After a decade of financial misery, it appears that Valencia CF’s problems are finally over. The foreign takeover by Singaporean billionaire Peter Lim will be concluded in the upcoming weeks, and the construction on the new stadium will resume after five years on hold due to a lack of money. On 3 June Bankia, the Spanish bank that “saved” Valencia CF in 2009 by providing a loan of €81 million, gave the green light for the takeover. However, appearances can be deceiving. Indeed, Valencia CF has been the subject of numerous Spanish Court decisions since March 2013, the latest dating from 22 May 2014. The cases concern a guarantee given by the local authorities and whether this guarantee should be relied upon since Valencia CF is incapable of repaying its debt. Meanwhile, the European Commission announced that it will soon reach a final decision regarding the formal investigations into alleged State aid measures granted to the club. Strangely enough, the Spanish Courts are showing little interest in the pending Commission Decision and Mr Lim seems to be ignoring it as well. True, EU institutions have so far never sanctioned public authorities of Member States for granting aid to football clubs, but the evidence in this case is so damning that it will be difficult to overlook. Our aim in this blog-post is to disentangle the legal complexity of a case fought both at the national and the European level.  

Saving Valencia CF with public money

The aid measure has its origins in 2009, when Valencia CF, aiming to reduce the clubs total debt of €596 million and continue the construction works on a new stadium, decided to sell new shares for a total capital injection of €92 million. Unfortunately, club members only subscribed €18 million in shares. The majority of the shares were acquired by La Fundación del Valencia Club de Fútbol, (a foundation especially created by the club for this purpose) becoming majority shareholder of the club (70%) for the sum of €75 million. The money was loaned by BANCAJA, the largest financial institution of the autonomous region of Valencia. The loan was later increased to €81 million in November 2010. The Fundación and BANCAJA also agreed that the revenues for the old “Mestalla” stadium, which was for sale, would go to the bank. Furthermore, on 26 August 2009, the Instituto Valenciano de Finanzas (hereafter: IVF[1]) had issued a guarantee on the controversial loan.[2] In case of a default by the Fundación, the IVF was to pay back to the bank the outstanding amount. In return, the IVF would receive an annual premium of 0.5% and the Fundación is prevented to selling shares without the previous consent by the IVF.[3]

In September 2012, Bankia (the new name of the bank following a merger in 2010) was forced to restructure the deal it had with the Fundación. Bankia was suffering heavily from the financial crisis and, after being rescued by the Spanish Government, was forced to decrease its financial debt by increasing its liquidity and reducing its real estate portfolio. Thus, Valencia CF was to negotiate the refinancing of its debt, given that the Fundación was unable to repay the loan to Bankia.

By February 2013 the total of Valencia’s debts reached €387 million owed to different creditors, including the €81 million it owed to Bankia. In light of the guarantee issued, the Consell de la Generalitat de la Comunidad Autónoma de Valencia (the local government of the autonomous region of Valencia, also known as the Generalitat) was asked to transfer €4.8 million to Bankia to cover interest payments. Even worse, the Generalitat might have to bear the full debt of €81 million the Fundación owed to Bankia. As a result, the Generalitat would hold 70% of the shares in Valencia CF, thereby making the football club state-owned.[4]

Claiming that the guarantee breached both Spanish and EU law and should therefore be declared void, two club shareholders lodged a complaint against the local government of Valencia.[5] In its judgment, dating from 8 March 2013, the Administrative Court of Valencia annulled the guarantee, arguing inter alia that the operation would not generate benefits for the IVF and that the restrictions placed by the public authorities on the selling of shares by Valencia CF will distort competition.^[6] Finally, the duty to evaluate whether the operation was subject to EU State aid rules had not been complied with.^[7]

This last argument by the Administrative Court is no surprise, in light of the blatant State aid. Indeed, both the press and Members of the European Parliament quickly jumped onto the allegations that State aid in the form of loan guarantees was granted by Spanish public authorities. The European Commission forced by this judgment, press reports and a flood of information sent by Spanish citizens officially asked Spain to comment on these reports on 8 April 2013.[8] After analysing all the information the Commission decided to initiate the procedure laid down in Article 108(2) TFEU on alleged illegal State aid on 18 December 2013. Now that the Commission has announced in its Management Plan 2014 that the final decision will be published in 2014, one can reasonably expect the case to draw to its close.

The strategy of the Spanish Courts: Let’s ignore State aid rules and the Commission

The judgment by the Administrative Court of Valencia was only the first in a whole string of judgments by the Spanish Courts. The most important ones date from 15 November 2013, 19 December 2013, and 22 May 2014. 

