The football transfer system faces potential collapse following a ruling by the Court of Justice of the European Union (CJEU) that declared key FIFA transfer regulations incompatible with EU law.
Dubbed “Bosman Part Two,” this landmark decision stems from the case of FIFA v. Lassana Diarra, a former midfielder for Chelsea, Arsenal and Portsmouth.
The court issued two pivotal judgments. First, it determined that the rules governing the authorisation of player transfers violate the freedom of movement, a fundamental principle of EU law. Second, it ruled that the requirement for buying clubs to cover compensation costs when a player unilaterally terminates a contract “without just cause” is anti-competitive.
In a statement, the court emphasised that “the rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club established in the territory of another Member State of the European Union.
“Those rules impose considerable legal risks, unforeseeable and potentially very high financial risks, as well as major sporting risks on those players and clubs wishing to employ them, which, taken together, are such as to impede international transfers of those players.”
Furthermore, the court noted that “as regards competition law, the Court holds that the rules at issue have as their object the restriction, and even prevention, of cross-border competition which could be pursued by all clubs established in the European Union, by unilaterally recruiting players under contract with another club or players about whom it is alleged that the employment contract was terminated without just cause.”
The court concluded that these rules “do not appear to be indispensable or necessary.” Consequently, this case will now be heard by the Belgian courts, where the legal proceedings originally began.
Context
The case began in 2014 when Lassana Diarra, then with Lokomotiv Moscow, was embroiled in a salary dispute that led the club to terminate his contract, claiming a breach. Lokomotiv subsequently sought €10.5m in damages from Diarra through FIFA’s Dispute Resolution Chamber, which ruled in favour of the club.
Shortly after, Diarra received a contract offer from Belgian club Charleroi, contingent on FIFA confirming that he could transfer without liability for Lokomotiv’s claims. However, FIFA did not provide this assurance due to its rules requiring an international transfer certificate from the departing club. Consequently, in December 2015, Diarra filed a lawsuit against FIFA and the Belgian league for lost earnings.
Potential outcomes
As FIFA navigates the fallout from the recent ruling, it must confront serious questions about how it will modify its regulations.
One significant impact of this announcement is the potential for a new environment, in which players may find it easier to terminate contracts to join other clubs. This shift could significantly diminish the risk of compensation claims for buying clubs, ultimately transforming the landscape of player transfers.
If this happens, clubs may be left perplexed about how to maintain a player’s loyalty. However, contracts are not merely assurances of a player’s commitment; they play a crucial role in a club’s financial revenue strategy.
While this ruling does not establish any definitive outcomes at this stage, it is not surprising that it is being referred to as “Bosman Part Two.” The original Bosman ruling in 1995 addressed the right of players to leave a club freely at the end of their contracts.
For many years, clubs have struggled to maintain control over player contracts, increasingly losing power to players and their agents. This announcement seems poised to diminish that control even further, if not eliminate it altogether.
FIFA recently came under fire because of its plans to expand its match calendar. In July, European Leagues and FIFPRO Europe announced a plan to file a complaint with the European Commission.
