With the World Cup starting in South Africa in June, this latest article aims to tackle the legal issues surrounding player participation at the World Cup and other national team football tournaments. Some interesting legal questions that have arisen in the past few years. Many of the issues discussed below demonstrate the tension that exists between clubs who pay a players salary and the national teams who select that player for international duty. The topics discussed below include debates about:

• who should pay the wages of a player if they get injured whilst on international duty;
• whether individual associations like the English Football Association (the FA) should take out insurance against player injury; and
• how much compensation (if any) should clubs receive whilst their players play in international competitions like the World Cup.

Player Injuries During International Duty

Clubs had for many years protested that they should receive compensation for releasing their players to represent their respective countries in international matches. National associations had traditionally rejected the idea of paying clubs to use their players when playing for their country. An important case occurred in 2004 which proved the catalyst for change in this area of disagreement between clubs and national associations. The case concerned football player Abdelmajid Oulmers. In November 2004, whilst playing for Morocco against Burkina Faso, Mr Oulmers was injured and was unable to play football for eight  months. His club, Sporting Charleroi, blamed the loss of the player as the reason for failure to win their domestic championship. Understanding the issue was of major importance to all clubs throughout Europe, an association called the G14 supported Sporting Charleroi in a compensation claim against FIFA for the injured Oulmers.

By way of background, the G14 was formed in September 2000 by fourteen of Europe’s top clubs. It had no official authority in the footballing world and had been seen by UEFA as an unofficial pressure group that provided clubs with a powerful collective voice. The G14 was founded as a consequence of the dissatisfaction felt by the founding clubs with UEFA and a feeling that clubs should be represented within the formal UEFA decision making process so that they would be consulted before UEFA made decisions affecting them.

The G14 further claimed a huge €860m in damages and compensation for the costs that had not been paid to clubs whose players had been representing their country for free whilst the clubs continued to pay their wages.

In January 2008 as a result of negotiation on the part of UEFA, FIFA and the G14, the clubs  that formed part of the G14 agreed to disband the organisation and replace it with a new association called the European Club Association (ECA). At the same time it was agreed between UEFA, FIFA and the G14/ECA, that all outstanding lawsuits (including the Oulmers case) would to be brought to an end. It meant that a court did not make a final decision on the case.

Both parties viewed the negotiation and transformation of the G14 into the ECA as a big success. FIFA and UEFA now have the comfort that various legal disputes started or supported by the G14 clubs would be dropped whilst the clubs, from the Euro 2008 tournament, were guaranteed to receive compensation for releasing their players. Many believe that the most significant part of the G14/ECA deal with UEFA and FIFA was the significant compensation paid to clubs for its players participating in FIFA and UEFA sanctioned Finals Tournaments.

The agreement entitles compensation to be paid to the clubs for their players’ participation in international tournaments. It should be stressed that the compensation payable by UEFA and/or FIFA to clubs does not however cover situations when a player is injured when playing for his country. The case of Michael Essien, explained below, is a recent example of this ongoing issue.

For Euro 2008, UEFA agreed that clubs who released players should be paid up to £3,000 per player per day in compensation. Money was only paid to clubs for the finals tournaments and not for qualifying matches.

Additionally whilst UEFA said that Euro 2008 was worth more than £32million to clubs, Euro 2012 is expected to be worth in excess of £40million. UEFA President Michel Platini said “Clubs who provide UEFA and FIFA with certain amounts of money through these players should get some compensation and share in these profits”.

It has been reported that the 2010South African World Cup will see a total of €26 million being paid to domestic clubs, amounting to just over €1,000 per player per day. This figure is set to increase for the 2014 Brazil World Cup to around $70m. Michael Gerlinger, a lawyer for German team Bayern Munich, explained that the German club had received €1m for releasing its stars to play in Euro 2008.

Injury Insurance

As mentioned above, whilst FIFA and UEFA appear now to be paying compensation to clubs for releasing them to play in World Cup Finals and European Championship Finals Tournaments, there is no comprehensive mechanism currently in place for compensation if a player gets injured on international duty. The recent example of the Togo national team being shot at in the build up to the African Cup of Nations tournament illustrates a very serious issue. If Emmanuel Adebayor had been injured in the terrorist attack would Manchester City or Togo have been liable to pay his wages?  In most cases this would depend on whether the national association has an insurance policy to cover such eventualities. Many national associations explain that such insurance policies are too expensive. This can leave top European players whose transfer value may be around  €10m-€20m and who are paid €100,000 per week without insurance when playing international matches. The obvious safety net is for the club to insure the player for when he plays for his country.

It was reported that when Michael Owen was injured at the 2006 World Cup, Newcastle, his club at the time, received £10m in compensation. Owen missed almost the entire following Premier League season. Newcastle received the compensation because the English FA had an insurance policy in place to cover his wages should he or other members of the English national team be injured during the tournament. Many national associations however do not have player injury insurance in place.