Bankia appealed the judgment of 8 March 2013, claiming it should have been invited as a party at the trial. At first, the Administrative Court of Valencia upheld the previous decision annulling the guarantee, but Bankia’s second appeal, this time in front of the Tribunal Superior de Justicia de la Comunidad Valenciana, sala de lo Contencioso (the High Administrative Court of the autonomous region of Valencia) was successful. On 15 November 2013, the High Court, found the judgments by the Administrative Court to be void due to a procedural deficiency. Indeed, as Bankia was not provided the opportunity to present its views at the first trial, the tribunal violated Bankia’s right to be heard. More precisely the High Court considered that the IVF had not informed Bankia adequately when, as a public authority, it had the obligation to do so; Bankia’s own financial troubles and instability were too important for it to be left out of the procedure; and the fate of the football club would be at stake if the guarantee is revoked.[9] Hence, the guarantee provided by the local authorities on the loan was considered legally valid and Valencia CF’s bankruptcy risk dismissed. That the guarantee probably is in breach of EU State aid rules was irrelevant to the High Court.

In response to this latest judgment the same shareholders demanded an injunction that consisted in suspending the execution of the guarantee since it could constitute illegal State aid. Once again the demanding parties won the day and the execution of the guarantee was suspended in a decision dating from 19 December 2013. The timing by the Administrative Court to suspend the execution could not have been better. Indeed, the decision occurred only 24 hours after the Commission announced a formal investigation into the Valencia F.C case, thus, the alleged state aid could have been used as a fitting legal justification to suspend the guarantee. However, strangely enough, the Administrative Court did not refer to the State aid constellation. In the fourth paragraph of its judgment, the Court did recognize that procedural rules were breached including the European procedural rules on State aid[10], but the reasoning used to freeze the guarantee was based on national law. 

Peter Lim appears on stage: the end of all the trouble?

By January of this year, the IVF received a formal offer from Mr Lim to invest €210 million in the club. Mr Lim would, thus, take over IVF’s debt with Bankia. The Valencian government must have hoped for the end of their troubles. Indeed, it appeared that it was only the Commission decision it had to worry about.

But, Bankia, on the other hand, still believed it had a right to compensation by the Valencian government for refusing to execute the guarantee and launched a new civil procedure. In a ruling dating from 22 May 2014, the high Civil Court in Valencia sided with the bank and upheld the validity of the guarantee (yet again). Furthermore, the judge ordered the local government to pay €4.2 million as a compensation for loss of opportunities.[11] To make the legal uncertainty certain, the Valencian government quickly reaffirmed its refusal to pay any compensation to Bankia since it considered the execution of the guarantee as suspended by the Administrative Court.[12]

The ball in the Commission’s Court

From a substantive perspective, the Valencia State aid case seems quite straightforward. Valencia CF is a professional football club engaged in economic activities and should therefore be considered an undertaking under EU State aid rules. The guarantee provided by the local government constitutes an economic advantage for the football club over its competitors, as it is technically shield from the possibility of going bankrupt. The measure is selective, distorts competition towards clubs not enjoying a similar guarantee and is funded by State (more precisely the regional governments) resources. In other words, the criteria of article 107(1) TFEU can be considered as fulfilled. Finally, the measure does not appear to fall under any of the exemptions of articles 107(2) and 107(3) nor under any provisions of the General Block Exemption Regulation. 

It remains to be seen, however, whether the Commission will take an unprecedented action and sanction the local authorities of a Member State for supporting financially a professional football club. The Valencia case certainly provides an outstanding opportunity to do so. First of all, the facts of the case cast little doubt as to whether or not the measure breached EU State aid law. Second, even though the Commission cannot decide the matter in place of the Spanish Courts, any decision will create a guiding precedent hopefully putting a final point to the prevailing legal uncertainty of a long-lasting and protracted legal saga.

[1] The IVF is the Public Entity that  performs the public credit policy of the government of the autonomous region of Valencia

[2] Memoria de Actividades: Institut Valencià de Finances, Informe Anual 2009, page 48

[3] Sentencia N° 103/2013, N° de Recurso 239/2010, 8 March 2013, §5

[4] Ibid

[5] J. M. Bortvalencia, “Creo que Bankia no puede recurrir esta sentencia”, Levante – EMV, 21 March 2013

[6] Supra Nº3, §7

[7] Ibid

[8] Commission Decision State aid SA.36387 – Spain: Alleged aid in favour of three Valencia football clubs

[9] Las Provincias, El Valencia gana tranquilidad al decretar el TSJ que la Generalitat vuelve a ser avalista, 16 November 213

[10] Auto N° 239/2010,  19 December 2013, §4

[11] Iusport, Bankia levanta el hacha de guerra y ejecuta parte del aval del Valencia, 27 May 2014

[12] Las Provincias, La Generalitat «no se plantea pagar nada» por el aval a la Fundación del Valencia CF, 27 May 2014

Editor’s note: Rhys Lenarduzzi is a final semester Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) student, at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.

