Source: https://www.lawinsport.com/content/sports/item/the-legal-background-of-feet-drain-the-italian-case?category_id=152
Timestamp: 2019-09-15 06:21:27
Document Index: 269637381

Matched Legal Cases: ['Art. 19', 'art. 81', 'art. 34', 'Art. 20', 'Art. 21', 'art. 17']

The legal background of Feet Drain: the Italian Case - LawInSport
The legal background of Feet Drain: the Italian Case
By Luca Ferrari, CBA Studio Legale e Tributario, and Tommaso Tamburino, Withers LLP
As is often the case with social trends, the phenomenon of “feet drain (1)” in Italian football academies is also significantly ingrained on its regulatory framework. The objective of this contribution is to provide an overview of FIGC(2) and FIFA rules that make up the relevant legal background for the analysis of said phenomenon.
The authors’ intentions are, in particular, to highlight the relation and interaction between Italian domestic rules and the European context in which they are inserted. This approach should identify where the national rules allow room for foreign talent hunters to take away the most promising young players from Italy, as in Gennaro Gattuso’s case and many other frequently cited cases, narrated by other contributors to this collection.
This article is structured in four paragraphs and conclusions. The first paragraph provides an overview of FIGC rules that define the status of young players registered by Italian professional clubs and that impose restrictions aimed at protecting their training and development. The second paragraph gives a glance at the FIFA rules that provide age restrictions for international transfers. The third paragraph focuses on the weaknesses of the Italian system, aiming in particular to highlight the discrepancies that domestic legal regulations present with respect to the European context. The fourth paragraph raises criticisms from an EU law perspective on the interaction between FIGC and FIFA regulations regarding the status of young players. This will be followed by the conclusions.
1. Italian rules protecting the training and developing of young players.
The status of young football players registered with Italian clubs is set out in the Internal Rules of the Italian Football Association (3), which provide a detailed description of the manner and the limits within which clubs can register underage players.
Particular focus is given in this paper to the status of young players who are over 14 years of age and who are registered with professional clubs. For young amateur players, on the other hand, suffice to say that clubs can only use a ‘seasonal registration’ for players aged 8 to 14 years old, which means that at the end of the season the player is free to be registered with any other club. This also applies when the player is registered with a club whose senior team plays in a professional league. After the player turns 14, an amateur club is allowed to use a registration that binds him until the season of his 25th birthday, after which the athlete has to be registered again on a seasonal basis (4).
When the player turns 14 and is registered with a professional club, FIGC rules provide that he acquires a particular status, defined “young player of series” (5), which binds him to the club at least until the end of the season of his 19th birthday. This status consists of an ad hoc set of rules, the rationale of which is to allow clubs to train young players on a long term basis, protecting and somewhat guaranteeing a return for the investments made to those ends. Clearly, this should also work as an incentive for clubs to spend their resources on the development of young players. This set of rules may be split into the following three groups: (i) rules imposing restrictions regarding young players’ transfers and their first employment contract; (ii) rules providing compensation due the clubs that trained and developed the young players; (iii) rules setting out quotas of home grown players in senior teams.
1.1 – Transfer restrictions: in particular, the right to a first employment contract
As illustrated above, players registered with a professional club (6) at the age of 14 acquire the status of ‘young of series’, which ties them to the club until the season during which they turn 19. In a hypothetical ladder, the status of ‘young of series’ precedes the status of professional, which is only acquired by the player when he enters into an employment contract with a club participating in a pro-league. During their last season as ‘young of series’, the players become party to a particular relationship defined as “technical training relationship”, which entitles them to receive an indemnity (7). At the end of said technical training season clubs can hire the players on their first employment contract, which may not exceed three years. For the sake of clarity, it must be noted that, by way of express legal provision, the technical training relationship does not amount to the acquisition of the status of professional.
As an alternative to entering into a contract at the end of the technical training relationship, clubs can also offer an employment contract to the ‘young of series’ at any time after the season of their 16th birthday (8).
However, there is a substantial difference between the two cases. In fact, when the offer is made at the end of the technical training relationship (9), it is provided that clubs have the right to enter into the first employment contract with their own ‘young of series’. This means that if the club for which the young player is registered makes him an offer of employment during the technical training relationship, the player is bound to accept it, whether the offer is convenient or not (10). Should the player refuse, in principle he could not accept offers made by other Italian professional clubs, as this would amount to a breach of the right to first employment enjoyed by the club that has carried out his training and development. In fact, the club could file the player’s first contract at the FIGC offices even if the player has not signed it, and this would prevent the same player from registering with another club (either professional or amateur). Evidently, this rule aims at protecting and rewarding the investments that clubs make in their youth programmes, preventing the most wealthy clubs from easily stealing the best young players from the clubs that “moulded” them by submitting a better offer as soon as they have achieved the maturity to compete at senior levels.