In a similar case, Michael Essien the Chelsea midfielder suffered knee ligament damage whilst on international duty with the Ghana national team. It was thought that the reason Chelsea did not pursue a compensation claim with the Ghana Football Association was because the Association could not have afforded to pay Essien’s wages (reported to be over £100,000 per week). Some commentators believe that every national team should be compelled to take out insurance for player injuries in order to avoid such situations like the Essien example.

At present, it is reported that Arsenal are seeking compensation from the Dutch Football Federation. Robin van Persie was injured playing for Holland in a friendly match and was unable to play for Arsenal for around five months. Arsenal manager Arsene Wenger was adamant that he:

“expect[ed] financial compensation for the damage it can make to the championship [prospects] and the salary involved.” He went on to state that  “the federations have too much power ahead of the clubs, yet it is the clubs who pay the players’ wages.”

Conclusion

Whilst clubs like Arsenal, Chelsea and Bayern Munich are all now compensated for releasing their players during a World Cup or European Championship Finals Tournament, there is still much debate about who should insure players whilst they are on international duty, and if they do subsequently get injured, who is liable to compensate the club, for losing that player for a significant amount of time. These are the very same arguments that may have been resolved had the Oulmers case been ruled on. As the ECA, FIFA and UEFA came to a compromise agreement in 2004, there may well be many future disputes between clubs and national associations, when players return injured from international duty. Who pays and who is obliged to take out insurance to cover any risk of injury appears now to be a pressing international issue.

With the news that Wolverhampton Wanderers (Wolves) have been handed a suspended £25,000 fine as a result of breaching PL rules for fielding a weakened team, the Premier League (PL) Board decision raises questions about past situations where managers have rotated or rested players in important games yet not been punished.

The Regulations

The PL Board found Wolves guilty of breaching rules B.13 and E.20. B.13 relates to each PL club behaving “towards each other Club and the League with the utmost good faith.” Rule E.20 stipulates that “in every League Match each participating Club shall field a full strength team.”

Since the PL Board announced the decision, there has been much debate about how previous instances of heavy rotation had gone unpunished. Neil Warnock, the ex-manager of Sheffield United whose team were relegated after Liverpool and Manchester United (United) allegedly fielded weaker teams (against teams competing with Sheffield United to avoid relegation in 2007), did not mince his words.

“It’s a disgrace the Premier League even thought about charging them [Wolves]. They didn’t charge United or Liverpool, which were far more expensive mistakes. Have Liverpool been docked points for the team they put out against Fulham or the one Manchester United did against West Ham? I don’t think so somehow.”

This is clearly a difficult area based on subjective assessments of  rotation, resting players and player injuries. Perhaps what went against Wolves was that their manager Mick McCarthy was blunt in his explanation that Wolves had a relegation six pointer against Burnley three days after the United game, and that was his priority. Wolves fans who travelled to Manchester for the game were subsequently furious that they paid over £40 to watch a Wolves reserve team take on United.

Two Premier League Examples: The Quality of Your ‘Second String’

Below are two examples of heavy rotation by United and Liverpool. The context of the United example, was that they had just won the PL with one game to spare. They played Hull on Sunday 24 May with the Champions League Final versus Barcelona three days later. Nine days earlier they had put out their strongest team against Arsenal because at that stage the race for the title with Liverpool was still up for grabs. Once United had secured the PL title they then rotated ten of their 11 players for the trip to Hull in advance of their Champions League final.

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This article is to give you an understanding about the free movement of football players in the European Community (EC). It will set out cases and the rules and regulations of UEFA, FIFA and the Premier League.

Legal Framework

The laws that govern this issue primarily relate to Article 39 of the EC Treaty. This basically means that every European Member State that is a member of the EC (such as Germany, Italy or Spain for example) has to obey European-wide laws on a number of issues. One such law is Article 39 which relates to the free movement of workers, which include football players. Article 39 only relates to players playing inside a European Member State. Therefore an English player in Japan could not use Article 39 to challenge Japanese football rules.

Bosman and the Free Transfer

The ‘Bosman’ case is seen by many football commentators as the most significant European football case of all time.  Jean-Marc Bosman was a footballer playing for a Belgium club called Leige. His playing contract expired in 1990 but the club that wished to buy him (Dunkerque) did not offer a large enough transfer fee to Leige.  As a result Leige held on to his registration and did not allow him to leave the club. The reason why this story is the most important football decision ever made in the EC is because the European courts in 1995 (five years after his complaint) ruled that:

1. when a European footballer came to the end of his contract he was free to sign for any European club he wished and that it was illegal for the club he had played for to hold on to his playing registration; and

2. as foreigner quotas were in operation in European competitions, such quotas which allowed for a limit of three “foreign” players in a team squad were also illegal. Both issues were ruled unlawful under Article 39.

The effect was that Bosman and all other EC football players were given the right to a free transfer at the expiry of their contracts. Some of the biggest Bosman transfers in Europe have included Sol Campbell from arch rivals Tottenham to Arsenal and Steve McManaman from Liverpool to Real Madrid. The summer before McManaman moved to Madrid Barcelona bid £12m for McManaman but the transfer fell through. Less than a year later he had joined Madrid on a free transfer. Liverpool were not very happy at the money they lost!

