Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

New Event! Rule 50 of the Olympic Charter and the Right to Free Speech of Athletes - Zoom In Webinar - 14 July - 16:00 (CET)

On Wednesday 14 July 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret, is organizing a Zoom In webinar on Rule 50 of the Olympic Charter and the right to free speech of athletes.

As the Tokyo Olympics are drawing closer, the International Olympic Committee just released new Guidelines on the implementation of Rule 50 of the Olympic Charter. The latter Rule provides that ‘no kind of demonstration or political, religious or racial propaganda is permitted in any Olympic sites, venues or other areas’. The latest IOC Guidelines did open up some space for athletes to express their political views, but at the same time continue to ban any manifestation from the Olympic Village or the Podium. In effect, Rule 50 imposes private restrictions on the freedom of expression of athletes in the name of the political neutrality of international sport. This limitation on the rights of athletes is far from uncontroversial and raises intricate questions regarding its legitimacy, proportionality and ultimately compatibility with human rights standards (such as with Article 10 of the European Convention on Human Rights).

This webinar aims at critically engaging with Rule 50 and its compatibility with the fundamental rights of athletes. We will discuss the content of the latest IOC Guidelines regarding Rule 50, the potential justifications for such a Rule, and the alternatives to its restrictions. To do so, we will be joined by three speakers, Professor Mark James from Manchester Metropolitan University, who has widely published on the Olympic Games and transnational law; Chui Ling Goh, a Doctoral Researcher at Melbourne Law School, who has recently released an (open access) draft of an article on Rule 50 of the Olympic Charter; and David Grevemberg, Chief Innovation and Partnerships Officer at the Centre for Sport and Human Rights, and former Chief Executive of the Commonwealth Games Federation (CGF). 

Guest speakers:

  • Prof. Mark James (Metropolitan Manchester University)
  • Chui Ling Goh (PhD candidate, University of Melbourne)
  • David Grevemberg (Centre for Sport and Human Rights)

Moderators:


Free Registration HERE

Investment in Football as a Means to a Particular End – Part 1: A non-exhaustive Typology - By Rhys Lenarduzzi

Editor's note: Rhys is currently making research and writing contributions under Dr Antoine Duval at the T.M.C. Asser Institute with a focus on Transnational Sports Law. Additionally, Rhys is the ‘Head of Advisory’ of Athlon CIF, a global fund and capital advisory firm specialising in the investment in global sports organisations and sports assets.

Rhys has a Bachelor of Laws (LL.B) and Bachelor of Philosophy (B.Phil.) from the University of Notre Dame, Sydney, Australia. Rhys is an LL.M candidate at the University of Zurich, in International Sports Law. Following a career as a professional athlete, Rhys has spent much of his professional life as an international sports agent, predominantly operating in football.

Rhys is also the host of the podcast “Sportonomic”.


Introduction

In the following two-part blog series, I will start by outlining a short typology of investors in football in recent years, in order to show the emergence of different varieties of investors who seek to use football as a means to a particular end. I will then in a second blog, explore the regulatory landscape across different countries, with a particular focus on the regulatory approach to multi-club ownership. Before moving forward, I must offer a disclaimer of sorts.  In addition to my research and writing contributions with the Asser Institute, I am the ‘Head of Advisory’ for Athlon CIF, a global fund and capital advisory firm specialising in the investment in global sports organisations and sports assets. I appreciate and hence must flag that I will possess a bias when it comes to investment in football.

It might also be noteworthy to point out that this new wave of investment in sport, is not exclusive to football. I have recently written elsewhere about CVC Capital Partners’ US$300 million investment in Volleyball, and perhaps the message that lingers behind such a deal.  CVC has also shown an interest in rugby and recently acquired a 14.3 per cent stake in the ‘Six Nations Championship’, to the tune of £365 million.  New Zealand’s 26 provincial rugby unions recently voted unanimously in favour of a proposal to sell 12.5 per cent of NZ Rugby’s commercial rights to Silver Lake Partners for NZ$387.5 million.  Consider also the apparent partnership between star footballer’s investment group, Gerard Pique’s Kosmos, and the International Tennis Federation.  Kosmos is further backed by Hiroshi Mikitani’s ecommerce institution, Rakuten, and all involved claim to desire an overhaul of the Davis Cup that will apparently transform it into the ‘World Cup of Tennis’. Grassroots projects, prizemoney for tennis players and extra funding for member nations are other areas the partnership claims to be concerned with. As is the case with all investment plays of this flavour, one can be certain that a return on the capital injection is also of interest.

