Leaders
Dallmeier

Business Directory

Browse the Directory

Sign Up to the Directory

FC Business Twitter
FC business Linked in
FC Business facebook
FC Business Youtube

Football’s Transfer System is Failing, FIFPro Study Finds

Thu 15th Oct 2015 | Money & Finance

The 3 billion Euro a year football player transfer system which is intended
to redistribute wealth among clubs is failing all but a few elite teams, according to a study published
today.
The research by Stefan Szymanski, a professor of sport management at the University of Michigan,
found that “a significant fraction of the transfer market is controlled by elite clubs who circulate top
players among themselves.” Very little trickles down to “grass roots’’ football, he said.
At the same time, the system overseen by FIFA impedes the freedom of movement of players.
Footballers, some who face harassment for complaining about unpaid wages, have to appeal to a
“slow and cumbersome” resolution process to get out of binding contracts, the report found.
“The transfer system is not only unfair to players, it also promotes the opposite of what was
intended,’’ Szymanski, co-author of the best-selling book “Soccernomics,” said. It “sustains the
dominance of the elite clubs by ensuring that they are the only ones with financial muscle to afford
the transfer fees payable for the very best players.”
FIFPro, the players union which represents 65,000 players around the world, has filed a complaint
about the transfer system to the European Commission saying it was anti-competitive, unjustified
and illegal. FIFPro, which commissioned Szymanski’s 20-page report, wants the Commission to
explore how FIFA’s transfer rules harm players as well as small and medium-size teams and their
supporters.
Football transfer regulations date back to 1890, when they were introduced by the English Football
Association to compensate smaller teams for releasing players to bigger clubs. The rules, which FIFA
and the Commission updated in 2001 to ensure “competitive balance”, are not working, Szymanski
said in the report. FIFA’s Transfer Matching System found that between 2011 and 2013 the largest 25
clubs in the world accounted for between 51 percent and 58 percent of transfer spending.
In the English Premier League, which generates billions in revenue each year, 72 percent of transfer
fees were exchanged by its 20 member clubs, Syzmanski, said, citing 2014 research by accountancy
firm Deloitte. Only £8 million pounds of the fees – less than one percent - went to the 48 clubs in
England’s third-tier and fourth-tier divisions.
It’s difficult for small and medium-size clubs to benefit from the transfer system because it is “to a
significant extent a lottery” outside their control, Szymanski said.
The system also creates a barrier of entry for clubs trying to break into the inner circle of top teams,
Szymanski said. Between 2009 and 2011, Manchester City spent £357 million on transfer fees and an
extra £390 million on wages to challenge for the Premier League title.
“The transfer rules tend to restrain competition between clubs rather than promote it, do little to
support competitive balance, solidarity or club stability,” Szymanski said.
Transfer fees would be much lower and fairer if they were based exclusively on the costs to clubs of
training a player, and the system would be more competitive, he said. A 2013 study by KEA European
Affairs found that only 1.8 percent of transfer fees in Europe were being paid out to a player’s former
clubs in solidarity payments.
FIFA’s regulations are also failing thousands of footballers around the world by shackling them to
clubs against their will, Szymanski said.
In a 12-country survey in 2012, FIFPro found that 42 percent of players did not receive salaries on
time and in one-third of cases their wages were more than three months late. Trapped by the
transfer regulations, some had faced harassment for complaining: 16 percent were forced to train
alone at unsociable hours such as at midnight, 12 percent were victims of violent acts and 10 percent
had been bullied.
“The present system is weighted against the players,” Szymanski said. “The club can exert pressure
on the player in order to achieve its own ends while the player has few options when the club fails to
respect the contract.”
For leaving a club without permission, a player could face a fine of 10 times his salary, Szymanski
said, citing a 2009 ruling by the Court of Arbitration for Sport in the case of Shakhtar Donetsk and
Brazilian player Matuzalem Francelino da Silva. The Swiss Federal Supreme Court subsequently ruled
the verdict was an excessive restraint on his freedom.

The 3 billion Euro a year football player transfer system which is intended to redistribute wealth among clubs is failing all but a few elite teams, according to a study published today.

The research by Stefan Szymanski, a professor of sport management at the University of Michigan, found that “a significant fraction of the transfer market is controlled by elite clubs who circulate top players among themselves.” Very little trickles down to “grass roots’’ football, he said.

At the same time, the system overseen by FIFA impedes the freedom of movement of players. Footballers, some who face harassment for complaining about unpaid wages, have to appeal to a “slow and cumbersome” resolution process to get out of binding contracts, the report found.