The relevance of the Bosman decision is that:

1. European footballers can benefit from letting their contracts expire and then sign for another European club. Players like Michael Ballack took advantage of this with a large signing on fee from Chelsea and wages (reported to be over £100,000 per week when he joined Chelsea from Bayern Munich in 2006; and

2. no quotas can be imposed on clubs by FIFA or UEFA that discriminate on the basis of nationality (as this would conflict with Article 39 as mentioned above).

The New Quota Debate

In the last few years, and because of the influx of many foreign players into European leagues the Premier League, UEFA and FIFA have either implemented or propose to introduce further reforms to limit the number of foreign players playing in leagues like the Premier League, Serie A or competitions like the Champions League or the Europa League. The football authorities have to be very careful however that they do not implement quota systems that would be illegal under the European free movement laws. UEFA has already implemented new regulations concerning foreign players called the “home grown players” rule.

At present, UEFA regulations state that the 25 man squad submitted by a club participating in the Champions League must include 8 “locally-trained players”. A “locally trained player” can be either “club-trained” or “association-trained”. There is little difference between these two terms, both essentially mean that that player must have been registered with the club (or with another club affiliated to the same national association) for three full seasons, or 36 months, between the age of 15 and 21. The Premier League has recently announced that it will be implementing a home-grown player rule in time for the start of the 2010/11 season.

The PL quota rule follows a very similar format to the UEFA rules as discussed above. Home grown players will be defined by the Premier League as anyone registered with the English or Welsh Football Associations for three seasons or 36 months before a player’s 21st birthday. The important part of the rule is that it applies irrespective of nationality meaning that players such as Cesc Fabregas, Arsenal’s Spanish midfield maestro, counts towards Arsenal’s quota of “locally-trained players” even though he’s about as English as paella!

The future of foreign player quotas

FIFA has not yet brought any rules on a quota system into place. Its proposals for reducing the number of foreign players in national leagues, include introducing a true quota system for foreign players, where every team must consist of at least 6 players born in the country they play football in. This is important as this restriction in based directly on nationality. This is where the UEFA rules and FIFA proposals differ.

Players UEFA regulations FIFA proposals PL regulations for the 2010-11 season

Steven Gerrard playing for Liverpool – Qualifies as a home grown player (UEFA Regulations), Qualifies as national of England (FIFA Proposal) Qualifies as a home grown player (PL Regulations for 2010-11).  Cesc Fabregas playing for Arsenal – Qualifies as a home grown player even though he was born in Spain (UEFA REgulations), Does not qualify as he was born in Spain (FIFA Proposal), Qualifies as a home grown player even though he was born in Spain (PL Regulations for 2010-11).

Clubs will not want their ability to purchase the best international players restricted. League’s may not want restrictions which lessen the attractiveness of the league product for marketing and television broadcasting sales if only second rate national players (under FIFA’s system) can be used because each clubs ‘foreign’ quota has been reached.

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High profile takeovers of Premier League (PL) football clubs have become common place in recent times.  Current  Chelsea owner like Roman Abramovich is almost as recognisable as some of his star players.  Many investors have seen the vast revenues that can be generated from broadcasting money, Champions League success, merchandising and ticket sales.  Since 2005 11 current PL clubs have changed ownership as illustrated by the below table.

One of the most notable takeovers in recent years occurred in July 2003 when Chelsea was sold to Roman Abramovich for around £140m.  It has been reported that Mr Abramovich has since poured over £600m into Chelsea in the form of transfer fees and wages. Within three years Chelsea had invested heavily in Shevchenko (£30m) Essien (£24m) Drogba (£24m) Wright-Phillips (£21m) Carvalho (£19m) Mutu (£19m) Duff (£17m) Veron (£16m) and Crespo (£16m).  Chelsea subsequently won the PL title in 2004-05 and 2005-06 and FA Cup in 2007 and 2009.  Interestingly Ken Bates, who sold Chelsea to Abramovich considered that:

 “if this is the start of the super-rich invaders it’ll be very, very interesting to see how the fans react to it.”

No doubt Chelsea fans have been more than happy with their trophy collection and mega signings since the beginning of the Abramovich era.  Other football takeovers in the PL have been more controversial.  One example is Manchester United.  Having won the PL championship for the last three years and Champions League winners in the 2008-9 season, United’s debt is over £700m after the Glazer family takeover back in 2005.  In the three years since the takeover, interest payments of around £86m have been paid to various investment banks and hedge funds who loaned the Glazer family part of the money needed to purchase Manchester United.  The most recent accounts show that if Ronaldo had not been sold to Real Madrid for £80m, the club would have made a loss of over £30m for the second consecutive year.  The award for the largest ever annual loss in the PL however goes to Manchester City with an annual loss of £92.6m in the year since owner Sheikh Mansour bought the club.

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