So, what are we to conclude from the trends of investment in sport and more specifically for this blog series, in football? A typology elucidates that a multiplicity of investors have in recent years identified football as a means to achieve different ends. This blog considers three particular objectives pursued; direct financial return, branding in the case of company investment, or the branding and soft power strategies of nations.More...



WISLaw Blog Symposium - Rule 40 of the Olympic Charter: the wind of changes or a new commercial race - By Rusa Agafonova

Editor's note: Rusa Agafonova is a PhD Candidate at the University of Zurich, Switzerland   

The Olympic Games are the cornerstone event of the Olympic Movement as a socio-cultural phenomenon as well as the engine of its economic model. Having worldwide exposure,[1] the Olympic Games guarantee the International Olympic Committee (IOC) exclusive nine-digit sponsorship deals. The revenue generated by the Games is later redistributed by the IOC down the sports pyramid to the International Federations (IFs), National Olympic Committees (NOCs) and other participants of the Olympic Movement through a so-called "solidarity mechanism". In other words, the Games constitute a vital source of financing for the Olympic Movement.

Because of the money involved, the IOC is protective when it comes to staging the Olympics. This is notably so with respect to ambush marketing which can have detrimental economic impact for sports governing bodies (SGBs) running mega-events. The IOC's definition of ambush marketing covers any intentional and non-intentional use of intellectual property associated with the Olympic Games as well as the misappropriation of images associated with them without authorisation from the IOC and the organising committee.[2] This definition is broad as are the IOC's anti-ambush rules.More...

WISLaw Blog Symposium - Why the existing athletes' Olympic entering system does not comply with the fundamental principles of Olympism enshrined in the Olympic Charter - By Anna Antseliovich

Editor's note: Anna Antseliovich heads the sports practice at the Moscow-based legal group Clever Consult. She also works as a senior researcher at the Federal Science Center for Physical Culture and Sport (Russia).


The Olympic Games have always been a source of genuine interest for spectators as Olympians have repeatedly demonstrated astounding capacity of the human body and mind in winning Olympic gold, or by achieving success despite all odds.

At the ancient and even the first modern Olympic Games, there was no concept of a national team; each Olympian represented only himself/herself. However, at the 1906 Intercalated Games[1] for the first time, athletes were nominated by the National Olympic Committees (‘NOCs’) and competed as members of national teams representing their respective countries. At the opening ceremony, the athletes walked under the flags of their countries. This was a major shift, which meant that not only the athletes themselves competed against each other, but so too did the nations in unofficial medal standings.  

The nomination and selection of athletes by their NOCs to compete under their national flag and represent their country is a matter of pride for the vast majority of athletes. However, to what extent does such a scheme correspond to the ideals which the Olympic Games were based on in ancient times? Is it possible to separate sport and politics in the modern world? More...


WISLaw Blog Symposium - Legal and other issues in Japan arising from the postponement of the Tokyo 2020 Olympic Games due to COVID-19 - By Yuri Yagi

Editor's note: Yuri Yagi is a sports lawyer involved in Sports Federations and Japanese Sports Organizations including the Japan Equestrian Federation (JEF), the International Equestrian Federation (FEI), the Japanese Olympic Committee (JOC), the Japan Sports Council (JSC) and the All-Japan High School Equestrian Federation.


1. Introduction

Japan has held three Olympic Games since the inception of the modern Olympics;Tokyo Summer Olympic Games in 1964, Sapporo Winter Olympic Games in 1972, and Nagano Winter Olympic Games in 1998. Therefore, the Tokyo 2020 Olympic Games (Tokyo 2020) are supposed to be the fourth to be held in Japan, the second for Tokyo. Tokyo 2020 were originally scheduled for 24 July 2020 to 9 August 2020. Interestingly, the word ‘postpone’ or ‘postponement’ does not appear in the Host City Contract (HCC).

