took into account the amounts in dispute. In this sense, circumstances that had not the CAS Panel did not consider Considering all the above, yet become final and binding it reasonable to reduce the especially the conclusion of the in determining the appropriate fines imposed or to impose a settlement agreement between sanction to be imposed in reprimand instead of a warning the parties and the overall both cases, particularly when in the two cases submitted. circumstances of these cases, the proceedings involving two the CAS Panel found that it was separate contractual disputes As to SC Internacional’s appropriate to reduce the fines pending before the Single arguments that FIFA failed imposed on SC Internacional Judge were not formally joined. to take into account (a) from CHF 15,000 to CHF 7,500 the financial crisis of the (approx. EUR 7,000) in each For this reason, the CAS Panel Brazilian club and (b) that SC case. stated that the Single Judge Internacional tried to comply could arguably have taken into with its financial obligations, On these grounds, the appeals account the argument of a the CAS Panel found that these were partially upheld. repeated offence in one of the arguments would not justify two proceedings, but certainly any other conclusion different not in both. from that of FIFA’s.
Nevertheless, the CAS Panel 1 CAS 2003/O/486 Fulham F.C v. Olympique Lyonnais; CAS 2004/A/780 Christian Maicon found that the final argument Henning v. Prudentopolis Esporte Clube & of SC Internacional, i.e. that FIFA.
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The Clément Lenglet case
➔➔ Labour disputes – Overdue payables – Salaries – Breach of contract – Just cause – FIFA Dispute Resolution Chamber (FIFA DRC) - FIFA RSTP – Foreign players
CAS 2019/A/6525 Sevilla FC v. AS Nancy Lorraine
The wording of the Sell-on clause included in the transfer agreement concluded between Sevilla FC and AS Nancy Lorraine regarding the player Clément Lenglet is wide enough to cover every kind of transfer, both in a contractual and non-contractual framework, for which Sevilla was to receive a payment.1
Facts and Procedure1 The capital gain must be the employment agreement by understood as the difference the Player, the Player would pay On 5 January 2017, the French club between the amount received Sevilla, as indemnity, the sum of AS Nancy Lorraine (Nancy) and the (training compensation EUR 35,000,000, as increased by Spanish club Sevilla FC (Sevilla) included) by the club Seville an amount corresponding to the signed a transfer agreement FC from a third-party club as a consumer price index variation. providing for the terms and result of the player’s definitive conditions of the transfer of the transfer to that club and the On 12 July 2018, FC Barcelona player Clément Lenglet (Player) sum of 5,000,000 € paid by (Barcelona) deposited, with the from Nancy to Sevilla. the SEVILLE FC in respect consent of the Player, the total of the ASNL final transfer amount of EUR 35,910,000 in the Article 3.2 of this agreement compensation, to the club account of the Spanish Professional [“Payment of an additional SEVILLA FC. Football League, to be paid to compensation”] (Sell-on clause) Sevilla for the purposes of the read as follows: For example, in the event of Buy-out clause. The Player then transfer of the player from the joined Barcelona by executing an “SEVILLA FC agrees to pay to SEVILLA FC to a third club for employment contract with such club. ASNL an additional transfer a sum 7,000,000 € (including compensation as follows: training compensation), On 30 July and 21 August 2018, SEVILLA FC would have to Nancy sent Sevilla formal notices to In case a definitive transfer pay to ASNL an additional pay the amount of EUR 3,708,000, of the player is signed, and compensation of 12% of granting it 30 days to remedy the the player is transferred from 2,000,000 €, that’s to say alleged default. SEVILLA FC to another club, 240,000.” allowing SEVILLA FC to realize On 5 November 2018, Nancy filed a a capital gain, 12% of this value The “Buy-out” clause included claim with the FIFA Players’ Status will be transferred to the club in the employment agreement Committee (FIFA PSC). ASNL. concluded between Sevilla and the Player stated that in the Sevilla resisted, asserting that 1 The award can be found here: www.football- event of unilateral termination of Nancy did not have any right to a legal.com
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payment according to the Sell-on means of the payment of the to cover every kind of transfer, clause. compensation provided for in the both in a contractual and non- Buy-out clause. contractual framework, for which On 24 July 2019, the Single Sevilla was to receive a payment, Judge of the FIFA PSC issued Thus, the Panel had to explore the whatever label is put upon it. its decision. On 3 October 2019, “real and common intention of the the grounds of the decision were parties”. This point marks a decisive issued. The Single Judge decided distinction between this case that, as the transfer of the Player The Panel recalls, as noted in and the dispute decided in the from Sevilla to Barcelona had the Keita award (CAS 2010/A/2098 Keita award, where the triggering undisputedly occurred, Nancy was Sevilla FC v. RC Lens, par. 67), that the element was not in general terms entitled to 12% of the net profit Sell-on clause contains a well- a “transfer”, but specifically a made by Sevilla in relation to it, in known mechanism in the world of “resale”. accordance with Article 3.2. of the professional football: the new club transfer agreement. agrees to share with the old club This conclusion is not affected by a portion of any profit made by the reference in the Sell-on clause On 15 October 2019, Sevilla filed a the new club in connection with a to the transfer needing to be Statement of Appeal with the CAS. player’s movement. “signed” by Sevilla. In that regard, the Panel agrees with the Single In the case at hand, the dispute Judge that such reference appears between the parties precisely only to confirm that the “transfer”, Points of Law refers to this point, i.e. to the exact in order to trigger the payment, identification of the meaning and had to be concluded – or be final, The Sell-on clause was triggered scope of this triggering element as indicated in the same provision. only in the event of a “definitive (“transfer signed” by Sevilla). transfer […] signed” by Sevilla and, As a consequence, the Single in this case, the Player terminated The Panel notes (as already Judge decision held that the the employment agreement by underlined in the Keita award) Sell-on clause was triggered had exercising the Buy-out clause – that in the world of professional been approved and confirmed: hence no transfer was signed by football a “transfer” of a player Nancy was entitled to receive 12% Sevilla. means in general terms a change of the profit made by Sevilla for the of “registration” of a player or transfer of the Player to Barcelona. Is the exercise of the Buy-out clause – to put it in another way – for a to be considered as a transfer professional player it means a In light of the foregoing, the Panel triggering the Sell-on clause? “change of employer”. The FIFA found that the appeal brought by rules, and chiefly the Regulations Sevilla was to be denied and the Is any payment to be made to on the Status and Transfer of FIFA decision be confirmed. Nancy with respect to the amount Players, in all their editions, are received on the basis of the Buy- based on such a concept. In that out clause? regard, therefore, a “transfer” can be equated to a “movement” in the registration/employment relation.
Award Analysis A transfer can be the object and the purpose of the parties’ The main issue in this arbitration, agreement. It can also take place as raised by Nancy, concerns the outside the scheme of a contract interpretation of the Sell-on clause between the old and the new club, contained in the transfer contract. in the event that the player moves from a club to another following In short, Sevilla argued that no the termination of the old transfer of the Player had taken employment agreement as a result place, because the Player had of its expiration or its breach. merely exercised his unilateral right to an early termination of The Panel notes that the wording the employment agreement by of the Sell-on clause is wide enough
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Olivier Martin: “This award will clause. It should be noted that this interpretation goes entirely serve as a guide to sports lawyers against the spirit of the Royal Decree that created and imposed in the drafting of ‘droit de suite’ such a system.2 In my opinion, this clauses in transfer contracts” constitutes a total deviation from the system, and when a Spanish club overestimates the amount lawyers in the drafting of “droit de of a sell-on clause, which is finally suite” (ius persequendi) clauses paid by another club, we are in a in transfer contracts, where CAS case where the consent of the panels do not always understand club whose player has abandoned the specificities of national laws was indeed given before the (and Spanish Law in particular). negotiation even started.
The Lenglet ruling merely differs Besides, the Spanish Professional from the Keita award on the Football League (LFP) and language used to draft the relevant several Spanish first instance transfer contract, which was the civil courts have recently handed primary legal issue decided by down decisions validating the CAS. This proves that the fate of an fact that the transfer of a player eventual legal conflict may depend between two Spanish clubs on how precise is the language constitutes a transfer, even when used to draft the transfer contract. the aforementioned transfer takes Interview with Olivier Martin place following payment by the Lawyer, Martin & Associés new club (and not by the player) Lyon - France How can this award be interpreted of a sell-on clause. The LFP has under Spanish law? clearly refused to “hide” behind In your opinion, can this Court of the specificity of its internal Arbitration for Sport (CAS) award O. M. - This is a point that we had regulations in order to impose create “jurisprudence” regarding genuinely discussed during the solutions that would not comply the application of “resale earnout CAS proceedings, namely that the with the relevant FIFA regulations. provisions” in the context of specificity of Spanish Law, where the “transfer” of footballers if a sell-on clauses are imposed on There is a trend of thought that sell-on clause is triggered? 1 players’ employment contracts considers transfers from Club A by law. Furthermore, in my view, to Club B, following the payment Olivier Martin - It is always this is not justified in most cases. of a sell-on clause, as being equal challenging to determine whether Therefore, sell-on clauses are not to a transfer. This is the case with an award will set a precedent for a consensual transfer operation FIFA’s case law, and there is no we know that CAS regularly recalls for clubs whose players have doubt about the world football’s the autonomy of its arbitrators. quitted them as these clubs did governing body’s opinion on the Therefore, we cannot really consider not consent to the operation in the matter. The LPF is already issuing that all CAS awards constitute first place. similar decisions, as well as CAS, a single legal corpus to which that has just upheld this trend by reference could inevitably be made. There was a time in which sell-on issuing the Lenglet award, and both That said, arbitrators regularly refer clauses in Spain were actually football stakeholders analyze and to concepts established in previous concluded to allow players to buy address these matters on a case- awards, and it remains possible out their own contracts, so clubs by-case basis. to think that one decision may be could effectively argue that their intended to inspire other arbitrators. players had left them against their will. This no longer seems to be the Concerning this particular case, case in the vast majority of current it is inevitable that this award negotiations in Spanish football, as will serve as a guide to sports these sell-on clauses are grossly
overvalued and are, at the end 2 Royal Decree 1006/1985 of 26 June, 1 Olivier Martin was the AS Nancy Lorraine of the day, a mere retention regulating the Special Employment club’s counsel in this case. Relationship of professional athletes.
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Abusive conduct in an employment relationship between a club and a foreign football player The case of Alberico Barbosa da Silva (Brazil) v. Akwa United FC (Nigeria)
By Diego Eidelvein do Canto Lawyer, Cravo, Pastl e Balbuena Advogados Associados Porto Alegre – Brazil
➔➔ Labour disputes – Overdue payables – Salaries – Breach of contract – Just cause – FIFA Dispute Resolution Chamber (FIFA DRC) - FIFA RSTP – Foreign players
FIFA DRC, 19 February 2020, Player Alberico Barbosa da Silva, Brazil / Akwa United Football Club, Nigeria
The present article will analyze the case of Brazilian football player Alberico Barbosa da Silva (Player), against the Nigerian club Akwa United FC (Club), in order to exemplify some abusive situations that professional football players are subjected to.
Introduction to players who: a) had expired However, this is not an easy task. employment contracts; b) had In some situations, football players The number of international terminated the employment early are seduced to go abroad, in order football transfers over the years by mutual agreement; c) did not to improve their remuneration has been increasing. In 2019, have a professional employment and to have more opportunities the football transfer market contract with their previous club; or to development their careers, but reached unprecedented numbers. d) had terminated the employment the hiring clubs’ promises are not According to FIFA Global Transfer contract early and unilaterally. fulfilled. Or worse, the players are Market Report 2019 - Men1, clubs submitted to abusive conducts by around the world completed 18,042 The high number of transfers of their employer to try to force them international transfers, of which foreign players to the most diverse to terminate or change the terms 64,3% were related to transfers of parts of the globe can be explained of the employment contract. players without contract with a club. by the necessity of players to open new markets in order to continue These numbers demonstrate their careers and, with this, be that the international football able to provide for themselves Facts of the case market is not only fed with sustainably and also provide for transfers involving fees. In fact, it their families.2 On 13 November 2018, the Club and is the opposite, which gives to the the Player signed an employment football’s legal framework certain 2 The professional football market is very contract, for the 2018-2019 grounds of complexity. competitive. Only a small percentage of Nigerian football season. A few players reach professional level and can survive exclusively by playing football. This days later, on 19 November Despite the fact that the value of scenario is not different in Brazil, where 2018, the parties signed another 82% of the players have incomes around transfers reached USD 7,350,000 BRL 1,000 (approx. EUR 175). See: www. employment contract, extending in 2019 (approx. EUR 6,500,000), esporteinterativo.com.br. This fact may the validity of their contractual explain why Brazil ranks in first position, most of transfers were related according to FIFA Global Transfer Market relationship until 18 November Report 2019 – Men, of the outgoing transfers 2020 and complementing the 1 resources.fifa.com in world, with 948 transfers in 2019.
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employment obligations stipulated setting the Player aside from his agreed by the parties), which before (however, in this new function in the Club’s first team, was duly sent by the Player contract, the obligation of the Club the Club also did not return the immediately. Nevertheless, after to pay a performance bonus was Player’s passport, which it had that, the Player did not receive any not established). retained in its possession since response. the signing of the employment These contracts contained some of contract. Within this context, the Player sent a the financial conditions established letter to the Club on 16 August 2019: between the parties. For this reason, the Club was notified on 19 June 2019, to (a) informing the Club that Until the end of March 2019, the provide to the Player, among he was at the Club’s disposal Player received his salary and the other reasons, the reasons that led to resume his activities and performance bonuses as agreed the Club to make the Player train to represent the Club in the by the parties. separately and not travel with his Nigerian season of 2019-2020; teammates to the next matches It is worth noting that the Player after the suspension of the former (b) asking the Club to provide had been recommended to the Head Coach and of the former him the air tickets to allow his Club by its Brazilian Head Coach, Assistant Head Coach. In the same return to the Club, as previously Mr Everton Rafael Assis de Lira, and letter, it was also requested the agreed by the parties; by the Brazilian Assistant Head return of the Player’s passport. Coach, Mr Israel José de Lira, and (c) asking the Club to inform had been hired by the Club after its After the notification, the Club him if there was an estimated representative’s approval. returned the Player’s passport date for the payment of the with a letter regarding the team outstanding amounts due Within this context, on 10 June vacations, on 20 June 2019. to him regarding: (i) the 2019, the Club sent a written notice performance bonus agreed by to the Head Coach suspending him Within this context, with the due the parties; (ii) the monthly indefinitely. In the same letter, the authorization from the Club, on salary corresponding to July Assistant Head Coach was also 27 June 2019, the Player traveled 2019; (iii) the sign-on fee suspended indefinitely. to Brazil for his vacations. For his verbally agreed when the return to his homeland, the Player parties signed the employment Immediately after both the Head had to pay a fine of USD 1,000 contract; Coach and the Assistant Head (approx. EUR 900) to be allowed Coach were suspended, the to leave Nigeria, as a fine for the (d) asking the Club to reimburse Club ordered the Player to train absence of the relevant residence the fine paid by the Player to separately from the other players permit (which only could be made the Nigeria Government to of the first team, without any with his passport in his possession). allow him to leave Nigeria, due grounds (which per se caused to the absence of the relevant severe damage to his career). This On the other hand, in the residence permit. situation apparently occurred in aforementioned letter sent by the connection with the Head Coach Club, the Player was informed This letter was never answered by and the Assistant Head Coach’s that “[t]he management will get the Club. suspension, despite the fact that in touch as to the resumption the Player had always fulfilled all of date for the new season which On 18 August 2019, when the his obligations towards the Club. starts early August 2019.” Despite Player was still in Brazil (with the Moreover, after the suspension such provision, until mid-August Club’s consent and knowledge), he of the Head Coach and of the 2019, the Player had not received received a message via WhatsApp Assistant Head Coach, the Player news from the Club regarding his from the Club’s secretary, informing did not travel with his teammates employment situation. him that he should return to Uyo to the next matches. (in Nigeria) on the same day (i.e. On 14 August 2019, the Club’s 18 August 2019) and that he should It is important to emphasize that secretary asked the Player, by present himself to the training the Club did not justify to the WhatsApp, for his international sessions on 19 August 2019. Player the reason for this abusive passport (to buy the air tickets behavior at the end of the 2018- to allow the Player’s return to On 19 August 2019, the Player 2019 season. Furthermore, besides the Club, as had been previously sent another letter to the Club,
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summarizing the facts described the purposes of the Article 14bis amounts: (i) overdue above and putting the Club in of FIFA RSTP. At the same time, performance bonus; (ii) the default towards the Player, for the Player granted to the Club amount corresponding to the the purposes of the Article 12bis a deadline of 15 days as from Player’s monthly salaries for of FIFA Regulations on the Status the receipt of such letter - which July and August 2019; (iii) the and Transfer of Players (RSTP). expired on 18 September 2019 sign-on fee verbally agreed by Moreover, by means of this letter, - to pay the amounts due, all in the parties at the time of signing the Player granted to the Club: (a) accordance with the provisions of of first employment contract; a deadline of 10 days to pay the Article 14bis of FIFA RSTP. (iv) the reimbursement of the overdue amounts to the Player, all fine paid by the Player to the in accordance with the provisions Due to the facts described above, Nigerian Government due of Article 12bis of FIFA RSTP; the Player communicated to to the undue retention of his and (b) a deadline of 24 hours to the Club, by means of a letter passport by the Club, all these inform him if the Club still had an dated 23 September 2019, that amounts plus interests of 5% interest in the Player’s services the employment contract signed per year since the date when and, if the answer were positive, to by and between the parties on each payment should have provide him the relevant air tickets 19 November 2018 was terminated been done; to allow his return so as to resume with just cause on that date, due his activities. to major and permanent violations (c) to order the Club to pay a undertaken exclusively by the Club. compensation for the breach of On 26 August 2019, the Player This decision was based on the the contract; sent another letter to the Club, Articles 14 and 14bis of FIFA RSTP. extending the deadlines previously (d) to impose on the Club provided, granting to the Club a Within this context, the Player had a sanction of banning the deadline up to 31 August 2019: no option but to file a claim before Club from registering any (a) to inform him if it still had an the competent FIFA dispute new players, either nationally interest in his services and, if the resolution body, in order to obtain or internationally, for two answer were positive, to provide payment of the overdue sums registration periods, in him the relevant air tickets to (provided for in the employment accordance with Article 17, allow his return so as to resume his contract) and the compensation par. 4, of FIFA RSTP; activities; (b) to pay the amounts for the breach of contract. overdue to the Player, already (e) alternatively, if FIFA described in the letter sent on does not apply the sanction 19 August 2019. provided for in Article 17, The proceedings before par. 4, of FIFA RSTP, or if it is However, after the deadline granted FIFA DRC able to cumulate the sanctions ended, the Player did not receive of the above-mentioned article any formal response or indication Considering that the Nigerian with the sanctions provided for regarding his case, demonstrating club did not fully comply with its in the Article 12bis, par. 4, of the unlawful and the arbitrary contractual obligations towards the FIFA RSTP, to impose on the decision taken by the Club. Player, regarding his remuneration Club the appropriate sanctions and bonus payments, the Player as provided for in Article 12bis, Besides the overdue amounts filed a claim before FIFA Dispute par. 4 of FIFA RSTP. indicated in the Player’s letter sent Resolution Chamber (FIFA DRC) on 19 August 2019, considering asking: In spite of being invited to do so, that the employment contract the Club failed to submit a reply to signed between the parties was (a) to uphold the reasons the claim. still valid, binding and in force, the invoked by the Player to Player’s monthly salary regarding terminate the employment On 4 February 2020, the Player the months of July and August contract with just cause, in informed FIFA that he had not 2019 also became overdue, and accordance with the provisions concluded any new employment were not paid. of Articles 14 and/or 14bis of contract following the termination FIFA RSTP; notice dated 23 September 2019. In this regard, on 3 September 2019, the Club was formally put (b) to order the Club to pay With this scenario in mind, the in default towards the Player for to the Player the following investigation phase was closed.