Having considered the history and justifications for the FIFA training compensation and solidarity mechanisms in my previous blog, I will now consider these systems in the African context. This appears to be a worthwhile undertaking given these global mechanisms were largely a result of European influence, so understanding their (extraterritorial) impact beyond the EU seems particularly important. Moreover, much has been written about the “muscle drain” affecting African football and the need for such drain to either be brought to a halt, or, more likely and perhaps more practical, to put in place an adequate system of redistribution to ensure the flourishing of African football that has essentially acted as a nursery for European football for at least a century. In the present blog, I intend to draw on my experiences as a football agent to expand on how FIFA’s redistributive mechanisms function in practice when an African player signs in Europe via one of the many kinds of entities that develop or purport to develop talent in Africa. I will throughout address the question of whether these mechanisms are effective in a general sense and more specifically in relation to their operation in Africa.

1.     The context: African players’ pattern of migration to Europe

There is a substantial body of work on player migration from Africa to Europe. The history of this movement is important context but just one element to the composition of this blog, so for a more comprehensive unpacking I recommend turning to Darby and Poli’s work. Briefly though, much of the movement began in the early 1900s, with an axiomatic nexus between African countries and their colonial ruler. These connections and channels live on and as one author noted, old colonial ties continue to structure the flow’.[1] This is of little surprise given the language advantages, cultural and economic connections between countries already in place, though some other explanations for the ongoing and evidently near exclusively one way flow are at play.

Economic prosperity has always been the drawcard for African footballers pursuing the European dream, though as Ungruhe submits, in modernity there is an additionally strong pull and distortion at play.[2] Here Ungruhe apportions considerable blame on Africans and the media painting a picture of football in Europe through the lives of players like Didier Drogba and Samuel Eto’o. The result for young African footballers is a ‘dream of being part of an imagined Euro-American modernity and aspirations of a good life as well as socio-cultural demands of ‘becoming a somebody’ in society.’[3] These dreams don’t always align with the realities and come at the cost of other educational or career pursuits.

Further and perhaps more obvious reasons for the movement is the relatively cheap labour costs an African player presents in opposition to the European player of equivalent footballing quality. Transfer fees, or more relevant to this blog, training compensation, is commonly waived (often in exchange for a less than ideal future sell-on arrangement) making the African player attractive in an economical sense. The way Africa acts as a nursery to European football clubs has been analogised by Darby to the mining of the imperialist colonial period, where the ‘sourcing, refinement, and export of raw materials’ can be compared to the ‘mining and export of indigenous football talent for consumption on the European football market.’[4] Though as has been noted above, this is ongoing and the movement continues to be one way, seemingly pointing to a neo-colonialist dimension to player movement, a term famously used in a Sepp Blatter interview (2003), along with such practice being labelled ‘social and economic rape’.

Though much is made of the movement being nearly exclusively one-directional historically and in a contemporary transfer market, the movement and environment surrounding such transfers might be more defensible if FIFA’s redistributive mechanisms were effective.

2.     Statistics of concern: FIFA redistribution mechanisms and Africa

Quantitative data in this space has historically been hard to come by. In fact, a breakdown of the parties that paid the due training compensation and solidarity contributions, a breakdown of those that did not meet their payment obligations, and the confederations in which the paying and the owing entities sit would be instructive but is currently missing. Nevertheless, the recently published Players’ Status Department Report and Global Transfer Market Report 2019 provide some interesting insights. For instance, the Players’ Status Department Report shows inter alia that clubs from CAF are very rarely a respondent in training compensation and solidarity mechanism claims,[5] the rather obvious result of being largely an export rather than import market. If we focus on 2018-2019 transfers to UEFA clubs (see fig.12), most transfers to these clubs are from within UEFA (8,108), whereas CONMEBOL to UEFA is second (836), then CAF to UEFA (581). Despite there being a gap between CONMEBOL and CAF transfers to UEFA, it is not nearly as significant as the gap between claims brought and resolved at FIFA, for both solidarity contributions and the training compensation mechanism. For instance, the solidarity contribution mechanism claims brought and resolved where CONMEBOL is the claimant and UEFA in the respondent (304) is approximately double that of CAF as claimant and UEFA as respondent (144) (see fig.12). The number of resolved claims with UEFA as respondent for training compensation disputes is again, approximately double, with CONMEBOL (131) and CAF (70). (see fig.19) This disproportionality between total transfers and disputes brought and resolved on the redistributive mechanisms, may point to African clubs being either unaware of their rights under these mechanisms or rendering themselves unable of achieving a remedy when falling victim to a more powerful club from Europe.

In 2018, it was reported that just USD$67.7m of the USD$351.5m due to be distributed in solidarity contributions, was actually paid. That is a mere 19.3% of what should have trickled down and perhaps just as alarming is that this percentage has been worsening. Africa, as a poorer continent than most and certainly a poorer continent than Europe to which it provides football talent more than it provides any other confederation, is arguably hurt most from this non-payment. Furthermore, the 2019 FIFA Global Transfer Market Report stated that USD$12.2 million in training compensation was paid,[6] which is a considerable distance from what was paid in solidarity contributions and light-years from what was supposed to be paid in solidarity contributions. So what might this say about these mechanisms in general and in the African context specifically, if one is to conclude that Africa provides a wealth of talent for Europe and other confederations and is hence in most need of redistribution for fulfilling the role of talent nursery?

