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LEGAL COMMENT: Player Contracts - Transparency & Confidentiality

Mon 7th Mar 2016 | Legal

Samuel Okoronkwo, Head of Chambers at Mercantile Barristers looks at the issues surrounding confidentiality of player contracts and how clubs can balance this with increasing calls for more transparency in spending. 

In January 2016 the wider football world was treated to a Wiki Leaks type revelation of player contracts by Football Leaks, a website which described itself as “…a newly-formed organisation in pursuit of truth…” while stating “… we believe that only through public pressure in high volumes a difference can be made…”

Its aim appeared altruistic to expose the outlawed practice of third party ownership of players by Portuguese and Dutch clubs, through publishing confidential football contract documents. FC Porto, Sporting Lisbon and Boavista were early targets of Football Leaks as was the sports management company, Doyen Sports.

Their publication indicated that Doyen Sports loaned £3.8 million to FC Twente, winner of the 2010 Eredivisie title with manager Steve McClaren, in return for a proportion of the economic rights of five of their star players.

One of these players, Dusan Tadic (pictured), was subsequently sold to Southampton in the Premier League for £11.5 million in 2014. The third-party agreement was not unlawful at the time, but an investigation by the Dutch FA precipitated by the publication led to the resignation of the club president and the club being banned from European competitions for three years.

The regulator concluded that it had been deliberately misled as Twente had apparently not fully disclosed the details of their arrangement with Doyen Sports, which placed the club in a position to sell these key players so that the investor could profit.

Against this background, FIFA’s Head of Transfer Matching System Mark Goddard, said "… all streams of information are very, very useful and that one has been as well…"

Further leaks revealing that Gareth Bale’s transfer fee was indeed world record-breaking; Manchester City paid an excessive fee for Eliaquim Mangala; Manchester United overindulged in the acquisition of Anthony Martial and that Real Madrid inserted a buy-back clause in the contract of Mesut Ozil, all make for excellent football ‘banter’.

The situation was however different prior to 1961, when Football League clubs abolished the £20 maximum wage cap in England. Then, players’ income and contracts were of very limited, if any interest. The abolition of maximum wage cap initiated the progressive period in which players could negotiate their remuneration, commensurate with their worth and market forces. The landmark Bosman ruling in 1995 completed the substantial shift in the balance of negotiating power from the clubs to the players.

Fans funding the sport through paying rocketing ticket prices, television subscriptions and merchandising costs seek transparency of player contracts and associated fees. This is resisted by players and clubs who profit from the game, which has made player contracts topical and newsworthy.

So where is the balance between Transparency and Confidentiality?

Notwithstanding the universal appeal and popularity of football, it is not a public service organised by the state or public authorities to which an entitlement to information as per the Freedom of Information Act 2000 is applicable. This Act creates a public “right of access” to information held by public authorities. It obliges public authorities to publish certain information about their activities and gives members of the public an entitlement to request information from public authorities.

Professional football is sport and entertainment organised by private enterprises for profit. As such, a fan has no legal entitlement to confidential information which is not part of his contract of purchasing tickets, satellite TV subscriptions and merchandise.

Fans may withdraw their custom and exert their economic power to compel desired action by clubs as was recently demonstrated at Liverpool football club. Following an unprecedented mass walkout during Liverpool's match with Sunderland at Anfield on 7 February 2016, the club owners by a subsequent letter addressed to the supporters, apologised for the distress caused by their plans that tickets will rise by £18 to £77. Fenway Sports Group conceded that the ticket prices will freeze at the current rate of £59 for the next two seasons.

Fan economic power cannot however compel publication of player contracts where the regulator will not publish under their own rules and will have additional statutory duty not to publish, on account of the Data Protection Act 1998.

The media wishing to exercise their right of free speech under Article 10 of the European Convention on Human Rights to publish such information will have that right balanced against Article 8 of the European Convention on Human Rights and the Human Rights Act 1998. This provides that everyone has a right to respect for his private and family life, his home and his correspondence.

In the balance to be struck between freedom of expression protected by Article 10 and the Article 8 rights of individuals to private and family life, the media attracts special protection because of its role as a public watchdog, and restrictions on freedom of expression are subjected to very close scrutiny. The right to freedom of expression is however limited so there is a natural tension between the Article 10 interest in openness and transparency and Article 8 interest in privacy. The structure of these provisions permits a proportionality-based approach to the reconciliation of these competing rights.

Where these rights conflict, focus is brought on the comparative importance of the specific rights being claimed in the individual case. In addition to the type of expression at stake, the factors which impact the balance to be struck include:

                        the public stature of the individual

                        the degree of interference with privacy

                        any breach of the law or of professional ethics by the reporter

 

In Mosley v Newsgroup Newspapers, Max Mosley, former Formula 1 boss successfully sued News of the World following its 2008 publication of a story and clandestinely filmed video relating to his allegedly Nazi themed sado-masochistic activities with a number of prostitutes. Given the limited public interest supposedly served by that publication, his Article 8 rights of a reasonable expectation of privacy in relation to sexual activities, albeit unconventional, between consenting adults on private property, superseded the newspaper's Article 10 rights of freedom of expression.

Conversely in Ferdinand v Mirror Group Newspapers, the balance favoured the freedom of expression and MGN's Article 10 rights. In 2010 the newspaper paid a woman for her story and published the details of their "on and off" sexual relationship over a period of 13 years. Ferdinand had made public statements relating to leaving his "wild man" past behind him to settle down with the mother of his children. He had taken up captaincy of the England national football team after his predecessor was dismissed for an extramarital affair. His “family man” image and the expectation for him to be a role model both on and off the pitch meant that there was a substantial public interest in the newspaper's disclosure sufficient to justify the publication.

It follows that there can be no lawful justification for the mass publication of otherwise confidential player contracts of the type espoused by Football Leaks. The balance remains in favour of the confidentiality of player contracts against the transparency desired by football fans, unless conduct of any particular player or club raises substantial public interest to justify publication. ■

Samuel Okoronkwo is Head of Chambers at Mercantile Barristers. He specialises in Sports Law with particular emphasis in Professional Football and can be contacted at www.mercantilebarristers.com or through his Clerk at clerks@mercantilebarristers.com or by calling 0203 034 0077.

Image: Action Images / Andrew Couldridge

Posted by: Aaron Gourley 

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