The Wall Street Journal Europe interviews Juan de Dios Crespo on the breach of contracts by football players

FEBRUARY 7, 2010, 6:29 P.M. ET
Transfer Rule Snares Footballers
Fifa’s Article 17, Designed So Sport Follows Europe’s Labor Laws, Turns Into a Tangled Net

Football’s transfer system has always been a murky business.

Unlike the National Football League or the National Basketball Association in America, where players enter the professional ranks amid the glitz and razzmatazz of the college draft, the movement of players in football is an altogether more furtive operation.

Players are effectively the property of their employers, bought and sold by professional clubs without oversight or regulation from the sport’s authorities. Since every player has a price attached, recruitment is a cloak and dagger process.


Hamburg’s Olic Ivica (right) fights for the ball with Harry Kewell and Morgan De Sanctis (left) of Galatasaray during their UEFA Cup round of 16 in March.
Transfers are usually kept secret until the last possible moment, and often the first thing fans know about their idols making a move comes when they’re paraded in public wearing the jersey of a new club.

Now, the complex web of football’s transfer dealings has just become a bit more tangled.

Last week, FIFA, the governing body of world football, issued a ruling on the latest attempt to modify the present system of clubs trading players like goods. The dispute concerns Italian goalkeeper Morgan De Sanctis, who walked out on Udinese, his team in Italy’s Serie A, to join Spanish club Sevilla in 2007 despite being under contract.In doing so, Mr. De Sanctis invoked Article 17 of FIFA’s transfer regulations, an obscure rule introduced in 2001 in an effort to bring the football industry up to date with modern labor laws.

The introduction of Article 17 grew out of European Commission regulations on freedom of movement for workers and allows footballers to break their contracts in exchange for compensation to their clubs once a “protected period” has expired. For players under 28 years old when they signed their contract, they must be three years into their deal—those over 28 can use it after just two years.

Mr. De Sanctis, then 29, was midway through a five-year deal with Udinese when he unilaterally ripped up his deal.

“I realized it was time for a change, even though Udinese thought otherwise—taking advantage of the FIFA rule was the only way out, so I used it,” he later said at a news conference. “That’s the way it should be for everyone, because Article 17 gives you freedom. Sometimes colleagues find themselves in positions where they’re not free to choose, and that’s not how it should be”.

This legal loophole has been used twice before. In 2006, the Scottish defender Andy Webster became the first player to cite Article 17 when he quit Heart of Midlothian 12 months before his contract expired to join Wigan Athletic in the English Premier League.

A long legal battle ensued over the amount of compensation due, with Hearts placing a valuation of £5 million ($7.8 million) on the defender, but the Court of Arbitration for Sport in Lausanne, Switzerland struck an apparent blow for player power by deciding on an award of £150,000 to the Scottish club—a nominal sum equivalent to the year’s salary he had remaining on his contract.

The ruling was said to herald a major power shift in the transfer market, guaranteeing the rights of players and forcing football to accept its status as an industry like any other.

Not so fast.

Football authorities were incensed by the decision, which threatened to introduce a pay-as-you-go system in which players were required simply to hand in their notice before joining rival teams in Europe for a fraction of their market value.

Sepp Blatter, the president of FIFA, declared the ruling a “a Pyrrhic victory for those players and their agents who toy with the idea of rescinding contracts before they have been fulfilled,” while Arsenal manager Arsene Wenger said the ruling would be “very detrimental” to clubs which seek to nurture the development of young footballers.But when Brazilian playmaker Matuzalem, captain and top scorer for the Ukraine team Shakhtar Donetsk, ripped up his contract in July 2007 and signed for Spain’s Real Zaragoza—later to be transferred to Lazio in Italy—the pendulum swung back in favor of the clubs.

Shakhtar took the case to FIFA and then appealed to CAS after an initial compensation award of €6.8 million ($10.6 million). Last May, the Ukrainian team was awarded €12 million in a decision that took into account the value of the player to his former club, his salary, and even the difficulty the team would have in finding a suitable replacement.

No wonder that Article 17 has since become a clause for concern as clubs, players and agents scramble to weigh up what it really means.

“It’s really difficult to understand right now how the amount of compensation is awarded,” says Juan de Dios Crespo Pérez, the Valencia-based lawyer who successfully argued for FIFPro, the global players’ union, in the Webster case and subsequently represented Shakhtar in the Matuzalem ruling.

The decision in the De Sanctis case has done little to clarify things.Where the Matuzalem ruling had appeared to limit the Article 17 escape route only to those clubs with the deepest of pockets, this latest ruling is less of a deterrent.While Udinese requested €22 million in compensation, Sevilla and Mr. De Sanctis argued the amount should be closer to €1.5 million—equivalent to the three years’ salary remaining on the goalkeeper’s contract.Last week, FIFA made its ruling, awarding Udinese €3.9 million in compensation. All three parties have subsequently requested the grounds of the decision and intend to appeal the award in the CAS.

“None of us is happy with the decision, although obviously we are happier than Udinese,” says Mr. Crespo Pérez, who is representing Sevilla in the dispute. “With De Sanctis, we have a case that is not Webster and it is not Matuzalem. It is something completely different”.

The lawyers for Udinese and Mr. De Sanctis weren’t available for comment.If such differing applications of Article 17 appear to show the amount of compensation awarded is completely arbitrary, Mr. Crespo Pérez says that is only in keeping with what the football authorities want: to satisfy European law while doing as little as possible to upset the operation of the transfer system, which has changed remarkably little since its inception in England in 1890 as a means of preventing the poaching of players.

“It is quite impossible for clubs, players or agents to pre-prepare a case and say ‘this player is going to be worth this’ and then breach the contract,” he says. “There is no uniform formula. And that is exactly what FIFA wants—to avoid a situation where a player or an agent can end a contract with knowledge of how much they will have to pay”.

In the meantime, players attempting to use Article 17 to breach their contracts must accept that when it comes to compensation, it’s a case of win, lose or draw.