Today’s Irish Times contains an interesting story which claims that Bohemians had called on other League of Ireland soccer clubs “to enter a ‘collective agreement’ that establishes a base level on transfer fees.” This move is supposedly designed to reduce the outflow of players from League of Ireland clubs to overseas, mainly UK, clubs. A collective agreement between League of Ireland clubs to establish a base or minimum transfer fee for selling their players. What could possibly go wrong?
According to the Irish Times, Bohemians Chief Operating Officer made the proposals on Twitter. The paper quotes him as saying in a Twitter post.
“Clubs are getting better ‘add-ons’ but we need to collectively improve the up front fees being achieved. This is essential for academy investment to continue to develop players at all levels.
The biggest impediment to up front fees are agent ‘get out’ clauses and these can be counteracted by clubs having a collective agreement to set a certain level where no club breaks it and delivers higher fees for all.”
It appears that some agents have managed to have “get out” clauses included in players’ contracts, which effectively allows the players to leave if overseas clubs come calling offering a better deal. The newspaper highlights a significant outflow of players from League of Ireland clubs in England’s League One, effectively the third tier of English football, where it states player wages average €3,000 per week compared to €1,000 per week in the League of Ireland. Any such agreement could deny a player the opportunity to move to an employer willing to pay them much more money, as buying clubs may be unwilling to pay any minimum transfer fee agreed by League of Ireland clubs.
League of Ireland clubs have managed to include provisions for “add-ons” in transfer deals whereby, if a player who is sold by them is subsequently sold-on to another club, they receive a percentage of the subsequent transfer fee. This can represent a significant amount of money if players are sold-on for high transfer fees. According to the newspaper report, Shamrock Rovers netted a seven-figure sum when Ireland international goalkeeper Gavin Bazumu was sold by Manchester City to Southampton recently. Nevertheless, the inclusion of get-out clauses in contracts reduces League of Ireland clubs’ bargaining power and thus the size of the initial up-front transfer fee.
There would appear to be obvious problems with the proposal as described in the newspaper report from a competition law perspective. That stuff in section 4(1) of the Competition Act, 2014, and Article 101 of the Treaty on the Functioning of the European Union comes to mind. The bit that says that “all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State are prohibited and void”. Domestic competition law would obviously apply and, while Brexit means that EU law may not apply to player transfers to English clubs, it would apply to transfers to clubs in other EU Member States. It is worth noting, in this regard that several League of Ireland players have moved to Italian clubs in recent years.
It is well established that professional sports clubs and leagues are subject to competition law just like any other business. The European Court of Justice Judgement in Bosman struck down European football’s existing player transfer system.
The Irish Times reported that representatives of two other League of Ireland clubs contacted by the newspaper disagreed with the proposal. Wonder if anyone at the CCPC reads the sports pages.
#sportsbusiness #competitionlaw #economics