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The Legal Minefield of Football Transfer Agreements

Fri 30th Aug 2013 | Legal

This summer’s football transfer window has brought up the issue of player power and how a club reacts to a player who clearly wants to leave. 

Three protracted potential transfers in particular have highlighted some of the issues that clubs need to contend with when dealing with a player who wishes to leave.  Luis Suarez, Wayne Rooney and Gareth Bale have all been subject to headline making transfer bids. 

Each saga has brought up separate issues, including the importance of having a clear written agreement (Suarez) and adopting a strong negotiation point (Bale).

Football players are employed on fixed term contracts.  A transfer fee is generally compensation to the selling club reflecting the player’s market value and the remaining value of the unexpired contract term.

Arsenal’s bid for Suarez highlighted the importance of having a well drafted and clear agreement.  It is understood that Arsenal had been advised (presumably by Suarez’s advisors) that any offer above £40 million triggered a release clause.  It is now apparent that the wording of the clause only obliges Liverpool to consider the offer and inform the player.  Player contracts will often contain a ‘good faith negotiation clause’ (no such duty is imposed at law) but Liverpool are entitled on the wording of the contract to hold out for their market valuation of the player and merely inform him that an offer has been made.

The issue was clouded somewhat by Suarez claiming that a verbal agreement was reached last year between him and the club that would allow him to move if such an offer was made and if Liverpool failed to qualify for the Champions League.  While verbal amendments can be made to written contracts, it is always best to confirm the terms of the revised agreement in writing so as to reduce the risk of a potentially costly dispute in the future.

Gareth Bale’s impending move to Real Madrid has demonstrated the potentially difficult position that a player can find themselves in before a move is finalised.  Until the move is completed, Bale is still a Tottenham Hotspur employee and therefore should respond to their reasonable requests, i.e. turn up for training.  The fact that Tottenham have openly spoken about potentially fining Bale for his apparent failure to train this week suggests that the relationship between club and player has broken down and that a move is very close.

The transfer window does add a sense of intrigue to the start and middle of the football season, although there have been some understandable calls that the window should be shut before the season actually starts in order to minimise player disruption.

The high profile potential transfers of Bale, Suarez and Rooney have all highlighted the difficult balance that a club has to manage: Should they keep a prize asset, sometimes to the detriment of team morale if that player refuses to play or train, or should they cash in? 

Clear written agreements and a long fixed term can work in the club’s favour as the length remaining on the contract will invariably affect the player’s market value.  Of course, player contracts also need to comply with the relevant regulations, and this will always be a consideration at the forefront of the club (and its lawyer’s) minds.

 

Esther Smith

Partner and Head of the Sports and Leisure Department

Thomas Eggar LLP

www.thomaseggar.com

 

Posted by: Aaron Gourley

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