However, the International Olympic Committee (IOC), the Tokyo Metropolitan Government (TMG), the Japanese Olympic Committee (JOC), and the Tokyo Organising Committee of the Olympic and Paralympic Games (TOCOG) decided on 24 March 2020 that Tokyo 2020 would be postponed because of the pandemic of COVID-19. Later on, the exact dates were fixed ‘from 23 July 2021 (date of the Opening Ceremony) to 8 August 2021 (date of the Closing Ceremony).

The process of the decision is stipulated in the ‘ADDENDUM N° 4’ signed by IOC, TMG, JOC and TOCOG.

This paper provides an overview of the current situation, along with legal and other issues in Japan that have arisen due to the postponement of Tokyo 2020 due to COVID-19. The overview is offered from the perspective of a citizen of the host city and includes a consideration of national polls, the torch relay, vaccination, training camps, ever increasing costs, and the related provisions in the Candidature File and the Host City Contract. More...



WISLaw Blog Symposium - Freedom of Expression in Article 10 of the ECHR and Rule 50 of the IOC Charter: Are these polar opposites? - By Nuray Ekşi

Editor's note: Prof. Dr. Ekşi is a full-time lecturer and chair of Department of Private International Law at Özyeğin University Faculty of Law. Prof. Ekşi is the founder and also editor in chief of the Istanbul Journal of Sports Law which has been in publication since 2019.


While Article 10 of the European Convention on Human Rights (‘ECHR’) secures the right to freedom of expression, Rule 50 of the Olympic Charter of 17 July 2020 (‘Olympic Charter’) restricts this freedom. Following the judgments of the European Court of Human Rights (‘ECtHR’) relating to sports, national and international sports federations have incorporated human rights-related provisions into their statutes and regulations. They also emphasized respect for human rights. For example, Article 3 of the Fédération Internationale de Football Association (‘FIFA’) Statutes, September 2020 edition, provides that “FIFA is committed to respecting all internationally recognised human rights and shall strive to promote the protection of these rights”. Likewise, the Fundamental Principles of Olympism which are listed after the Preamble of the of the Olympic Charter 2020 also contains human rights related provisions. Paragraph 4 of Fundamental Principles of Olympism provides that the practice of sport is a human right. Paragraph 6 forbids discrimination of any kind, such as race, colour, sex, sexual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status. In addition, the International Olympic Committee (‘IOC’) inserted human rights obligations in the 2024 and 2028 Host City Contract.[1] The IOC Athletes’ Rights and Responsibilities Declaration even goes further and aspires to promote the ability and opportunity of athletes to practise sport and compete without being subject to discrimination. Fair and equal gender representation, privacy including protection of personal information, freedom of expression, due process including the right to a fair hearing within a reasonable time by an independent and impartial panel, the right to request a public hearing and the right to an effective remedy are the other human rights and principles stated in the IOC Athletes’ Rights and Responsibilities Declaration. Despite sports federations’ clear commitment to the protection of human rights, it is arguable that their statutes and regulations contain restrictions on athletes and sports governing bodies exercising their human rights during competitions or in the field. In this regard, particular attention should be given to the right to freedom of expression on which certain restrictions are imposed by the federations even if it done with good intentions and with the aim of raising awareness. More...


WISLaw Blog Symposium - Stick to Sports: The Impact of Rule 50 on American Athletes at the Olympic Games - By Lindsay Brandon

Editor's note: Lindsay Brandon is Associate Attorney at Law Offices of Howard L. Jacobs


“Tell the white people of America and all over the world that if they don’t seem to care for the things black people do, they should not go to see black people perform.” – American sprinter and Olympic Medalist John Carlos

On 21 April 2021, the Athletes’ Commission (AC) of the International Olympic Committee (“IOC”) received the “full support of the IOC Executive Board for a set of recommendations in regard to the Rule 50 of the Olympic Charter and Athlete Expression at the Olympic Games.” This came over a year after the 2020 Tokyo Olympic Games were postponed due to the Covid-19 pandemic, and almost a year after the IOC and AC embarked on an “extensive qualitative and quantitative” consultation process to reform Rule 50 involving over 3,500 athletes from around the globe.

Since its introduction of the new guidelines in January 2020, Rule 50 has been touted by the IOC as a means to protect the neutrality of sport and the Olympic Games, stating that “No kind of demonstration or political, religious or radical propaganda is permitted in any Olympic sites, venues, or other areas.”  In other words, the Olympics are a time to celebrate sport, and any political act or demonstration might ruin their “moment of glory”.

