View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Springer - Publisher Connector Int Sports Law J (2016) 15:233–252 DOI 10.1007/s40318-015-0080-x ARTICLE Debating FIFA’s TPO ban: ASSER International Sports Law Blog symposium 1 1 2 3 4 Oskar van Maren • Antoine Duval • La Liga • Raffaele Poli • Ariel N. Reck • 5 6 6 Daniel Geey • Christian Duve • Florian Loibl Published online: 19 November 2015 Ó The Author(s) 2015. This article is published with open access at Springerlink.com Abstract On 1 May 2015, FIFA introduced Article 18ter LFP) and four renowned experts on TPO matters (Daniel in the FIFA Regulations on the Status and Transfer of Geey, Ariel Reck, Rafaelle Poli and Christian Duve). The Players, thereby banning third-party ownership of players’ contributions focused on different aspects of the function- economic rights (TPO) in football. The decision to put a ing of TPO and on the impact and consequences of the ban. definitive end to the use of TPO in football is highly controversial, especially in countries where TPO is a Keywords TPO Á TPE Á FIFA Á European competition mainstream financing mechanism for clubs such as Spain, law Portugal and countries in South America. In fact, the Portuguese and Spanish football leagues launched a com- plaint in front of the European Commission, asking it to 1 FIFA’s TPO ban: introduction find the FIFA ban contrary to EU competition law. In order to debate the appropriateness of the TPO debate, the editors Oskar van Maren and Antoine Duval of the ASSER International Sports Law Blog organized its On 1 May 2015, FIFA introduced Article 18ter in the first Blog Symposium in April 2015. We received contri- FIFA Regulations on the Status and Transfer of Players, butions from the complainant (the Spanish football league, thereby banning third-party ownership of players’ & Oskar van Maren Florian Loibl [email protected] florian.loibl@freshfields.com Antoine Duval 1 Researcher International and European Sports Law, T.M.C. [email protected] Asser Institute, The Hague, The Netherlands La Liga 2 Liga de Fu´tbol Profesional (La Liga), Madrid, Spain [email protected] 3 International Centre for Sports Studies (CIES), Neuchatel, Raffaele Poli Switzerland [email protected] 4 Reck Sports Law, Buenos Aires, Argentina Ariel N. Reck [email protected] 5 Fieldfisher, London, UK Daniel Geey 6 Freshfields Bruckhaus Deringer, Frankfurt am Main, daniel.geey@fieldfisher.com Germany Christian Duve christian.duve@freshfields.com 123 234 Int Sports Law J (2016) 15:233–252 economic rights (TPO) in football.1 The decision to put a in return for being entitled to a share of a player’s future definitive end to the use of TPO in football is highly transfer value. Thus, TPO is enshrined in a separate private controversial, especially in countries where TPO is a law contract between a third-party and a club or a player. mainstream financing mechanism for clubs such as The plurality of TPO situations derives from this contrac- Spain, Portugal and countries in South America. In fact, tual basis. The parties are free under national private law to the Portuguese and Spanish football leagues launched a creatively draft those contracts as they see fit, each one of complaint in front of the European Commission, asking them being a specific type of TPO in itself. it to find the FIFA ban contrary to EU competition law.2 The main aim of the practice is to finance clubs. Often In order to debate the appropriateness of the TPO TPO is used to externalize the costs of recruiting a player, debate, the editors of the ASSER International Sports Law sometimes it is used to finance the general functioning of a Blog organised its first Blog Symposium in April 2015. We club. However, the use of TPO is always intimately con- received contributions from the complainant (the Spanish nected to the drive of professional clubs to diversify their football league, LFP) and four renowned experts on TPO funding sources in order to leverage their competitiveness matters (Daniel Geey, Ariel Reck, Rafaelle Poli and in national and international competitions. Nowadays, a Christian Duve). The contributions focused on different club like Atle´tico Madrid would probably not have been aspects of the functioning of TPO and on the impact and able to reach the final of the Champions League or win La consequences of the ban. Liga without having widespread recourse to it. 1.1 What is TPO? 1.2 What are the problems with TPO? The use of the notion of TPO is often criticized because it TPO is first and foremost seen as an intrusion of a third-party would misrepresent the situation it purposes to qualify. in the life of a football club and a player with the potential for Indeed, no third-party owns a player, but only a share of the an illegitimate influence on the management of the team and ‘‘economic right’’ attached to the player. This is why, as the player’s career. The many conflicts of interest that might you will see