Monti to blow the whistle on football transfer fees

Date: 18/05/2000

By Peter Chapman

COMPETITION Commissioner Mario Monti is set to outlaw the current rules governing football players' transfer fees unless the sport's organisers move swiftly to change them.

Monti has delivered a final warning to soccer's world governing body FIFA to come forward with proposals to amend the existing regime, arguing that it breaches Union anti-trust rules. The move is the latest salvo in an increasingly bitter battle between the European Commission and the soccer industry, whose repeated demands for special treatment have been rebuffed by the EU executive.

It follows five separate complaints from three clubs, players organisations in Belgium and a lobby group campaigning for 'sport and liberty' which claim that the existing rules stoke up massively inflated transfer fees which in turn unfairly restrict the free movement of players.

Monti's spokesman said FIFA had promised to table proposals for a new regime "within a few days" after a 3 May meeting between the Commissioner and FIFA, its European counterpart UEFA and Euro soccer players' association FIFPRO, but had yet to come forward with details.

He insisted that any changes proposed by FIFA must fully satisfy the Commission's demands. Otherwise, he said, the EU executive would make a formal decision prohibiting the current regime. "From the point of view of the competition directorate-general, transfer systems based on arbitrary fees which bear no relation to training costs of a player should be prohibited," he explained. "What we want is concrete proposals that can make a difference in practice, not something vague that postpones any change. Only if these changes are put in place quickly would the Commission envisage dropping its case."

The European Court of Justice's 1995 Bosman ruling banned transfer fees on out-of-contract players. The target of the Commission's current investigation, which began two years ago, are the regulations governing transfers of players still under contract.

The Commission has three key concerns about FIFA's rules. Firstly, it argues that players should be allowed to join other clubs if they buy themselves out of their existing contracts, without their new team also being forced to pay a transfer fee. This is what happened when Brazilian star Ronaldo left Barcelona in 1997. On Ronaldo's behalf, his new club Inter Milan legally bought him out of his contract with Barcelona for a massive €24 million. However, FIFA ruled that the star's new employers must pay an additional transfer fee of €1.8 million to Barcelona to compensate the club for losing his services.

Competition officials insist that the rules must be changed to allow players to sign up with other clubs freely in such cases. They say this would still allow clubs to be well compensated for the loss of a player, but the payments would have to be in line with national labour laws. "There can be indemnity clauses in the contract ensuring that the player pays a severance fee if he ends his contract prematurely - as for other workers in the economy," said Monti's spokesman, adding that the Commission would scrutinise national labour legislation to ensure it did not conflict with EU rules by "allowing transfer fees through the backdoor".

Secondly, the Commission argues that FIFA must change its general rules governing the sale of players who are still under contract in cases where both the player and his club agree to the move "by mutual consent". Monti's aides claim the current requirement for 'receiving clubs' to pay "arbitrary" transfer fees in such cases is blatantly unfair. They want FIFA to devise a new "transparent system" of charges based on strict criteria such as the player's age, wages and the training costs invested.

Finally, the Commission say FIFA's rules governing the transfer of non-EU players to and from clubs in Union member states place unfair restrictions on players.

Competition Commissioner Mario Monti is set to outlaw the current rules governing football players' transfer fees unless the sport's organisers move swiftly to change them.