3.     The Operation of Training Compensation in the African Context

More than any other confederation, Africa has found itself with an array of different entities undertaking football training and education, most commonly referred to as academies. Not all have questionable intentions, however this range of non-conventional arrangements of registering or attaching young players to a particular entity is usually for profit. This often results in some regulatory gymnastics, and particularly in relation to both the training compensation and solidarity mechanisms when profit is on the line.  I will borrow Darby’s four categories of training structures in Africa and apply my understanding of the industry. I would submit that we can look at these arrangements and form conclusions on how training compensation may operate in each scenario if a young player from either of these environments is recruited to Europe. I will keep the players and clubs involved in the following anecdotes anonymous, in the interest of confidentiality and professionalism. I will pay particular attention to scenarios (1) and (3) as what takes place in practice behind the scenes in these categories can be less obvious and perhaps more interesting for the purpose of this blog.

Darby’s four categories of training structures in Africa are; ^[7]

1)    African academies, organized and run by African club sides or African national federations

2)    Afro-European academies, which involve either a partnership between an existing academy and a European club or an arrangement whereby a European club takes a controlling interest in an African club[8]

3)    Private or corporate-sponsored academies, which have well-established foundations and operate with the support and sponsorship of private individuals

4)     Non-affiliated, improvised academies, which are set up on an ad hoc basis and involve poorly qualified staff and lack proper facilities[9]

3.1. Scenario 1: Training compensation and African club academies

In my experience as a football agent and that of my colleagues and competitors that I’ve spoken with on the topic, scenario (1) is the most likely to result in some redistribution, though it is still not always commonplace for clubs to stand their ground and demand training compensation. Instead, what regularly happens is a gamble of sorts, where African clubs waive their right to training compensation initially, in exchange for a percentage of future sell-on value. This can be pitched by a new club to be an amount that would be greater than what a club would receive in training compensation, but is simultaneously often a condition of a “take it or leave it” offer from a buying club, meaning that the player will no longer be of interest if they are not free. This “fee” or piece of future sell-on value is then at times contingent on things such as the new club’s success or first team appearances of the player in question. Unfortunately with the latter, there have been instances when clubs have stopped selecting the player in question when his number of appearances is coming close to the threshold of that clause.  

Scenario (1) type clubs can appear to be the most legitimate entities of the four categories to claim training compensation, though perhaps the following two anecdotes taken from my practice will shed light on how the mechanism operates in practice, with particular attention to it’s waiver and the ‘hindrance effect’[10] it might have. For instance, a former youth national team captain from Ghana had been on the edge of a transfer to a myriad of small-medium size clubs in Europe. The interest had been intense since his 16^th birthday and the plan was for him to move at 18 when the regulations permitted. However, due to a short-term injury around age 18, the interest for an immediate transfer diminished. The player recovered and struggled to generate the same interest in Europe as before, but became of interest in Australia, where the strategy would have been to play at a club within a country that was arguably a better stepping stone to Europe than his current club. When the interest was from Europe, his club was open to waiving training compensation in exchange for a future sell-on benefit and saw this as a safer bet. However,when the interested club was an Australian one, the training club saw the chances of the player moving on to Europe as less likely and the chance to profit substantially from future sell on fees unlikely, hence it refused to waive the training compensation. The player is still at the same club years later, in his mid-twenties and with little prospects of playing outside of his home nation. The result in this instance is that the player's career was strongly affected by the training compensation mechanism, his training clubs and community will never be the beneficiaries of redistribution, and the Australian club who was only interested if the player was free missed out on a player who wanted to come to the club. Can such a strong restriction on a player’s ability to move to seek employment as a professional player outside of his home country really be justified by the redistributive goal of the training compensation mechanism? Especially, when in many cases this mechanism is being waived and perhaps not considered necessary by FIFA itself. 

In another example of a scenario (1) legitimate club with a youth academy involving the ‘hindrance effect’, an arguably unfortunate outcome can result if a training club refuses to waive its rights to training compensation. Indeed, often only a small group of big clubs with well above average financial resources can afford the entire bill for compensation between the ages of 12 and 21.  I recall a top youth prospect from Mali who had attracted lots of interest from clubs in Europe following strong performances at both the under 17 and the under 20 World Cup. Yet, training compensation due had acted as a hindrance until he had a strong season around age 20. The player’s training club(s) in Mali had stood their ground and insisted training compensation be paid if the player was to transfer. Here, it took a relatively big club that regularly plays Champions League or Europa League football with the financial resources to pay it.  The club has an enormous squad, many international players, and would not generally be thought of as an ideal destination for a youth prospect as they have a history of parking players. Since his signing, the player has played little football as loan options have fallen through and he has been unable to find himself in the first team. In this case the player's development has stagnated, having ended up at a big club, and not at other more suitable destinations despite interest and offers, nearly exclusively because training compensation acted as a barrier for him to be signed by a club that most would deem a more appropriate stepping stone.

