Football player contracts

Are football players able to unilaterally break their existing contract with their football club?

Player power in football

Player power in football is an issue which is consistently discussed when talking about top level football – one of the most lucrative industries in the modern world. Players are currently paid vast sums of money on a weekly basis for the contracts which will earn them millions per year.

The role of football agents in increasing player power

Football agents have a key role to play in increasing the financial power currently experienced by footballers. For example if a player has experienced a good season for his club which has seen his market value go up agents will often use this as a bargaining tool to engineer a new contract for that player despite not being anywhere near the end of his previous contract. Football players contracts can last for a total of five years but are often renewed after only two years in order to increase the wages paid to that player – this is a key example of player power.

Player power following the Bosman ruling

Following the Bosman ruling which enabled out of contract football players to move to clubs within the European Union without the requirement of a transfer fee we have seen a significant increase in player power. For example players will often refuse to sign a new contract with their existing club in order to become out of contract and thus able to move for free. If the club that the player moves to is not required to pay a transfer fee then they will be willing to provide that player with huge amounts of money both as a signing-on fee and in wages.

Player power when under an existing contract

Following the Bosman ruling players are often able to play clubs off against each other to engineer the highest salary when they are out of contract. The notion of having a player under contract would therefore, provide the club with some form of stability to ensure that when they sell their player to another club they can demand a transfer fee for the worth of that player. However, there is a FIFA rule which provides power to the players even in this scenario.

Article 17 of the FIFA Transfer Regulations

Article 17 of the FIFA Transfer Regulations states that players can unilaterally cancel their contract with their club after a certain protected period has expired if an amount of compensation is paid to their original club.

What is the protected period?

For players under the age of 28 the protected period for their contract is three years, meaning they will be able to unilaterally terminate their contract when they are three years into it. For players over the age of 28 the protected period for their contract is two years, meaning they will be able to unilaterally terminate their contract when they are two years into it.

Are the players required to give notice to their club to do this?

The player is required to give notice of two weeks following the final competitive match of the season of his intention to invoke Article 17, the compensation to be paid to the club must also be agreed upon within this time frame.

How will the compensation be decided upon?

The first time this rule was ever evoked by a professional footballer concerned a player moving from a Scottish club playing in the Scottish Premier League wished to move to an English club. The player was outside the protected period of his contract and was able to move under Article 17.

His former club claimed for compensation which they believed to be appropriate to his transfer fee considering the English club had previously put in a £4 million pound bid and another English club had also put in a £1.5 million bid. The case was heard by the FIFA Dispute Resolution Period which decided upon a sum which was disputed by both parties. The case was then heard by the Court of Arbitration for Sport (CAS) in which it decided upon a significantly less amount of compensation.

What did the CAS say?

The CAS stated that the club could not claim for the transfer value of the player as lost profit. Although Article 17 is a very complex rule the CAS decision gives some guidance on the amount of compensation usually being set at a year’s wages and a slice of the transfer fee originally paid for the players services.

Who will pay the compensation?

In the first case using Article 17 the compensation was to be paid by the club gaining the services of the player, however, it is certainly a possibility considering the huge amount of wages earned by professional footballers that the player themselves could pay the compensation effectively buying himself out of the contract.

Has this rule increased player power?

There have not been any real high profile cases where players from top football clubs have actually used Article 17 however; the possibility of it being used has enabled that player to engineer themselves a new contract with their club on better terms. For example a high profile player outside the protected period of his contract could threaten Article 17 to move to another club and although his original club would receive some compensation this would not be as much as a possible transfer fee for that player. If the player is signed to a new contract and within the protected period if the club wishes to let him move to another club they will be paid the entire transfer fee for that player’s worth.

Does this rule then bring footballers alongside workers in other industries in terms of employment law?

Footballers are still not alongside everyone else in terms of employment law due to the inherent value that their contract is worth. If they unilaterally breach it outside the protected period compensation will have to be paid and if they break it inside the protected period the whole value of their worth will need to be paid.