This year the race for UEFA Europa League places in Serie A was thrilling. In the final minutes of the last game of the season, Alessio Cerci, Torino FC striker, had the opportunity to score a penalty that would have qualified his team to the 2014-2015 edition of the UEFA Europa League. However, he missed and Parma FC qualified instead.

One would think all was decided after the referee’s final whistle. However, on 19 May, the Italian Football Federation’s Second Instance Commission for UEFA Licences confirmed the decision of the First Instance and denied Parma FC its UEFA Licence for the 2014-2015 season. Indeed, Parma did not comply with the provisions included in the UEFA Licensing Manual, in particular paragraph 14.7 – F04 of the Italian Version regarding overdue payable to tax authorities for salaries. In this context, the Commission considered that Parma had not paid €300,000 of taxes related to payments made in October/November 2013 to 10 players on loan by the 31 March 2014 deadline imposed for overdue payments to players or tax authorities. 

Parma appealed this decision in front of the Italian High Court of Justice for Sport. Arguing that the payments made to the 10 Players were salary advances requiring a payment of taxes at the end of the season (i.e. 30 June 2014). However, the two Commissions and the Court considered these payments as a salary anticipation that required the payment of taxes within 30 days after the disbursement. This position was also reinforced by the qualification of the payments made by Parma’s tax advisors. 

Nonetheless, the facts of the case are quite murky. In fact, on 31 March, Parma had not received any notification from the Italian tax authorities regarding its non-compliance with tax obligations. The club received a first communication on 30 April, which was after the deadline set to obtain the UEFA Licence. Hence, Parma also claimed that it would have complied with its tax duties within the deadline, if only it had received a notification from the authorities before 31 March. This situation is even more absurd if one takes in account that had Parma raised objections to the tax authorities’ assessment it would have triggered the suspension of the legal delay and, therefore, would have gotten the UEFA Licence. 

In a decision dating from 22 May, the Italian High Court, even though it denied the Licence to Parma FC, sympathized with the club’s fate and acknowledged that in this concrete case the strict implementation of the UEFA Manual led to an unfair outcome. Nevertheless, the High Court considered that the UEFA manual was solely applicable and could not be put aside in this specific instance. Moreover, the High Court stated that as an ad hoc regulation, only UEFA itself had the power of suspending or adapting these rules. Thus Parma was sanctioned on the basis of a strict liability reasoning leaving little room to the judiciary to adapt the sanction to the circumstances of the case.  

On 3 June the CEO of Parma, Mr. Leonardi, declared that the club is considering to appeal the decision in front of CAS. It is however likely that the CAS will dismiss the appeal and declare itself incompetent since there is no arbitral clause in favour of CAS included in the Statute of the Italian Football Federation (FIGC). This is not a similar configuration as in cases CAS 2013/A/3067 Málaga CF SAD v. UEFA and CAS 2013/A/3233 PAE Giannina 1966 v. UEFA in which the UEFA License was denied by the UEFA disciplinary bodies. Moreover, an analogous situation arose in the case CAS 2013/A/3199 Rayo Vallecano de Madrid SAD. v. RFEF leading to the CAS denying any competence to re-consider the refusal by the Spanish Football Federation to confer a UEFA license to Rayo Vallecano.    

Parma could also appeal the decision in front of the Italian Administrative Courts, according to the law 17 October 2003, n.280. Article 3 of the law gives exclusive jurisdiction to the Regional Administrative Tribunal of Lazio, with seat in Rome, for appeals against decisions of the Italian Sports Justice. The jurisdiction of this Court is, however, limited to acts of the Italian Olympic Committee or Sports Federations that do not fall under the exclusive competence of Sports Justice Bodies according to article 2 of this law. Hypothetically, in this case the Administrative Court could quash the decision of the High Court and, also, issue a provisional measure suspending the effect of the decision. However, in my opinion, this is very unlikely to happen for reasons linked to the good administration of justice, rather Parma might be able to obtain a compensation. 

The Parma case highlights the sometimes “Kafkaesque” absurdity of the UEFA Licensing regulations: A club is denied the right to play in one of the most prestigious European competition on the ground of a wrongdoing it is not entirely responsible of! Supporters are deprived of their right to travel Europe to cheer for their team and the club is deprived of the opportunity to increase its revenues and financial sustainability. Again, this reminds us of the necessity to embed a legal mechanism enabling a contextual evaluation and adaptation of the sanctions in UEFA’s licensing regulations.  

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