To answer this, it is perhaps useful to go back to Bosman. When that bombshell ruling was delivered, clubs said the world would end, as the players now had all the power, which meant there was no point having academies, as the brightest talents would leave for nothing, and fans could forget getting attached to anyone, as the best players would swap teams every year.
The verdict came too late to help Bosman. But when the likes of Sol Campbell and Steve McManaman ran down their contracts at Tottenham and Liverpool respectively, in order to secure moves to new clubs, on much higher wages, it looked like the doom-mongers were onto something.
But six years after Bosman, the clubs, aided by FIFA and European football’s governing body UEFA, managed to persuade the European Commission that too much freedom of movement was bad for football and what that industry really needed was contractual “stability”.
The result was the first iteration of FIFA’s Regulations on the Status and Transfer of Players (RSTP). The authorities called it a compromise between the clubs’ need to retain some control of their most valuable assets and every other EU citizen’s right to quit one job and take another, anywhere in the single market. The unions called it “an ambush”.
In 2006, however, the pendulum swung towards the players again when a Scottish defender called Andy Webster decided to use a provision in the rules — the right for a player to buy out their contract after a prescribed protected period — to force a move from Hearts to Wigan.
As he was over 28, his protected period was three years and he was in the final year of a five-year deal, so he was OK to move. Unfortunately, nobody had settled on a formula for deciding how much he should pay his old club.
Hearts reckoned Webster, an international, was worth £5million but his lawyers offered them £250,000, a sum equal to what he was owed in wages for the last year of his deal.
Like Diarra, they took it to FIFA’s Dispute Resolution Chamber (DRC), which decided Hearts were owed £625,000, a sum based on his future earnings and the club’s legal costs. He appealed against that verdict at CAS and it reduced the compensation by £150,000 but backed the gist of the ruling.
For a year, it looked like Webster had become “the new Bosman” but, in 2007, the pendulum swung back towards “stability” when Brazilian midfielder Matuzalem tried to engineer “a Webster” out of Shakhtar Donetsk to Real Zaragoza.
After the usual visits to the DRC and CAS, football had a new, more club-friendly precedent for deciding the compensation jilted parties were owed by these unilateral contract-breakers, a sum based on the player’s remaining wages and his unamortised transfer fee.
Confused? Don’t worry, it was a bigger number and therefore a larger deterrent.
So, the pendulum is about to swing again?
Again, it depends on who you ask.
For FIFA, this is a great big nothingburger.
Its immediate response to the news from the ECJ was to jump on the sentences in the ruling that supported its right to have rules that breach EU rules on freedom of movement and competition because professional sport is not like journalism, law and other humdrum jobs. It has “specificity” and should therefore be exempted from certain principles, providing they are for a “legitimate objective”, such as “ensuring the regularity of interclub football competitions”.
Therefore, FIFA noted, the court still agrees football can justify rules aimed “at maintaining a certain degree of stability in the player rosters of professional football clubs”.
Phew, that should save most of the rulebook, then, right?
“The ruling only puts in question two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to consider,” a FIFA spokesperson said, referring specifically to two of Diarra’s main objections: the joint liability of the new club in a dispute like his, and the withholding of the International Transfer Certificate, which players need for a cross-border deal, until compensation has been paid.
FIFA’s chief legal and compliance officer Emilio Garcia Silvero doubled down on this “Am I bothered?” take with a later statement that said: “Today’s decision does not change the core principles of the transfer system at all.”
And he might be right. After all, it is now up to the Belgian court to apply the ECJ ruling to the Diarra case, which could clarify things slightly and certainly provide some time for the dust to settle.
It is also possible to read the ECJ ruling and imagine a scenario in which FIFA places all liability for breaching contracts “without just cause” on the player but puts in place a less onerous and more transparent formula for working out how much compensation should be paid.
And if FIFA wanted to increase its chances of gaining union support, it could also broaden the list of reasons why a player might have cause to break a contract. At present, it thinks the only justifications for a player to breach are not getting paid for months on end or the outbreak of war.
But there are plenty of people who have now read the ruling and do not believe FIFA is going to get away with a few tweaks.
As mentioned, FIFPRO and its member players’ associations are convinced the entire transfer regime is up for grabs and FIFA will now have to enter into the types of collective bargaining agreements that are central to professional sport in North America.
As David Terrier, the president of FIFPRO Europe, puts it: “The regulation of a labour market is either through national laws or collective agreements between social partners.”
Ian Giles, head of antitrust and competition for Europe, Middle East and Africa at global law firm Norton Rose Fulbright, is on the same page as the unions when it comes to the potential ramifications of the ruling.