3.2. Scenario 3: Training compensation and African private academies

Scenario (3) has become an incredibly common environment for young African footballers to find themselves in, given the abundance of these academies throughout the continent.  Players enter these entities either by paying their way if they have the means and aspirations but lack the talent or having been scouted for their above average potential. This creates for an interesting dynamic come transfer time and considerable controversy. These academies are generally created for profit but are of course non-FIFA entities, requiring they get creative if a player becomes the subject of interest from Europe. Some less than ideal sequences of events can follow from this arrangement.  Examples include academies affiliating themselves with clubs through ‘under the table’ arrangements, handing the player back to a FIFA recognised club before transferring, or having the player registered at that club for the duration of their stay with the academy to simplify a transfer if it eventuates, perhaps then attracting training compensation to the club but more likely arranging an agreement like those alluded to above, where compensation for training a player will only be realised down the track on future sell-on fees. Academies want immediate money as well though so there are instances where a club will pay to have the players current registration and share a percentage of future sell on fees with the academy.  There are a number of other arrangements however one can probably get the picture, that the FIFA training compensation mechanism is regularly being circumvented or tweaked significantly so as to make a deal happen, rather than having it fall through. In this instance, the academies are paid in some form now or later, as well as the clubs that help them facilitate the transfer.

For instance, a star of a recent under 17s World Cup from Nigeria had spent the majority of his youth at one of the more famous scenario (3) type academies. When interest flooded in following the World Cup, there was nearly a year worth of assessing what would be the best move for the player.  A lot of the interest was from medium sized clubs and from destinations outside of the big 5 leagues, and these destinations were arguably a better stepping-stone. However, most of these preferable destinations demanded the player be free or they would not make an offer and some of this interest hinged on an assumption the player would be free given he was the product of a private academy and not a FIFA recognised club.[11] After much dispute and controversy with the academy trying to get in the way of a deal or be the beneficiaries of such a deal, the player managed to get away free from the academy and sign for free with a club. It is difficult to emphasise how tricky it was to fend off attempts from this academy to stop the deal or be a part of it, as well as how important it was that the player be free for a more suitable deal to eventuate. The player has already transferred again within Europe to a bigger club, as he was able to get plenty of first team football to display his abilities. This can sound great for the player and the clubs, but what about the far-reaching societal benefits that training compensation and solidarity is geared towards achieving? In many, perhaps most, analogous cases, the academy would have successfully got in the way of the deal or benefitted from it. In both cases, the deal that happened, or the scenario that usually happens as unpacked above, the objectives of the redistributive mechanisms are bypassed. The ‘hindrance effect’ would have almost certainly played a part in this players journey had compensation been due, or a big club that could afford compensation may have come forward, though it would then have been unlikely that the player would have played first team football to the same extent, and his career might have faltered.

My experience shows that the fact that training compensation can be waived has turned it into a subject of speculation and market negotiation between the more powerful European club and the economically vulnerable African club. The latter are often happy to forego their claim for training compensation if it is necessary to close a deal that would include some future potential benefit. Thus, it can hardly be said that African clubs can rely on this right to training compensation to guarantee stable funding to support their investment in educating players. Furthermore, while being relatively ineffective as a mechanism of redistribution, it nevertheless acts as a hindrance on the movement of African football players. Hence, the continent experiences the worst of both worlds, limited training compensation for its clubs and limited freedom of movement for its players.

4.     Africa’s missing solidarity contributions

The solidarity mechanism is mandatory and cannot be waived like the training compensation mechanism, though as is clear from the gap between what is paid and what ought to have been, there are issues with regard to its implementation. In the African context, there are a number of reasons why payments are not made. On the one hand, it is clear that the differing capacity of administration and the quality of legal advice accessible to African clubs plays a role. Sometimes African clubs are simply unaware that they are even owed solidarity. Further, if they are aware, the task of taking on a European club in a legal battle can be too expensive or too daunting to pursue, ultimately rendering this an access to justice issue as well.

On the other hand, as is true of both solidarity and training compensation mechanisms, funds are channelled through the national association and this has been problematic on occasions. I was once involved in a situation with a club within an African league with a notoriously controversial national body. The club was due to receive solidarity contributions given a player it had registered between the ages of 12 and 21 had signed with a club from one of the big 5 leagues for a fee into the tens of millions of euros. The African club had changed names but remained the same legal entity between the time the player had been at the club and his subsequent transfer. This was common knowledge to the football community within this African country and the national federation. It appeared on this occasion that the national governing body was attempting to argue the club ‘ceased to participate in organised football’ per Annex 5(2)3 of the RSTP which outlines that an association is entitled to receive the proportion of solidarity contribution, though it shall be reserved for youth football development programmes in the association. Given this particular associations track record, suspicions linger as to what the money would have been used for.

