Why a free labour market in football is a bad idea

On the face of it, transfer fees in football infringe the right of players to free movement as employees of their clubs. That is the contention of the European Commission, which has asked Fifa, football's world governing body, to get rid of the transfer fees system. However, the Commission's case arises from a confusion between a game and real life. The point about football is not that it is more important than real life, but that it is a sport and teams are not ordinary employers.

On the face of it, transfer fees in football infringe the right of players to free movement as employees of their clubs. That is the contention of the European Commission, which has asked Fifa, football's world governing body, to get rid of the transfer fees system. However, the Commission's case arises from a confusion between a game and real life. The point about football is not that it is more important than real life, but that it is a sport and teams are not ordinary employers.

If transfer fees were abolished across the European Union, the viability of many smaller clubs would be threatened, and they are vital to the support structure for football at Premiership level. There are many clubs, such as Wimbledon, Crewe and Norwich City, which have traditionally made money by discovering, nurturing and selling on talented young players. If Premiership clubs were able to cream off the best players without compensating smaller clubs for their investment, that might be in the short-term interest of individual players who would be able to pocket money that would otherwise go in transfer fees, but it would not be in their long-term collective interest, or in that of the sport as a whole.

This is an example of a larger principle, which is that the relationships between teams have to be regulated by the laws of sport as well as by those of the market. This applies most of all to sports that are strongly commercial. It is not in the interest of football as mass entertainment that rich clubs such as Manchester United should accumulate wealth out of all proportion to their sporting rivals.

This is the reason why the transfer markets in American football and baseball are heavily regulated, to balance the purchasing power of teams in an attempt to ensure that the sport remains competitive, and therefore entertaining.

If sport can be treated as a special case in the free labour market of the United States, then it should be recognised as such in Europe too. There are signs that the European Commission realises that it went too far in August this year, when the death notices for transfer fees were issued.

Just when it seemed that a compromise might be reached which balanced the collective interest of the sport against the individual rights of players, however, the players' organisations publicly split with Fifa yesterday. For once, The Independent is on the side of regulation. Fifa is right to restrict players' rights of movement in this special case. The players should give ground gracefully.