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On 19 February 2020, the FIFA the first contract. As such, the liable for the early termination of DRC judge decided the case,3 judge stated that only the second the contract. discussing of the following points contract signed on 19 November of law: 2018 would be taken into account (III) With regards to the consequences for the assessment of the matter at of the early termination of the (I) the applicability of the hand. employment contract, the judge, first contract and the second taking into consideration Article 17 contract to the dispute; (II) As to the consideration if the par. 1, of the FIFA RSTP, decided contract had been unilaterally that the Player was entitled to (II) the unilateral termination terminated with or without receive from the Club an amount of of the contract with or without just cause by the Player on money as compensation for breach just cause by the Player on 23 September 2019, the DRC of the contract in addition to any 23 September 2019? judge observed that prior to the outstanding payments on the basis termination notice, the Player of the relevant employment contract. (III) the consequences of the had sent four letters to the Club, unilateral termination of the indicating the outstanding amounts Consequently, taking into account contract with or without just due to him and granting the Club that the contract was terminated cause. various deadlines to comply with its on 23 September 2019, and in financial obligations. In particular, accordance with the general legal the judge took note that, in his principle of pacta sunt servanda, letter dated 3 September 2019, the the judge decided that the Club The analysis of the Player granted the Club a deadline was liable to pay the amount decision of the FIFA DRC of 15 days to pay two monthly corresponding to the monthly judge salaries, as well as other amounts. salaries of July and August 2019, with the relevant interests. (I) Regarding the applicability of The judge further noted that, by the first contract and the second means of the letters sent to the As to the calculation of the amount contract to the present dispute, Club, the Player also requested of the compensation for the breach the FIFA DRC judge took note sporting measures, such as his of contract, the FIFA DRC judge that the parties first concluded reintegration into the first team and determined that the amount of an employment contract on airfare tickets to return to Nigeria. compensation payable by the Club 13 November 2018, following which to the Player had to be assessed they signed a second employment In this sense, the judge deemed in consideration of the other contract on 19 November 2018. it necessary to recall the content parameters set out in Article 17, of Article 14bis, par. 1, of the FIFA par. 1, of the RSTP. Bearing in mind Within this context, the judge RSTP, which reads as follows: the foregoing, the judge ordered observed that both contracts “In the case of a club unlawfully the Club to pay to the Player the were signed by the parties, 5 days failing to pay a player at least two equivalent amount to the residual apart. The judge further analyzed monthly salaries due on their due value of the contract, i.e. the the content of the first contract dates, the player will be deemed monthly salaries of the Player until and the second contract and to have a just cause to terminate 18 November 2020, without any concluded that both contracts his contract, provided that he has mitigated compensation, since the covered the same subject matter. put the debtor club in default in Player did not sign an employment Therefore, the judge was of the writing and has granted a deadline contract with another club during opinion that it must have been the of at least 15 days for the debtor the relevant period of time. parties’ intention to only consider club to fully comply with its the second contract as the valid financial obligation(s).” Concerning the sign-on fee and binding document governing and performance bonuses, their contractual relationship. Considering that on the date of the respectively, the judge noted that termination notice, two monthly these requests were not based With those considerations in salaries were outstanding in favor on any contractual provision, mind, the judge considered that of the Player, the judge was of nor were they substantiated. the second contract superseded the firm opinion that the Player Therefore, the judge decided to terminated the contract with just reject these requests. Also, the
3 FIFA DRC, 19 February 2020, Player Alberico cause on 23 September 2019. judge decided to reject the request Barbosa da Silva, Brazil / Akwa United As such, the Club should be held for the payment of USD 1,000, Football Club, Nigeria
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corresponding to the fine allegedly (d) the Player did not receive paid by the Player, due to the lack his remuneration; of evidence provided. (e) the Club tried to create a Finally, the DRC judge decided situation of unfulfillment of the that, in the event that the Club contract by the Player, when it does not pay the amounts due to requested the Player’s return on the Player within 45 days from the the same day of the contact to moment the Player, following the present himself to the training notification of the present decision, session on the following day, communicates the relevant bank disregarding the fact that the details to the Club, a ban from Player was in Brazil and needed registering any new players, either to travel to Nigeria. nationally or internationally, for the maximum duration of three Despite the fact that FIFA entire and consecutive registration deliberated that the main reason periods shall become effective on for considering that the Player had the Club in accordance with Article legally terminated the employment 24bis pars. 2 and 4 of the RSTP. contract with just cause was the fact that two monthly salaries were After the parties received the outstanding in favor of the Player, grounds of the decision, the Club the contract could also have been presented an appeal to the Court terminated with just cause since of Arbitration for Sport and the the Club undertook conduct that case is still ongoing. could be considered as abusive, in the provisions of the Article 14 of FIFA RSTP. The case at hand demonstrates the In this sense, in the present case, most ordinary problems the FIFA RSTP proved to be an faced by players important tool to protect the party submitted to that was subjected to numerous abusive conduct of instances of abusive conduct and employers that was also the weaker party in the relationship, helping the healthy development of this huge market. Some remarks on the case
The case at hand demonstrates the most ordinary problems faced by players submitted to abusive conduct of employers:
(a) the Player had his passport retained by the Club from the moment of signing the employment contract;
(b) the Player was forced to train separately from his teammates, without any grounds;
(c) he did not receive any contact from the Club after his vacation leave;
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The Rights of the Child and the FIFA Protection of Minors
By Gustavo Albano Abreu1 Professor, Austral University Buenos Aires - Argentina
➔➔ Minors – FIFA RSTP – National law – National courts – Fundamental Rights
Appellate Court of Mar del Plata (Buenos Aires), 22 August 2017, no. 184(S)F°1032/1046, C. Q., W. A. y Otros c/ Asociacion de Futbol Argentino y otros s/ Amparo
The case of the Ecuadorian minor football players has again brought into consideration the issue of the limits of International Sports Law when one of its members goes to the ordinary courts and invokes in his/her defense, state norms or international treaties.
Introduction1 thus enter the world of Argentine to Argentina to study and play football, an opportunity which football, a sport they practiced Given that the majority of is being denied to them by the with enthusiasm and skill, that is sports federations, national and existence of a provision issued “they have the technical conditions international, require their members by FIFA, of which the Argentine and potential to be able, perhaps not to go to ordinary courts to Football Association (AFA) is a part” one day, to play professionally.” resolve conflicts arising from the (the events in quotation marks were interpretation or application of extracted from the judicial file). The minors traveled to Argentina statutes, regulations, decisions with the consent, approval and and guidelines of both the national support of their parents, since and regional federations and FIFA, in Ecuador there are Soccer it is rare, worldwide, that ordinary, Where is the mentioned Training Schools, sponsored non-specialized judges have to prohibition established? by the Club Atlético River Plate resolve cases such as this. (River Plate) of Argentina. The general prohibition is regulated The Ecuadorian entity called The purpose of the claim “C. Q., by Article 19 of the RSTP: Sportpoint C. Ltda. (Sportpoint) W. A. and others vs. Argentine formalized an agreement with Football Association on Legal “Protection of minors: International River Plate through which River Protection (Amparo)” was that transfers of players are only Plate made available to Sportpoint the minors J.W.C.M. and J.A.M.C. permitted if the player is over the its experience and training with could register with a sports age of 18.” the sports infrastructure of River association on behalf of a club, in Plate to improve the sports skills order to participate in the official of school students. competitions of this country [Argentina]. “In other words, they Facts It was within the framework of should be allowed to ‘sign in’ and that system implemented between In 2014, the Ecuadorian minors River Plate and Sportpoint, that the 1 Gustavo Abreu is also Director of the in question were 12 and 13 years minors travelled to Argentina and Arbitration Department, Executive Director of the LL.M. Master of Laws, Director of the old when they entered Argentina. adapted well to the environment, Chair of Sports Law at the Austral University They are cousins and they moved liked it and decided - with the Law School.
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approval of their parents - to stay River Plate, could not be formally Transfer of Players, being that both and try their luck to find a future in registered in any club in Argentina the children have Argentine DNI and Argentina. to play football under the express current immigration documentation. prohibition that arises from Article At your entire disposal. Sincerely. Within a year, the minors, 19 of the FIFA Regulations on the Sergio Daniel Miori - President - although they were of Ecuadorian Status and Transfer of Players Pablo Tello - Secretary -“. nationality: a) had settled in (FIFA RSTP), and the conditions of the country, having obtained a having residence and the national national identity document and identity document of Argentina. b) had completed their stay What did the Argentina in Argentina with the express Football Association consent of their parents, who answer? authorized a tutor to represent What did the Argentine them in all the acts necessary clubs interested in the “The minors, through their legal for education, sports training, Ecuadorian football representatives - parents - are comprehensive health, growth, players say? in a position to request the Sub- etc., involving those minors, during Committee appointed by the FIFA the period of stay in the country. River Plate declined to register the Players’ Status Committee to issue The minors lived in a city in the minor Ecuadorian football players a ruling, at the earliest opportunity, province of Buenos Aires, studied for fear of FIFA sports sanctions, as to whether they are in breach in a private school and, according and stated that “it is not in the of the rule preventing minors to their statements, they felt very interest of the Club Atlético River under the age of 18 from entering comfortable in Argentina, living Plate to incorporate or ‘sign’ the another country. For this reason, in better conditions than in their minors involved here, even though we maintain that they did not country of origin. they meet all the technical, sports necessarily have to file an action and personal conditions, the truth for protection and that, to date, They were playing for River Plate is that the incorporation becomes there is no cause to file the action in the Federal Capital in the unfeasible given the prohibition in question. (...) league (an unofficial competition contained in the art. 19 of the in which River Plate participates). Regulations for the Statute and The aforementioned art. 19 of the They felt comfortable in Argentina Transfer of Players issued by FIFA. ” FIFA Statutes is not inspired by and wanted to officially play for any discriminatory decision that River Plate in Argentina and be Although the aforementioned ban serves an arbitrary, unreasonable enrolled in the Argentine Football caused River Plate to withdraw from or persecutory purpose, but seeks Association (AFA). They made it its interest in having the Ecuadorian to balance the rights of minors and known that the living conditions in minors, another club appeared, their parents, seeking to achieve Ecuador were not very good, since Club Deportivo Norte de Mar del the solution that best safeguards there were days when they did not Plata (Club Deportivo Norte), the best interests of the child.” have enough to eat (they indicated who also expressed interest in the that they each have five and four youths joining their lower divisions, The plaintiffs challenged Article 19 brothers in Ecuador, respectively). but was unable to do so, unless of the RSTP holding that it prevents they had a court authorization to registering minors in a club, so as avoid the ban imposed on them by to allow them to take part in official the football system. competitions and, eventually, play What happened to their professionally; “However, this rule football careers? Specifically, Club Deportivo Norte does not prohibit such a possibility noted: “Hereby and in my capacity but subjects it to a condition for When the minors were 13 and as president of Club Deportivo the protection of minors, namely 14 years old, their parents - on Norte Mar del Plata, I inform you that the player’s parents move to 3 March 2015 - were formally that these children, although they the country where the new club informed by Mr José Luis Migueles, meet the football, human, social and is based, and that this move is for a member of the Sportpoint, in his physical conditions to be registered reasons unrelated to football.” capacity as Sports Director, that in our institution, we cannot make the minors, although they fulfilled the relevant registration given the the technical conditions and prohibition detailed in art. 19 of the requirements to be registered by FIFA Regulations on the Status and
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What did the minors do? the basis of the principles of that a discriminatory act is equality and universality; committed by anyone who The representatives of the minors restricts or undermines the went to the ordinary courts Article 5: The State will ensure egalitarian bases expressed in to request the declaration of the conditions that guarantee said Constitution. unconstitutionality of Article an effective equality of 19 of the RSTP stating that: treatment, so that foreigners Article 1 defines a discriminatory “The arbitrary and illegitimate can enjoy their rights and fulfill act as “any person who regulations that the Argentine their obligations; arbitrarily prevents, obstructs, Football Association intends to restricts or in any way impairs apply (issued by the Fédération Article 6: The State in all its the full exercise on an equal Internationale de Football jurisdictions, ensures equal basis of the fundamental rights Association), directly affects and access to immigrants and and guarantees recognized seriously violates rights protected their families under the same in the National Constitution”, by constitutional guarantees such conditions of protection and and states that particular as the right to work (art. 14), the rights that nationals enjoy, consideration shall be given right to establish associations particularly with regards to to discriminatory acts or for useful purposes (art. 14 bis) social services, public goods, omissions on the grounds of and the right to equality (art. 16), health, education, justice, “race, religion, nationality, and it also affects the principle work, employment and social ideology, political or trade of legality enshrined in article 19 security. union opinion, sex, economic and discriminates against these status, social condition or adolescents for being foreigners Article 13: For the purposes of physical characteristics.” (art. 20) on the basis of a provision this law, all acts or omissions issued by a private entity.” determined for reasons 3) Thirdly, the defense of such as ethnicity, religion, minors invoked the Advisory nationality, ideology, political Opinion OC-18/03 issued by or union opinion, sex, gender, the Inter-American Court of On which laws did the economic position or physical Human Rights, referring to representatives of the characteristics, which arbitrarily non discrimination and equal minors base their request prevent, obstruct, restrict or protection before the law (...) for unconstitutionality? in some way undermine the and the Convention on the full exercise on an equal basis Rights of the Child. 1) Firstly, the Immigration of the fundamental rights Law 25,871 of the Argentine and guarantees recognized “Article 3 provides that in all Republic: in the National Constitution, measures concerning children, International Treaties and whether undertaken by public The objectives of this law are: laws, will be considered or private institutions, the best discriminatory. interests of the child shall be a Article 3, par. f): Assure any primary consideration.” person who requests to be Article 14: The State in all its admitted to the Republic of jurisdictions, whether national, 4) Lastly, the minors’ Argentina permanently or provincial or municipal, will representative highlighted temporarily, the enjoyment of favor initiatives aimed at the the fact that, in June 2011, the non-discriminatory admission integration of foreigners in Republic of Ecuador (country of criteria and procedures in terms their community of residence. origin of minors) signed, as an of the rights and guarantees Associated State of Mercosur, established by the National 2) Secondly, the minors’ the “Act of Accession to the Constitution, international representative also Residence Agreement for treaties, current bilateral invoked in support of their Nationals of the States parties agreements and laws; request Law 23.592 called to Mercosur, Bolivia and Chile” “discriminatory acts”, that and, in such agreement through Article 4: The right of migration classifies discriminatory Article 9, the recognition of as essential and inalienable to acts as crimes, based on equality is agreed as a civil the person, guaranteeing it Article 16 of the National right of nationals of the parties in the Argentine Republic on Constitution, determining and associated countries, as
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simply equal treatment with Article 8 provides that the of the Mercosur Agreement, the the nationals of each of the nationals of the State parties that second instance judges shared members and associates. have obtained residence under the conclusion of the first instance the terms of the Agreement have judge in so much as he pointed out the right to: “enter, leave, circulate that Article 19 of the RSTP does and freely stay in the territory of not represent a valid legal reason What did the Judge in the the receiving country. (...)They to prevent the minors J. W. C. M. First Instance decide? also have the right to access any and J. A. M. C. from registering or activity, both on their own or for signing up in an Argentine football “Taking into account the others, under the same conditions club. normative support referred to, as the nationals of the receiving the factual circumstances of the countries, according to the legal That is so because the minors, case and the insufficiency of the regulations of each country.” being natives of one of the States arguments put forward by the “adhering” to the agreement defendant, I conclude that the In turn, Article 9.1 establishes signed by the State parties to prohibition contained in art. 19 that: “The nationals of the State Mercosur (that is, of the Republic of the Regulations on the Status parties and their families that have of Ecuador) and obtaining legal and Transfer of Players issued by obtained residence under the residence in the territory of the FIFA and the exception to this terms of the present Agreement Argentine Republic, have access prohibition provided for in point shall enjoy the same civil, social, to the same cultural, civil, social 2), paragraph a), which were the cultural and economic rights and and economic rights and liberties arguments put forward by the freedoms of the nationals of the as the nationals of Argentina. plaintiffs [...], are unreasonable receiving country, in particular the and discriminatory, and therefore, right to work and to exercise any This being the case, the second in relation to those mentioned, lawful activity under the conditions instance judges considered that it is necessary to agree on a provided by the law; petition “the de facto assumption that declaration of unconstitutionality the authorities; enter, remain, FIFA regulations are applicable is in the Argentine Republic.” transit and leave the territory of not verified, since the recognition the Parties; associate with lawful of equal civil rights with respect “As a result of the foregoing, the purposes and freely profess their to players of Ecuadorian origin, as Argentine Football Association worship, in accordance with the well as equal treatment with our shall refrain from applying, in laws that regulate their exercise.” country’s nationals, allows us to relation to the plaintiffs – i.e. rule out the existence of a typical minor J. W. C. M. and J. A. M. C., In the opinion of the second case of international transfer of the prohibition on registration instance judges, the normative underage players. Moreover, if we provided for in article 19 of the framework provides sufficient assume that the core of the dispute Regulations on the Status and objective reasons for the solution is not about the international Transfer of Players issued by FIFA.” of the case, since the evidence transfer of underage players, the in the record shows that the mere application of the Mercosur minors J.W.C.M. and J.A.M.C. Residence Agreement would have had obtained legal residence in exempted the judge a quo from What did the Judges Argentina in accordance with ruling on the constitutional validity in the Second Instance the provisions of the Agreement of art. 19 of the RSTP FIFA.” decide? (Articles 384 et seq. Of the Code of Civil Procedure). In other words: the “constitutional In the First Instance, the judge affront” underlying all “legal pointed out in his judgement, on Indeed, from the documentation protection” claims does not arise 29 June 2011, that the Argentine of the case, it appears that in the from the existence of a norm Republic signed the “Agreement Argentine Republic the minors contrary to the constitutional law on Residence for Nationals of were granted a National Identity at stake, but from the conduct of the States Parties to Mercosur” Document with the category of the sports entities that set Article (hereinafter, the Agreement), to “temporary residence”. 19 of the RSTP in force, without which the Republic of Ecuador realizing that - in the particular adhered to on 28 June 2011 (in Based on these premises, and case - minors must be considered accordance with Mercosur/CMC/ taking into consideration the as “nationals” since by virtue of the DEC N°21/11). meaning and scope of the rules Mercosur Residence Agreement,
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the natives of the subscribing considered that the resolution account the specific circumstances States and those of the adherents that admits the action of legal of each case and the opportunities are granted equal rights in each protection should be upheld, on for integration offered by football. of the respective territories (the the understanding that, by denying More than 85% of these requests latter would be the case of the the right to enroll in an Argentine for exceptions to Article 19 of the Ecuadorians). football club based on Article RSTP but this does not seem to 19 of the RSTP, harmful action be sufficient to deal with all cases In effect, the denial of the right to is committed which - currently such as that of the Ecuadorian sign up for an Argentine football - restricts the constitutional minors. Club restricts – blatantly - the right rights of the minors J.W.C.M. and of free association that is protected J.A.M.C. (Article 43 of the National by Article 14 of the Magna Carta, Constitution; Article 20 paragraph Why is the Subcommittee’s which authorizes these collective 2º, Provincial Constitution; Articles task insufficient in practice structures with useful purposes as 1, 2, 6 et seq. of Law no. 13.928; for cases like this? is undoubtedly the sports practice Articles 3, 9 and 12 of the Children’s within a football club. Rights Convention; Article 3 et seq. The procedure that governs the of Law no. 26.061, and Articles 4, 5, request of the first registration Likewise, the right of equality 6, 7 et seq. of Law no. 13.298). and the international transfer before the law (Article 16 of the of minors, through its Article 5, National Constitution) and the only foresees that the interested guarantee embodied in Article association is the one who 19 of the National Constitution Final thoughts requests the first registration of whereby “no inhabitant of the the player, developing the entire Nation will be forced to do what is process, without admitting the not required by law, or deprived to Why is FIFA applying these interested minor and his parents do what it does not prohibit” are measures? who have the right to access such also violated. process directly. This procedure is If there are no adequate controls, not appropriate, as the rights that That legislative order must be the younger footballers are are intended to defend cannot be integrated, in turn, with international affected by exploitation and abuse subject to the voluntary action of a treaty norms such as Article 75, in a foreign country. Although in third party in relation to the holder paragraph 22, of the Federal Charter specific cases, an international file of such rights (in the case it would (Article 20.2 of the Universal can promote the sports career of a be the AFA itself); insofar as such Declaration of Human Rights young footballer, this practice can a position would imply breaching and Article 15 of the American harm the vast majority of minors the inviolability of the right to Convention on Human Rights). and, for FIFA, ensuring that the defense of the person. latter develops in the possible In fact, Article 16 paragraph 1 of the way and in a stable environment American Convention on Human is above mere sporting interest. In Could FIFA modify its Rights establishes that: “Everyone the past, the trafficking of minors procedures to prevent minor has the right to freely associate for to clubs - mostly European clubs - footballers from going to (...) sporting purposes (...).” led to some young people being ordinary court to make abandoned to their fate when they these claims? The practice of sports is also did not meet the expectations of protected through Article 15 of the clubs. According to the criteria of the American Declaration of the the judges who intervened in Rights and Duties of Man when both cases, the procedure must it states that: “Everyone has the Is the task of the authorize the child’s parents or right to rest, to honest recreation Subcommittee of the their representatives to initiate and to the opportunity to use his Player Status Committee requests for exceptions before free time usefully for the benefit of sufficient? FIFA, but in practice, that is his spiritual, cultural and physical impossible because the only entity improvement.” The Subcommittee of the FIFA authorized to request the player’s Player Status Committee is first registration, developing the Taking into account all the above, responsible for reviewing the entire process, is the interested the second instance judges requests for exceptions, taking into national federation.
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How has the case of the Ecuadorian minors been resolved in ordinary justice?
Ordinary judges resolved the case by applying state norms and international treaties determining the unconstitutionality of Article 19 of the RSTP after verifying that the Ecuadorian minors, still living far from their family and friends, were enjoying better living conditions than in their country.
This case is paradoxical given that the FIFA Regulations aimed at preventing child trafficking unintentionally go against state laws and international treaties that allow minors with the authorization of their parents and with an authorized guardian to go to another country without their families, to live and practice any activity for useful purposes.