“The decision essentially says the current system is too restrictive and so will have to change,” he explained.
“In terms of free movement, the ECJ recognises there may be a justification on public interest grounds to maintain the stability of playing squads, but considers the current rules go beyond what is necessary.
“It’s a similar story regarding the competition law rules. The ECJ has deemed the relevant transfer rules to amount to a ‘by object’ restriction — a serious restriction similar to a ‘no-poach’ agreement. Concerns about labour market restrictions, including ‘no-poach’ agreements, are a particular area of focus for competition authorities globally.
“Under competition law, it’s possible for otherwise restrictive agreements to be exempt — and therefore not problematic — if they lead to certain overriding benefits, but it’s generally difficult for ‘by object’ restrictions to meet the specific requirements for exemption.”
Giles’ point about the ECJ saying article 17 of the regulations is a “by object” restriction has been noted by other experts, as it means the court is effectively saying it is a restriction, end of story, and there can be no justification for it, no matter how noble the objective.
In terms of what this might mean for the industry, Giles can only speculate like the rest of us.
“It’s entirely possible this means players will feel they can now break contracts and sign on with new clubs, without the selling club being able to hold them or demand significant transfer fees,” he said.
“This will likely result in reduced transfer fees and more economic power for players, but over time things will have to stabilise to allow clubs to remain economically viable. Smaller clubs who rely on transfer fees for talent they have developed may well be the losers in this context.
“The key question now for FIFA will be how they how can adapt its transfer rules so that they are less restrictive and therefore compatible with EU law, while seeking to maintain the stability of playing squads. It will also be interesting to see whether more players start to breach their contracts in the meantime, emboldened by the ECJ’s judgment.
“Something else to keep an eye on is whether we could see other players bring damages claims, alleging they’ve suffered harm as a result of FIFA’s transfer rules, with damages claims for breaches of competition law generally on the rise in the UK and Europe.”
Yes! Not that they have shed much light on where we are heading, although they have confirmed where loyalties lie.
European Leagues, the organisation that represents the interests of domestic leagues across the continent, took a player-friendly stance by saying the decision confirmed that “FIFA must comply with national laws, European Union laws or national collective bargaining”.
It added that it stood for contractual stability but only when it is “safeguarded by national laws and collective bargaining agreements negotiated and agreed by professional leagues and players’ unions at domestic level”.
The European Club Association (ECA), however, adopted an “if ain’t broke (for us), why fix it” approach.
“Whilst the judgement raises certain concerns, the ECA observes that the provisions analysed by (the court) relate to specific aspects of the FIFA RSTP, with the football player transfer system being built on the back of the entire regulatory framework set out in the (regulations) which, by and large, remains valid,” it said.
“More importantly, the ECJ did recognise the legitimacy of rules aiming at protecting the integrity and stability of competitions and the stability of squads, and rules which aim to support such legitimate objectives, including among others, the existence of registration windows, the principle that compensation is payable by anyone who breaches an employment contract and the imposition of sporting sanctions on parties that breach those contracts.”
As a champion of clubs large and small, the ECA noted that the transfer system “affords medium and smaller-sized clubs the means to continue to compete at high levels of football, especially those who are able to develop and train players successfully”.
Whether that is actually true or not is the subject of a much bigger and long-running debate. But it is certainly an attractive idea and sometimes that can be enough.
What do football’s transfer movers think?
My colleague Dan Sheldon spoke to Rafaela Pimenta, a football agent who represents Erling Haaland, Matthijs de Ligt, Noussair Mazraoui and other top stars. She told The Athletic: “If you talk to agents, they are over-excited because, finally, the players are going to get heard. How many times are we still going to see them crying after having their careers destroyed because they are being denied a transfer?”
She made it clear, though, that the focus now should be on conversations between football’s various stakeholders to define what the new rules should be.
“For players, this can be a landmark and I hope players will use it wisely,” she said. “This is not an excuse for them to do whatever they want; it is a reason to stand up for their rights.
“I think what the challenge here is to make sure their voices are used responsibly. And by that I mean let’s talk and have this discussion, let’s lead the process and understand what clubs need, what players need and what is the compromise.
“If there is no balance and one side, either the players or the clubs have all the power, then it will go wrong again.
“I understand clubs need to have assets, but they need to understand that players are human beings and sometimes things don’t go according to plan and they cannot become the asset that stays there parked on a corner.”
That is probably enough excitement for one day. We shall back with more analysis when the pendulum swings again.
OK, what might happen next, then?