In fact, the Rule 50 Guidelines say that a fundamental principle of sport is that it is neutral, and “must be separate from political, religious or any other type of interference.” But this separation is not necessarily rooted in totality in modern sports culture[1], particularly in the United States (“U.S.”).  This is evidenced by the United States Olympic and Paralympic Committee (“USOPC”) committing to not sanctioning Team USA athletes for protesting at the Olympics. The USOPC Athletes stated “Prohibiting athletes to freely express their views during the Games, particularly those from historically underrepresented and minoritized groups, contributes to the dehumanization of athletes that is at odds with key Olympic and Paralympic values.” More...



WISLaw Blog Symposium - 2020 Tokyo Olympic Games - Introduction

Women In Sports Law (WISLaw) is an international, non-profit association based in Switzerland and aimed at promoting women in the sports law sector, through scientific and networking events, annual meetings and annual reports. WISLaw’s objectives are to raise awareness of the presence, role and contribution of women in the sports law sector, enhance their cooperation, and empower its global membership through various initiatives.

This year, WISLaw has partnered with the Asser International Sports Law Blog to organise a special blog symposium featuring WISLaw members. The  symposium will entail both the publication of a series of blog posts authored by WISLaw members, and a virtual webinar (accessible at https://lnkd.in/dgWsy6q with the Passcode 211433) to promote discussion on the selected topics. Article contributions were invited on the topic of legal issues surrounding the Tokyo 2020 Olympics. In the midst of a pandemic and the rise of social justice movements around the world, the Games and their organisation gave rise to a number of interesting legal issues and challenges, which will be explored through a variety of lenses. 

We hope that you enjoy and participate in the discussion.

New Event! The Court of Arbitration for Sport at the European Court of Human Rights - Prof. Helen Keller - 26 May - 16:00

On Wednesday 26 May 2021 from 16.00-17.00 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), is organising its fifth Zoom In webinar on the Court of Arbitration for Sport (CAS) from the perspective of the European Court of Human Rights (ECtHR).

We have the pleasure to be joined by Prof. Helen Keller, former Judge at the ECtHR and a prominent dissenter to the majority’s ruling in the Mutu and Pechstein case.

The ECtHR decision in the Mutu and Pechstein case rendered on 2 October 2018 is widely seen as one of the most important European sports law rulings. It was also the first decision of the Strasbourg court dealing with a case in which the CAS had issued an award. The applicants, Adrian Mutu and Claudia Pechstein, were both challenging the compatibility of CAS proceedings with the procedural rights enshrined in Article 6(1) of the European Convention on Human Rights (ECHR). The court famously declined to conclude that the CAS lacked independence or impartiality, but did find that, insofar as Claudia Pechstein was concerned, she was forced to undergo CAS arbitration and, therefore, that CAS proceedings had to fully comply with the procedural rights guaranteed in the ECHR. In particular, the court held that the refusal by CAS to hold a public hearing, in spite of Claudia Pechstein’s express request, was contrary to Article 6(1) ECHR. Beyond this case, as highlighted by the recent decision of Caster Semenya to submit an application to the ECtHR, the decision opens the way for a more systematic intervention of the Strasbourg court in assessing the human rights compatibility of CAS awards and more broadly of the transnational sports regulations imposed by international sports governing bodies.

Prof. Helen Keller will discuss with us the implications of the ECtHR’s Mutu and Pechstein decision and the potential for future interventions by the court in the realm of the lex sportiva.

The webinar will take the form of an interview followed by a short Q&A open to the digital public. 

Please note the discussion will NOT be recorded and posted on our Youtube channel. 

Register HERE!


Asser International Sports Law Blog | Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 5: Rethinking Redistribution in Football - By Rhys Lenarduzzi

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 5: Rethinking Redistribution in Football - By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi recently completed a Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) 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.

 

As one may have gathered from the series thus far, the question that comes out of this endeavour for me, is whether redistribution in football would be better divorced from the transfer system?

