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FIFPro steps up lobbying against football transfer system

Out-Law News | 18 Feb 2016 | 3:23 pm | 2 min. read

New data on the training compensation paid between football clubs for the transfer of young players highlights the need for football's transfer system to be "overhauled", players union FIFPro has said.

Last year $20.7 million in training compensation was paid in total across world football, FIFPro said. The figure, compiled by football's world governing body FIFA but not released publicly, represented 0.5% of the $4.2 billion in player transfer fees that were agreed in 2015, it said.

"The share matches a record low and was ten times less than club payments to agents," FIFPro said.

FIFPro secretary general Theo van Seggelen said that it was wrong for agents to benefit more than "football clubs that produce talent" and said it is "critical" that the current football transfer system is "overhauled".

"Transfer fees are circulating among football’s elite, keeping a handful of clubs and a few agents rich, and not enough money is reaching smaller clubs," Van Seggelen said. "Ever since the creation of the current transfer system in 2001 there has been a clear lack of motivation to modernize football."

FIFA's Regulations for the Status and Transfer of Players (RSTP) contain mechanisms designed to ensure that clubs involved in the training and education of players are compensated when those players move to other clubs. One set of rules under the RSTP framework places a general requirement on buying clubs to pay training compensation fees where they acquire players under 23 years of age from other clubs.

A solidarity mechanism is also provided for and means that clubs involved in a player's development are eligible for a proportion of the training compensation due from that player's transfer between two other clubs.

Last year FIFPro filed a competition law complaint against FIFA, the world governing body for football, before the European Commission. It claimed that the player transfer market system, which is governed by FIFA regulations, is "anti-competitive, unjustified and illegal".

The Commission is not obliged to investigate FIFPro's complaint. FIFPro said that the Commission is currently "studying the complaint and has asked FIFA for its response". Legal experts at Pinsent Masons, the law firm behind Out-Law.com, have highlighted previous court rulings and research that might influence how any investigation into football's transfer system could be approached.

FIFPro's calls for an investigation into football's transfer system have support from UK MEP Richard Corbett. He said an investigation is necessary to see whether the system is "fair, transparent and above board and whether it works in the wider interest of the game".

Sports law expert James Earl of Pinsent Masons, the law firm behind Out-Law.com, said that the figures are indicative of wider challenges that smaller, developmental clubs face in raising investment.

"These statistics, if correct, underpin how little of the huge value of transfer fees in football actually trickle down to clubs involved in the development of young players," Earl said. "This also underlines the growing divide between larger, wealthier clubs and those who have traditionally specialised in the development of grassroots talent."

"The problem is also compounded when you consider the third party ownership ban which was imposed by FIFA in 2014 – many clubs in key markets, particularly Spain, Brazil and Portugal, have historically relied on investment from third parties in order to fund the development of their squad which in turn have enabled increased transfer values to be derived by these clubs," he said. "That funding route is now gone, and given what we now see with the disproportionate sharing of transfer fee income, it must surely be a bleak time for a wide number of these smaller clubs."

"Indeed, with this potential route of investment cut, and there now being evidence that clubs can expect to receive just a fraction of the total value of transfers fees being exchanged in world football through training compensation, it does leave smaller, developmental clubs in a difficult position and one must ask whether this could impact on the supply of player talent from certain markets in the longer term. However, whilst FIFPro is justified in shining a light on this disparity, it remains to be seen whether FIFPro has a cogent legal case that football's transfer system breaches EU competition laws," Earl said.