To answer this, it is perhaps useful to go back to Bosman. When that bombshell ruling was delivered, clubs said the world would end, as the players now had all the power, which meant there was no point having academies, as the brightest talents would leave for nothing, and fans could forget getting attached to anyone, as the best players would swap teams every year.
The verdict came too late to help Bosman. But when the likes of Sol Campbell and Steve McManaman ran down their contracts at Tottenham and Liverpool respectively, in order to secure moves to new clubs, on much higher wages, it looked like the doom-mongers were onto something.
But six years after Bosman, the clubs, aided by FIFA and European football’s governing body UEFA, managed to persuade the European Commission that too much freedom of movement was bad for football and what that industry really needed was contractual “stability”.
The result was the first iteration of FIFA’s Regulations on the Status and Transfer of Players (RSTP). The authorities called it a compromise between the clubs’ need to retain some control of their most valuable assets and every other EU citizen’s right to quit one job and take another, anywhere in the single market. The unions called it “an ambush”.
In 2006, however, the pendulum swung towards the players again when a Scottish defender called Andy Webster decided to use a provision in the rules — the right for a player to buy out their contract after a prescribed protected period — to force a move from Hearts to Wigan.
As he was over 28, his protected period was three years and he was in the final year of a five-year deal, so he was OK to move. Unfortunately, nobody had settled on a formula for deciding how much he should pay his old club.
Hearts reckoned Webster, an international, was worth £5million but his lawyers offered them £250,000, a sum equal to what he was owed in wages for the last year of his deal.
Like Diarra, they took it to FIFA’s Dispute Resolution Chamber (DRC), which decided Hearts were owed £625,000, a sum based on his future earnings and the club’s legal costs. He appealed against that verdict at CAS and it reduced the compensation by £150,000 but backed the gist of the ruling.
For a year, it looked like Webster had become “the new Bosman” but, in 2007, the pendulum swung back towards “stability” when Brazilian midfielder Matuzalem tried to engineer “a Webster” out of Shakhtar Donetsk to Real Zaragoza.
After the usual visits to the DRC and CAS, football had a new, more club-friendly precedent for deciding the compensation jilted parties were owed by these unilateral contract-breakers, a sum based on the player’s remaining wages and his unamortised transfer fee.
Confused? Don’t worry, it was a bigger number and therefore a larger deterrent.
So, the pendulum is about to swing again?
Again, it depends on who you ask.
For FIFA, this is a great big nothingburger.
Its immediate response to the news from the ECJ was to jump on the sentences in the ruling that supported its right to have rules that breach EU rules on freedom of movement and competition because professional sport is not like journalism, law and other humdrum jobs. It has “specificity” and should therefore be exempted from certain principles, providing they are for a “legitimate objective”, such as “ensuring the regularity of interclub football competitions”.
Therefore, FIFA noted, the court still agrees football can justify rules aimed “at maintaining a certain degree of stability in the player rosters of professional football clubs”.
Phew, that should save most of the rulebook, then, right?
“The ruling only puts in question two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to consider,” a FIFA spokesperson said, referring specifically to two of Diarra’s main objections: the joint liability of the new club in a dispute like his, and the withholding of the International Transfer Certificate, which players need for a cross-border deal, until compensation has been paid.
FIFA’s chief legal and compliance officer Emilio Garcia Silvero doubled down on this “Am I bothered?” take with a later statement that said: “Today’s decision does not change the core principles of the transfer system at all.”
And he might be right. After all, it is now up to the Belgian court to apply the ECJ ruling to the Diarra case, which could clarify things slightly and certainly provide some time for the dust to settle.
It is also possible to read the ECJ ruling and imagine a scenario in which FIFA places all liability for breaching contracts “without just cause” on the player but puts in place a less onerous and more transparent formula for working out how much compensation should be paid.
And if FIFA wanted to increase its chances of gaining union support, it could also broaden the list of reasons why a player might have cause to break a contract. At present, it thinks the only justifications for a player to breach are not getting paid for months on end or the outbreak of war.
But there are plenty of people who have now read the ruling and do not believe FIFA is going to get away with a few tweaks.
As mentioned, FIFPRO and its member players’ associations are convinced the entire transfer regime is up for grabs and FIFA will now have to enter into the types of collective bargaining agreements that are central to professional sport in North America.
As David Terrier, the president of FIFPRO Europe, puts it: “The regulation of a labour market is either through national laws or collective agreements between social partners.”
Ian Giles, head of antitrust and competition for Europe, Middle East and Africa at global law firm Norton Rose Fulbright, is on the same page as the unions when it comes to the potential ramifications of the ruling.