in the different contributions, some of the arise in the shadow of multiple, sometimes contradictory, authors refused to use the term and have opted for alter- investments are particularly feared. TPO is also seen as a native concepts, such as TPE (third-party entitlements). dubious financing technique used to circumvent the new Beyond this semantic debate, various types of contrac- UEFA Financial Fair Play regulations and to prop up clubs tual situations are included under the umbrella term TPO. that are chronically in financial troubles. Finally, there is a What is common to all cases is that a company or an moral dimension. For example, UEFA president Michel individual provides a football club or a player with money Platini likened TPO to a type of modern ‘‘slavery’’.3 In short, should it be acceptable for someone to own a share of an economic right personally attached to a player? Can a player 1 FIFA Regulations on the Status and Transfer of Players (2015), be forced-sold on the basis of a TPO agreement? All these Article 18ter: 1. ‘‘No club or player shall enter into an agreement with a third issues are discussed extensively in this symposium. They are party whereby a third party is being entitled to participate, either in central to the evaluation of the ban’s compatibility with EU full or in part, in compensation payable in relation to the future competition law. transfer of a player from one club to another, or is being assigned any rights in relation to a future transfer or transfer compensation. 2. The interdiction as per paragraph 1 comes into force on 1 May 1.3 Regulating TPO or banning it? That is 2015. the question! 3. Agreements covered by paragraph 1 which predate 1 May 2015 may continue to be in place until their contractual expiration. TPO has been banned for some time in England, France However, their duration may not be extended. 4. The validity of any agreement covered by paragraph 1 signed and Poland, while it was authorized in the rest of the world. between 1 January 2015 and 30 April 2015 may not have a The English FA, profoundly upset by the Carlos Te´vez contractual duration of more than 1 year beyond the effective date. affair, decided to ban the practice as early as 2008. In other 5. By the end of April 2015, all existing agreements covered by countries, particularly Spain, Portugal and South American paragraph 1 need to be recorded within the Transfer Matching System (TMS). All clubs that have signed such agreements are required to nations, TPO has been part of the ‘‘football culture’’. For upload them in their entirety, including possible annexes or amend- example, it is estimated that in Brazil’s top division 90 % ments, in TMS, specifying the details of the third party concerned, the of the players were subjected to a TPO agreement at the full name of the player as well as the duration of the agreement. moment FIFA decided to ban the practice.4 In these 6. The FIFA Disciplinary Committee may impose disciplinary measures on clubs or players that do not observe the obligations set out in this article.’’ 3 Reuters (2015). 2 La Liga (2015). 4 Majithia (2014). 123 Int Sports Law J (2016) 15:233–252 235 countries TPO is seen as a necessity for national football of part of players’ economic rights (TPO) is a useful clubs—not only to compete with clubs in richer countries, practice for clubs. However, it also recognized that the but also for professional football to be financially viable. It practice must be strictly regulated. In July 2014, La Liga was no surprise that the leagues and clubs of the above- approved a provisional regulation that was sent to many mentioned countries were against a blanket ban of TPO and of the relevant stakeholders, including FIFA’s Legal would rather see it being regulated.5 They consistently Affairs Department. expressed their views during the FIFA Congress in June Although initially we felt that FIFA would focus on 2014 and the working groups created by FIFA in strict regulation, FIFA finally tilted the balance towards September 2014 with the aim of tackling the issue.6 the idea of an absolute ban. FIFA even put an end to Nonetheless, on 26 September the FIFA executive com- the working parties it had put in place to regulate this mittee took the decision to ban third-party ownership of issue.9 After verbal and written notices, La Liga has players’ economic rights (TPO) with a short transitional filed a complaint with the Competition Authorities of period.7 Following this announcement, the FIFA circular the European Union, since the prohibition of TPO fleshing out the legal details of the ban was published on 22 violates the EU competition rules.10 In our view, apart December.8 Article 18bis of the Regulations on the Status from breaching the Treaty on the Functioning of the and Transfers of Players were amended and, finally, the European Union, it also violates the rules on competi- new Article 18ter came into force on 1 May 2015.