Review: WSLR Players Contracts 2011

On Thursday 7th July I attended the annual World Sports Law Report Player Contracts 2011 conference. There were a variety of distinguished and respected attendees from not just the legal industry but also finance, regulation and academia to name but a few. There were a variety of topics on the programme for the day.

The first topic was a legal look at the UEFA Financial Fair Play Rules from Stephen Hornsby. He made a number of interesting points particularly regarding the enforcement of the rules, being critical of the appointment of former Belgian Prime Minister Jean-Luc Dehaene as being in charge of enforcement and critical of football authorities in general in needing to learn to apply their own rules. It was also said that the break even rule on "footballing activities" could make access to European competitions only available to established clubs with high football revenues, and hence no real change to the current status quo. Having later spoken to a UEFA representative at the conference who was involved with the formulation of the rules, it was regrettable that he was not invited to take part in a roundtable discussion with Stephen. Before the first refreshment break we then heard from two representatives of FIFA on the relatively new Transfer Matching System, which has as one of its principal objectives to reduce the risk of money laundering in transfer dealings, and therefore the risk of corruption in the game. It was a highly knowledgeable and detailed presentation on how the system operates and was clearly useful for representatives from football clubs who actually have to use the system. Particular praise should be given to Isabelle Solal for fielding difficult specific questions on a system which only became compulsory in October 2010 and therefore obviously will still be suffering from teething problems.

After the first break a presentation on the poaching of young players was given by Wil van Megen, a lawyer from FIFPro, which was well placed in the programme as it led on from some of the issues raised in the previous presentation. He examined the rules which look to prevent young player poaching and trafficking and how these rules are enforced, then picked a number of holes. He also provided a good summary of the Kakuta case, involving Chelsea FC and the French system of development of young players. Finally, he offered a number of solutions to the problem with the overall message that the freedom of movement must prevail with the justification being that even if young players ultimately don't make the grade then research into the psychology of the experience still suggests that the players believe it was worth it overall. The final presentation before lunch was a detailed look at the compensation for training costs by barrister Owain Draper, which again followed on well from the preceding discussion, and as it turned out was a hot topic for those in the room. He focused in some detail on the recent Olivier Bernard decision from the European Court of Justice citing his preference for the analysis and views of Advocate General Sharpston rather than that of the court itself. However, it was clear from both that an important consideration must be the “player ratio” in terms of the cost of the amount of young players trained compared to the amount that actually make it professionally. He then examined both the FIFA and FA rules on the topic, saying that the latter is more case-specific but hedged round with discretionary elements, whilst the former has a safety valve in the form of the Dispute Resolution Chamber who can adjust compensation down where it is "clearly disproportionate", but questioned its weakness in practice.

After a lunch which gave good opportunities to network with the diverse range of people in attendance we were treated to an analysis of the fine levied against QPR at the end of the last football season in relation to third party ownership by Jack Anderson, a case which had a very large volume of media coverage at the time. As a football fanatic as well as a lawyer it was a simple yet knowledgable walk through the genesis of the case and of the rationale behind the FA tribunal’s ruling. Legally it was interesting to note that although there is a civil standard of proof in the FA Regulations, the tribunal essentially applied a "comfortable satisfaction" standard, similar to that found in the WADA Code, which is higher than civil standard but still falls short of a criminal one. In essence all QPR were found guilty of was non-disclosure of a murky looking situation with a third party owner in South America. Crucially, in contrast to the Carlos Tevez case which triggered the instigation of rules on third party influence, there was no evidence of bad faith on the part of QPR. People from the floor rightly questioned the point of restrictions on third party influence but Anderson did point out that the equivalent FIFA provision had been used to tackle match fixing in Finland which he believed is what it should be used for.

Next came a somewhat understandably one-sided view on compensating clubs for international duty by Wouter Lambrecht, the legal counsel for the European Clubs Association, which is essentially a representative body enhancing the role of clubs in European football governance. He spoke persuasively on the issue of compensation for injury whilst on international duty and insurance for such an event. However it was heavily slanted towards taking the liability away from the clubs entirely and, as I questioned, that is all well and good but if I were a national association I would ask for certain mitigating factors to be included, for instance a cut from transfer fees if the players value had increased by playing for their country, for example at a World Cup. The third issue on the agenda during this session was the practical one of immigration and eligibility of players, and mention must be given to Gulay Mehmet for filling in at the very last minute. She used her many years of experience in this field to set out succinctly the new immigration rules, which on top of the old requirement of having played a certain number of games for your country also adds a points-based requirement which shifts the onus on to the clubs, and to answer well many questions from lawyers and football clubs who have had issues with the system in practice.

There were three presentations after the final break of the day. The first centered on possibly the most prominent topic across the legal world at the moment: the Bribery Act 2010. Barry Vitou of Pinsent Masons spoke practically on its application to the world of sport in terms of risk, the law and compliance. He particularly cited the new offence of a failure to prevent bribery and how to manage this in terms of scouts and agents, for example, and the relationship of the new act with the draconian Proceeds of Crime Act, particularly for contracts. His overarching message was that transparency is the principal solution to avoid falling foul of the new act.

The penultimate topic was that of rival competitions and it was pleasing to have a presentation from a different sport other than football in the shape of Ian Smith from the Professional Cricketers’ Association. With cricket being a sport which has had many issues over the years with rival competitions he chose to centre his piece around the most recent, the feud between the Indian Premier League and the Indian Cricket League twenty-twenty competitions. He emphasised that the common factor across all sports that must be remembered is that players are the product and that market forces must be allowed to rule with some controls; in essence effective athlete representation is key to fair regulation and buy-in. In this respect he was in favour of bringing ”legitimate tournaments” into the international fold.

The final presentation was very much of a legal nature, calculating compensation for contract breaches, so thankfully was opined upon by bright young barrister Andrew Smith. This has been a recurring topic at the conference over the years but being a first-time attendee I was impressed with the analysis of the evolution of the case law coming from both the FIFA Dispute Resolution Chamber and the Court of Arbitration for Sport. It was interesting to learn about the use of the "specificity of sport" concept as a “correcting factor” to make compensation fairer and more reflective of loss suffered. His final slides were also a practically useful checklist of the key principles in this much litigated area.

I very much enjoyed the day and learned a great deal, as well as meeting many engaging, interesting and knowledgeable people. There are however a couple of changes I would make to the programme in the future: the first would be rather than 'panels' after two or three presentations throughout the day for questions I would include roundtable discussions on prevalent topics; and, echoing comments after last year’s conference, it would be good to have a wider variety of sports represented in terms of the speakers, which I imagine would also benefit the organisers by attracting a higher number of delegates.

By Kevin Carpenter, Contributor of Lawinsport.com