“The decision essentially says the current system is too restrictive and so will have to change,” he explained.
“In terms of free movement, the ECJ recognises there may be a justification on public interest grounds to maintain the stability of playing squads, but considers the current rules go beyond what is necessary.
“It’s a similar story regarding the competition law rules. The ECJ has deemed the relevant transfer rules to amount to a ‘by object’ restriction — a serious restriction similar to a ‘no-poach’ agreement. Concerns about labour market restrictions, including ‘no-poach’ agreements, are a particular area of focus for competition authorities globally.
“Under competition law, it’s possible for otherwise restrictive agreements to be exempt — and therefore not problematic — if they lead to certain overriding benefits, but it’s generally difficult for ‘by object’ restrictions to meet the specific requirements for exemption.”
Giles’ point about the ECJ saying article 17 of the regulations is a “by object” restriction has been noted by other experts, as it means the court is effectively saying it is a restriction, end of story, and there can be no justification for it, no matter how noble the objective.
In terms of what this might mean for the industry, Giles can only speculate like the rest of us.
“It’s entirely possible this means players will feel they can now break contracts and sign on with new clubs, without the selling club being able to hold them or demand significant transfer fees,” he said.
“This will likely result in reduced transfer fees and more economic power for players, but over time things will have to stabilise to allow clubs to remain economically viable. Smaller clubs who rely on transfer fees for talent they have developed may well be the losers in this context.
“The key question now for FIFA will be how they how can adapt its transfer rules so that they are less restrictive and therefore compatible with EU law, while seeking to maintain the stability of playing squads. It will also be interesting to see whether more players start to breach their contracts in the meantime, emboldened by the ECJ’s judgment.
“Something else to keep an eye on is whether we could see other players bring damages claims, alleging they’ve suffered harm as a result of FIFA’s transfer rules, with damages claims for breaches of competition law generally on the rise in the UK and Europe.”
Right, has anyone else chipped in?
Yes! Not that they have shed much light on where we are heading, although they have confirmed where loyalties lie.
European Leagues, the organisation that represents the interests of domestic leagues across the continent, took a player-friendly stance by saying the decision confirmed that “FIFA must comply with national laws, European Union laws or national collective bargaining”.
It added that it stood for contractual stability but only when it is “safeguarded by national laws and collective bargaining agreements negotiated and agreed by professional leagues and players’ unions at domestic level”.
The European Club Association (ECA), however, adopted an “if ain’t broke (for us), why fix it” approach.
“Whilst the judgement raises certain concerns, the ECA observes that the provisions analysed by (the court) relate to specific aspects of the FIFA RSTP, with the football player transfer system being built on the back of the entire regulatory framework set out in the (regulations) which, by and large, remains valid,” it said.
“More importantly, the ECJ did recognise the legitimacy of rules aiming at protecting the integrity and stability of competitions and the stability of squads, and rules which aim to support such legitimate objectives, including among others, the existence of registration windows, the principle that compensation is payable by anyone who breaches an employment contract and the imposition of sporting sanctions on parties that breach those contracts.”
As a champion of clubs large and small, the ECA noted that the transfer system “affords medium and smaller-sized clubs the means to continue to compete at high levels of football, especially those who are able to develop and train players successfully”.
Whether that is actually true or not is the subject of a much bigger and long-running debate. But it is certainly an attractive idea and sometimes that can be enough.
What do football’s transfer movers think?
My colleague Dan Sheldon spoke to Rafaela Pimenta, a football agent who represents Erling Haaland, Matthijs de Ligt, Noussair Mazraoui and other top stars. She told The Athletic: “If you talk to agents, they are over-excited because, finally, the players are going to get heard. How many times are we still going to see them crying after having their careers destroyed because they are being denied a transfer?”
She made it clear, though, that the focus now should be on conversations between football’s various stakeholders to define what the new rules should be.
“For players, this can be a landmark and I hope players will use it wisely,” she said. “This is not an excuse for them to do whatever they want; it is a reason to stand up for their rights.
“I think what the challenge here is to make sure their voices are used responsibly. And by that I mean let’s talk and have this discussion, let’s lead the process and understand what clubs need, what players need and what is the compromise.
“If there is no balance and one side, either the players or the clubs have all the power, then it will go wrong again.
“I understand clubs need to have assets, but they need to understand that players are human beings and sometimes things don’t go according to plan and they cannot become the asset that stays there parked on a corner.”
That is probably enough excitement for one day. We shall back with more analysis when the pendulum swings again.