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Tapping TV Money: Players' Union Scores A Goal In Brazil. By Giandonato Marino

On March 27, 2014, a Brazilian court ruling authorized the Football Players’ Union in the State of Sao Paulo[1] to tap funds generated by TV rights agreements destined to a Brazilian Club, Comercial Futebol Clube (hereinafter “Comercial”). The Court came to this decision after Comercial did not comply with its obligation  to pay players’ salaries. It is a peculiar decision when taking into account the global problem of clubs overspending and not complying with their financial obligations.  Furthermore, it could create a precedent for future cases regarding default by professional sporting clubs.

In 2013, 19 players were victims of financial mismanagement of the football club based in Ribeirao Preto. This year, with the problem still unresolved, the 19 players once again were facing financial distress. The total sum that Comercial still owed players, which consisted of overdue salaries, social security contributions and severance pay after contract expiration, amounted to R$ 363,147.71, or €120,000.00. By means of meeting the player’s demands, Comercial had issued unredeemed cheques in order to pay part of the salaries of the Players before this year’s carnival. To receive the salaries Comercial owed, the Players’ Union filed a complaint against Comercial in front of the Labour Court of Ribeirao Preto, representing eight players who are members of the Union. It asked, inter alia, for a provisional measure that would freeze  the amount that Comercial would receive from the Football Federation of Sao Paulo and the Brazilian television network Rede Globo for the TV rights. Rede Globo is the biggest broadcasting company in Brazil and holds the rights to broadcast the main competitions in football, including the upcoming FIFA World Cup. For Comercial, this would mean not receiving up to €850,000.00 from the Football Federation of Sao Paulo for the TV rights agreement. The agreement included the broadcasting of the Campeonato Paulista, for which Comercial was to be paid in four instalments (January, February, March and April 2014). At the time of the request, three out of four instalments had already been paid. Therefore, the Players’ Union could only acquire the amount of the fourth instalment due in April 2014, equal to €210,000.00.

In accordance with the tradition of Roman Law, on which the Brazilian legal system was developed, the Court had identified the existence of both legal requirements in order to issue a provisional measure: fumus boni juris, i.e. that the claim has a reasonable prospect of success and periculum in mora, i.e. the danger that claimant's rights may be impaired by the lapse of time. Regarding the first requirement, the Court established (in accordance with Article 335 of Brazilian Civil Procedural Code[2]) that Comercial had issued cheques that afterwards could not be claimed by the players. As regards the second requirement, the Court took in consideration the fact that Comercial was relegated to the second division of the Sao Paulo State League[3] and that the players were dismissed.

As a consequence, the Court accepted the request of the Players’ Union, and ordered the Football Federation of Sao Paulo and Rede Globo to deposit the amount that was due to CFC on the Union’s bank account instead. Whether Comercial exerted its possibility to challenge this measure within five days is yet unknown.

This decision is, to our knowledge, a novel and efficient method (from the point of view of the players) to tackle the problem of unpaid salaries in the world of football. It has, therefore, also been welcomed by FIFPRO. The measure issued in this particular case is of limited importance, because it only applies to the eight players affiliated to the Players’ Union. However, the method used by the Union, ceasing the TV rights income directly, might prove very useful for players in similar situations worldwide, it ensures that, even in case of default of their employers, the contractual demands of the players can be satisfied.

2nd Labour Court of Ribeirao Preto SAPESP-Comercial F C (3).pdf (14.6KB)

[1] Sindicato de Atletas Profissionais do Estado de São Paulo, one of the five founding members of the Brazilian National Players’ Union (FENAPAF)

[2] that states the application of rules of common experience in absence of specific regulations

[3] Paulistão da Série A2

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