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Transparency & Protection: key themes at Player Contracts 2014

Thu 30th Oct 2014 | Legal

Day One review…

Regulations and jurisprudence governing player contracts should be more transparent, and should be fit for purpose were the underlying themes at Day One of Player Contracts 2014, organised by World Sports Law Report.

Around 200 delegates from 35 countries, including 43 clubs, made their way to Arsenal's Emirates Stadium to hear presentations on topics including FIFA's Intermediary Regulations; Contract Termination; Protection of Minors; FIFA's Transfer Matching System and more.

In the opening session, speakers highlighted the difference between dealing with disputes at the FIFA level and the Court of Arbitration for Sport (CAS) level. It was agreed that CAS procedural rules are generally stricter than FIFA's, which are more "forgiving", as CAS Arbitrator David Casserly put it. It was argued that both approaches have their advantages, but that more transparency is needed in publishing both FIFA and CAS jurisprudence, as sometimes unpublished jurisprudence is relied upon as precedent.

FIFA pointed out that its procedural regulations are available online, but it was highlighted that these are not often followed by decision makers. It was also mentioned that CAS might consider publishing a 'closed list' of arbitrators, as at present 40 out of a list of over 300 arbitrators are used for 80% of the cases, and that it would be useful for everyone to know which arbitrators hold expertise in which areas (i.e. what cases they have acted on).

Last season, 60% of Premier League clubs sacked their manager, was a shocking opening figure from Nick Carter, Senior Legal and Commercial Counsel at Manchester City, in a presentation on termination of manager contracts. He also mentioned that corporate CEOs remain in their job for an average of six years, as compared to two years for football managers. Lucio Colantuoni, a CAS arbitrator, also highlighted that Antonio Conte, the new manager of the Italian national team, will receive over half of his pay from sponsor Puma. It emerged that manager contracts are often complex and subject to national peculiarities, and manager contract termination remains an emerging area of sports law jurisprudence.

Of course, jurisprudence is not lacking when it comes to player contract termination, but it is becoming harder for players to walk out of their contracts, due to the compensation mechanisms in place. "It would take a brave lawyer to advise a player to walk out of his contract", said John Mehrzad, a Barrister with Littleton Chambers. In an entertaining session, in which he likened the legal negotiations underpinning player contracts to a magic show, he highlighted the Comolli case as one where compensation had already been paid, but it was ruled that statutory compensation was also "magically" due.

The importance of recognising mediation clauses in player contracts was also highlighted, as Premier League clubs can be penalised if they ignore such clauses. Pekka Aho, of Studio ELSA, pointed out that mediation clauses can also be used to settle buyout clauses in player contracts, when time is an issue.

Ritchie Humpreys, Chairman of the Professional Footballers Association's Management Committee, highlighted some interesting facts from the player's perspective. He said that the average career of a player in England is eight years, and that 95% of players use agents. He also said that education of players is an issue. "Players are sometimes not aware that a clause which cuts their pay by 20% if the club is relegated, but boosts their pay by 20% if the club is re-promoted, will mean that they will be on less money".

Dan Lowen, of Couchmans, highlighted that FIFA's Intermediary Regulations are sometimes wrongly labelled as a de-regulation, when they in fact represent a "shift in focus. FIFA are regulating the activity itself rather than the person." He also said that FIFA is aware that the current regulations are not working because it lacks the resources to police them effectively. He said that the FA would make its position known about the new Intermediary Regulations known next year.

Mel Stein, Chairman of the Association of Football Agents (AFA), gave a characteristic barnstorming performance criticising FIFA's new approach. "There can be no regulation without representation", he said. "We were never consulted by FIFA." He also argued that it is standard industry practice that agents are remunerated at 5% of the transfer fee, and the 3% level suggested within the Regulations amounts to "price fixing". Stein said that the AFA's challenge to the Regulations has been acknowledged by the European Commission, who are awaiting a response from FIFA.

The need to reform FIFA's Regulations on the Transfer of Minors was also highlighted by speakers and delegates, who pointed to difficulties with the wording of the Regulations in their current form. As just one example, Jesús Arroyo, of Sevilla FC, pointed out that one exemption for a block on international transfers of U18 players was if that player's parents move to a new country. He highlighted that there are currently no exemptions to that rule - i.e. it must be both parents that move, and the exemption is not triggered if a player's legal guardians move.

Omar Ongaro, Head of Players' Status and Governance with FIFA, said that FIFA is aware of the issues. He said that a working group had agreed that there is a need to bring down the ban on U18 transfers, firstly to U16. Ideally, FIFA would like to bring the ban down further, so it will try to do so. "We will try to do it, then wait to see if there are any legal challenges", he said.

In a very interesting presentation, Daniel Lorenz of FC Porto highlighted a number of situations where the Regulations had been strictly interpreted, preventing minors already in another country from playing. He highlighted the case of Valentin Vada, an Argentinean player who had been refused registration in France because it could not be proved that his parents had moved to France for 'reasons unconnected to football'. "The family situation needs to be taken into account", he said. "In certain situations, they could lose the chance for a better life".

Kimberly Morris, of FIFA's Transfer Matching System (TMS), highlighted how forged documents are often entered into the system as proof of last contract end, in an attempt to get a player registered. She said that both clubs and football associations have been sanctioned for trying to get around the rules in this area. In a statistical analysis of the international transfer system, she highlighted how there has recently been a huge increase in the amount of payments to intermediaries. In a new initiative, TMS will offer a tab where national associations can keep track of intermediaries used in player contracts, in order to comply with FIFA's Intermediary Regulations. She also pointed to spending inflation in England, which since 2011 has increased a three times the average market rate.

The final session of the day dealt with the extraordinary lengths that criminals will go to in order to dupe young players into handing over money in exchange for the promise of a free trial. Delegates were shown contract forms from various clubs, sometimes running into numerous pages, produced by agents forming social media profiles with information gleaned from FIFA's list of football agents. "One young player from Africa was duped into flying to Russia", said Eby Emenike of TBD Sports Management, which has launched projects in Africa - including an 'app' - to protect young players from this threat. "He made it back, but was forced to sleep rough for three months."

At Day Two of Player Contracts 2014, which takes place today, delegates will hear presentations on UEFA's FInancial Fair Play Regulations; Bonus Structures & Incentive-based pay; Training Compensation & Solidarity Payments; Salary Caps; Third Party Investment; Bridge Transfers and more. Hot topics are sure to be the European Commission's reported rejection of the Striani complaint yesterday; whether FIFA can effectively ban or regulate TPO; and the old chestnut of whether salary caps are feasible in football.

For updates, follow the #playercontracts14 hashtag on Twitter. For more information on the programme, click here.

Posted by: Kev Howland 

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