THE LEGALITY OF THE TRANSFER MARKET

Introduction

To answer the question about what the transfer market in football is, it is the period during the football season within which a player can transfer from one professional club to another for a fee or for free.

It is also characterized as a monetary transaction between two clubs that involves a player moving from their current club to a different one, for various different reasons. The transfer market exists because it is necessary for football clubs to better themselves by updating their roster of players from time to time while also making any financial profit that they can. The transfer market exists mostly for three reasons,

● Clubs try to sell players in order to make a profit.

● Purchase players to bolster their starting lineup by giving the team's offensive force more speed and power.

● Trying to offload players until the season ends, which is also done for various reasons like maintaining their starting squad while also trying to generate a financial benefit.


Transfers are usually contingent upon a transfer fee. A transfer fee is essentially the sum paid by the purchasing club in exchange for the professional football player's playing capabilities and employment agreements. Transfer fees depend upon a lot of varied factors, which include the age, demand, form, and popular appeal of the player. Additionally, it considers a number of elements, such as a player's overall quality, the duration of their present contract, their commercial value, and their future value.


The football transfer market is by its very nature full of rumors, and frequently the general public is unaware of the more intricate legal factors that influence the deals. In order to clarify this, this article asks some of the top attorneys and agents in football for their opinions on some of the key legal concerns that arise during the football transfer window. This post aims to serve as a helpful resource for both experts and enthusiasts who want to learn more about the business and laws governing the sport.


General rules governing the transfer market

The transfer market has certain rules that are set up by domestic leagues around the world that prevent a distortion of the market where the clubs with wealthy owners (Roman Abramovich, Sheik Mansour, and Qatar Sports Investments) have a monopoly over the best players available. Football players can only be registered and become eligible to play for a club during the 12-week summer transfer window or the 4-week winter transfer window. Additionally, comparisons can be made between the prohibition on a player's ability to transfer easily to a rival and a non-compete clause in an employment contract's termination clause. Registration periods are a way to stop player loyalty from waning, especially in the legal services market where lateral moves to competing firms are frequent. This is due to the possibility that highly coveted athletes who are at the height of their careers could be easily distracted by brightly colored objects, such as the chance to realize a childhood ambition of playing at Camp Nou, Santiago Bernabéu, or even Old Trafford for players like Alexis Sanchez.


Objectives of the players and clubs

A noteworthy development in the world of football business is the rise of performance-related remuneration in player contracts negotiated by the top teams in Europe, particularly those in the English Premier League. Several underlying goals can be used to explain why certain clubs are moving away from the conventional, more straightforward method centered around fixed sums and little room for flexibility, and toward more flexible and variable pay systems. The capacity of a club to safeguard its interests by bringing performance-based compensation into player contract discussions at the outset is a fundamental justification, first and foremost from a commercial one.

By giving players the chance to effectively control their wages, clubs have the ability to boost player motivation and incentives, which can eventually improve team culture and atmosphere and improve individual and team performance. Furthermore, with the growing sophistication of clubs' performance analysis methodologies and the growth of data analytics in football generally, clubs can more simply, more conveniently, and with better levels of accuracy examine and analyze players' effectiveness and room for improvement. This has aided clubs' recruitment efforts and assessments of transfer targets, as well as the transition to pay structures that are required to do the job. Some believe that the recent trend will be met with resistance from players and their representatives because they see risk and uncertainty in a payment system that includes a lot lower guaranteed pay and more room for performance-based variance. However, there is a growing consensus that players and agents will accept the idea given the obvious chance it presents to greatly enhance individual wages through higher levels of performance, both on a personal and team level.


Issues that give birth to legal challenges

The difficulty for a club wanting to implement performance-related pay as part of its payment strategy will be to ensure that an adequate balance is found between a player's chance to trigger incentives through individual success (for example, goals or assists) and team success (for example, promotion or qualification for European competition), as well as to ensure that performance goals are both achievable and reasonable. Clubs must achieve this by staying abreast of the constantly evolving data analytics techniques employed by Europe's top teams to evaluate and analyze players' current and future performance. The major difficulty for players and their officials will be to make sure that any language regarding performance-related pay in a contract appropriately strikes a balance between the player's and his or her possible future employer's commercial interests, as well as that the adjustment sufficiently rewards and empowers the player.


The Bosman Ruling

The 1995 lawsuit filed by Belgian midfielder Jean-Marc Bosman against his former team RFC Liege, which resulted in the historic ruling Union Royale Belge des Sociétés de Football Association ASBL v. Jean-Marc Bosman (C-415/93), revolutionized the football transfer market. The European Court of Justice ("ECJ") ruled that at the expiration of a player's contract, a football club in one member state was not entitled to compensation for the player's transfer to a football club in another member state. Bosman's salary was decreased by the Belgian team RFC Liege as a result of the French club USL Dunkerque's refusal to pay the selling club's valuation of the player. The decision opened the door for the free transfers of Sol Campbell (Arsenal, 2001), Andrea Pirlo (Juventus, 2011), and Robert Lewandowski because the ECJ maintained the concept of free movement of labor, one of the four principles of the European Union (Bayern Munich, 2014).


Conclusion

The football transfer market is a very vulnerable transaction forum based upon an employer-employee relationship. Although there are fundamental regulations in place, there is still a vast scope of exploitation. This is because these transactions cannot be brought into the jurisdiction of a particular country, and hence the delivery of justice and welfare is often compromised. The football transfer market is in dire need of regulation that would make sure a certain element of fairness is ever-present in the footballing world. Introduction of laws and regulations would prevent the development of monopolies, would incentivize fair and transparent transfers, and would not leave a certain party at the risk of being exploited inorder to better their starting eleven.


References

1. LawInSport, 2015. A Guide To The Key Legal Issues In The Football Transfer Window. Available at: <https://www.lawinsport.com/topics/features/item/a-guide-to-the-key-legal-issues-in-the-football-transfer-window> [Accessed 4 July 2022].


2. Goal, 2020. How does a football transfer work? From Players to agents, clubs to leagues. Available at: <https://www.goal.com/en-in/news/how-does-a-football-transfer-work/130og8e76770l1dcqbne3jntx7> [Accessed 4 July 2022].


3. Kwafo-Akoto, H., 2018. Legal Interview Topics: The Laws Behind the Football Transfer Window. [Blog] The Lawyer Portal, Available at: <https://www.thelawyerportal.com/blog/laws-behind-football-transfer-window/> [Accessed 4 July 2022].



This article is written by Partha Singh of Institute of Law, Nirma University.

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