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Atromitos FC not punished for It is worth mentioning that a pyrotechnic display by FK Legia insufficient organization during Warszawa’s fans (who made use rd of bengal lights/pyro) took place the 3 qualifying round of the in the north tribune at the 54th 2019-2020 UEFA Europa League minute. But it was proved that Atromitos FC took every possible measure to identify such devices by using police knowledge, power and experience, since it was the police that conducted the relevant By Aspa Souloukou controls. However, those using Lawyer, Souloukou & Partners Law bengal lights/pyro were impossible Firm Athens – Greece to identify and consequently be prohibited from entering and re-entering the stadium. It shall ➔➔ Security – Safety obligation – also be noted that the police did Stadium – Disciplinary litigation – UEFA Control Ethic and Disciplinary everything to prevent supporters Body (CEDB) from bringing bengal lights/pyro into the stadium (full control, body UEFA CEDB, 20 September 2019, no. and bags search, etc.). 32872 - UEL - 2019/20, Atromitos FC
This paper aims at sparking a new debate, concerning the application of In light of the above, the sanctions of the FIFA Disciplinary Code by the FIFA Disciplinary Committee UEFA Control and Disciplinary and the importance of such decisions to be coordinated with the internationally Body decided not to punish recognized humanitarian notion of the right to a fair trial. Atromitos FC for insufficient organisation.
Disciplinary proceedings had been door did not prevent either the instigated against Atromitos FC smooth arrival or departure from for insufficient organization. the stadium and this was admitted In particular, during the match by the delegate himself; v) only one between FK Legia Warszawa stairway was blocked because most and Atromitos FC held in the city of the time the fans were moving of Athens on 14 August 2019, in and never seated on the stairs or the context of the 3rd qualifying anywhere else. All the rest of the round of 2019-2020 UEFA Europa stairways were clear for the whole League, a locked evacuation duration of the match; vi) FK Legia gate and blocked stairways were Warszawa supporters provoked identified by the UEFA delegate. Atromitos FC’s supporters with impolite words in Greek leading Before the UEFA Control and to the reaction of 5 Atromitos FC Disciplinary Body, Atromitos FC supporter attempting to jump over proved that: i) the locked gate the fence to the athletic track to try was locked only before the match to enter the tribune where FK Legia began. It was opened before kick- Warszawa supporters were. off and remained open during the However, the reaction of the police whole match. Furthermore, there was immediate as they were already was a steward who was responsible in position and so they blocked for the supervision of that space; ii) Atromitos FC’s supporters and this particular gate was not a central prevented further consequences. gate; iii) the number of spectators So, such incident confirmed once at this particular gate 7B was small again Atromitos FC’s readiness and and so the neighboring gate by preparation in favor of security and itself provided complete security in safety. case of emergency; iv) the locked
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Australia
Player Trials in the legal spotlight as young Australian footballer takes legal action against an A-League club
By Peter Paleologos Player Agent & Lawyer, LIBERO Consulting Melbourne – Australia
➔➔ Trials – Football Federation Australia (FFA) – Player contract – Labour law – Labour disputes – National law
Recently, Mark Moric, a talented young Australian footballer who trialed for the A-League club Central Coast Mariners (Mariners) for almost four months without being paid, took legal action in a case that could set a precedent on the legality of unpaid work, trials and internships in Australia.
Background of the matter Europe) to August 2019 when he professional football player and was told he was not needed by the only trialed.1 Football player trials used to be Mariners. The trial overlapped with a significant process for clubs to a significant part of the Australian identify player talent. However, A-League transfer window, being trials have become increasingly the months of July and August of Australian laws on rare as clubs now rely on a 2019. internships and unpaid network of scouts, their academies work trials and scouting platform tools like As the unpaid trial period went Wyscout, Instat and Scisports on for close to four months, Mr In relation to player trials, there is Index to find talent. Moric found it increasingly difficult no Football Federation Australia to support himself financially as (FFA) regulatory framework In Australia however, most the club was based in Gosford that covers players trialing at A-League clubs still use a trial which is two hours away from his professional clubs. Therefore, the process to assess younger players home in Sydney. Consequently, Australian Law that covers trials to for professional contracts. the failure of the Mariners to offer obtain work is the Fair Work Act Mr Moric a contract resulted in him 2009 (Commonwealth of Australia The case of Mark Moric has two pursuing a civil claim by filing an Legislation). aspects which make it fascinating. application in the Federal Circuit Firstly, it will affect the long- Court of Australia for more than Whether an unpaid work standing culture in the football AUD 60,000 in unpaid wages and arrangement or internship is lawful business of trialing younger damages against the Mariners. under the Fair Work Act 2009 talented players or lesser known depends on: players for a long period of time A separate letter from Mr Moric’s and secondly, it will impact how lawyers to the Mariners stated: ➥➥ whether an employment promises allegedly made by clubs “after a few weeks on trial Moric relationship exists; or are treated that following a trial was promised a scholarship period, a professional contract will contract worth $30,000 a ➥➥ whether the arrangement be made available. year the club coach for the involves a vocational placement. 2019-20 season.” The Mariners 1 Sydney Morning Herald, Ben Schneiders, Mr Moric’s trial was from April disputed this fact and stated that 5 December 2019, “‘Internships’ on trial 2019 (when he returned from Mr Moric was never engaged as a as young footballer takes action against A-league club.” www.smh.com.au
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In order to obtain guidance on that short trials were an accepted Although the case draws attention whether a trial would be lawful part of football, but it was not to the use of unpaid work in and for how long it should last, common practice that the trial professional sport it will also apply we would need to refer to the should last for over three months. to all young workers in many other guidance notes provided by the industries who undertake unpaid regulators who implement and Workplace law expert Professor trials and will be a test case. regulate the legislation, being the Andrew Stewart of University of Fair Work Commission (which acts Adelaide who has written major Based on evidence disclosed as an arbitrator) and the Fair Work reports for the Government and already, it will very difficult for the Ombudsman (which deals with regulators has stated that “unpaid Mariners to justify a 3-4-month complaints and guidance). work is increasingly common, player trial unless Mr Moric particularly for young people, and consented, and the Mariners can In relation to unpaid trials, the Fair is happening all over the labor prove that they never offered any Work Ombudsman acknowledges market right now.”4 However, if contract at any time and were that unpaid trials will occur and we look at the guidance note by transparent with Mr Moric about defines the concept as: Fair Work Ombudsman, it will be this. Further, the case may also difficult for the Mariners to argue examine the unique characteristics “Sometimes an employer might ask that the trial period was lawful, as of football trials as compared to a person to do an unpaid trial while a three-month trial may be seen as other workplace trials. they evaluate them for a vacant an abuse of a trail period pursuant job. This is used to determine if to the legislation. the person is suitable for the job by getting them to demonstrate However, a Mariners spokesman their skills and is sometimes called said the club was “surprised” by a work trial.”2 the nature of the claim and said they “believe it to be without In relation to unpaid trials involving a merit” and no representations skills demonstration (which is what a were made to Mr Moric that a deal football trial can be defined as), the was very close. 5 Fair Work Ombudsman guidance note states that the trial “is only for as long as needed to demonstrate the skills required for the job. This Setting a legal precedent will be dependent on the nature and complexity of the work.”3 The facts of the case present two separate legal issues that need to be considered by the Australian Federal Circuit Court. Firstly, how Are football trials and when clubs or businesses different to other unpaid can use unpaid trials and what work trials are the reasonable limits to them. Secondly, the case will consider Work experience, trials, the legal question of whether placements and internships Mr Moric was misled and deceived are all part of the employment by the Mariners. process for young graduates now. In relation to football trials, it is The Federal Court has an generally industry practice that opportunity to provide a a trial would normally be for one “precedent setting” decision on or two weeks however, if there unpaid trials in Australia. are trial games, this may be for a longer period. In the Moric case, it was acknowledged by Mr Moric 4 Sydney Morning Herald, Ben Schneiders, 5 December 2019, “‘Internships’ on trial 2 Fair Work Ombudsman website, (Australia) as young footballer takes action against www.fairwork.gov.au A-league club” 3 Ibid. 5 Ibid.
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Australian club versus coach contract termination cases determined at FIFA
By Peter Paleologos Player Agent & Lawyer, LIBERO Consulting Melbourne – Australia
➔➔ FIFA Player Status Committee (FIFA PSC) – Coach contract – Breach of contract – Jurisdictional competence – Domestic dispute – International dispute – Court of Arbitration for Sport (CAS) – Liquidated damages clause
Recently, two second division clubs in Australia have been ordered by the FIFA Player Status Committee (FIFA PSC) to pay tens of thousands of dollars to two coaches that they were ruled to have been wrongfully dismissed. These are unprecedented and novel circumstances for Australian football as both clubs are semi professional and belong to the National Premier League (NPL) competition (below the professional A-League) and rarely has a coach/club dispute from Australia reached the FIFA PSC for a decision.
International dimension instructed their ex-clubs to pay Abbas Saad.2 The club disputed that them outstanding amounts.”1 the termination was in line with this The coaches - namely Gorka contract and were disappointed a Etxeberria and Chris Taylor - took FIFA tribunal did not rule this way their former club employers, however, the club never appealed Sydney Olympic FC and South Reasons for terminations the FIFA PSC outcome. Melbourne FC respectively, to the FIFA PSC after they were both Mr Taylor who had coached South terminated just before the season Melbourne FC for four-and-a-half was to commence. Mr Taylor years, won the NPL title twice and South Melbourne FC has been resident in Australia took the club to an FFA Cup semi- appeal to CAS for 20 years although still holds final against Sydney FC, was owed a British passport. Mr Exteberria 14 months in wages at the time of South Melbourne FC requested is a coach who holds a Spanish his sacking. At the time, Mr Taylor grounds for the decision from FIFA passport. was not warned about his imminent and have now lodged an appeal to sacking and only received an email the Court of Arbitration for Sport Mr Exteberria was sacked as Sydney and text. (CAS) regional office in Sydney, Olympic FC coach when he had Australia, which may be based one year left on his contract, whilst In relation to Mr Exteberria, on several grounds (ascertained Mr Taylor had two years left of his Sydney Olympic FC said its board from viewing the contract and the contract. Neither Mr Exteberria nor made the decision to remove Mr grounds of the FIFA PSC hearing) Mr Taylor were aware that they Exteberria in the “best interests” which could include: were going to be terminated “but of the club, saying his position was with the assistance of the Football untenable and pointing out they Coaches Australia (FCA) (coaches went on to win the NPL double FIFA PSC Jurisdiction association), in supporting their in 2018 under his replacement, motions they have been awarded South Melbourne FC may underlie roughly AUD 80,000 each after the basis of their appeal on the 1 Sydney Morning Herald, Vince Rugari, the FIFA PSC heard their cases 13 February 2020, “‘I achieved every KPI’: FIFA PSC not having jurisdiction before December 2019 and FIFA orders two former NSL clubs to pay out sacked coaches” www.smh.com.au 2 Ibid.
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as Mr Taylor’s contract included a a coach’s contract. CAS would in Australia, could use FIFA’s clause that the “state of Victoria, have to assess whether South Players’ Status Committee to Australia laws apply and Courts Melbourne FC gave Mr Taylor seek redress, local coaches must within this jurisdiction will hear an opportunity to address any go through the expensive local the dispute.” The Swiss Federal concerns as his termination was Australian court process or the Tribunal recognises that parties possibly without any reasonable Fair Work Commission since the can stipulate that national laws warning or notice and also the will FFA has no dispute resolution apply to the hearing of disputes.3 of parties, as set out in the contract, mechanism for coaches. The FCA is Conversely, if the lawyer of which is considered under of Swiss now campaigning for standardised South Melbourne FC who made Federal law.5 contracts for Australian football submissions at the FIFA PSC did coaches and the establishment of not object to FIFA’s competence, an FFA operated internal football then the CAS arbitrator may rule Liquidated Damages clause dispute resolution process.6 The FIFA had jurisdiction. The Court of in Mr Taylor’s contract emergence of two cases at FIFA Arbitration would have to weigh PSC has provided a catalyst for up its own jurisprudence4 and South Melbourne FC may argue FFA involvement in regulating the Swiss Federal Court view on that the contract between South coach contracts and dealing with national laws which can preclude Melbourne FC and Mr Taylor had disputes. FIFA jurisdiction versus having a 7-day liquidated damages clause a good faith hearing and the and that only 7 days of wage legal principle of venire contra compensation will be payable fact proprium (no one may set when Mr Taylor was terminated. himself in contradiction to his own However, as Mr Taylor is owed previous conduct). 14 months in wage payments, he may ask for additional damages in addition to that 7-day liquidator Using a company in the damages clause. employment contract In summary, the CAS appeal of The agreement between Mr Taylor South Melbourne FC v. Taylor and South Melbourne FC included covers some very interesting legal Mr Taylor’s consulting company as issues including jurisdiction, use of the third party in order for Mr Taylor private consulting companies in to invoice South Melbourne FC for contracts, the need for warnings his wages. South Melbourne FC before terminations and liquidated may claim that this makes the damages. Ultimately, any CAS dispute a commercial one to be finding on jurisdiction will most considered by Courts in the State likely dictate in whose favour the of Victoria however, Mr Taylor may South Melbourne FC v. Taylor case argue that his consulting company will be decided. was only included for invoicing and wage payment purposes only.
Australian coaching Termination of Mr Taylor’s disputes – Future contract frameworks
The good faith legal doctrine The recent emergence of recognised by CAS and Swiss Law Australian club versus coach (Article 107 of the Switzerland disputes reaching the FIFA PSC has Code of Obligations) requires resulted in the FCA advocating for clubs to generally send a warning stronger regulatory protection for letter first before terminating coaches. Although Mr Exteberria and Mr Taylor, as foreign coaches 3 Swiss Federal Tribunal, 22 January 2018, 6 Sydney Morning Herald, Vince Rugari, 13 decision 4A_432/2017. February 2020, “I achieved every KPI': FIFA 4 CAS 2014/A/3682, Kurt Kowarz v. 5 Swiss Federal Tribunal judgment, 15 April orders two former NSL clubs to pay out Lamontville Golden Arrows. 1970, decision BGE 96 II 52. sacked coaches” www.smh.com.au
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France
The PSG had the right to keep Hatem Ben Arfa away
➔➔ Player contract – Labour disputes – Salaries – National courts – National law
Labour Court of Paris, 16 December 2019, no. 19/00954, Hatem Ben Arfa
For the first time, French employment judges had to rule on the question of the exclusion of a professional footballer by his employer club. In the case opposing French footballer, Mr Hatem Ben Arfa against his former employer club, Paris Saint-Germain (PSG), the Paris Labor Court held that, in light of the employment contract and the usual practices in professional clubs, the choice of whether or not to select a player and field him in one or more matches was related to the autonomous management powers that professional football clubs have.
More precisely, this is a first On 20 December 2017, the player As a consequence, the player instance ruling handed down by was invited, along with the entire complained about being excluded the Conseil de Prud’hommes of Parisian squad, to attend a training from the team since April 2017. In Paris (French labor court), which is camp in Doha (Qatar). When the that regard, he referred the matter already on appeal. Nevertheless, it French international failed to again to the Legal Committee of a very instructive case. First of all, show up at the start of the training the LFP for conciliation to no avail. it is the first time that labor judges camp, missing the event, PSG have had the opportunity to rule on decided to deduct two days’ pay As his claims were not upheld by this increasingly frequent problem from his December 2017 salary the French sports authorities, the that affects professional players. (corresponding to the duration of player tried to seek relief in court Sometimes, footballers indeed feel the training camp) and not pay in order to obtain payment from sidelined by their employer club. him his monthly ethics bonus for PSG regarding the two days he However, the interest of this ruling is unjustified absence. was sanctioned by PSG and the not limited to this issue alone, since December 2017 ethics bonus. He it also addresses other particular The player challenged the also claimed additional bonuses, aspects of the employment aforementioned measures and such as various individual and relationship in professional football, brought the matter before the collective bonuses provided for in such as the ethics bonus (prime Legal Committee of the French his employment contract, including d’éthique). Professional Football League his equipment manufacturers’ (LFP), which, by decision of 3 July contract bonuses in respect of 2018, upheld the deductions made the loss of opportunity due to his by PSG. According to the Legal exclusion by the club. However, on Facts Committee of the LFP, the player 16 December 2019, the Paris Labor was unable to justify his absence Relations Court dismissed Mr Ben On 1 July 2016, PSG hired Mr Hatem by a work stoppage or a medical Arfa’s claims in their entirety. Ben Arfa, and both parties signed certificate, and he could not prove a fixed-term contract for two that he had obtained the club’s football seasons for a gross permission not to attend the training monthly salary of EUR 425,000 camp. This decision was confirmed and a monthly ethics bonus by the Joint Appeals Commission amounting to EUR 75,000. of the LFP on 17 September 2018.
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Pay Cuts Moreover, contrary to what will always depend on their club’s the player argued, the judges decision. More specifically, it will Under Article 9 of the player’s considered that the non- depend on coaches’ management employment contract, the judges payment of this premium was not powers, which are also subject noted that the player was obliged discriminatory. Therefore, it did to the unilateral power of to inform his employer immediately not constitute any kind of unequal direction of their employer (club). in the event of absence. In the treatment since other players had Therefore, excluding any unfair case of absence due to illness already suffered a similar fate. and discriminatory situation, or accident, he was furthermore that power will always be freely required to provide a medical exercised. In the present case, certificate within 48 hours to justify to rule out the existence of it. In the present case, the court The “Keeping Away” abuse, the judges considered ruling held that Mr Ben Arfa did not Clause that PSG had acted within the prove that he had informed PSG legal and accepted limits of its of his absence. Mr Ben Arfa merely The footballer alleged that, by unilateral power of management, contented himself with providing having been sidelined by his club pointing out in particular that a medical report one month after since April 2017, PSG had failed the player’s exclusion was based the facts. According to him, he was to fulfill its obligation to provide on objective statistical data1. In admitted to the emergency room of him with his “contractual work these circumstances, the judges the Parisian American Hospital on performance,” which caused him a accepted that the player’s exclusion the evening of his departure for the significant financial loss amounting from the team had inevitably Doha training camp. Accordingly, to roughly EUR 7,650,000. In caused him financial damage due the judges considered that he had order to assess the merits of the to “inherent professional risks” breached the contract and that player’s claim, the judges referred that all professional footballers PSG was entitled to reduce his to the obligations imposed on carry throughout the career. salary for two days, namely 21 and each party by the contract. In this 22 December 2017. sense, Article 8 of the employment contract, which governed the “Player’s obligation,” stated that Mobbing “the player shall take part in all The Ethics Bonus official matches in all competitions Finally, the player argued that in which the club is engaged and the conditions under which he In order to assess the player’s for which the club has called him was excluded constituted a form application for payment of the orally, in writing and by posting of psychological harassment. alleged outstanding ethics bonus notices. The player’s participation The Conseil de Prud’ hommes for December 2017, the judges in any official match is within the of Paris also rejected this claim. considered the conditions for the club’s power of selection.” Since the conditions under which payment of the bonus, as referred the club had excluded the player to in the employment contract. In At the same time, the judges noted from the team were considered that regard, it was apparent from that Article 507 of the French in that case to be part of the paragraph 3-2 of the addendum Professional Football Charter, non-abusive exercise of PSG’s to his employment contract that which has the force of a collective managerial power, Mr Ben Arfa the right to receive the ethics agreement in France, states that had to provide enough evidence bonus resulted from compliance “the organization, preparation, in order to substantiate his claim, with several conditions, including and training conditions of players which he could not. Hence, the the employee’s punctuality and for sporting events, which follow Conseil de Prud’ hommes of Paris attendance. The court ruling, the competition schedule, as well ruled that the evidence presented therefore, held that, by his as players’ training practices in by the player showed a rather unjustified absence from the order to compete, fall within the typical situation “faced by many winter training camp, Mr Ben Arfa management power of the employer players due to the labor conditions failed to comply with one of those in accordance with the status of in professional football clubs.” conditions. The absence of this football coaches.” triggering condition justified the club not paying him the December In light of these provisions, the 1 These data were a collection of calculations and assessments which the player does 2017 ethics bonus. labor court held that whether not dispute, showing his ranking at the players are fielded or selected bottom of PSG's attacking hierarchy from a statistical point of view.
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France
An intermediary registered in England sees its authorization to operate in France denied
➔➔ Intermediaries / Agents – National regulations – Freedom to provide services
A players’ agent of French nationality, registered as an intermediary with the English Football Federation and whose agent recognition in France was refused by the French Football Federation (FFF) and then by the French National Olympic and Sports Committee (CNOSF), can only appeal the refusal if he had first opposed the CNOSF’s conciliation proposal within fifteen days.
In 2015, a French citizen was request, the administrative judge registered as an “intermediary” found that the “intermediary” did with the English Football not prove that he had opposed the Federation. By letter of 16 March conciliation proposal presented 2018, he tried to apply to the FFF’s by the CNOSF within the fifteen- Federal Sports Agents Commission day deadline. As a consequence, (CFAS) in order to recognize his the court determined that the agent certificate so he could get “intermediary” was considered as a license that would permit him to having accepted the conciliation operate on French territory as a proposal. Therefore, the conciliation players’ agent. proposal was binding on the parties.
By decision of 11 April 2018, the aforementioned CFAS refused to recognize his English qualifications and refused to grant him a French license. Contesting the merits, the agent referred the matter to the CNOSF, which rejected his request by a conciliation proposal on 2 July 2018.