In my introductory blog I point towards historical, cultural, and of course the legal explanations as to why redistribution was established, and why it might be held onto despite obvious flaws. In my second blog, I point out how the training compensation and solidarity mechanisms work in practice through an African case study, as well as the hindrance caused and the Eurocentricity of the regulations. The key take-away from my third blog on the non-application of training compensation in women’s football might be that training compensation should apply to both men’s and women’s football, or neither. The sweeping generalisation that men’s and women’s football are different as justification for the non-application to the women’s game is not palatable, given inter alia the difference between the richest and poorest clubs in men’s football. Nor is it palatable that the training compensation mechanism is justified in men’s football to incentivise training, yet not in women’s football.

In the fourth blog of this series, I raise concerns that the establishment of the Clearing House prolongs the arrival of a preferable alternative system. The feature of this final blog is to consider alternatives to the current systems. This endeavour is manifestly two-fold; firstly, are there alternatives? Secondly, are they better? 

 

1. Is training compensation necessary to incentivise training?

It might be the case that this question does not receive adequate attention. Though we are told there exists a need to incentivise training and the system as it stands is justified by this notion, is that truly what the redistributive mechanisms in the current form achieve? Furthermore, for all the flaws in reasoning and hindrance created by the mechanisms, is it really worth it?

During my time as an agent, I have personally never heard from a director or executive of a football club, the words or sentiment that, time - effort - money placed towards their youth football programs is done so solely, predominantly, or at all in anticipation of training compensation or solidarity payments.  Nor have I ever come across the sentiment from within any club, that a club would not care for or abandon its youth programs without the ‘dangling carrot’ of potential compensation. FIFA now refer to the redistributive mechanisms as ‘training rewards’, though one may reasonably struggle to connect these training rewards with a true definition of incentive. It appears more likely to be the case that any desire or expectation to be rewarded or compensated is an after the fact conclusion, when a player progresses professionally and a training club concludes that they are part of the reason for that players’ success. In a macro sense, given how infrequent it is for a training club to develop a professional, this seems to add weight to an argument that compensation does not create the purported incentive, or at least that clubs do not rely on the prospect.  It is because of this that I tend to lean towards the view that the incentivisation to train youth as a justification for redistributive measures may not have aged well. In any event, it would be interesting to test that intuition derived from experience, through a proper social scientific survey of clubs. Systems with such far-reaching implications should be grounded in a proper study of the socio-economic drivers of the training of football players.

On the other hand, the possibility of attracting large and exciting transfer fees is often spoken about within club walls.  For these ‘selling clubs’ with a clear intention to invest in youth and capitalise later in the form of transfer fees, such fees may be seen as compensation of sorts, but more likely as a remuneration for a deliberate though hardly risk-free investment. Moreover, these clubs do not simply abandon their first team and focus on youth and potential transfers exclusively. First team squads are also the beneficiary of strong youth systems and commonly the main reason a club invests in youth. Additionally, clubs can have a strong connection to their communities and see a combined duty and benefit of having strong youth programs. Clubs not only play a role in sustaining the social fabric of the communities to which they are situated, but benefit commercially through the many ways in which fans add value.

If it is true that compensation does not amount to incentivisation, then it is difficult to conclude that it is necessary. However, even if training compensation and the solidarity mechanism are not deemed necessary, a strong case can still be made for redistribution so long as the gap between wealthy and poor clubs remains or grows, and entire continents continue to be nurseries and the source of the muscle drain.

 

2. Imagining Alternative Redistributive Mechanisms

Proposing an alternative to the existing FIFA systems of redistribution is a difficult task. I have raised the concern of the Eurocentricity of the current regulations, and in proposing something else, one must be mindful that these are global regulations. If one suggests a form of taxation or tariff to redistribute, awareness of the myriad cultural differences on taxation and the multiplicity of enforcement contexts might be important. Also, whilst I have raised the question on whether compensation ought to be divorced from the transfer system, reasons for redistributing at all should be axiomatically better than not having a system of redistribution.

Intent and what is to be achieved needs to be clear. Is the ideal system of redistribution in place to reward ‘something’ or should redistribution be directed more deliberately and where it is needed, acting as welfare of a kind? I have already suggested that compensation does not incentivise clubs, though conversely, might clubs be disincentivised to grow if they only remain the beneficiaries of redistribution insofar as they stay sufficiently small and poor, whatever that threshold might be? Or could a system still incentivise growth, with clubs the beneficiaries of an amount that would not be enough to sustain themselves in full, yet enough to help them to continue to grow and commercialise? Whether greater commercialisation is a desirable change is another worthwhile question.