It is clear that in general a lot of solidarity money is lost or not paid, and it ultimately does not reach the African grassroots where it is needed most. It seems some, if not most, of this loss can be attributed to the costs attached to the process of obtaining this solidarity funds. If FIFA were serious about redistribution, it would ensure that solidarity transfers be almost automatic. Otherwise all the talk about solidarity is hypocritical at best, as those who need it the most are the least likely to enjoy it.

5.     Concluding remarks

This blog has highlighted various issues that surface in the African context with regard to FIFA’s redistributive systems. While on the face of it solidarity between the richest European football clubs and African training clubs can only be applauded, it remains to be seen whether the current regulatory set-up achieves the desired solidarity.

I have seen first-hand that training compensation acts as a real hindrance for the professional career of African footballers. Players suffer from being unable to go to clubs of suitability, and it is clear that the mechanism has become a regular bargaining chip in the wider transfer market, where a waiver in exchange for a future sell-on fee  may be as common an occurrence as actual payment of a training compensation. In practice and because it can be waived, the training compensation is part and parcel of a speculative transfer market rather than an effective instrument of solidarity between clubs. Moreover, insofar as the solidarity mechanism is concerned, its effectiveness seems to be blunted by the administrative burden that comes with its implementation. All too commonly, African clubs have simply too little means to be able to ensure the rights they should derive from it. Ultimately, from the training compensation mechanism arises a transactional dilemma, whilst in the event of non-payment of solidarity contributions, arises an administrative predicament.

There is a neo-colonial flavour to the fact that the training compensation can be waived. Indeed, (European) buyers are often in a strong bargaining position, as they can (collectively) put pressure on training clubs with ‘take it or leave it’ options. In doing so, they shift some of the risks related to the future development of the player back onto the shoulders of African clubs. Instead of getting an immediate fee for training the player, the African clubs get only a potential opportunity of a future fee that will be dependent on a player’s capacity to adapt to his new club and a myriad of other factors. One could see this as a free choice, yet, such a view would paper over the massive power imbalance between European clubs and African ones. If the objective of FIFA’s regulations is truly to foster solidarity and redistribution then they ought to be devised in a way that takes better account of this power imbalance between clubs from different parts of the world. African clubs must be able to systematically claim their training compensation fee without fearing to miss out on a transfer entirely, and to seamlessly receive the solidarity contributions owed. If not, it becomes extremely hard to justify burdening the (African) players’ right to move and take employment around the world. Indeed, one is left to wonder whether FIFA’s redistributive mechanisms could not be entirely uncoupled from the players’ movement and from the transfer market.

[1] Raffaele Poli, ‘Migrations and Trade of African Football Players: Historic, Geographical and Cultural Aspects’ (2006) Vol. 41, No. 3 The Other Game: The Politics of Football in Africa, at 409.

[2] Christian Ungruhe, 'Mobilities At Play: The Local Embedding Of Transnational Connections In West African Football Migration' (2016) 33 The International Journal of the History of Sport.

[3] Ibid 1770.

[4] Paul Darby, 'Out of Africa: The Exodus of Elite African Football Talent to Europe' (2007) 10 WorkingUSA 445-446.

[5] CAF was not even listed in Fig.11 of the report “Confederation of respondent club for claims resolved in 2019/2020”.

[6] 2019 FIFA Global Transfer Market Report, 12.

[7] Paul Darby, et al, Football Academies and the Migration of African Football Labor to Europe (2007) 31 Journal of Sport & Social Issues, 149-150.

[8] Scenario (2) is ultimately an example of European clubs being commercially savvy and the entire arrangement is to avoid costs or fees like training compensation.  This probably needs little more explanation as one can see that a European club may essentially be paying themselves if they are the main stakeholder in the African club or academy from which their new player has graduated.

[9] Scenario (4) academies are arguably the most detrimental in terms of their societal effects. They often purport to be a channel for ambitious players but lack the quality of facility and coaching, let alone contacts or ability to spring board players onto bigger and better things. They are never the recipient of redistribution given they are not FIFA recognised yet take money for their services and cannot fulfil promises.

[10] Jakub Laskowski, 'Solidarity Compensation Framework In Football Revisited' (2018) 18 The International Sports Law Journal, 168, 178, 182.

[11] The player spent a small amounts of time registered to a club to be eligible for the national team.

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

The CAS award in Joseph S. Blatter v. FIFA

In the first half of March, the CAS published its long-awaited award in the arbitration procedure between FIFA’s former President Mr Joseph S. Blatter and FIFA itself. The Panel dismissed the appeal filed by Mr Blatter against the decision rendered by the FIFA Appeal Committee on 16 February 2016. As a result, Mr Blatter remains banned from taking part in any football-related activity at national and international level for six years as of 8 October 2015.