In these circumstances, the “intermediary” asked an administrative court in Paris to annul the above-mentioned decision and to order the CFAS to issue him with a sports agent’s license. However, on 5 July 2019, the Parisian Court rejected his request.
Concerning the admissibility of the
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Germany
New Cases Involving the VAR
By Joachim Rain Lawyer, Schickhardt Rechtsanwälte Ludwigsburg – Germany
➔➔ Video assistance referee (VAR) – Referee decisions – German Football Association (DFB)
In recent matches, several controversial refereeing decisions involved the VAR.
SV Wehen Wiesbaden vs. 18 seconds before Wehen scored. That is, does it matter that the Dynamo Dresden As a consequence, the referee referee continued the match decided to annul the goal. Wehen instead of awarding a goal kick 1. On 8 November 2019, the second lost the match 0-1 and filed a to Wehen, even though the league match between Dynamo protest against this result with the ball was probably out before Dresden (Dresden) and SV Wehen DFB Sports Court (Sports Court). Dresden’s right-wringer played Wiesbaden (Wehen) took place. Wehen plead that the referee it before Wehen’s goal, which (in annulling the goal), given the initiated Wehen’s attack that Dresden’s right-winger was specific circumstances of the case, finally ended in a goal? sprinting on the right wing, trying did not make a decision about the to reach the ball before the sideline, facts (that cannot be appealed), 3. The Sports Court held the close to the penalty area of Wehen, but instead acted in violation of following: and played the ball (from or rules and regulations. beyond the sideline) backwards a) The decision to review the goal close before Wehen’s goal, where 2. In principle, the Sports Court could obviously be reviewed by a Wehen defender stopped the ball had to deal with the following the VAR, since the question of with his breast and dropped it from questions: whether or not a goal has been there to another Wehen defender, (correctly) scored is one of the who was placed behind him. a) Was the goal open for a review? four cases the VAR protocol allows a review for. From there, Wehen started an b) Can a decision of the referee attack, involving 5 or 6 players that was caused by an The question of whether or not within a period of about 18 seconds, intervention of the VAR be a ball was out of play prior to that led to a perfectly scored goal appealed by a protest at all? the goal is also mentioned as an for Wehen. explicit case that allows for the c) How far can incidents prior to annulation of a goal after a VAR However, the VAR intervened and a goal be reviewed back/what review. after a review of the video footage, are the limits of review? the referee came to the (likely Accordingly, the circumstances correct) conclusion that the ball d) Is it of any relevance that a were open to a VAR review in had already left the pitch, when possible wrong decision prior to accordance with the applicable the Dresden right winger played it a goal, was to the detriment of rules. close before Wehen’s goal about the team that suffered the goal?
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b) Even though this was not the simply because the initiation of this decisions, it would be helpful to only reason the Sports Court based decision was given by the VAR? receive more reliable guidelines the dismissal of the protest upon, it and have objective criteria for such further held that according to the c) In the Wehen case, a further situations, for example, stating protocol, “in principle a match is important question asked was that an attacking phase starts not invalidated because of wrong how far back in the history of play once the team crosses the middle decisions involving the VAR (as prior to a goal can be examined centerline. the VAR is a match official).” by review? Nobody in German football could actually understand d) Finally, it was of no relevance In its reasoning, the Sports Court why this goal had to be annulled. that the wrong decision prior to the explained that even if in single goal was actually to the detriment cases the intervention of the VAR In this regard, it is worth looking of Wehen. Apart from the fact should lead to a wrong result, this into the VAR Handbook, in that it was questionable whether must be accepted in consideration particular page 19, paragraph or not a goal kick had actually of the higher level of justice the “What phase(s) of play can be been an advantage (since in that VAR grants in general. reviewed”. case, Dresden would have had the opportunity to orderly return back In other words, and even though Whilst Law 5 of the Laws of the to defense), the question which this cannot be considered as a Game (LOTG) clearly states that team actually profited from the well-established rule yet, it seems “the referee may not change a initial wrong decision of the referee as if any wrong decision of the decision on realizing it is incorrect must considered to be irrelevant. referee, if such decision has been (…) if play has restarted (…)”, made based upon intervention of there is no absolute limitation as the VAR or as a result of the review to how far back the review may of video footage, can in any case, be extended. However, rule 5.2.4 Hannover 96 vs. not lead to an invalidation of the of the VAR Handbook contains a Darmstadt 98 match result. list of factors that might be taken into account, the most relevant This would be a rather odd one probably being the “attacking conclusion, because if the referee possession phase”. takes a decision that is against the rules (and not just a wrong decision In the case at hand, this raised the about facts), no reason can be question whether or not stopping seen why the legal consequences an attack of the other team right of such a misapplication of rules before Wehen’s own goal - even should be different, depending more by dropping back the ball on whether or not the VAR was from one defender’s breast to 1. On 25 November 2019, the second involved. another - can be considered to Bundesliga match between Hannover be the beginning of the “attacking 96 (Hannover) and Darmstadt 98 This can be illustrated by the possession phase”. (Darmstadt) took place. following case: Even though in its written At a score of 1-2 for Darmstadt, Let's assume there is a foul reasoning, the Sports Court did near to the final whistle, a Hannover somewhere in the midfield of the not deal deeper with this question, player wanted to play the ball pitch that the referee does not these criteria are obviously from the left wing into Darmstadt’s recognize but the VAR intervenes not precise and subject to penalty area. The ball was deflected (because the VAR official thinks it interpretation. from a Darmstadt player’s leg; from might require a red card) and the there it hit the back of the referee, referee, after review, sanctions the For example, what if, after regaining where it was further deflected foul in the midfield with a penalty. the ball’s possession, Wehen had to a Hannover player, who, after The question is why should this kept the ball for one more minute dribbling a few steps with the ball, situation (given that a foul outside in their own half before starting the scored a fantastic goal from about the penalty area does not trigger attack? What if Wehen had shortly 30 meters. a penalty) not be considered to lost the ball during their attack, be an obvious misapplication of but then immediately regained The referee went to the midpoint, the rules with the right to protest, it? In order to avoid arbitrary thus indicating that a regular goal
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was scored, but after having had 2. Hannover further argued that Consequently, the Sports Courts contact with the VAR annulled this by first touching Darmstadt’s dismissed Hannover’s protest. goal. Hannover was of the opinion defender and then the referee’s that this annulment was not in line back, the flight path of the ball with the applicable regulations and was only insignificantly diverted. laws of the game and therefore This having the consequence that The case of David Wagner filed a protest with the Sports “the start of a promising attack” Court. could not be assumed, since the attack had already started when In this regard, it must be reminded Hannover’s left winger tried to that Law 9.1 of the LOTG was play the ball (which was deflected recently changed and now also twice) into Darmstadt’s penalty applies to cases in which the ball area. However, the Sports Court touches a match official, remains regarded the double deflection on the field of play and a team as having created a new situation starts a promising attack, the ball that was considered “the start of goes directly into the goal or the a promising attack”. This stance 1. Mr David Wagner is the head team in the position of the ball of the Sports Court seems to be coach of the Bundesliga club changes. rather construed, as by focusing Schalke 04 (Schalke). In a Cup only on the player who finally match between Schalke and In the case at hand, only the scored the goal from about 30 Hertha BSC Berlin (Hertha) on first alternative (a team starts meters (after having had ball 4 February 2020, an incident took a promising attack) could be possession only for one or two place during the extra time (at a considered to be applicable. seconds before), the start and the score of 2-2 - final score 3-2) when end of the promising attack would a Schalke player committed a rush Hannover argued that the revised more or less concur. tackle, hurting Hertha’s player Mr version of Law 9.1 could not fall Jordan Torunarigha out of the pitch under the scope of the category Moreover, the Sports Court did and directly in front of Schalke’s “ball out of the play before a not admit the argument that, if the bench. goal was scored” in accordance prior attack (that is, playing the ball with the VAR protocol and the into the penalty area) had been Mr Wagner was standing in his VAR Handbook. This is because successfully completed (by the coaching zone and just managed when designing the respective ball actually reaching the penalty to evade Mr Torunarigha, who criteria, the International Football area), Hannover’s chances to score was smashed at high speed into Association Board (IFAB) could a goal, from an objective or ex the coaching zone almost hitting not have had the situation in this ante perspective, would have been Mr Wagner. case in mind. much higher than by a shot out of the blue from a distance of about While Mr Torunarigha was lying on In the definition in the VAR 30 meters. Rather, the Sports Court the floor, Mr Wagner bent down to Handbook (see 8.2 on page held that this must be considered him, inquiring if he was fine and 34), “ball out of the play” has to be irrelevant. First, since a new tried to help him up, and avoid exclusively been explained as “if promising attack can be assumed any escalation directly in front of the ball wholly crosses the goal if it immediately follows or results Schalke’s bench. Mr Torunarigha, line or touch line”. from the prior promising attack, who has previously been the victim and second, but more importantly, of a racist assault by spectators, Nevertheless, this argument has that the determination of these was emotionally very upset and, not been given any weight by the criteria is subject to the discretion recovering from the hard tackle, Sports Court, which simply ruled of the referee and a decision about reacted and smashed an empty that, in principle, a goal is always the facts. beverage case to the floor. subject to VAR review, and the decision whether or not it has been Consequently, mistakes determining Mr Torunarigha had already correctly scored or there have those facts (that the Sports Court received a yellow card earlier in the been any reviewable incidents by the way did not see in this match and the referee then sent prior to the goal, is a decision case) cannot be considered to be him off with yellow-red card for his about facts that is not subject to violations of the rules and thus are behavior post tackle. Even though a protest. not subject to a protest/appeal. this decision of course was a very
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harsh one, in particular given the From the beginning of the 2019- circumstances of an evident error circumstances, to everybody’s big 2020 season, officials, including (which happens every few years surprise, the referee undertook coaches, can be sanctioned only), discharged Mr Wagner and a review subsequently. Since the with red cards and, in principle, annulled the usually mandatory yellow-red card is not generally the same criteria apply to the suspension for one match. subject to review, everybody was sanctions of officials as to players. expecting that the review would The mandatory consequence of a concern the hard tackle against red card against a coach is that he Mr Torunarigha in order to determine is automatically suspended for (at whether or not this tackle required least) 1 match, even if the decision a red card. However, surprisingly, turns out to be wrong. the result of the review was that Schalke’s coach, Mr Wagner, For everybody, including to the received a red card. prosecutor of the Deutscher Fussball-Bund (DFB) and the Presumably, the referee - mistakenly Sports Court itself, it was obvious - interpreted Mr Wagner’s offer to that the decision to send off help Mr Torunarigha as an act of Mr Wagner was absolutely wrong. violence (which it obviously had not been, which was clearly proven In particular, the video footage by video footage). clearly proved that he was only trying to help Mr Torunarigha, who Even more surprising was the also understood the Mr Wagner’ subsequent written report of the was trying to assist, as he referee, in which he stated his confirmed in a subsequent written reasons for sending off Mr Wagner. statement. The referee blamed him of trying to delay the game by “holding” As suspending Mr Wagner for Mr Torunarigha. This decision was one match would have, under the obviously wrong, both in terms specific circumstances of the case, of the facts as well as the legal been an unacceptable injustice, the conclusions. Mr Wagner did not DFB applied paragraph 13.2 of the “hold” Mr Torunarigha, but only - as Legal and Procedural Regulations a measure of care - tried to help and of the DFB and discharged protect him. Furthermore, no delay Mr Wagner accordingly. ensued as that took just one or two seconds. At any rate, the game Paragraph 13.2 of the Legal and had been interrupted at that time Procedural Regulations of the anyway with the ball being far away. DFB stipulates that, under very exceptional circumstances, a Finally, Mr Wagner had no reason decision of a referee about facts to delay the game when the score can be annulled, if it is based on an was 2-2 in the extra time, as his evident error. An “evident error” team was the home team and a can be assumed if the decision of draw in a Cup match is not an the referee is objectively incorrect acceptable final result (note that without any doubt. Even though a in Germany, contrary to other wrong decision by a referee deserves countries, in the case of a draw protection in terms of the result there is no rematch, but penalties of the match (such that in those will decide the match). cases the wrong decision cannot be invalidated), this does not apply to 2. Principally, the VAR was allowed and is not required for suspensions to intervene in those circumstances beyond the duration of that match. (even if based on a completely wrong point of view) since a red Consequently, the Sports Court card was at stake. assumed the very exceptional
242 Football Legal WORLD IN REVIEW
Greece
Multiclub ownership in Greece - PAOK FC and Xanthi FC proven to be owned by the same person
By Aspa Souloukou Lawyer, Souloukou & Partners Law Firm Athens – Greece
➔➔ Multi-ownership – Hellenic Football Federation
Committee on Professional Sports, 27 January 2020, no. YPPOA /GDYA/ DEAEA/ TSOEK/268616/19140/2703/86
The Hellenic Football Federation (HFF), at the end of the 2018-2019 sporting season and after the acquisition by PAOK FC of the championship, removed from its statutes the ban of multi-ownership in Greek Football. Thus, the only remaining regulation forbidding and penalizing it with expulsion from the league rests with the National Sports Law at Article 69.
The Committee on Professional of Xanthi FC, it is stated that dominant influence over Xanthi Sports (CPS), established in the it “has entered into a non- FC. RFA is a related company of context of the National Sports Law cancellable operating lease with Dimera Ltd (Dimera), namely the (the role of which is, amongst other the related company VIALAND SA company which holds the shares of things, to safeguard transparency, concerning the rental of offices PAOK FC and is involved in many of fair and sound competition and and sports facilities.” Furthermore, the business projects of the owner the credibility in the field of in the above financial statements, of PAOK FC. In actual fact, PAOK professional football and further, Vialand is referred to “as a related FC is the subsidiary company of prevent any attempt of multi- company” of Xanthi FC. In light of Dimera and Dimera is the subsidiary ownership which obviously all the above-mentioned factors, company of Beltarra Holdings endangers them), after a claim Vialand exercises, within the Ltd (Beltarra), shareholders of lodged on 4 December 2019 by meaning of paragraph 9 of Article which are the wife and son of the Olympiacos FC issued its binding 69 of the National Sports Law, owner of PAOK FC and Dimera. and detailed report (of around administrative rights and dominant Simultaneously, Beltara is a related 70 pages) by virtue of which the influence over Xanthi FC and has company of RFA. All the aforesaid following key issues were proved. the ability to participate being to companies, namely RFA, Beltarra influence the management and and Dimera are related companies, Vialand S.A. (Vialand) is the function of Xanthi FC. with loan agreements over the years company which holds all the between them and they all share the assets of Xanthi FC (including On 30 August 2018, namely at same head offices in Nicosia, Cyprus. training center, fields, etc.). The the very beginning of the 2018- RFA’s shareholder, up until 2014, members of the Board of Directors 2019 sporting season -being the was the person who represented the of Vialand and Xanthi FC over time season where PAOK FC won the owner of PAOK FC Ivan Savvidis to were substantially the same and, championship - Vialand’s shares the Board of Directors. In 2014, RFA at least until 2018, the owners and were transferred to RFA Trading was transferred to a third degree shareholders of these companies and Consulting Ltd (RFA) so relative of the owner of PAOK FC were the same. Additionally, in that, since 30 August 2018, RFA (a waiter by profession) who had the published financial statements exercised administrative rights and participated over many years in the
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Board of Directors of companies Decision of Civil Court of Greece awarding Agent’s affiliated with the Savvidis family remuneration but reducing the penalty clause as and Ivan Savvidis even at the time excessive of the acquisition of the shares of Vialand by RFA. At the time of the By Aspa Souloukou acquisition of the shares of Vialand Lawyer, Souloukou & Partners Law Firm by RFA, in the summer of 2018, the Athens – Greece intermediate acquired convertible bonds issued by PAOK FC According ➔➔ Intermediaries / Agent – to the relevant contracts submitted Intermediary fees – Penalty clause – by RFA, the said bonds are freely Overdue payables – Proportionality convertible and therefore at any – National courts – National law time in the future the intermediate may exercise his right to become a First Instance Civil Court of Athens, 7 shareholder of PAOK FC. January 2020, no. 213/2020, PAO FC
In the light of the above- A foreign FIFA agent (Agent) and a Greek Football Club (PAO FC) signed a mentioned, RFA and its sole private agreement dated 26 June 2015 for the Agent’s services to PAO FC shareholder, a third degree relative regarding the signing of a two-year employment contract for football player of the owner of PAOK FC, acted Michael Essien with PAO FC. as intermediates of Dimera, and thus, the penalty of expulsion from the league should be imposed AO FC could not fulfil the financial a percentage of 40% and rejected both on Xanthi FC and PAOK FC obligations of the agreement in full the request for settlement. according to CPS. CPS forwarded and after long negotiations with So, PAO FC was ordered to pay in the decision as a 'Binding Report' the Agent, the latter agreed to full and in one payment the whole to the competent Disciplinary reduce his whole commission to awarded amount. Committee of the Super League the commission corresponding for the imposition of the prescribed only to the first year of the player’s In light of the above-mentioned, penalty, in accordance with Article employment contract and thus both the Agent and PAO FC 69 (12) of Law 2725/1999. the parties signed a new contract appealed the decision to the on 8 July 2016. However, PAO FC Second Instance Civil Court of Surprising though, the Greek failed to comply once again with Athens and a hearing before the Government intervened and its financial obligations. Court of Appeal is expected to changed the relevant article so as to take place. save PAOK FC and Xanthi FC from Therefore, the Agent terminated expulsion and as a result, PAOK FC the contract and lodged a claim and Xanthi FC are still competing before the Greek Civil Courts in the same league under the requesting the whole amount of same ownership and only face the contract along with the agreed the possibility of punishment by a penalty clause. deduction between 5 (minimum) and 10 (maximum) points. The PAO FC argued that: i) the Disciplinary Committee of the contractual penalty was invalid; ii) Super League imposed a deduction in the case that it shall be considered of 7 points to each one of them. as valid, it should be reduced as Both PAOK FC and Xanthi FC excessive; and iii) requested the appealed the decision before the whole awarded amount to be competent Appeal Committee of settled in installments. the HFF which upheld the decision. PAOK FC is claiming that it will file The First Instance Civil Court of an appeal against that decision Athens, which consisted of a Panel before the Court of Arbitration for of three judges due to the high level Sport (CAS). of the amount, acknowledged that the penalty clause was valid but reduced the penalty as excessive to
244 Football Legal WORLD IN REVIEW
Italy
New Ambush Marketing Provisions in Italy
By Stefano La Porta Lawyer, Gallavotti Bernardini & Partners Rome – Italy
➔➔ Ambush marketing – National law – Sponsorship – Trademark
In adopting special measures for the organisation of the Winter Olympic Games of 2026, the Italian Parliament has enacted new provisions aimed at fighting ambush marketing, which are applicable to all sports events of national or international relevance.