Despite the difficulties in suggesting an alternative, one can hope that a system of redistribution can be non-discriminative, does not create the hindrance effect to the current extent or encourage risky circumvention of the regulations (see blog 2 for detail), and is able to attain its legitimate aims. I would submit that the current systems do not tick these boxes. In this section, I provide some food for thought regarding potential alternatives, though I must caveat that I am not an economist and have not yet settled on an alternative myself.

 

a)     Coubertobin Tax

I will begin this section by introducing Andreff’s Coubertobin tax, in the interest of highlighting that others have thought about alternative systems of redistribution and have perhaps proposed alternatives that are arguably better than the current systems. Whilst I hope to present the Coubertobin tax adequately, one will need to read Andreff for the full picture.  Though valuable food for thought, I do not endorse the Coubertobin tax per se, as it has its flaws and remains connected to the transfer system, albeit to a lesser extent.

Inspired by a mix of the economic thought of James Tobin and Pierre de Coubertin, the idea of a Coubertobin tax “is to levy a tax at a 1 % rate on all transfer fees and initial wages agreed on in each labour contract signed by athletes and players from developing countries with foreign partners.”[1]

The objectives are as follows:

  1. slightly covering the education and training cost, for his/her home developing country, of any athlete or player transferred abroad;
  2. providing a stronger disincentive to transfer an athlete or a player from a developing country, the younger he/she is when the transfer takes place;
  3. thus, slowing down the muscle drain from developing countries and toward professional player markets in developed countries; and
  4. accruing revenues to a fund for sports development in the home developing country from the tax levied on every athlete or player transfer abroad.[2]

There is little wonder why Andreff desires to redistribute to developing countries. He has done extensive work on the correlation between economic prosperity and sporting success. This list is by no means exhaustive, but for instance, he writes extensively on the muscle drain, where athletes from developing nations move for financial and developmental reasons, which creates a myriad of follow-on issues to the home-country. He identifies the toll poverty takes on a developing country’s domestic leagues and competitions due to the muscle drain and the inability to train professionals to a world class standard. He notes that some athletes defect to other nations early and qualify for the adopted country’s national team. Per Andreff and in summary “the overall context of sport underdevelopment does not provide a strong incentive for talented players to stay in their home country even if a professional championship does exist there.”[3]

Andreff’s proposal is not set in stone and an admirable element to his work on the matter is the consistent offering of caveats that suggest, with more study and/or work, a certain piece of the Coubertobin system may benefit from amendment. Andreff describes his system as “a solution (not a panacea) which is likely to alleviate, along with some of the financial problems of developing countries, the aforementioned problem of the muscle drain.”[4] Most relevant is perhaps the idea that, the younger the player is in question regarding a transfer, the higher the tax (see suggested formulae).[5] This he submits, may put a brake on the muscle drain at such early ages, or result in greater amounts of money moved to developing nations if a club wishes to recruit a player at a significantly young age.

Andreff acknowledges hindrances, though takes a macro view that encompasses protecting minors, as well as strengthening local leagues in developing countries given the talent will remain for longer periods. One can envisage an additional positive result, in having young athletes finish non-football education having stayed at home until a later date.

Though this is my interpretation, I suspect Andreff finds it an easy task to identify the beneficiaries or winners of these transactions and therefore those parties should be the ones who pay the Coubertobin tax, on “the bill for the transfer fee and the first year wage”.[6]

Andreff raises the concern of “bargaining and corruption surrounding the tax collection in developing countries”,[7] though offers a plausible solution. “[T]he collection of the Coubertobin tax should be monitored and supervised by an international organization, either an existing one (UNDP or the World Bank) or an ad hoc one to be created.”[8] This is plausible as it is not so different to the way FIFA intends to outsource the operation of the Clearing House to a suitable and reputable organisation that would be subject to audit (see blog 4).

Andreff admits the tax “would meet with both hindrance and resistance”,[9] it would “not be easy to implement and enforce insofar as it has to be accepted on a worldwide basis”,[10] the system would contain administrative costs that would need sorting and ironing out, and there would need to be a method for disputes and perhaps fines for non-compliance.  Even so, the Coubertobin tax provides much food for thought as it is proposed for all professional sport and not just football. It attempts to address the muscle drain and the taxes proposed may prove less a hindrance than the current FIFA systems.

