Football in the balance
The ruling over Jean-Marc Bosman's contract gave players unprecedented power. Now clubs need lawyers more than ever before, says Dan Hayes
Tuesday 19 August 2003
Jean-Marc Bosman may not have had the most illustrious career on the pitch, but recent high-profile football transfers, such as that of Harry Kewell from Leeds United to Liverpool, mean the name of the former RC Liege midfielder will have an important place in the sport's history.
In 1995 the European Court of Justice famously, some might say notoriously, upheld Bosman's right to move from Liege to US Dunkerque without a transfer fee because his contract had expired. The court ruled that existing transfer rules directly affected players' access to the employment market in EU member states and therefore impeded the movement of workers and contravened the EEC Treaty.
That is the history. The reality is that, almost overnight, players won unprecedented power over the transfer market and the potential to hold clubs to financial deals their predecessors could barely have dreamt of.
Kewell is a case in point. Faced with the possibility that the Australian forward could next season walk away free of charge, Leeds agreed to sell him to Liverpool for £5m, £2m of which they had to pay to the player's representatives. The Yorkshire club was therefore left with only a fraction of the sort of transfer fee for which it might have hoped and barely a dent in the £78.9m debts it reported in its half-year financial results on 31 March.
Peter McCormick, senior partner of the Leeds-based law firm McCormicks, knows all too well what Bosman can mean. He was formerly a director of Leeds United and is currently a member of the Legal Working Party of the FA Premier League. "Bosman handed the power in professional football to the players. You only have to look at the way players' remuneration has rocketed since 1995," he says.
The problem with this, he adds, is that money that might once have stayed in the game via transfer fees is now going out of it, spent on the trappings of celebrity life. Kewell's is just the most recent example. "It's only right that players should capitalise on their ability," McCormick says, "but the Bosman ruling has taken things too far."
Numbered among the most dramatic losers in such deals are smaller clubs, says McCormick. "It's the likes of Tranmere, Hull City and Chesterfield which are being hit," he says. "They used to cover their overheads by developing a young player and then selling him. Now players can wait until their contracts expire and walk away."
It may be a better deal for certain individuals but for many famous teams the Bosman ruling has hit hard, and has contributed in large part to the fact that around 30 of England's football clubs are now in administration or corporate voluntary arrangements.
"The transfer market has been killed," says McCormick. "I don't think the legislators at the European Court thought about the ruling enough. They adopted a strictly legal approach. It made legal sense - a man has a contract, when it expires he becomes a free agent. Why should an employer get a fee afterwards? But they didn't work with the governing bodies in football."
One of the results has been that salary negotiations are happening earlier in a footballer's contract, often two years or more before it expires. Mal Goldberg, a partner at Max Bitel Greene, the north London-based sports specialist law firm, says: "Now you have the situation where a player such as Patrick Viera could virtually hold Arsenal to ransom, demand £100,000 a week to extend his contract or just sit around until it runs out and then go to another club while Arsenal lose the £30m they might have got for him."
Goldberg was involved in the Venezuelan consortium that expressed an interest in buying Chelsea but lost out to the Russian oil magnate Roman Abramovich. "Because that was mentioned in the press, almost half of the sides in the Premiership have contacted me because they are short of funds. So have four of the top European clubs. They're all short of money," he says.
Keeping an eye on the purse strings is ever more crucial to survival, advises Goldberg. "Clubs need to look very carefully at how they spend. Good housekeeping is absolutely crucial. Clubs need good lawyers and good accountants."
So could the legal profession prove to be the saviour of football as we know it? Don't rule it out, says Goldberg. "Clubs need to look at all their contracts and make sure there are clauses that cover issues such as if the team is relegated it has the option to terminate the contract or pay a reduced salary."
McCormick agrees. "There is a greater demand and need for lawyers to be involved," he says, "Contracts need to be tightened up."
He does not see change coming easily, however. "It could be very difficult in the long term. There will begin to be a movement among UK football clubs to seek to take the position back somewhat, so players have less power and more money stays in the game."
Salary caps and longer, more binding, contracts are likely to be on the agenda, he adds, but cautions: "The European Commission and the European Court are very strong on defending freedom of movement for workers. It's difficult to see them co-operating."
In the meantime, he suggests that football club chairmen consult the works of a famous Englishman - Charles Dickens. "Clubs need to follow the advice of Mr Micawber," he says, "and avoid spending more than they have coming in."
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