Based on these assumptions, officers of the Italian Government, Introduction when the time came for the Italian who have prepared a draft law Government to comply with the addressing ambush marketing. At last in Italy, from 14 May 2020, commitments of the National Such provisions were eventually specific law provisions became Olympic Committee with respect approved by the Parliament as available in the fight against to the organisation of the 2006 part of the law dedicated to the ambush marketing. Winter Olympic Games in Turin, organisation of the 2026 Winter the matter of ambush marketing Olympic Games, due to take place For about 15 years, providing legal was addressed with Legislative in the north of Italy. assistance to sports institutions Decree no. 167 of 2005. Such law who were in the process of provided for limited-in-time only, organising sports events in Italy, anti-ambush provisions: their I have participated in meetings, enforceability, in fact, was over at Law Decree no. 16/2020: debates and workshops with the end of the year of the Olympics definition of ambush the Italian Government, police (i.e. on 31 December 2006). marketing forces, etc. aimed at drawing their attention to the benefits More recently, the awareness of the According to Article 10 of Law that the introduction of anti- Italian authorities with respect to Decree 11 March 2020 no. 16 (final ambush-marketing provisions ambush marketing has improved, version adopted following the would bring to the national sports both in terms of understanding of enactment of Law 8 May 2020 environment. In most of the cases, what ambush marketing means - no. 31 - the Law Decree), the the feedback received featured probably due to some cases which following activities are considered scarce understanding of the have occurred during international ambush marketing and are thus problem and the shallow belief that events staged in Italy - and for prohibited (here below reference the existing domestic provisions the awareness of the financial loss will be made to sports events only, addressing unfair competition suffered by their organisers and even if most of the provisions and the protection of intellectual sponsors. are applicable also to fairs and property rights were sufficient exhibitions): to satisfy the expectations of the This new scenario has made it organisers of sports events and, in possible for UEFA and FIGC, ➥➥ the creation of a direct general terms, meet the needs of during the organisation of the or indirect link between the Italian scenario. Italian matches of UEFA Euro a trademark or another 2020, to work in close cooperation distinctive feature and a with highly skilled and experienced sports event of national or
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international relevance that All the anti-ambush-marketing Comments can mislead people about the provisions above, according to list of official sponsors of said Article 11 of the Law Decree, are Taking into account the cases of event; applicable and enforceable in the past years, it is clear that the relation to all acts committed new provisions do not address all ➥➥ giving a false representation in the time-frame between categories of ambush marketing. or advertising to be official the registration of the official sponsor of one the events trademarks of the sports event No remedies are available, above; and the 180 days from the end for instance, against the so of the event. This means that the called “ambush marketing by ➥➥ the promotion of trademarks provisions of the Law Decree will intrusion” that typically features or other distinctive features be applicable with respect to any the distribution of leaflets or through any initiative not sports events of international giveaways to supporters on authorised by the organiser or national relevance and any their way to the stadium or the of the event that, at the same ambush marketing activity carried display of advertising materials in time: a) is aimed at getting the on in relation thereto. proximity of the event’s venue or attention of the public, b) takes fan-gathering points. place during one of the sports events above and c) misleads Likewise, the express exclusion people to believe that the Remedies from the concept of ambush promoter of the initiative is an marketing of the initiatives of official sponsor of the event; It is common knowledge that the participating teams/athletes’ ambush marketing can be tackled sponsors may somehow suggest a ➥➥ the sale and the marketing in an efficient manner only if way to carry on ambush marketing of goods or services illicitly immediate remedies are available activities with impunity. It must be featuring, either in whole or to stop the illicit conduct. said, however, that the marketing in part, the logo of one of the regulations of international events events above or other signs Article 12 of the Law Decree deals typically regulate strictly the which can mislead people with the enforcement, providing use and display of advertising about the existence of some for a fine between EUR 100,000 materials by participating teams/ link with one of the events and 2,500,000 to all individuals athletes. above or with their organisers or entities found guilty of ambush or partners. marketing. As for all new law provisions, however, only time will tell how The same Article 10 of the Law The power to investigate, with accurate the Italian way of tackling Decree clarifies that the initiatives of the involvement and coordination ambush marketing is and whether the official sponsors of the athletes/ of police forces, and to impose or not the rights of the organisers teams participating in sports events sanctions is entrusted with the of sports events can be properly can never be considered ambush Italian Competition Authority (ICA), protected. marketing activities. an independent public agency that has a general competence In any case, a first step has been As per Article 13, the anti-ambush in the fields of unfair commercial taken and this is something measures made available by the practices and misleading and that the whole Italian sports Law Decree do not affect nor unlawful comparative advertising. movement must view as a great undermine the enforceability of the accomplishment. general law provisions concerning According to Article 12, the ICA unfair competition and the can order the immediate cessation protection of intellectual property of any ambush marketing activity rights, which apply concurrently and seize all materials used for whenever appropriate. the illicit conduct. In this aim, the ICA is assisted by the Guardia di According to Article 14, the Finanza, a police force with units registration of trademarks specialising in business-related featuring the image of the trophies crimes and the enforcement of of well-known competitions is intellectual property rights. prohibited.
246 Football Legal WORLD IN REVIEW
the Netherlands
Impact of Dutch Remote Gambling Act on Professional Football
By Tim Wilms Lawyer, CMS Amsterdam – The Netherlands
➔➔ Betting – National law – Match-fixing – Integrity – Sponsorship
This article outlines the possibilities and requirements for the establishment of online football and sports betting under the new (draft) regulations, as well as the conditions under which sponsorship and advertising related to football and sports (betting) will be permitted.
Introduction on 19 February 2019.1 The Act submitted to the Ksa (Netherlands enables betting operators to acquire Gambling Authority). The Ksa is In Europe, betting companies are a a licence to offer various forms of authorised to grant licences and significant sponsor of professional online betting in the Netherlands. supervise compliance with the football clubs and organisations. The date that the Act is expected Dutch gambling legislation. Any Half of Premier League clubs, 17 of to enter into force is 1 January 2021. entity established in the European the 24 English Championship clubs If this date is achieved, the first Union (EU) or European Economic and 8 of the 20 LaLiga clubs have licences could be granted as soon Area (EEA) can apply for a licence.4 a betting company as their shirt as 1 July 2021. Many key elements A physical establishment in the sponsor. of the new legislation are set out Netherlands is not a requirement. in greater detail in secondary It follows from the RGD that a This situation differs in the legislation (primarily the Remote licence holder must, however, Netherlands, where gambling Gambling Decree2 [RGD] and the have a local representative in the legislation currently does not Regulations on Remote Gambling3 Netherlands who is an expert in allow for new gambling operators [RRG]). The RGB and RRG are the field of gambling addiction and to acquire a licence. As such, the not final yet but no further major addiction prevention.5 A licence licensing system is effectively changes are expected. holder must also comply with a closed, meaning there are only reliability test;6 maintain a control a limited number of licensed database with players and game operators and no new licences are data;7 be a member of a central being granted. Currently, online and Background register that registers players who land-based sports betting may only are voluntarily or involuntarily be offered by one operator, Toto The new Remote Gambling Act excluded from games of chance;8 (part of the Dutch Lottery). Due to had been discussed for many years and comply with various reporting this closed system, endorsement before agreement on its terms was obligations to the Ksa. Under the and sponsorship deals with finally reached. The Act allows - next tax regulations related to the betting companies - such as shirt to online sports betting - several Act, licencees are required to or sponsorship or advertising online games of chance, such as pay 29% tax on the gross gaming on pitch-side boarding - do not casino games, poker and betting currently exist in Dutch football. on horse racing. Applications for 4 The costs of a licence application will be an online gambling licence shall be around EUR 45,000 and the operator also needs to provide a financial guarantee of This will change in light of the EUR 830,000 to safeguard the payment of Remote Gambling Act (Act) that 1 Dutch Bulletin of Acts and Decrees 2019, 127. any fines. 2 Attachment to Parliamentary Papers II 5 Article 4.1 RGD. was adopted by the Dutch Senate 2019/20, 33 996, no. 76. 6 Article 3.4 RGD. 3 Attachment to Parliamentary Papers II 7 Article 5.3 RGD. 2018/19, 33 996, no. 75. 8 Article 33h Remote Gambling Act.
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result9.10 On the basis of registered events during a sports match; or (ii) can be offered on league and cup interested parties, it is estimated on the results of a sports match.13 games as well as on friendly games. that approximately 90 licences will Events during a football match initially be granted. are, for example, considered to be the half time score, number of One of the most controversial goals per team and the amount of Restrictions to online aspects of the Act is the so called players that score goals. A sports sports betting “cooling-off period” which prevents match qualifies as: (i) a match an operator obtaining a licence organised by or under the auspices There are a number of exceptions immediately if such operator - in of the national sports organisations included in the RGD, most of those the two and a half years before recognised by the NOC*NSF restrictions are included in order to the licence application - had or by comparable international prevent (the risk of) manipulation. been sanctioned for illegally and (umbrella) sports organisations; or It is stipulated that bets may not be specifically targeting the Dutch (ii) another match of a sport that organised on: (a) a youth match, gambling market.11 An illegal has been designated as a sport (b) a match in which only amateurs gambling operator specifically by the Dutch Olympic Committee, (that do not get paid) participate, targets the Dutch market if it: (i) NOC*NSF.14 The RGD allows offering (c) a match that is not objectively uses a website with the extension sports betting through fixed-odds recorded (e.g. by cameras of the .nl; (ii) uses the Dutch language; betting (quotations) and seemingly organizer or media), (d) a negative (iii) advertises on Dutch TV, radio also sports betting through pool or easily manipulated event during or in print media; (iv) uses domain betting and betting exchanges. In a match, and/or (e) a match in names with terms that typically pool betting, the operator collects which no bets may be made in refer to the Netherlands; (v) uses all bets on a sporting event, the country in which the match is websites with features that suggest receives a percentage of these being organised, due to the risk of a focus on the Netherlands; and/ bets and pays the remainder (the manipulation.16 or (vi) uses payment methods that total pot) to the winner(s). With are exclusively or largely used by exchange betting, the operators A youth match is considered a Dutch people (such as iDeal). In offer a market similar to the stock match in which mainly minors recent years well-known gambling exchange where buyers and play (which for e.g. means bets operators, such as William Hill, Unibet sellers can trade with each other. on the FIFA U-17 World Cup) and and Bwin, have been sanctioned The provider of exchange betting is not allowed. A negative event for specifically targeting the Dutch does not determine the quotation is considered to be the imposition Gambling market.12 In view of the itself, but leaves this to supply and of a disciplinary sanction or a cooling-off period, these sanctions demand on the market in question. player leaving/being ejected from have a considerable impact on these For each bet that players make with a match.17 This means that bets operators, as they will not be able to each other, the operator receives on red or yellow cards, injuries obtain a licence immediately upon a commission. Fantasy sports’ and substitutions are not allowed. the new legislation coming into betting is allowed if it is based on Neither are bets allowed on the force. (elements of) a sports match that duration of any suspension to be fits within the definition of sports imposed on a player or the nature match and if the bets are organised of any other disciplinary measure. with due regard for the safeguards An event that is easy to manipulate What kind of online against the manipulation of sports is one whose occurrence is under sports betting is allowed? events (see in the next paragraph). the dominant influence of one Fantasy sports are online participant in the match and/or The RGD stipulates that a licence games in which users compose whose occurrence has no dominant can be obtained to (i) offer bets on (fantasy) teams of players whose influence on the course or outcome performance is based on their of the match.18 Examples of this are,
9 Gross gaming result is considered to be the real counterparts. In theory, according to the legislator, taking difference between the amount of received betting on e-sports is possible or causing the first throw-in, free bets of players and the amount of prizes paid out to players. as soon as an e-sport falls within kick or corner ball as well as faults 10 Parliamentary Papers II 2018/2019, 35 031. the definition of a sports match, and (caused or missed) penalties.19 11 See: Parliamentary Papers II 2019/20, 24 557 15 no. 168. which is not yet the case. Bets 12 See R.W. de Vrey & T.A. Wilms, “Dutch Gaming 16 Article 4.9 RGD. Authority sanctions bwin, Unibet and takes 13 Article 2.1 (c) RGD. 17 Article 3.17 (1) RRG. action against affiliate marketing websites: 14 Article 1.1 RGD. 18 Article 3.17 (2) RRG. who's next?”, CMS Law Now 10.09.2019 15 Attachment to Parliamentary Papers II 19 Explanation of Article 4.9 RGD and Annex 2 www.cms-lawnow.com 2019/20, 33 996, no. 76, p. 64-65. part 2 of the RRG.
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The RGD also stipulates - in order to are the advertising possibilities engaging in recruitment and avoid a conflict of interest between of online betting operators. The advertising in video games (not the gambling sector and sport - that legislator had considered a general being games of chance) that are a licence holder may not organise ban on advertising and sponsorship organised remotely using electronic bets on a match if the licence holder but stated that such ban would be means of communication, as well as has a significant influence on the too severe and would to a great on websites or in apps where such match organiser concerned or on extent, prevent Dutch consumers videogames are offered.23 Games an interested party in that match. being able to find the legal betting such as FIFA, as well as social The same applies contrariwise and markets. Therefore, it was decided (casino) games are included. This is it is also prohibited to offer bets in that advertising and sponsorship of because, according to the legislator, the event that a match organiser licence holders would be allowed research24 shows that, in general, or interested party exercises any under the new Act subject to people that play games are easily significant influence over a bet or certain conditions and restrictions. tempted to play games of chance if the licencee’s organisation.20 This advertisements for them are made could be the case, for example, if a Licence holders may advertise via within (the website of) a game. person is a board member of both linear television services between a licence holder and a football club. 21:00 and 6:00 hours. However, Sponsorship of football clubs, sports broadcasting advertising is organisations and individual athletes In addition to the above exclusions, prohibited, with the exception by licence holders is permitted. the legislator has the power to of neutral mention of media However, licence holders may not implement a so-called “black list” of sponsorship, between 6:00 and use individual athletes’ services in specific matches and match events 21:00 hours.21 Furthermore, as a their recruitment and advertising to which no bets may be organised. general rule, the recruitment and activities.25 It is also prohibited for According to the legislator, this is advertising activities of licence licence holders to use in recruitment possible for events and moments holders cannot be misleading and for advertising activities “role of play which can - in any case - or encourage risky gambling models” that are younger than 25 be regarded as negative or easily behaviour, potentially leading to years and/or have a substantial manipulated, but also matches and/ addiction to games of chance.22 amount of followers who are minors. or competitions which are easy to Neutral sponsor references on This is likely to prevent using manipulate or which experience shirts, pitch side boarding and football players for such advertising has shown, often include match along the pitch of football stadiums activities because most football fixing. The relevant (Dutch) sports will be allowed. General television players are popular to minors and organisations - such as the Dutch advertising during halftime (and are considered as role models. Royal Football Association (KNVB) within the prescribed hours) is also - may render advice with respect to permitted. However, it is forbidden the risks associated with matches during a match (and during half- and/or events and the inclusion or time) to advertise for bets on that Integrity and prevention exclusion of events and matches match to the spectators, viewers of match-fixing on the black list. The legislator can or listeners of that match. This only deviate from the advice of a regardless of whether the match A key focus of the new legislation sports organisation with sufficient is watched by the spectator, is integrity. Licence holders have substantiation. It remains unclear viewer or listener in the stadium, several obligations with respect whether the KNVB also has the right on television, radio or the internet. to integrity such as drafting a to render such advice in respect of An exception applies to the gaming general policy to recognise and foreign football competitions. interface operated by the licence prevent money laundering and holder, where it is permitted to fraud26 and - if online sports betting advertise for betting on a specific match during that match. Prior to 23 Article 6.1 RGD, which incorporates a new Advertising and a match this exception does not subclause (5) in article 3 of the Decree on apply and the licence holder may Advertising. sponsorship possibilities 24 See D.E. de Bruin, “Gamers en gokkers. related to sports and promote its odds and betting on Literatuurverkenning naar de risico’s en a specific match. Licence holders schadelijkheid van gamen in relatie tot football gokken”, Utrecht: CVO – Research & are, moreover, prohibited from Consultancy, 2018. One of the most discussed aspects 25 Article 5.1 RRG, which incorporates a new 21 Article 3 (4) Decree on Advertising (in article (3) in the Regulation on Advertising of the new gambling regulations Dutch: “Besluit werving, reclame en (in Dutch: “Regeling werving, reclame en verslavingspreventie kansspelen”). verslavingspreventie”). 20 Article 4.9 (3) RGD. 22 Articles 2 and 3 of the Decree on Advertising. 26 Article 4.5 RGD.
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is offered - a specific policy about volumes of bets and exceptionally One of the most far-reaching and how the integrity of the sports high bets on a particular outcome onerous obligations of a licence matches on which bets are offered of a sporting event, or a specific holder is the obligation to inform is maintained.27 This policy must be event occurring. Specific bets the relevant match organiser and aimed at detecting manipulation of by individual players could also, sports organisation of the nature of matches (match fixing) by spotting in view of their player history, the betting markets they organize suspicious gambling patterns or indicate a suspicious pattern. If in advance.37 This concerns other indicators of match fixing. an investigation reveals unusual information about the match and facts or circumstances that its elements (i.e. the result and the For certain types of football and indicate an increased risk of events during that match) that can sports matches, a licence holder match fixing, the licence holder be bet on. It is unclear how this must carry out a risk analysis must take appropriate measures information should be provided, in advance to properly identify, to control the risks and - without although the legislator stated that analyse and evaluate the risks to delay - inform the Ksa, the match it is not forbidden that an operator the integrity of the match. A non- organiser and the football or sports publishes this information regularly exhaustive number of factors must organisation concerned.31 A licence and refers the sports organisation be taken into consideration, such holder must be ready to explain the to it.38 The football organisations as the significance of the match; way in which the risk analysis has do not have a "betting right", the extent to which athletes are been carried out at any time.32 If the whereby betting on a competition paid on time and sufficiently; the analysis indicates an unacceptable should be permitted by the sports degree of objective recording of level of risk33, the licence holder organisation in advance. the match; the available safeguards cannot open betting markets for against match fixing; as well as the match in question.34 internal and external signals that indicate a risk to the integrity of A licence holder should also take Comments the match concerned.28 However, measures to prevent conflicts it is stipulated that the risk analysis of interest and misuse of inside The new Act is good news for the is not necessary for a large number information in relation to matches. Dutch football sector. Football of Dutch competitions of well- Measures should be taken to federations and clubs will be aware known and popular sports such prevent: (a) abuse of the licence of the bets that will be offered on as football.29 The following Dutch holder’s financial and economic their games and about (potential) football competitions are currently relationship with the concerned integrity issues, while they can also excluded: Premier League (men sports organizer, club or athlete, expect substantial revenue from and women), First Division, Johan (b) involvement of persons betting operators as soon as the Cruijff Cup, League Cup and Second involved in a match (players, new Act comes into force and new Division. It is at this point unclear referees, etc.) in determining the operators can obtain licences. The whether foreign competitions odds, and (c) participation in an new legislation represents a new will also be excluded from the organised bet by persons involved potential source of revenue for the obligation to make a risk analysis in the (organisation of the) relevant Dutch professional football sector. in advance. match.35 This does not explicitly Based on the evidence of other prohibit licence holders from European countries, sponsorship Further risk analyses shall have to sponsoring sports organisations and partnerships with betting take place during and after bets are or athletes but requires the licence operators are very likely to become offered. There are no exclusions in holder to recognise sponsorship of popular among Dutch football clubs this respect. Licence holders shall a player or football organisation as as soon as the Act enters into force. analyse the number and financial a potential conflict of interest and It is my understanding that several amount of placed bets and bets take this into account in its integrity Dutch football clubs have already should be analysed for curious policy.36 been approached by operators transactions and suspicious and preliminary contracts have patterns.30 According to the already been concluded. At the legislator, common indicators of same time, football clubs and the latter are exceptionally large 31 Article 4.8 (4) RGD. betting operators should carefully 32 Article 4.8 (5) RGD. 33 According to the legislator, it is not possible assess their advertising strategies, 27 Article 4.7 (1)(2) RGD. to define when a risk is unacceptably high, and should carefully consider 28 Article 4.8 (1) RGD. this depends on circumstances of the case. 29 Article 3.16 in conjunction with Annex 2 part 34 Article 4.9 (1) RGD. 1 RRG. 35 Article 4.7 (3) RGD. 37 Article 4.8 (2) RGD. 30 Article 4.8 (3) RGD. 36 Explanation of Article 4.9 RGD. 38 Explanation of Article 4.8 (2) RGD.
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contractual arrangements with operators in this respect. In Italy and Belgium, for example - where betting advertising is banned (Italy) or substantially reduced (Belgium) - we have seen that the excessive promotion of betting operators can work adversely and can ultimately lead to (further) restrictions.
The new legislation represents a new potential source of revenue
The new legislation is also a step forward because there are currently no legal online sports betting markets in the Netherlands. This has contributed to the fact that there are a large number of markets being operated illegally by unlicensed gambling operators. These illegal operators are not regulated by the Dutch regulator, which consequently has very limited influence on the activities of such operators. At the same time, the Ksa has limited instruments to deal with illegal operators, and the sanctions imposed are arguably ineffective. By way of example, the Ksa does not have the power to block websites (or have them blocked); fines on illegal gambling operators abroad are difficult to collect; and the services of illegal operators often remain available despite imposing sanctions. The new regulations encourage people to make more use of legal markets that meet the requirements set by the Dutch regulator and, to that end, the new regulations are a positive change.39
Based on the interests and opportunities for stakeholders under the new rules, it is hoped that the legislation will indeed come into effect on the target date of 1 January 2021.
39 The legislator has the objective that, under the Remote Gambling Act, at least 80% of all betting activity by Dutch consumers is conducted on platforms of legal (i.e. licenced) operators and expects that this is a realistic objective.
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Russia
The Football Union of Russia makes another step in the transparency and predictability of decisions of the Dispute Resolution Chamber
By Eugene Krechetov Lawyer, Eksports Law Moscow – Russia
➔➔ Football Union of Russia (FUR) – National regulations
On 15 November 2019, the Executive Committee of the Football Union of Russia (FUR) approved a revised version of the FUR Dispute Resolution Regulations (DRR), coming into force as from 1 January 2020.
Apart from a set of routine Should the decision be confirmed When parties reach a settlement changes, the FUR introduced a or partially modified by the CAS, agreement after the decision is novella according to which all it shall be published together with issued by the DRC or the PSC, the FUR Dispute Resolution Chamber the notification on the parts that parties may file an application for (DRC) decisions with grounds shall were modified. reconsideration of the case on the become publicly available. basis of new circumstances (due Another important revision to the settlement agreement) From now on, where a party to concerns amicable settlement or, in cases where the decision is a dispute requests a grounded agreements. This issue had not appealed before the CAS, they decision, such decision shall be been much regulated before. may request the CAS to approve published on the FUR website, the settlement agreement instead. being however first anonymized The revised Regulations read that (unless all parties to the dispute parties to a dispute may enter into In the case of a party failing to agree to keep it non-anonymized). a settlement agreement at any respect the approved settlement stage of the dispute resolution, agreement, consequences similar According to the FUR, publication including after the decision is to the ones for the failure of of all grounded decisions aims at issued by the DRC and/or Players’ execution of the DRC and the PSC ensuring awareness of football Status Committee (PSC), and even decisions shall apply. stakeholders about decisions made if it was appealed before the CAS. by the DRC, systematization and uniformity in the application of the Settlement agreements are subject rules. to approval by the DRC or the PSC. The DRC and the PSC may only Decisions shall be published within reject a settlement agreement to two months from the issuance of be approved if it is evident that their grounds, unless either party it violates rights and interests of filed an appeal with the Court of a third party(ies) which is not a Arbitration for Sport (CAS). In the party to the dispute and which case of an appeal, the decision shall gave no consent. be published within one month from the finalization of the CAS CAS decisions made after procedure, unless the decision was the approval of a settlement set aside by the CAS in its entirety. agreement shall be disregarded.