 

b)    Abolishment and Free Market Economics

If this was day one of football, there might be a strong argument for a free market approach, with emphasis on club management to make sure intelligent decisions are made to sustain clubs, with wealth the responsibility of the clubs themselves. However, we are not at the beginning of football.  Certain clubs in certain regions are the victims of much more than mismanagement, adding weight to an argument for a need to redistribute equitably.

As it stands, an equitable system or one where redistribution is directed to where it is most needed, is not in place and has not been proposed. Could it be the case, at least in the interim, that the free market is the best and fairest? The current systems appear at least somewhat a case of over-regulation with side effects that were not, or could not have been anticipated, like the hindrance effect and the pressures on vulnerable clubs to waive compensation to name just a couple.  It then seems defensible to abolish systems that do not work in the interim, than to hang on to those flawed systems until a better proposal is put forth. Instead, all efforts could be placed into study and research to remedy the obvious flaws.

Conversely, the free market in modern football would not appear to improve the situation for the kind of club I have identified frequently throughout this series, and although it may eliminate the hindrance effect, destination clubs would have their pick of players and poor clubs would undoubtedly lose all talent. Furthermore, if a system of redistribution was to be created that clearly improved football and the free-market approach had been adopted in the interim, a valid consideration might be the difficulty the relevant bodies would have in re-introducing a system of redistribution, having gone back to the free market for a period.  It is for these reasons that I can not endorse such an approach, however sympathetic I am to abolishment and the idea of alleviating hindrance and promoting free movement.

 

c)     FIFA Funded Solidarity: A New Model

As he addressed the Confederation of African Football’s (CAF) 42nd ordinary general assembly, FIFA President Gianni Infantino said, “I believe in Africa. I count on Africa, and you can count on me to help you to bring Africa to the top.” However admirable and applaudable are the purported goals of FIFA for Africa, and the sentiment warm, one cannot help but wonder if this African project, relevant to this blog series, could not be expedited by a substantial FIFA based investment. Infantino went on to say, “I want to see at least 50 national teams and 50 clubs from all over the world that can compete for the title of world champions with realistic chances of winning. And why shouldn’t Africa be at the top, with the incredible talent that we see shining every week, mainly in Europe’s top clubs? I am convinced it’s only a matter of commitment, work and engagement by all of us together.”

To answer the President’s question, one cannot see African clubs on top in a global sense, so long as all the best African players play, as the President said, in Europe. Further, we will continue to be less likely to see an African national team win a World Cup, whilst some of the best African players play for other nations to which they moved when they were younger, and whilst African federations are unable to organise like European federations, given they do not have the same resources.  I could of course go on, but one likely gathers my point. 

So, could FIFA make an investment sufficient to prop up Africa as it supposedly desires? Perhaps. How about an amount equal to the frequently referred gap between what is owed and paid when it comes to the redistributive mechanisms of FIFA? Could FIFA at least cover that gap? If one considers the annual financial reports, certainly, and probably further and in a more specific and deliberate fashion. Surely direct, targeted investment is preferable to leaving redistribution to the whim of a club’s good fortune to have registered a player that would go on to be a professional. That is, of course, if that player’s club did not have to waive training compensation to render a transfer possible.

The FIFA Forward Development Programme is described by FIFA as “global football development and the way we share the success of the FIFA World Cup”. It is an encouraging and frankly exciting initiative, and again one must applaud the efforts. Under the Infantino administration, FIFA has pledged more funding in this way than ever before. “On 13 June 2018, the FIFA Congress decided to increase investment in the FIFA Forward Development Programme still further for the next cycle of 2019-2022 with a 20% increase in the annual entitlement for each of the 211 member associations and six confederations.”

Anyone can go to the webpage for the FIFA Forward Programme, roll their cursor over the interactive map and see that FIFA are investing money in places of need. Disappointingly, not overly specific information is provided regarding the exact use of funding, though there are encouraging articles that unpack some of the investments and initiatives and these efforts should be commended (the FIFA Foundation Community Programme is another example of some of the encouraging work being done).  One element that is interesting and appealing within these funding programs, is the toying with an application process to be granted some form of investment. This perhaps shows an increased awareness that money ought to be distributed specifically and deliberately, to address a genuine need. Though not a trial per se, this kind of process could be used as one and may turn out to be preferable to clubs in need, who would for instance prefer to bypass the national association if that relationship is not so sturdy.   