“The transfer system is not only unfair to players, it also promotes the opposite of what was intended,’’ Szymanski, co-author of the best-selling book “Soccernomics,” said. It “sustains the dominance of the elite clubs by ensuring that they are the only ones with financial muscle to afford the transfer fees payable for the very best players.”

FIFPro, the players union which represents 65,000 players around the world, has filed a complaint about the transfer system to the European Commission saying it was anti-competitive, unjustified and illegal. FIFPro, which commissioned Szymanski’s 20-page report, wants the Commission to explore how FIFA’s transfer rules harm players as well as small and medium-size teams and their supporters.

Football transfer regulations date back to 1890, when they were introduced by the English Football Association to compensate smaller teams for releasing players to bigger clubs. The rules, which FIFA and the Commission updated in 2001 to ensure “competitive balance”, are not working, Szymanski said in the report. FIFA’s Transfer Matching System found that between 2011 and 2013 the largest 25 clubs in the world accounted for between 51 percent and 58 percent of transfer spending.

In the English Premier League, which generates billions in revenue each year, 72 percent of transfer fees were exchanged by its 20 member clubs, Syzmanski, said, citing 2014 research by accountancy firm Deloitte. Only £8 million pounds of the fees – less than one percent - went to the 48 clubs inEngland’s third-tier and fourth-tier divisions.

It’s difficult for small and medium-size clubs to benefit from the transfer system because it is “to a significant extent a lottery” outside their control, Szymanski said.

The system also creates a barrier of entry for clubs trying to break into the inner circle of top teams, Szymanski said. Between 2009 and 2011, Manchester City spent £357 million on transfer fees and an extra £390 million on wages to challenge for the Premier League title.

“The transfer rules tend to restrain competition between clubs rather than promote it, do little to support competitive balance, solidarity or club stability,” Szymanski said.

Transfer fees would be much lower and fairer if they were based exclusively on the costs to clubs of training a player, and the system would be more competitive, he said. A 2013 study by KEA European

Affairs found that only 1.8 percent of transfer fees in Europe were being paid out to a player’s former clubs in solidarity payments.

FIFA’s regulations are also failing thousands of footballers around the world by shackling them to clubs against their will, Szymanski said.

In a 12-country survey in 2012, FIFPro found that 42 percent of players did not receive salaries on time and in one-third of cases their wages were more than three months late. Trapped by the transfer regulations, some had faced harassment for complaining: 16 percent were forced to train alone at unsociable hours such as at midnight, 12 percent were victims of violent acts and 10 percent had been bullied.

“The present system is weighted against the players,” Szymanski said. “The club can exert pressure on the player in order to achieve its own ends while the player has few options when the club fails to respect the contract.”

For leaving a club without permission, a player could face a fine of 10 times his salary, Szymanski said, citing a 2009 ruling by the Court of Arbitration for Sport in the case of Shakhtar Donetsk and Brazilian player Matuzalem Francelino da Silva. The Swiss Federal Supreme Court subsequently ruled the verdict was an excessive restraint on his freedom.

Case study of Cristiano Ronaldo which tracks the flow of money exchanged between clubs and other parties during his career.

FIFPro consulted its member countries in Europe in a supportive piece of research that highlights clubs relegated due to financial insolvency (in 2014/15) and the story of Stelios Tsoykanis, one of the estimated 600 players affected.

Posted by: Kev Howland 

RETURN TO LATEST NEWS SECTION

SUBSCRIBE TO THE FCBUSINESS RSS FEED

If you have any football business related news stories you’d like to share then please contact us – agourley@fcbusiness.co.uk  

To subscribe to our range of football newsletters including news, products and jobs CLICK HERE.

Add to: Google Google | Yahoo Yahoo | Live Live | del.icio.us del.icio | Digg Digg |

Related Articles

West Ham United launch shirt auction in aid of Mexican earthquake relief

Fri 22nd Sep 2017 | Money & Finance

West Ham United will auction all match-worn shirts from this weekend’s London derby against Tottenham Hotspur , with all proceeds going to the victims’ families and survivors of this...

Stoke City success bringing benefits to region

Fri 22nd Sep 2017 | Money & Finance

Premier League football brought £130m to Stoke region and employed 2,200 people in one season, an EY study finds. The chance to play in the Premier League not only brings joy to fans of a club...

Manchester United Post Record Revenue Of £581m

Thu 21st Sep 2017 | Money & Finance

Manchester United has followed a successful year on the pitch with a successful year in business posting record revenues for the year ending 30 th June 2017. In a season which saw the club, under the...

30 September: the other deadline day

Mon 18th Sep 2017 | Money & Finance

As of 30 September 2017, all football clubs, sports agencies and their intermediaries will fall within the remit of the Criminal Finances Act. Through this Act, criminal sanctions can be imposed on...