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Following a transfer scandal, the Football Union of Russia introduces a new “imputed” solidarity mechanism
By Eugene Krechetov Lawyer, Eksports Law Moscow – Russia
➔➔ Football Union of Russia (FUR) – National regulations – Player transfer – Transfer fee – Solidarity contribution – Youth training system – Academy/Training center
On 15 November 2019, the Executive Committee of the Football Union of Russia (FUR) approved a revised version of the FUR Dispute Resolution Regulations (DRR), coming into force as from 1 January 2020.
In the first half of 2019, the that the young and prominent into the list of the first team, it will successful 25-year-old player of player was “sold” for less than have to pay a Solidarity Registration FC Orenburg, Alexey Sutormin, was EUR 1,000. Fee to all clubs that contributed to one of the most discussed players the player’s training and education in Russia. The head coach of the Respectively, all clubs that starting from the year of his 10th Champion of Russia, FC Zenit, did contributed to his training since birthday and ending the year of his not hide his interest in the player the year of his 10th birthday were 23rd birthday. Should any such club and the rumors said that he would prevented from being adequately be a budgetary institution, 50% of soon be transferred to FC Zenit rewarded within the terms of the the respective part of the Solidarity against a transfer fee of EUR 2,5 solidarity mechanism. Registration Fee shall be distributed million. The transfer was expected, among coaches of such club that taking into account that both This situation was highly criticized effectively trained the player. clubs were sponsored by the same by Russian media and this story group of companies. finally led to the introduction by No Solidarity Registration Fee shall the Football Union of Russia (FUR) however be payable if: However, in June 2019, the player of a completely new mechanism moved to FC Rubin Kazan and aiming at avoiding the negative ➥➥ the player has already been signed a 4-year contract. consequences in cases where included into the list of the first transfer compensation is somehow team of the club before and is Incredibly, just 9 days later, the hidden. not a “new” player for the club, player was transferred from FC in accordance with par. 9 of Rubin Kazan to FC Zenit and On 13 February 2020, the Article 13 of the Regulations; signed a 3-year contract with Executive Committee of the FUR 1-year extension option. approved a revised version of the ➥➥ the player is transferred against FUR Regulations on the Status and an unconditional transfer fee The most surprising, however, Transfer of Players (Regulations), amounting to RUR 10,91 million appeared the information on the introducing the new mechanism of (approximately EUR 135,000) transfer fee that was paid for two an “imputed” solidarity, known as or higher and payable within consecutive transfers of the player. the Solidarity Registration Fee. the maximum period of six When his former clubs requested months (in this case the new the information from the League According to the newly incorporated club shall pay a standard in order to get their part of the Article 23.2, as from 1 July 2020, Solidarity Contribution); solidarity contribution, it appeared when a top-tier club includes a player
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➥➥ the player enters into his first professional contract (in this case the club shall pay a standard Training Compensation).
The Solidarity Registration Fee shall be payable to all clubs that participated in the player’s training and education over the years, except for:
➥➥ the “old” (previous) club of the player, provided that he was moved on the basis of a transfer contract concluded between the “old” and the “new” club;
➥➥ any previous club of the player, if it is entitled to a Training Compensation for the player.
Payment of the respective parts of the Solidarity Registration Fee in favor of a youth academy founded by any professional top-tier club or which is incorporated into any professional top-tier club or which is financed by a professional top- tier club is not mandatory.
The amount of the Solidarity Registration Fee shall be calculated on the basis of the schedule and with the application of a coefficient, depending on a type of list in which the player has been included (list A or list B).
The Solidarity Registration Fee shall be paid by the respective club, within one month, to the FUR, while the latter shall be responsible for further distribution thereof among respective clubs and coaches upon their applications that may be filed within four months.
All undistributed amounts of the Solidarity Registration Fee shall be directed by the FUR for youth football development programs.
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Spain
First Criminal Case Judgement with a Guilty Verdict on Match-Fixing in Spain
By Enric Ripoll González Lawyer, Ruiz-Huerta & Crespo Sports Lawyers Valencia – Spain
➔➔ Match-fixing – Corruption – Spanish Profesional Football League (LaLiga) – Criminal law – Criminal proceedings – National law
Second Section of the Provincial Court of Navarre, 23 April 2020, no. 111/2020
Following the alleged manipulation of two matches during the 2013-2014 season of LaLiga, eight individuals, including the former General Manager and three board members of Atletico Osasuna SAD (Osasuna) and two former Real Betis Balompie (Betis) players have been sentenced to prison.
The judgement, issued on 23 April EUR 350,000. The more lenient considers that it had been proven 2020, explains that in exchange sentences were the ones imposed that the convicted persons for EUR 650,000, two players of on the Betis players, being one- made conscious use and abuse Betis agreed to manipulate the year imprisonment and two years of the club’s funds during the result of two matches, the first one disqualification from the exercise investigated seasons, in breach against Real Valladolid (Valladolid) of professional football activity of the obligations imposed on corresponding to the 37th week and a EUR 900,000 fine. them by the club’s statutes and, and against Osasuna itself on the furthermore, made improper use following week (38th), being the In addition, the judgement includes of the accounts through unjustified last two weeks of the season. The the obligations of all the individuals money withdrawals, as well as cash players were to ensure a victory to compensate Osasuna with an that was handled and that came of Betis against Valladolid and a amount of EUR 2,340,000 for the from store sales, ticket offices and defeat against Osasuna to help unjustified outflow of funds during season tickets. the latter to keep playing in the the 2012-2013 and 2013-2014 1st division 2014-2015 season. seasons. The total amount defrauded that was proved amounted to Despite Betis’ victory against The judgement explains that there EUR 2,340,000: EUR 900,000 Valladolid and Osasuna’s victory is more than one misconduct. for the 2012-2013 season and against Betis, Osasuna ended up Specifically, there are two separate EUR 1,440,000 for the 2013- being relegated to the second groups of actions in the facts. On 2014 season. In addition, it was division due to the other match the one hand, those referring to considered proven that the former results. the aspect of Osasuna’s financial General Manager benefited from management, which include an amount of EUR 600,000, the The harshest of the sentences the crimes of misappropriation, destination of which could not was imposed on the former documentary falsehood and be determined, except for the General Manager of Osasuna, who accounting falsehood, and on amounts that were used to fix the was sentenced to 8 years and the other, the crime of sports two matches. 8 months imprisonment, plus 11 corruption. months special disqualification to The forgeries of both seasons practice as manager or similar, in In relation to Osasuna’s were intended to balance the a sports association and a fine of management, the judgement accounts. In the 2012-2013 season,
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the mismatch was EUR 900,000 a social permissiveness towards and for this, two real estate agents them that is independent of the were contacted and agreed to fact that they are considered a sign a receipt for that amount, crime. The judgement recalls that pretending to have non-existent an athlete’s obligation does not real estate activities as their object. simply refer to ‘playing to win’ but to ensure that the sports result In the 2013-2014 season, the is arrived at in accordance with mismatch of the club’s accounts the previously recognized and amounted to EUR 1,440,000 and mutually accepted norms, without that is why a false contract with external and undue influence the Portuguese entity Flelfield and not included in the rules that three false invoices were created. govern the corresponding sports discipline. In relation to the crime of sports corruption, the judgement This exhaustive study of these so- concludes that there was an called “third party premiums” put agreement between the convicted an end to the discussion about the members of the Board and the club unfairness or illegality of paying manager with the two Betis players, to win a match and will make this not only to encourage their victory judgement of particular interest in against Valladolid but to lose the the following years. last league game that Osasuna was going to face, therefore being a global agreement.
The judgement concludes that in the legal provision that supports the convictions, Article 286 bis, section four of the Spanish Criminal Code includes the so- called “third party premiums”. This is the basis of an exhaustive study of the aforementioned article and of European and international standards on the subject.
It was argued that the offer of amounts or benefits to a club for winning a match seeks its own advantage but also produces a series of concatenated effects such as, among others, the damage to other teams that depend on those results from third parties and the economic damage derived from betting or to betting itself. Economic incentives from one club to another to promote a positive result, definitely influences competition.
The sentence also considers that the arguments given to consider that third-party bonuses are not criminally punishable are based on
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Spain
The Viana Pacts and a new modification of the Royal Decree-Law 5/2015
By Juan de Dios Crespo Pérez Lawyer, & Carlos Marroquín Romera Legal Intern, Ruiz-Huerta & Crespo Sports Lawyers Valencia – Spain
➔➔ COVID- 19 – Spanish Football Federation (RFEF) – Spanish Professional Football League (LaLiga) – Broadcasting rights
On 20 April 2020, the High Council of Sports (CSD), LaLiga and the Spanish FA (RFEF) reached an agreement, referred to as the “Viana Pacts1”.
First1 the return to professional worth EUR 10 million, to which the in a recent amendment to Royal football training was agreed, a fact Association of Spanish Footballers Decree-Law 5/2015 of 30 April that was subject to the evolution (AFE) and other entities4 will be 2015 on measures related to the of the COVID-19 pandemic and invited to contribute to in order to commercialisation of exploitation to the decisions taken by the help the most vulnerable athletes. rights of audio-visual content of Ministry of Health, obviously giving professional football tournaments, priority to the interests of public Fourth, a code of conduct for which was amended by Royal health.2 This action was critical in football, applicable to directors, Decree-Law 15/2020 on urgent order to manage the complicated managers and agents, was adopted and complementary measures calendar that LaLiga must fulfil to in order to build an honest and to support the economy and complete the season and therefore sincere dialogue that may serve as employment. accomplish the television contracts a reference for other professional that are an important source of sports and to facilitate good Among numerous issues, a income for football clubs. relations between the different foundation was created, called institutions within football, a Fundación España Deporte Second, they agreed to provide the dialogue which in the past has Global F.S.P, for the promotion, rest of the federative sports, Olympic become extremely complicated. impulse and diffusion of federated and Paralympic included, with sport and also Olympic and audio-visual income. On the basis of Finally, the Viana Pacts committed Paralympic sport. This foundation this agreement, Royal Decree-Law to defend and strengthen Spain’s is attached to the General State 5/2015 has been amended by the reputation as a safe sport country, Administration, through the CSD Royal Decree-Law 15/2020 which in line with the Iberian candidacy and will be the organization that includes many other non-sporting for the 2030 World Cup to which manages and sells the audio-visual measures3 and which recognises the Spanish Government has rights of sports federations and football as a fundamental part of the decided to give its full support, competitions other than football, reconstruction that will have to be understanding that the relationship in cases where sports federations carried out in Spanish sport. between both institutions is vital do not wish to take over the sale to achieve such an important of these audio-visual rights.5 The Third, there was also a commitment tournament. governing body of the foundation to set up a contingency fund (the foundation’s board) will As explained in the second point, include, among others, LaLiga, the 1 The name comes from the Palace of Viana where the meeting between CSD, LaLiga the first measures in line with RFEF and the other Spanish sports and RFEF took place. these agreements were found 2 This is the reason why the CSD refers to compliance with strict health protocols. 5 Later in the amendments of Royal Decree- 3 A battery of regulations designed to mitigate 4 On this point, it is not detailed which entities Law 5/2020 it will be specified that this is a the impact of the crisis. will be invited to participate. mandatory measure.
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federations as well as official and In any case, all these modifications unofficial competitions. and agreements only confirm a statement already made in the The purpose of the Royal Decree- past by the President of the CSD, Law 5/2015 was amended to Ms. Irene Lozano, that football is include all male and female state the locomotive of sport, at least, in competitions, organised by the Spain. RFEF (Article 1). Article 4.4 point f was modified in order to liberalize the audio-visual market related to football6 that will be effective for the commercialization of the audio-visual rights that are subject to centralised sale and which were approved as from the entry into force of the Royal Decree Law 15/2020. Article 6 was partially amended, and the Compensation Fund was reduced from 3.5% to 2.5%7, the amount set for the RFEF was increased by 1% and a new 1.5% was added to the CSD for the promotion, encouragement and dissemination of federated sport.
It is also important to highlight the new system of distribution of audio-visual rights for the commercialization of state competitions organised by the RFEF. The new system distributes 60% of the income to the teams that participate in the National Professional Football League and the remaining 40% of the income is distributed to promote amateur football and the other teams participating in the competition.
Finally, there will also be a mandatory assignment to the foundation described above, in the event that sports federations for other modalities different from football do not wish to take over the management and sale of the audio-visual rights themselves.
These modifications have not been free of controversy and still await the validation by the Parliament of the Royal Decree-Law.
6 Audio-visual contracts may last more than 3 years, thus complying with Community regulations. 7 All the percentages are in proportion to the revenue from the centralised sale of audio- visual football rights.
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The first Spanish women’s division has its collective agreement
By Juan de Dios Crespo Pérez Lawyer, & Océane Alba Legal Intern, Ruiz-Huerta & Crespo Sports Lawyers Valencia – Spain
➔➔ Women’s football – Collective Bargaining Agreement (CBA) – Spanish Professional Football League (LaLiga) – Players’ Union – Clubs’ Union
The date of 18 February 2020 marked a turning point in the careers of Spanish women footballers. After a long process of negotiation and a period of strike in October 2019 during which 93% of the women footballers of the Liga Primera Iberdrola participated, the first collective agreement was finally signed to regulate their employment situation.
The collective agreement for should be noted that the application agreement, an annual salary women’s football was signed by of the agreement is limited to between EUR 16,000 and the Association of Clubs (ACFF) professional footballers and the clubs EUR 30,000, with a part-time on the one hand, and the National represented by the organisations contract of less than 75% of Association of Spanish Football that have signed the agreement. the ordinary working day, shall Players (AFE) and the Football have a working day of at least Players’ Union ON on the other, Several key points can be 75% of the ordinary working and aims to improve the players’ highlighted from this agreement: day and increase their salary at conditions to enable professional EUR 2,000 gross per year. women’s football to survive. a) Minimum salary b) Part-time contracts This collective agreement has a According to Article 23, retroactive effect (Article 4). Its the minimum guaranteed Another of the most sensitive application starts on 1 July 2019 remuneration is set at EUR 16,000 points at the time of negotiating and ends on 30 June 2020. If it gross per year for players who the agreement was the is not denounced, by any of the have a full-time contract. implementation of part-time parties, at least three months contracts. before the date of its termination, However: it will be successively extended Article 7 provides that “the for periods of one football season ➥➥ footballers who are receiving working hours of part-time (Article 5, paragraph 1). an annual salary at the entry contracts may not be less than into force of this agreement 75% of the ordinary working hours The scope of the agreement between EUR 12,000 and EUR established in the agreement includes players from football clubs 15,999.99, with a part-time during its term.” that participate in the teams of contract of less than 75% of football clubs or sports corporations the ordinary working day, shall This particularity of women’s participating in the national have a working day of at least football can be understood as the championship of the Spanish 75% of the ordinary working need to provide a legal way for first division women’s league. day and receive a salary of EUR smaller clubs to be able to reduce Furthermore, female football players 16,000 gross per year; the salaries of their players, which who are called to a minimum of would be the only way for them to twelve matches in the first division or ➥➥ footballers who are receiving, operate. have played ten are within scope. It upon the entry into force of this
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c) Trial period Likewise, in case of permanent disability, the player will receive Article 15 reduces the maximum a compensation of EUR 90,000. duration of the trial period to 15 In case of death, her family days instead of the three months will receive a compensation of provided for in Real Decreto EUR 60,000. 1006/1985 of 26 June 1985, which regulates the special employment g) Seniority award relationship of professional athletes. A seniority award will be granted to professional football players upon d) Working hours and rest termination of their contractual periods relationship with the club or sports corporations when they have been The working hours of the players with the same team for six or more must be 7 hours per day, 35 hours consecutive seasons. per week in a semester with a weekly break of a minimum of one This historic agreement has and a half day in a continuous way, been a major step forward in the without including the periods of recognition of the work of women concentration or displacements. professional footballers. This legal framework secures the contracts As for the concentration periods, of women players while helping these are limited to “the 24 hours clubs, especially the smaller ones, immediately prior to the start of in the best possible way. the match when playing on home ground. If the game is played on However, this agreement quickly an away pitch, the concentration revealed certain shortcomings, period shall not exceed 72 hours such as compensation for (including travel time).” preparation or training. Article 20 of this text allows clubs to request Footballers shall be entitled to 30 compensation from the player’s calendar days’ annual paid holiday, new club when the contract of of which at least 21 days shall be their players under 23 years of age taken on a continuous basis. In expires. This article specifies that addition, the agreement specifies the club from which the player that there will be no games from comes may freely fix the amount 23 December until 4 January. requested for each player on a list provided for this purpose. This list e) Maternity currently includes various amounts requested by clubs, such as the In case of pregnancy during her last sum of EUR 500,000 requested by contract season, the agreement Levante for players Navarro and allows the player to choose for Batlle. This is a huge obstacle for the renewal of her contract for an a possible transfer, as to date, no additional season under the same similar amount has been paid by a conditions as she had last season club to compensate a formation. (Article 39). At present, this problem has not yet f) Inability been resolved. To be continued.
In the event of temporary disability, this agreement recognizes 100% coverage of the player’s compensation.
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The Spanish Futsal Cup tested a referee assistance video system
By Juan de Dios Crespo Pérez Lawyer & Hugo Morel Legal Intern, Ruiz-Huerta & Crespo Sports Lawyers Valencia – Spain
➔➔ Spanish Football Federation (RFEF) – Video assistance referee (VAR) – Referee decisions
The Spanish Futsal Cup (Copa de España de fútbol sala) served as a test for a “Technological Support” (Soporte Tecnológico) to the refereeing decisions. If FIFA deems it appropriate, this new refereeing system could also be used during the next FIFA Futsal World Cup.
The Spanish Futsal Cup (Copa de the watchful eye of FIFA. to chronometer issues, i.e. to España de fútbol sala), which was determine if the play happened held at the Martin Carpena Arena As explained by the RFEF before before the whistle sounds. in Malaga from 5 to 8 March 2020, the competition1, five situations served as a test for a “Technological could lead to the assistance of this During the game, the referee Support” to the refereeing technological support: shall always make a decision decisions. According to Carlos regardless of the existence of Velasco Carballo, Chairman of the ➥➥ the four first ones are similar the technological support. This Technical Committee of Referees to the ones provided for in decision would be changed only in of the Spanish Football Federation football: case of a clear and obvious error (Real Federación Española de after the review and the referee Fútbol – RFEF), “the purpose is to • goal or no goal - in order shall always be the one who will see if this experience is beneficial to check that the attacking make the final decision. to the game”, i.e. grants benefits team did not commit a foul with minimal interference. during the action that led to Two different cases may lead a goal; the referee to review these five If FIFA deems it appropriate, this particular situations: new refereeing system could • direct red card - in order to then be used during the ninth ensure that the player who ➥➥ First, the referee can have FIFA Futsal World Cup that is commits a foul deserves to immediate access to a replay scheduled to be held in Lithuania be directly sent-off; as long as he thinks it is from 12 September to 4 October appropriate. The referee must 2020, unless it is postponed and • mistaken identity - in order indicate that he is going to rescheduled due to the coronavirus to ensure that the right review a play by showing a TV pandemic. player is sanctioned; and, signal with his hands (outline of a TV screen). This new tool came from a proposal • penalty or no penalty. made by the RFEF and approved ➥➥ Second, each coach has the by FIFA. Thus, for the first time, a ➥➥ The last one, totally unknown at right to ask for a review of Futsal competition benefited from the moment in football, relates a specific play once during this technological resource under the match. To indicate to the 1 www.rfef.es
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referee that he is requesting by providing him the relevant the review, the coach should images. raise his arm and turn his finger in the air. If the coach’s ➥➥ While in football the review can request is successful, i.e. the be initiated by the video referee referee changes the decision or the referee, in futsal, this he made and which motivated review shall be at the referee’s the coach’s request for review, initiative only, or the coaches’s the coach will have another as explained above. The opportunity to request a referee cannot be invited by review. And there will be no the replay operator to review a request limits as long as these situation. This difference could requests are successful. Mr be explained by the fact that in Carlos Velasco Carballo and football, the VAR automatically Pedro Galán, Chairman of the checks every situation so there Futsal Referees Committee of is no need for coaches to the RFEF, indicated that the request a review. number of requests available per coach should initially Therefore, the term “technological be fixed to one although it support” is used and preferred, could be increased if the main as it constitutes a mere video purpose, i.e. the fluidness of the assistance to the referee, without game, is not affected. the presence of an additional referee benefiting from the video. Mr Galán also said that “This tool will mark a before and after for It is now time to wait for the final futsal. From now on we have to decision on a potential change to work together to keep improving the Futsal Laws of the Game from […]. We have seen an extraordinary FIFA after assessing the outcome acceptance by all the teams. We of this life-sized test. need to give value to being the first country to try this system.”