The dispute in question concerned (i) a payment of CHF 2,000,000 made by FIFA to Mr Michel Platini in early 2011 allegedly remunerating work performed by Mr Platini for FIFA between January 1999 and June 2002; and (ii) Mr Blatter’s alleged authorization which entitled Mr Platini to receive credit towards his FIFA ExCo pension fund for his service to FIFA from 1998 to 2002. With regard to the former, the Panel held that assuming there actually had been an oral agreement between Mr Blatter and Mr Platini dating back to 1998, such an agreement would nevertheless have been superseded by the written employment contract signed in August 1999 (according to that contract, Mr Platini were to be remunerated ‘only’ CHF 300,000 a year). Consequently, the Panel concluded that there was no contractual basis for the payment of CHF 2,000,000 in favour of Mr Platini. In respect of the second point of contention, namely the contribution towards Mr Platini’s FIFA ExCo pension fund, the Panel held that Mr Platini was simply not entitled to receive such a contribution for his service to FIFA from 1998 to 2002, as he became a member of the FIFA Executive Committee only in 2002.

The CAS award in Seraing FC v. FIFA 

The dispute between the Belgian football club Seraing FC and FIFA has its roots in the decision rendered by the FIFA Disciplinary Committee in September 2015. In this decision, the FIFA Disciplinary Committee imposed a transfer ban (four consecutive registration periods) and a fine of CHF 150,000 on Seraing FC for violating Articles 18bis and 18ter of the Regulations on the Status and Transfer of Players which prohibit the third-party influence on clubs and the third-party ownership of players’ economic rights (TPO) respectively. The Belgian club challenged the said decision (as confirmed by the FIFA Appeal Committee) before the CAS.

In its press release dated 10 March 2017, FIFA expressed its content with the award delivered by the CAS. According to FIFA, ‘the CAS has recognized and confirmed the validity of FIFA’s ban on TPO, which was adopted in order to preserve the independence of clubs and players in matters of recruitment and transfer, and to ensure the integrity of matches and competitions’. The CAS has not yet published the award, nor has it issued any statement in this regard.

WADA calls upon athletes and other persons to ‘Speak Up!’ 

On 9 March 2017, WADA launched a new digital platform called ‘Speak Up!’, which seeks to encourage athletes and others to come forward and report (i) alleged Anti-Doping Rule Violations under the World Anti-Doping Code (Code); (ii) non-compliance violations under the Code; or (iii) any act or omission that could undermine the fight against doping in sport. On this occasion, WADA’s Director General, Mr Olivier Niggli, stated that ‘WADA’s independent Pound and McLaren Investigations, which were both triggered by whistleblowers, highlighted the importance of these individuals to the Agency and to clean sport on the whole’. The platform is accessible via a secure app for iPhone and Android phones.

Sports Law Related Decisions

• CAS – Award delivered in the arbitration between Mr Alex Schwazer and IAAF
• CAS – Award delivered in the arbitration between Mr Arijan Ademi and UEFA
• CAS – Award delivered in the arbitration between Mr Joseph S. Blatter and FIFA
• Sport Resolutions (UK) – Award delivered in the arbitration between Aljaž Bedene, The Lawn Tennis Association Limited (applicants) and ITF (respondent)

Official Documents and Press Releases

• CAS – CAS registers two appeals filed by the Bolivia Football Federation
• CAS – Dr Sergei Portugalov sanctioned with lifetime ban
• CAS – FIS refers the case of Therese Johaug to the CAS
• CAS – Harold Mayne-Nicholls files an appeal at the CAS
• CAS – Settlement agreement in the case of FK Partizan v. UEFA
• FIFA – Circular on ‘Limited minor exception’
• FIFA – FIFA completes internal investigation, shares findings with authorities
• FIFA – FIFA rejects appeal of Sevilla FC against sanctions under third-party influence rules
• FIFA – FIFA suspends Malian Footbal Association
• FIFA – FIFA welcomes CAS award recognising compatibility of TPO ban with EU law
• FIFA – Human Rights Advisory Board meet in Zurich
• FIFA – Informative note on the eligibility checks
• FIFA – Match official banned for life due to match manipulation
• FIFPro – Football player sanctions: Legal opinion
• IOC – Declaration of the IOC Executive Board
• IOC – IOC launches bold initiative on gender equality
• UEFA – Zero tolerance for match-fixing
• WADA – The athlete voice, compliance and whistleblowing take centre stage at WADA Annual Symposium
• WADA – WADA encouraged by signs of progress within Russia after President Vladimir Putin urges country to heed demands of McLaren Investigation
• WADA – WADA launches ‘Speak Up!’ – A secure digital platform to report doping violations
• WADA – WADA removes Spain from the list of Signatories deemed non-compliant with the World Anti-Doping Code