At first glance, the almost even allocation of investment per member association found in Circular no. 1659 - FIFA Forward Development Programme – regulations (FIFA Forward 2.0) may seem equitable, though taking into account that some of the wealthier associations may be the beneficiaries of the systemic exploitation and drain that has featured in this blog series, might render the near even distribution questionable. Whilst “an additional amount of up to USD 1,000,000 is available for member associations with an annual revenue of USD 4 million or less”, one might reasonably wonder if that amount of extra funding to smaller and/or poorer associations is sufficient to affect real change.

Whilst I hope I have made clear that FIFA’s efforts ought to be commended, the overarching theme of this section is to consider if more could be done and if so, might those extra efforts to distribute funds be preferable and able to replace the current systems of redistribution connected to the transfer system. I do not find impressive the self-congratulatory theme of the statement from Alejandro Domínguez, Chairman of the FIFA Finance Committee, of being hundreds of millions of dollars under budget in the 2019 annual report, as well as possessing “sufficient liquidity”. FIFA, a not-for-profit organisation, was delighted to report that “at the 2019 year-end, total assets had increased to USD 4,504 million (four billion, five hundred and four million), chiefly made up of cash and financial assets (82%). Reserves also remained at a very satisfactory level at USD 2,586 million (two billion, five hundred and eighty-six million), clearly above the amount budgeted.”[11]

Proposing FIFA fund more redistribution is not a risk free, nor a concern free proposition, but it does appear the idea could be taken more seriously by the relevant stakeholders. FIFA’s predominate money maker is the FIFA World Cup, which is in a sense, a way of using the produce of the richest clubs in the world, which have in turn benefitted from some of the poorest clubs nursing the players until they are of age. FIFA, filling the frequently mentioned gap from the profits of the World Cup makes as much sense as any proposal. Is this not simply a case of, if more can be done then more should be done? Going off FIFA’s reports, it has the resources.

Within this potential alternative, where FIFA are responsible for raising and redistributing funding that would otherwise supposedly come from the current redistribution systems, is a change to the modality of redistribution. From what is currently intimately connected to training and transfers, this alternative provides for the much-needed decoupling, not only based on the philosophical flaws, but additionally due to the preferable practical implications that divorcing redistribution, training and the transfer market could achieve. In terms of a body or mechanism to implement an alternative like this, how might a Clearing House kind of project unfold, that adopts a specific and deliberate ethos to distributing FIFA funds? To expand, following a substantial process of planning and allocation of adequate resources, the creation of a specific arm dedicated to researching and identifying those areas of football most in need, as well as receiving and vetting applications for funding. Might that or a similar solution be achievable? It could be in-house or outsourced the same way the Clearing House is intended to be, geared to make suggestions, provide expert economic advice and proposals, reporting its findings back to FIFA for an extra layer of approval. Food for thought in any case.

 

3. Concluding Remarks

There is a core of wealth in football that has benefitted from, been propped up by, and drained the periphery. It is important to ensure the strength and survival of football outside this core of wealth and to actively make sure value is added to the periphery. Football needs to promote this notion and in doing so ask the question, where will the big clubs turn for talent and youth if those reservoirs which they drain are emptied and unable to continue to produce talent? 

If one is convinced that it is not necessary to incentivise training, that the current regulations have significant negative effects, that any system of redistribution should be non-discriminative, provide minimal hindrance to free movement and pursue deliberate legitimate aims, then one is in favour of overhaul. Further then, surely there is an obligation to address what can be in the immediate sense. Namely, to either default to the free market, until a convincing system of redistribution is created, or perhaps preferably, for FIFA to take the reins and fund redistribution to the periphery of football to a greater extent.


[1] Wladimir Andreff (2001). The correlation between economic underdevelopment and sport. European Sport Management Quarterly, 1, p.274.

[2] Wladimir Andreff, “A Coubertobin Tax Against Muscle Drain”, 4th Play the Game Conference: Governance in Sport: The Good, the Bad & the Ugly, Copenhagen, 6-10 November (2005) p.10.

[3] Ibid, p.5.

[4] Ibid, p.9.

[5] Ibid, p.11.

[6] Ibid, p.12.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] FIFA Annual Report 2019 p.124.

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