The reviewing area shall be right next to the pitch, with two monitors and a replay operator. The latter will not be a referee but someone who will only be assisting the referee for the review. When the referee makes his final decision, he shall show the TV signal again, indicate this final decision and how the game restarts.
The procedure can therefore be distinguished from the one applicable to the football VAR on several points:
➥➥ While in football there are video assistant referees who supervise the entire match, in futsal there is no referee behind the screen. The replay operator’s sole duty is to technically help the referee
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Product advertising through Spanish football clubs’ sponsorship and upcoming limitations on the regulatory landscape
By Ignacio Triguero Gea Lawyer, Senn, Ferrero, Asociados Sports & Entertainment S.L.P. Madrid – Spain
➔➔ Sponsorship – Betting – National law
Sports sponsorship has lately as, nineteen4 have also contracte creates an emotional “connection” become a considerable profitable commercial partnerships between the brand and the source of revenue for football involving betting companies sponsored entity. clubs and its growth, at least prior (seven of them including to the COVID-19 global crisis, has advertising on their sports kits). Under Spanish Law, the concept of continued to be irrepressible.1 sponsorship agreement is defined However, in the upcoming seasons, in Article 22 of the Ley 34/1988, In recent years in Spain, there has this landscape of commercial de 11 de noviembre, General de been a considerable increase in the partners related to betting and Publicidad (Advertisement Act) sponsorship of football clubs and top- financial entities might be affected as the “contract for which the level players by betting companies as a result of the latest regulatory sponsored entity, in exchange for and financial entities offering and developments in Spain as well as in financial aid for the realization of marketing complex financial products line with other European countries. its sporting, charitable, cultural, (forex, contracts for differences scientific or other activity, [CFDs], binary options and crypto- undertakes to collaborate in currencies, among others). the advertising of the sponsor”. Introduction Said definition is also framed by For the current 2019-2020 the modality of “Advertisement season, it is noteworthy that six Sports sponsorships have evolved in Placement Agreement” (“Contrato clubs participating in La Liga the last years to surpass traditional de Difusión Publicitaria”) as Santander (Spanish first division) advertising. Today the intension is defined in Article 17 of the are sponsored by financial entities to associate a brand with a particular Advertisement Act.5 either by including advertising sporting event or sports club, tying on sports kits2 or acting as together the philosophy, fair play, commercial partners3 and, as much players and fans and permeating the brand with the spirit teamwork 5 “An advertising placement agreement is one whereby, in exchange for a consideration and the competition. The audience fixed at pre-established rates, a media is massive, and sports sponsorship partner undertakes in favour of an advertiser 1 twocircles.com or agency to allow the advertising use of 2 Real Betis (Easy Markets) and Atlético de space or time units available and to carry out Madrid (Plus 500). 4 All clubs except Real Sociedad have a the technical activity necessary to achieve 3 Real Madrid, Sevilla, Valencia and Getafe. betting company among its sponsors. the advertising result.”
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Those definitions together with event or critical amendments in and promotion of betting operators longstanding and evolving the regulatory landscape. This is in Spain6, a matter that has been in practice are the main elements of even more important in the current demand for several years. the sponsorship agreement under market situation where brands and Spanish Law: rights holders usually enter into In this vein, on 24 February 2020, longer and more valuable deals. the Minister of Consumers Affairs a) Traditional atypical agreement: in Spain (a newly created ministry such agreement is not Compared with traditional with delegated powers pertaining regulated beyond the definition advertising, sponsorship offers to the Ministry of Health and provided in the Advertisement a wider scope of activities and Finance) published the Draft Act, so it will also be governed collaborations to enhance a Royal Decree on Commercial by ordinary law, general brand’s exposure. As an example, Communications for Gambling contractual rules contained in and for the purposes hereof, the Activities7 (“Proyecto de Real Section IV of the Spanish Civil advertisement pursued by a certain Decreto de Comunicaciones Code and party autonomy ex brand within the scope of a football Comerciales de las Actividades de Article 1255 of the Spanish Civil club’s sponsorship agreement is Juego” [Royal Decree Draft]). Code; not limited to featuring the name of the brand on the kit used by the The aim of this Royal Decree b) Bilateral: this includes football clubs as it was in traditional Draft is to develop the existing reciprocal obligations on the advertising. It also includes inter alia Articles 4 (Lottery), 7 (Advertising, part of both parties; outstanding mentions on the football sponsorship and promotion of club’s website, players partaking in betting activities) and 8 (Consumer c) Consensual: the agreement is commercials and marketing events protection and responsible executed solely by the parties’ organised by those companies, gambling policies) enshrined mutual consent and no specific special discounts offered to in the current Act 13/2011, of form is required, although it is members of the football clubs they 27 May 2011, gambling regulations always advisable to draft and sponsor and many others. Although (Gambling Act) which have not enter into a written agreement; this may be deemed very positive been developed since 2011. These from a commercial point of view for provisions provide the conditions d) Onerous: the advertisement sports actors offering attractive and under which entities holding the is carried out in exchange for wider sponsorship packages, it also necessary enabling license to carry a pecuniary remuneration or entails additional risks and limitations out gaming activities in Spain, remuneration in kind; since audiences are global, highly may undertake the advertising, and emotionally engaged and sponsorship and promotion of e) Intuitu personae: such element demographically diverse. their activity. On the other hand, is of the outmost importance they also establish the conditions within the scope of sponsorship This has been a key element under which responsible gambling agreement due to the close both for Spanish and European and consumer protection policies association between the brand authorities to target the activity must be implemented. and the sports entities in the of betting and financial companies eyes of the massively targeted considering the risk of the offered Although said Royal Decree Draft audience. products and its massive exposure is at a preliminary stage and a through these deals. public information process8 was Considering the aforesaid elements opened until 16 March 2020 (now under Spanish Law and its atypical suspended temporarily due to the nature, parties can almost freely COVID-19 pandemic) meaning that define and determine the content Latest regulatory additional amendments might be of such agreements with the developments affecting 6 www.elindependiente.com key element being to ensure the football clubs’ 7 Full text available: www.ordenacionjuego.es brand’s exposure throughout the 8 The purpose of the public information sponsorship by betting process under Spanish Law is to gather the life of the agreement and prevent companies opinion of interested parties with rights and mechanisms for early termination legitimate interests at stake that might be affected by the regulatory initiative, either or renegotiation of the terms of Since its election in January 2020, directly or through the organizations or the agreement if the balance of the new coalition government in associations that represent their interests and to make the allegations they consider fairness between the parties is Spain announced its intention to appropriate, so that they can be taken into undermined due to a force majeure regulate and restrict the activity account in the final drafting of the Royal Decree.
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introduced until its final approval o Sponsorship of sporting ➥➥ Additional restrictions apply and entry into force (initially events mainly addressed to to online betting commercial planned for July 2020 before minors; communications activities so the COVID-19 pandemic), as of that it is necessary to comply this date, we can already find an o Sponsorships consisting inter alia with the following important set of new regulations in the use of an operator’s cumulative requirements to which might affect the promotion brand or trade name to result in a neutral ad: and sponsorships deals entered identify sports facilities or into between betting companies any other training centre; o Include the wording and football clubs in Spain. “advertisement” or similar o Their use as the name and include messages In this regard, below you will find of sports teams is also such as “play responsibly” the main limitations and restrictions prohibited (naming rights). and warnings concerning included in the Royal Decree Draft, minors; focusing on those that might ➥➥ This provision will not affect impair the exposure of brands in the sponsorship of football o Refrain from undermining or their ongoing sponsorships deals kits, which will continue to be trivializing the complexity with football clubs competing at a allowed, except for branding of betting and its prejudicial national level: placed on youth football kits effects; which will also be banned. ➥➥ In general terms, broadcast o Refrain from linking the advertisement on gambling and ➥➥ The Royal Decree Draft also betting activity with a betting will be restricted via TV prohibits the use of celebrities general perception of and radio between the 1 am and to endorse their products, success in any way; 5 am slot (both in broadcast whether real or fictional, in and face-to-face events). This commercial communications o Refrain from associating restriction does not apply, in (except for the live sporting betting with a financial accordance with this preliminary events’ narrators). activity or investment. version of the Royal Decree Draft, to streaming, social media ➥➥ On social media, advertisement ➥➥ Finally, severe breaches to and on-demand platforms with will be restricted to websites the Royal Decree Draft can be certain exceptions. that have a filtering solution to punished with a fine ranging avoid targeting minors, while between EUR 100,000 and ➥➥ As an exception to the above, one responsible gambling ad EUR 1,000,000.00 as well as advertising may be broadcasted must be displayed for every the possibility for the operator and permitted during sporting four standard ads displayed. to be suspended from carrying events between 8:00 pm and out any activity in Spain for a whilst the sporting event takes ➥➥ Reinforcement of the gambling 6-month period. place (including half-time slot). operators’ conditions in Spain. This exception applies on TV, In accordance with the current From the effective date of the radio and static advertisement Gambling Act, operators future Royal Decree (in its final at the sporting event or that carry out commercial version), operators will have a stadium and players’ football communications are required three-month transition period in kits. These ads must not refer to hold (i) the corresponding order to adapt and comply with to promotions or bonuses or license for the marketing of such requirements. directly lead or induce people online gaming activities in to place bets, such as “play Spain, and (ii) an express Although operators with interests now” or “bet now”. In addition, authorization for promoting in Spain were initially afraid of no information on live odds can said activities. The Royal Decree the possibility of a total ban be shared in these ads. Draft includes an uncertain, on gambling advertisement yet additional, condition for (comparable to the general ban ➥➥ Moreover, the following operators, that is, to hold a implemented on tobacco), this prohibitions on sponsorships sufficient infrastructure in the Royal Decree Draft provides for betting companies and its country to market gambling additional restrictions rather than broadcasting are also contained activities at the time a certain the expected total ban, provoking in the Royal Decree Draft: advertising strategy is offered. criticism from those who were
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counting on and expecting a total regarding the advertisement of line with article 40 of Regulation ban. complex financial products, and (EU) No. 600/2014 of the European paid special attention to Section Parliament and of the Council, of 15 Until its final approval, operators 3 of the CNMV Report, focused May 2014. and sporting entities must carefully on the advertising of complex examine the content and extent of financial products carried out Following the ESMA decision, the Royal Decree Draft in advance through the sponsorship of Spanish some European countries such in order to adapt its ongoing football teams. This concern is also as France13, Netherlands14 and agreements and revise its strategy one of the key points included in Belgium15 implemented measures in the long term so as to avoid the the specific objectives of the 2020 in order to forbid direct or indirect imposition of future sanctions as CNMV Activity Plan.11 advertising of targeted investment a consequence of the entry into services offering CFDs and BOs, force of the Royal Decree (in its The products targeted by the including its advertisement final form). CNMV Report which are considered through sponsorship, and generally high risk and not suitable for retail granting a transitional period to customers are (i) the so-called become compliant therewith. contracts for differences (CFDs) Potential restrictions and (ii) binary options (BOs). In Spain, following the ESMA on the advertisement decision, the CNMV adopted on of complex financial Indeed, CFDs and BOs are 27 June 2019 a resolution on product products offered by especially complex financial intervention measures relating to financial entities in the instruments since they imply: BOs and CFDs, the Resolución de context of sponsorship of 27 de junio de 2019, de la Comisión ➥➥ High risk and elevated short- Nacional del Mercado de Valores, football clubs term volatility; sobre medidas de intervención de producto relativas a opciones We must now turn our attention ➥➥ CFDs usually include financial binarias y contratos financieros to yet another controversial hedging, which implies that the por diferencias16 (Resolution), thus, activity which has been under investor may incur additional implementing an indefinite ban the radar of the Stock Market losses on top of the amount on the marketing, distribution and National Commission (Comisión initially invested; sale of BOs among retail clients Nacional del Mercado de Valores9 and restricting said activities [CNMV]) and that might affect, ➥➥ Usual lack of transparency with respect to CFDs. In line with in the mid-term, the sponsorship regarding trading conditions such Resolution, the CNMV has deals concluded between financial which impairs the ability to implemented multiple actions entities and some first division properly understand the terms in relation to the marketing, clubs participating in La Liga, of the products and to assess distribution and sale of CFDs and considering the imminent exposure their expected return and the BOs among retail investors including to massive audiences of all ages. assumed risks. the publication of warnings and guidelines describing the inherent In an extensive report contained In this vein, the European Markets risks and the recent restrictions in the CNMV’s 2019 final quarter and Securities Authority (ESMA)12 on the marketing, distribution and Bulletin, under the title “Advertising adopted on 22 May 2018 a sale of these financial products of contracts for differences decision to prohibit the marketing, among retail investors. Despite (CFDs) and other complex distribution and sale of BOs to retail this Resolution, and the various financial products among the investors in the European Union actions and initiatives, the general public”10 (CNMV Report), (EU) as from 2 July 2018, and to advertisement of said products the CNMV underlined its concerns restrict the marketing, distribution is subject to the general rules and sale of CFDs to retail investors and currently, no specific general 9 The CNMV is the government agency in the EU as from 1 August 2018 in responsible for the financial regulation of the securities markets in Spain. The CNMV is 13 Decree no. 2017-159 of 9 February 2017, on also in charge of the protection of investors 11 See p. 36 of the CNMV Activity Plan for digital advertising services (also known as by implementing measures for marketing, 2020: www.cnmv.es the “Sapin II” Law). distribution and sale of this type of financial 12 ESMA is the independent EU Authority that 14 By implementing a new Article 56 bis in the product to retail investors, including the contributes to safeguarding the stability Market Conduct Supervision Decree. publication of warnings and explanatory of the European Union’s financial system 15 Royal Decree of 21 July 2016 that amends documents on the associated risks. by enhancing the protection of investors the regulation of the Financial Services and 10 Full report both in available here: www. and promoting stable and orderly financial Markets Authority (FSMA). cnmv.es markets. 16 www.boe.es
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restrictions exist concerning the indiscriminately at the general Conclusions referred complex products. public including young people. It will be important to follow the Due to this lack of a specific and As a result, and as one of the exposed regulatory developments clear prohibition, the CNMV has specific objectives of the 2020 in Spain to analyse their final extent been targeting the increasing CNMV Activity Plan, the items to and impact on sponsorships rights direct or indirect advertising for be addressed as per the CNMV of targeted activity brands. Hence, these types of products through a Report in order to implement this it is plausible that commercial wide variety of channels, including new restriction include: deals of this nature will need to be the sponsorship of Spanish first reviewed to restore the contractual division clubs which undeniably ➥➥ The need to analyse the most balance of ongoing sponsorship entail massive exposure on the suitable type of legislative agreements. occasion of sporting events. provisions to implement such restrictions and its concrete Provisions included in certain Indeed, in the 2019-2020 season, proposal on the ban’s scope; agreements offering the two football clubs participating this is, form a legal provision possibility for contractual parties in La Liga Santander currently to control this advertising or to renegotiate the terms of the display these financial entities’ analyse if the rules currently agreements will become most advertisement on their football existing in the Securities Market important. kits (it is important to underline Act or MiFIR regulations can be that no other European league has used for this purpose; Said potential regulatory clubs with similar advertisement developments affecting and on the sports kit), and four of ➥➥ The need to undertake restricting the marketing or them have commercial partnership additional actions and promotion of betting and financial agreements with targeted financial initiatives aimed at raising activities shall be rendered operators: awareness regarding the for reasons not attributable to underlying issue among clubs the contracting parties and, Team Sponsor Advertising on sports kit and society as a whole, and therefore, the rebus sic stantibus share the concerns with the principle might serve to novate Atlético de Plus500 4 17 Madrid Spanish La Liga , reiterating or renegotiate covenants and Real Betis Easy the current restrictions in force agreements which become 4 Balompié Markets on the distribution of BOs seriously unbalanced and Valencia Libertex 6 and CFDs and conveying the decontextualized by regulatory Getafe Libertex 6 CNMV’s concern regarding changes. This could even lead Real Madrid Exness 6 the use of football clubs as to the early termination of advertising channels for these agreements if losses are not able Sevilla Ever FX 6 type of products; to be compensated or there is no Source: CNMV. alternate benefit which sufficiently ➥➥ The CNMV Report also compensates it. It remains to be Likewise, said sponsorship provides for a transition period seen however what the future agreements often include mentions and regime with respect to the impact of these regulatory on the football team websites, shops, existing agreements. developments will be particularly players participation in marketing in deals and brand exposure, and and advertisement campaigns and Due to the COVID-19 pandemic, dependant on the final extent of even special discounts for members further regulatory developments the limitations. of the football club they sponsor, and actions in this regard have offering attractive conditions. been temporarily postponed, however future restrictions are Thus, the CNMV Report concludes most likely to be implemented. that restriction on direct and indirect advertising through sponsorship or collaboration with football clubs in Spain is required to be urgently implemented considering 17 In accordance with some media, the CNMV that these sponsorships represent contacted La Liga last February 2020 www. an advertising channel aimed eleconomista.es
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The Women’s National Soccer Team Loses Momentum in their Lawsuit while the United States Soccer Federation Experiences a Massive Overall
By Matthew D. Kaiser Lawyer, Global Sports Advocates Portland (Maine) – USA
➔➔ United States Soccer Federation (USSF) – Women’s football – National team – Collective Bargaining Agreement (CBA) – Discrimination – COVID-19 – Governance – Academy/Training center
The first half of 2020 brought significant change to all U.S. soccer constituents. The United States Soccer Federation (USSF) was forced to take drastic measures in the face of difficult circumstances, such as dissolving its Development Academy and nominating an interim president, while the U.S. Women’s National Soccer Team (WNT) lost significant leverage in its gender discrimination lawsuit after a judge granted many of the USSF’s summary judgment requests. Although the lasting effect of these events remains to be seen, the hope is that soccer in the U.S. will be rebuilt post-pandemic and post-litigation stronger than before.
U.S. Women’s National of the arguments it made back men’s soccer are different because Soccer Team Suffers in February 2020. Unfortunately, the men’s game involves much Significant Loss Prior to one of its arguments went too far, more speed and strength than Court Date unnecessarily demeaning the WNT does the women’s game and the in the process. jobs are not interchangeable - per On 9 March 2020, both the USSF FIFA regulations, no woman can and the WNT filed oppositions In order to undercut the WNT’s play on the MNT and no man can to the other side’s motion for Equal Pay Act (EPA) claim, the play on the WNT.3 The USSF then summary judgment as part of USSF tried to prove the WNT and went a step too far, stating “the the WNT’s gender discrimination the U.S. Men’s National Soccer job of [a] MNT player (competing lawsuit initiated last year.1 Although Team (MNT) did not perform equal against senior men’s national these submissions were supposed work.2 It attempted to do so by teams) requires a higher level of to be uneventful formalities, the distinguishing women’s soccer skill based on speed and strength USSF’s filing created an unwanted from men’s soccer. The USSF than does the job of [a] WNT firestorm, with many getting argued that women’s soccer and player (competing against senior burned in the aftermath. women’s national teams)” and that 2 The WNT’s lawsuit is based on USSF’s the MNT has more “responsibilities” alleged violations of the Equal Pay Act and Seyfarth Shaw LLP, the USSF’s Title VII of the Civil Rights Act of 1964. In than the WNT because the MNT outside counsel for the case, order to establish a prima facie case for has more viewers and can earn gender discrimination under the EPA, the 4 highlighted in the USSF’s opposition WNT must prove “(1) USSF pays the WNT more prize-pool money for USSF. submission the inapplicability wages ‘at a rate less than’ USSF pays the MNT; (2) the WNT and MNT perform ‘equal and shortcomings of the WNT’s work on jobs the performance of which This argument received immediate summary judgment arguments and requires equal skill, effort, and responsibility, public backlash from men, and which are performed under similar continued to reemphasize many working conditions’; and (3) the WNT and women, and even sponsors for MNT work within the same ‘establishment’”. being misogynistic and sexist. See Defendant’s Memorandum of Points 1 USSF filed a motion for summary judgment and Authorities in Opposition to Plaintiffs’ while WNT filed a motion for partial Motion for Partial Summary Judgment, filed 3 Id. at 11-12. summary judgment on 20 February 2020. 9 March 2020, at 4. 4 Id. at 12-13 (emphasis in original).