In the news

Doping 

• Anti-Doping Database FIS wants reasonably extended ban for Norwegian cross-country skier
• Nick Butler Anti-doping claimed to cost sport $ 300 million each year
• Nick Butler Isinbayeva reappointed head of Russian Anti-Doping Agency in face of WADA opposition
• Nick Butler USOC propose exclusion of Olympic officials from WADA governance
• Daniel Etchells iNADO publishes list of measures aimed at reforming WADA’s governing structures
• Global News World Anti-Doping Agency headquarters staying in Montreal until at least 2021
• Le Monde L’Agence mondial antidopage exige un système transparent
• Sputnik International Putin denies state-sponsored doping in Russia, vows to boost anti-doping efforts
• Sputnik International WADA needs Russian Anti-Doping Agency back in fold to secure funding

Football

• BBC Franz Beckenbauer questioned by prosecutors in 2006 World Cup fraud inquiry
• Andy Brown FA publishes written reasons for Manchester City ‘whereabouts’ fine
• Daily Sabah CAS rejects Trabzonspor’s appeal against UEFA’s match-fixing decision
• David Davutovic Exciting Australian prospect Seb Pasquali still waiting for FIFA clearance to join Ajax youth team
• Graham Dunbar FIFA to review pay, pension deals for Council members
• Rob Harris Russia World Cup head Vitaly Mutko barred from FIFA Council
• Elias Meseret Hayatou’s reign ends as African soccer head and FIFA VP
• Reuters Argentine FA faces possible FIFA ban
• Reuters FIFA looks to ease the fixture burden on players
• TASS Russian football player Eremenko to challenge UEFA’s decision with CAS
• The Guardian – Premier League launches major fightback against illegal streaming
• The Guardian – UEFA President hints at luxury tax and transfer changes to rein in rich clubs
• Max Winters – Equatorial Guinea launch CAS appeal against international football tournaments ban
• Yahoo! Sports FIFA ban Nigeria’s Adamu for two years

Other

• Yann Bouchez Evidence of corruption over Rio’s bid for the 2016 Olympic Games
• Nick Butler Paris 2024 become first Olympic bid to receive sustainability award
• Reuters Athletics: Fredericks steps aside from IAAF Taskforce
• Reuters IOC Ethics Committee looks into Rio payment claims
• The Times of India IOC cuts off funding to Kenya, suspension possible next week

Academic Materials

• Antoine Duval The Russian Doping Scandal at the Court of Arbitration for Sport: Lessons for the World Anti-Doping System
• Mathieu Maisonneuve Le Tribunal Arbitral du Sport et les Droits Fondamentaux des Athlètes
• Oskar van Maren How to bail out your local club: The application of the State aid rules to professional football clubs in financial difficulty
• Despina Mavromati Swiss Law in Doping Cases
• Peter Heermann Die Sportschiedsgerichtsbarkeit nach dem Urteil des BGH im Pechstein-Verfahren

Blog

Asser International Sports Law Blog

• Ryan Gauthier Kosovo at the Court of Arbitration for Sport – Constructing Statehood through Sport?
• Tomáš Grell FIFA’s Responsibility for Human Rights Abuses in Qatar – Part II: The Zurich Court’s Ruling

Law in Sport

• Phil Bonner Football’s zero tolerance rule on betting bites once again – Wayne Shaw pie eating case
• Terry Brennan How MLS’ single entity status works and its relationship with antitrust law
• Sean Cottrell Inclusive sport – Transgender participation
• Adam Osper Why athletes should consider career-ending insurance to protect against serious injuries
• Libby Payne, Andy Carruthers How football clubs must change to meet the needs of disabled fans
• Andrew Smith ‘Speak up!’ WADA’s recent reforms to its whistleblowing policies, procedures and systems
• Erin Stephens A guide to the UK’s new Code for Sports Governance
• Lloyd Thomas Should managers be required by regulation to pick full-strength sides?
• Lloyd Thomas The dangers of copyright disputes arising from the use of football club badges

Others

• Jens Andersen Anti-doping: Give WADA more owners and strengthen global commitment
• Andy Brown US anti-doping hearing: Stop the fox guarding the henhouse
• Andy Brown Weathering the storm – interview with Papa Massata Diack
• Josimar The slaves of St Petersburg
• Simon Leaf Article 50 and sport: What triggering of Brexit process could mean for Britain’s sport industry, from player transfers to stadium projects and intellectual property
• Keir Radnedge Swiss left holding the baby as FIFA wraps up its own inquiry into culture of corruption
• Rebecca Ruiz Willing to blow the whistle on doping? New legal aid group wants to help
• Rory Smith UEFA’s new President, Aleksander Ceferin, craves plenty of change in his staid sport

Upcoming Events

• 28-29 April – 2017 Macolin Anti-Doping Summit: A Fresh Look at the Science, Legal, and Policy Aspects of Anti-Doping, Swiss National Sports Centre, Macolin (Magglingen) Switzerland
• 7-9 June – International Conference on Doping and Public Health, Thon Hotel Ullevaal Stadion, Oslo, Norway
• 29-30 June – Sport & EU 12^th Annual Conference, Molde University College, Molde, Norway