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The USSF’s own then Vice President, Ms Parlow Cone made it clear that the WNT actually rejected Cindy Parlow Cone, immediately that a top priority of hers was to a pay-to-play compensation denounced the filing once it resolve the lawsuit against the structure during the negotiations became public (she never saw the WNT (which is seeking more for the 2017 CBA that was submission before it was filed).5 than USD 66 million in damages similar to what the MNT had.15 Don Garber, the commissioner of - approx. EUR 58.5 million)12 and Major League Soccer told rebuild the WNT’s trust in USSF.13 Carlos Several WNT Cordeiro, the president of USSF, players expressed “how unacceptable and offensive” However, any settlement leverage their shock he found the argument to be.6 Even the WNT had following the USSF’s sponsors such as Coca-Cola and filing and change in president and disappointment Volkswagen were “disgusted” by dissipated when on 1 May 2020, the USSF’s filing.7 Judge Klausner denied the WNT’s Judge Klausner then addressed motion for partial summary whether the USSF intentionally Two days later, on 11 March 2020, Mr judgment in full but granted, in discriminated against the WNT Cordeiro issued a public apology for part, USSF’s motion for summary under Title VII of the Civil Rights the USSF’s filing. He touted the WNT judgment. Judge Klausner granted Act of 1964 by subjecting them as “incredibly talented” and also the USSF’s motion for summary to discriminatory compensation noted that the USSF hired a new law judgment regarding the WNT’s and unequal working conditions firm to join the legal team to “guide EPA claim because he found the compared to the MNT. Regarding our legal strategy going forward.”8 evidence clearly demonstrated the latter, the WNT argued that Unfortunately, the mounting calls that the WNT players were not they were forced to play on worse for Mr Cordeiro’s resignation did paid at a rate less than the MNT field conditions and to endure not dissipate, so the following day, players. He agreed with the USSF worse travel conditions than the Mr Cordeiro announced that he was that the law requires all forms MNT. Judge Klausner dismissed resigning as president of the USSF9 of compensation made to or on the WNT’s discriminatory and took responsibility for not “fully behalf of the WNT players to be compensation claim based on his review[ing] the filing in its entirety included in the comparative wages earlier EPA findings as well as the before it was submitted”.10 calculation and concluded that WNT’s inferior field conditions the undisputed evidence showed because the USSF successfully The USSF subsequently selected the WNT made more money, both articulated, and the WNT could not Vice President Cindy Parlow overall and on a per game basis, rebut with any evidence, that it had Cone to serve as the USSF’s than the MNT over the period in a legitimate, nondiscriminatory president until the next Annual question.14 The WNT’s argument reason for requiring the WNT to General Meeting.11 As president, that they would have been paid play on more turf fields than the more if they had the MNT’s CBA MNT, namely, finances. However,
5 Julia Poe, “U.S. Soccer president Cindy was disregarded because “it the judge did not dismiss the Parlow Cone prioritizes settling USWNT ignore[d] the reality that the MNT WNT’s claim regarding inferior lawsuit, rebuilding trust”, Pro Soccer USA, 24 March 2020 www.prosoccerusa.com and WNT bargained for different travel conditions, finding the 6 Kevin Draper and Andrew Das, “‘Blatant agreements which reflect USSF’s explanation that it provided Misogyny’: U.S. Women Protest, and U.S. Soccer President Resigns”, The New York different preferences” and the fact more chartered flights and better Times, 12 March 2020 www.nytimes.com hotel accommodations to the MNT 7 Julia Poe, “Ex-USWNT players call for US Soccer president Carlos Cordeiro’s 12 Associated Press, “USWNT seek over $66 than the WNT for “competitive resignation after sexist legal arguments”, million in damages from U.S. Soccer”, NBC advantage” purposes was weak Pro Soccer USA, 12 March 2020 www. Sports, 21 February 2020 soccer.nbcsports. prosoccerusa.com com and only a pretext for the actual 8 Blake Schuster, “US Soccer President 13 Julia Poe, “U.S. Soccer president Cindy reason: gender discrimination. Carlos Cordeiro Apologizes to USWNT for Parlow Cone prioritizes settling USWNT Language in Filing”, Bleacher Report, 12 lawsuit, rebuilding trust”, footnote 4, supra. March 2020 https://bleacherreport.com 14 The class period is from 11 June 2015 Although the ruling did not On 1 April 2020, Seyfarth Shaw withdrew as forward. See, “Plaintiff’s Notice of Motion counsel for USSF in the case. and Motion for Partial Summary Judgment; completely terminate the WNT’s 9 Ben Pickman, “Carlos Cordeiro Resigns as Memorandum of Points & Authorities in case, it did significantly diminish U.S. Soccer President”, Sports Illustrated, 12 Support”, filed 20 February 2020. March 2020 www.si.com According to the evidence, over the class the crux of its argument, making 10 Carlos Cordeiro’s statement, available at period, the WNT played 111 total games it impossible for the WNT to twitter.com and made $24.5 million overall, averaging 11 Cindy Parlow Cone became the first female $220,747 per game, whereas the MNT receive compensation anywhere president of USSF and the second former played 87 total games and made $18.5 WNT player to hold the position. See, million overall, averaging $212,639 per game. “Carlos Cordeiro Announces Resignation as See, Order RE: Plaintiffs’ Motion for Partial 15 See, Order RE: Plaintiffs’ Motion for Partial U.S. Soccer President”, USSF, 13 March 2020 Summary Judgment; Defendant’s Motion for Summary Judgment; Defendant’s Motion for www.ussoccer.com Summary Judgment, 1 May 2020, at 18. Summary Judgment, 1 May 2020, at 19.
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close to the USD 66 million it At the youth level, the USSF the platform will create “a new had originally asked for. In the announced on the same day as standard for elite youth play” as wake of the decision, several the MLS and NWSL that all of its the U.S. prepares to co-host the WNT players expressed their Development Academy boys’ and 2026 FIFA World Cup.22 shock and disappointment on girls’ regular season matches would Twitter and other media outlets. be suspended through the end of The first half of 2020 proved to Megan Rapinoe disagreed with April 2020. be challenging for all U.S. soccer the judge’s reasoning, saying that stakeholders. The WNT lost a the MNT’s CBA was not offered However, the biggest news came significant part of its case, the to the WNT, especially not at in mid-April when USSF’s new CEO MLS and NWSL were forced to the same amount of money.16 Will Wilson, who was hired just a postpone their seasons indefinitely, few weeks earlier, made the difficult and the USSF had to restructure On 8 May, the WNT filed two decision to turn the Development both internally and externally. motions. The first motion asked Academy’s suspension into an How U.S. soccer emerges from the court to enter final judgment outright permanent discontinuation, the destabilization created by the as to the WNT’s EPA and Title effective immediately.17 According coronavirus and litigation will likely VII pay discrimination claims to Mr Wilson, the coronavirus dictate how successful U.S. soccer already dismissed on summary created a “financial situation that will be moving forward. judgment in order to be able to [did] not allow for the continuation file an appeal on these claims of the Development Academy to the Ninth Circuit. The second program into the future.”18 Along motion asked the court to stay the with disbanding the Development trial involving the remaining Title Academy, Mr Wilson also scaled VII claims, which is now set for back the Youth National Team 15 September 2020, pending the programming, took a 50% pay cut judge’s ruling on the WNT’s first himself, fired several senior staff motion (and any corresponding members and cut over 50 jobs.19 appeal). Judge Klausner denied The USSF was in such financial the WNT’s application to stay the despair that it applied for and was trial, however, as of the writing of granted a Government loan to this article, he has yet to rule on help it get through the coronavirus the WNT’s first motion. pandemic.20
Although the dissolution of the Development Academy was USSF Restructures Amid devastating for many, the academy the Coronavirus system did not completely disappear. In response to the newly The coronavirus has wreaked havoc created void, the MLS announced on sports throughout the world and that “it will launch a new elite soccer in the U.S. is no exception. youth competition platform which In fact, all aspects of soccer in the will provide year-round high-level U.S. have been affected by the matches for MLS club academy coronavirus. At the professional teams and non-MLS academy level, both Major League Soccer teams that previously participated (MLS) and the National Women’s in the U.S. Soccer Development Soccer League (NWSL) announced Academy.”21 The hope is that the day after Rudy Gobert of the
Utah Jazz tested positive for the 17 A Letter to Development Academy Clubs, coronavirus that they would put USSF, 15 April 2020 www.ussoccer.com 18 Id. their seasons on hold in order to 19 Letter to U.S. Soccer Membership, USSF, 16 protect fans, players, and other April 2020 www.ussoccer.com 20 Joe Prince-Wright, “Report: U.S. Soccer in stakeholders against COVID-19. perilous financial situation”, Yahoo, 21 April 2020 sports.yahoo.com 16 Cassandra Negley, “Megan Rapinoe, Alex 21 “Major League Soccer Leads Domestic Morgan call equal pay ruling ‘shocking’: ‘We Player Development with Launch of New really do believe in this case’”, Yahoo Sports, Elite Competition”, MLS, 15 April 2020 www. 4 May 2020 sports.yahoo.com mlssoccer.com 22 Id.
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Secretary-General (Football). Mr Grafström officially started his new duties on 2 January 2020. He succeeded former Presidential Adviser and Deputy Secretary- General, Zvonimir Boban, who left FIFA on 14 June 2019. His duties James Kitching Appointed Director encompass all FIFA football- of Football Regulatory at FIFA related activities, including the CAF General Secretary Mouad Hajji James Kitching, former head of organization of FIFA-organized Steps Down. Abdel Bah appointed legal services, disciplinary and football tournaments and the Mr Hajji, who was brought in as governance at the Asian Football development and promotion of a replacement for Mr Amr Fathy Confederation (AFC) from July football all over the world. on 11 April 2019, announced his 2012 to September 2017, has been resignation on 2 March 2020. CAF, appointed as Director of Football at the request of its President, Regulatory at FIFA. During his time organized an Emergency with the AFC, he conducted and Committee meeting on 3 March managed several investigations, 2020, in which CAF Commercial including doping, corruption, Director Mr Abdelmounaïm Bah match-fixing and severe off-field was unanimously appointed misconduct cases. After leaving Acting General Secretary of the AFC, Mr Kitching had been CAF. Mr Bah will assumes office running his own consultancy firm and carry his duties out until the in his hometown of Adelaide, next CAF Executive Committee Australia, and was part of the Saudi meeting. He continues to serve as delegation to the 2018 FIFA World Benoît Pasquier Leaves the AFC – CAF Commercial Director. Cup, serving as the point man of the Andrew Mercer appointed Acting Saudi Arabian Football Federation General Counsel & Director of during the aforementioned Legal Affairs competition. The new Director of Benoît Pasquier, the AFC General Football Regulatory is in charge Counsel and Director of Legal of supervising and coordinating Affairs, left his position at the the activities of several FIFA end of April 2020. Benoît was in departments, including the the role for nearly 7 years, since Players’ Status Department, the he joined the AFC in October Professional Football Department 2013 from FIFA, where he served and the TMS Global Transfers & as Deputy Secretary of the FIFA Compliance Department. Disciplinary Committee and FIFA Ethics Committee. In 2019, Benoît Newly Elected FA Presidents was included as an arbitrator in On 23 December 2019, Mr Armen CAS’ General and Football lists. Melikbekyan - a former journalist, Mr Andrew Mercer was appointed editor, and sports analyst - was Acting General Counsel & Director elected as the President of the of Legal Affairs. Both Benoît Football Federation of Armenia Pasquier and Andrew Mercer are (FFA) after the FFA held an now members of the Editorial Extraordinary Meeting in Yerevan, Board of Football Legal. Armenia. He was appointed as the General Secretary of the FFA in September 2018, while currently serving as a member of the UEFA Mattias Grafström Appointed as HatTrick Committee. He will FIFA’s Deputy Secretary General replace former FFA President In its Circular Letter no. 1702 dated Artur Vanetsyan, who resigned on 14 January 2020, FIFA confirmed 21 November 2019 following a harsh the appointment of Mr Mattias defeat for Armenia against Italy Grafström as FIFA’s Deputy during a UEFA Euro 2020 qualifier.
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On 25 January 2020, Mr Gerry On 3 July 2020, the Latvian Football ECA General Secretary Michele McAnaney was elected as the Federation (LFF) elected Mr Vadim Centenaro as its first Independent President of the Football Lyashenko for a two-year term. Executive Board Member. On the Association of Ireland (FAI) after The LFF Presidential Elections, same day, ECA announced that a landslide victory over Mr Martin which were initially scheduled for the position of General Secretary Heraghty. Mr McAnaney is a former 24 April, were postponed due to is to be replaced by that of CEO. Irish army officer and football the coronavirus crisis. Mr Vadim Current ECA Managing Director administrator. Lyashenko, an economic specialist Mr Charlie Marshall was appointed On 28 January 2020, Mr Rovnag and former chairman of the as ECA’s first-ever CEO. Abdullayev was re-elected as the Latvian Futsal Premier League President of the Association of and Federation, became the fifth Football Federations of Azerbaijan President of the LFF. The LFF (AFFA). Mr Rovnag Abdullayev, a Congress dismissed the former LFF former civil engineer, oil industry President, Mr Kaspars Gorkšs, in executive, and head of Azerbaijan’s October 2019. state-owned oil company (SOCAR), is to serve a fourth term as AFFA President after being re-elected for a third time. On 8 March 2020, Mr Terje Svendsen (photo) was re-elected as the President of the Norwegian Joachim Walltin appointed Football Federation (NFF) after General Secretary of FIFPRO the NFF held its General Assembly Division Europe in Oslo. Mr Svendsen, a Norwegian On 16 June 2020, FIFPRO businessman and banking announced that the former executive, is to serve a third two- President of the Norwegian year term as NFF President. He CAS Secretary-General Matthieu players’ association (NISO), was first elected as President of Reeb now acts as ‘CAS Director Joachim Walltin, was appointed the NFF in 2016 and had previously General’ as the General Secretary of managed Norwegian top club CAS Secretary-General Matthieu FIFPRO Division Europe. Rosenborg BK. Reeb will now act as CAS Director A NISO (Norske Idrettsutøveres On 21 April 2020, Dr Sándor Csányi General (see the new Article S22 of Sentralorganisasjon) member was re-elected as the President the CAS-Code). The International since 1995, which is the national of the Hungarian Football Council of Arbitration for Sport union for Norwegian athletes, Federation (MLSZ) after the MLSZ (ICAS) has recently decided to Mr Walltin was elected as the Annual General Meeting. Dr Csányi, “better reflect his managerial role” players’ representative for a Hungarian businessman, banking as CAS Chief Executive. several clubs and served as NISO executive, and philanthropist, is President for 10 years. Mr Walltin, to serve a third five-year term whose arrival completes the as MLSZ President. He was first transition process that started elected as President of the MLSZ when Mr Jonas Baer-Hoffmann in July 2010 and, in 2015, he was became FIFPRO General Secretary elected to the UEFA Executive on 1 January 2020, will support Committee. A member of the FIFA FIFPRO Division Europe President, Council since March 2017, he was Mr Bobby Barnes. Mr Walltin will named Vice President of FIFA in take office as General Secretary February 2018. of FIFPRO Division Europe, which On 30 April 2020, Faiivae Iuli consists of 31 players’ associations, Alex Godinet was re-elected as on 1 August 2020. the President of the Football Charlie Marshall appointed CEO Federation of American Samoa of European Club Association (FFAS) after the FFAS Ordinary On 9 April 2020, the European Congress. Faiivae Iuli Alex Godinet, Club Association (ECA) announced an American Samoan politician, is the creation of a new Executive to serve a fourth four-year term. Board position, electing outgoing
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other provisions of the CAS-Code, reasons why the USSF is not more precisely, in order to definitely required to implement a system of adopt the possibility of e-filing and promotion and relegation based on conducting video-hearings, which sporting merit in the United States. were already introduced during the The Bulletin also contains the final FIFPRO Launches Global Player coronavirus pandemic as part of its decision of the European Court of Council COVID-19 guidelines (see Articles Human Rights, rendered on 5 March On 9 January 2020, FIFPRO S8, S10, R31, and R32). Further, 2020, in the case of Michel Platini. announced the launch of the Global arbitrators appearing on the special Other relevant football awards are Player Council (GPC), with the list of arbitrators for the CAS Anti- included in the CAS Bulletins. objective of strengthening the role of doping Division may not serve male and female professional players as an arbitrator in any procedure in the football industry. The main conducted by the CAS Appeals mission of the newly elected GPC is Arbitration Division (see S18). These to reinforce FIFPRO’s mandate and modifications are included in the to protect the interests and rights newest version of the CAS Code, of footballers from all countries. The which came into force on 1 July 2020. GPC will meet a minimum of twice per year. Thanks to the GPC, active players will be able to comment on and take an active role during regulatory discussions. In other words, footballers will share their Court of Arbitration for Sport voices to impact and influence Publishes a Special CAS Seminar trends and strategic developments Bulletin in football that directly affect them. The Court of Arbitration for Sport GPC members are also able to drive (CAS) has published a special initiatives aimed at improving players’ issue of the CAS Bulletin following health and off-pitch development. the CAS Seminar held in Budapest Publication of the CAS Bulletins on 24 and 25 October 2019 and 2019/2 and 2020/1 attended by more than 260 CAS The Court of Arbitration for Sport members, which summarizes (CAS) has published CAS Bulletins the various presentations given 2019/2 and 2020/1, which include by CAS arbitrators and CAS articles and commentary as well counsels during the CAS seminar. as an overview of key case-law CAS Bulletin, Budapest seminar awarded by CAS in the second half October 2019, 2 June 2020 of 2019 and in the first half of 2020, respectively. The Bulletin 2019/2 contains CAS award 2018/A/5977 FC Rubin Kazan v. UEFA, one of CAS Publishes the 2020 Edition the most recent and exciting cases of its Code – Spanish becomes an on how the UEFA Financial Fair Official Language Play Regulations work in order to After a lengthy discussion, CAS has sanction non-complying clubs. It adopted Spanish as its third official also contains the conclusion of language (see Article S24 and R29 the Jérôme Valcke legal saga case of the CAS-Code). Previously, parties with the final decision of the Swiss in a CAS arbitration could request Federal Tribunal on 7 May 2019 ECA’s Report on the Impact of the the arbitration to be conducted in (decision 4A_540/2018, Jérôme COVID-19 Crisis Spanish, provided that all the parties Valcke v. FIFA). The CAS Bulletin On 7 July 2020, the European Club and arbitrators agreed to the use of 2020/1 contains CAS award Association published its findings Spanish. According to CAS, since its 2017/O/5264, 5265 & 5266 FC regarding the financial impacts creation, more than 400 arbitrations Miami FC & Kingston Stockade FC of the coronavirus pandemic on have been conducted in the language v. FIFA, CONCACAF & USSF, a European clubs. ECA has examined of Cervantes. CAS has also modified compelling case that details the the impact of the pandemic across
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ten different first division European on “Ensuring Legal Certainty for Andrew initially provided legal leagues, of which seven had Today’s and Tomorrow’s Football”. support in commercial matters returned to play, and three were These webinars were attended by as a member of the Marketing definitely canceled. According to more than a thousand participants. Legal Services unit (advising on IP, ECA, these leagues have a total sponsorship and licensing contracts) revenue loss of EUR 3.6 billion. It is but later joined UEFA’s Disciplinary expected that the financial impact Services unit, specialising in football- of the health crisis will continue specific regulatory and disciplinary during the forthcoming 2020- matters (including financial fair play, 2021 football season, even if the club licensing, general disciplinary aforementioned season is played and anti-doping cases). In 2017, in full. The report also analyzes he joined the AFC in Malaysia whether clubs will be able to pay as Deputy Legal Director. In this their players, stating that most of role, Andrew supported the AFC’s the revenue of European clubs General Counsel/Legal Director in is going to cover players’ wages Nick De Marco and Andrew Mercer connection with the range of legal (approx. 70%). join our Editorial Board activities undertaken by the AFC’s Nick De Marco QC, Barrister at Legal Division and headed-up the Blackstone Chambers, is a leading Sports Legal Services, Disciplinary international sports lawyer one of & Governance unit which provides only two barristers in England with legal expertise in disciplinary, a practice exclusively in sports- regulatory and governance matters. related disputes and as a renowned In May 2020, Andrew was appointed arbitrator and Queen’s Counsel Acting General Counsel & Director barrister. He has been involved in of Legal Affairs. The Football Legal many CAS arbitration and UK Courts team is very proud to welcome procedures. Nick has been involved them. in many recent high-profile sports law cases and has particular expertise Postponement of the 8th AIAF in commercial and regulatory Congress in Rio de Janeiro disputes, including the national and Due to the COVID-19 pandemic and international Financial Fair Play the uncertainty of the situation, regulations, as well as legal expertise the AIAF Executive Committee in doping cases and disputes has decided to postpone the 2020 relating to football intermediaries. edition of the AIAF Congress in He also writes and lectures on sports Rio de Janeiro to 2021. Despite law, is an author of “Challenging this postponement, the AIAF has Sports Governing Bodies”, and is decided to give the football world the General Editor and Author of the benefit of the experience and “Football and The Law” - the first Report on the Club Licensing know-how of its member lawyers. comprehensive review of the law System With the support of Football Legal, relating to all aspects of football, UEFA has published its first-ever the AIAF organised two three- including all of the main regulatory overview of how European football day webinar sessions on Zoom. and commercial aspects of the sport associations are implementing The first, which took place on 28, (ISBN 9781784512354, Bloomsbury UEFA’s club licensing system. 29 and 30 April 2020, dealt with Professional). The Report includes an in-depth the following topic: “COVID-19: Andrew Mercer started his legal analysis of the UEFA club licensing National measures affecting career at Slaughter and May in system, a list of the 34 UEFA players’ and coaches’ contracts London in 2006, specialising in IP/ member associations that have (contract amendments, salary commercial matters and advising a included adapted criteria in their deferrals and/or limitations, range of corporate clients (including national club licensing regulations, insurance coverage, protection Premier League football clubs). In an overview of the current financial mechanisms, income support 2010, Andrew moved to the Union environment, and an explanation arrangements...)”. The second of European Football Associations of the club licensing regulations webinars were held on 30 June (UEFA) in Switzerland, where he for women’s football. and 1 and 2 July 2020 and focused stayed for over 7 years. At UEFA,
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