As opposed to the above, the club and the young player may freely negotiate and enter into a contract before the season of technical training relationship. Although this is apparently an inconvenient option for clubs, in fact it is their only defence against the assaults made by foreign clubs to young domestic promises. This will be explained in more detail in the following paragraphs.
As a final remark, the ‘young of series’ automatically acquire the status of professional and the right to an employment contract when they have participated in a certain number of official games (for Serie A clubs, at least ten games in the Italian Championship or in the ‘Coppa Italia’). This rule is designed for those young footballers who have proven their maturity for senior levels “on the field”.
1.2 – Training and development compensation
The aim of compensating and acknowledging investments made by clubs in youth teams is pursued by FIGC rules that acknowledge the club’s entitlement to ad hoc rewards when the players achieve certain results during their career.
Three kinds of rewards are foreseen in particular:
(i) training reward, to be paid by the registering club on the first registration as a ‘young of series’ for a player who was formerly registered as a young player with an amateur club (payment due to all former clubs where the player was registered);
(ii) training and technical development reward, to be paid by the professional club upon the signature of the player’s first employment contract (payment due to the club where the player performed his last amateur or youth season (11));
(iii) career reward, to be paid by current professional club on first match played in Serie A or first match played with National Senior or U21 team (payment due to all amateur clubs or football academies for which the player has been registered as a young player).
1.3 – Quotas of home grown players
The FIGC has also adopted rules imposing quotas of home grown players in professional club rosters. Current regulations draw a distinction, within the general concept of home grown players, between locally trained players and association trained player, where the first ones are players aged 15 to 21 years old, who have been registered with the same FIGC club for three seasons or 36 months (which do not have to be consecutive) and the second ones are players aged from 15 to 21 years old, who have been registered with different FIGC clubs for three seasons or for 36 months, (which do not have to be consecutive). Based on this distinction, the FIGC has imposed the following quotas allocations from the 2007-2008 season:
- team rosters from 26 to 30 players : at least 8 home grown players, with maximum 4 association players;
- team rosters from 31 to 35 players : at least 8 home grown players, with maximum 5 association players;
- team rosters from 36 to 40 players : at least 9 home grown players, with maximum 5 association players;
- team rosters from 41 to 45 players : at least 10 home grown players, with maximum 6 association players;
- team rosters from 46 to 50 players : at least 11 home grown players, with maximum 6 association players.
Such rules have been adopted at national level by way of implementation of UEFA directives aimed at combating clubs’ loss of national identity and safeguarding the education and training of young players. Indeed, the well known FIFA’s 6+5 rule (12) proposal is a product of this policy too. An analysis of the ongoing discussions and of the delicate issues that this proposal involves from a perspective of EU law does not fall into the scope of this paper. Suffice to say that the adoption of the 6+5 rule would clearly be much more incisive than the current limitations are and would bring an enormous importance and evaluation to the clubs’ youth teams, but at the same time it would run the material risk not to pass muster before the EU internal market principles.
2. FIFA rules on the transfer and development of young players
Also FIFA rules are somewhat designed for limiting the transfers of underage players and for rewarding the investments made on youth by clubs. As it was done in respect to FIGC rules, it is possible to classify FIFA rules in three groups: (i) restrictions on international transfers based on age; (ii) rules setting out training compensation; (iii) rules aimed at safeguarding contractual stability.
2.1 – Age restrictions on international transfers
Art. 19 of the Regulations for the status and transfer of players provides the general rule that “international transfers of players are only permitted if the player is over the age of 18”. It goes without saying that this limit is inspired by the purpose to fight the marketing of young players, which is seen as a negative factor that often involves abuse and illegal practices on minors (13).
However, general prohibition would seem contrary to basic values such as the right to pursue happiness, the right to work, to practice sports, etc and in fact it is limited by the application of three significant exceptions. In particular, the transfer of minor players is allowed:
(i) when the player’s parents move to the country in which the new club is located for reasons other than football;
(ii) the player lives no further than 50 km from the national boarder and the club has its registered office within 50km of the border as well;
(iii) the player’s transfer takes place within the territory of EU/EEA and the player is aged between 16 and 18.
Exceptions (i) and (ii) appear indeed justified by social and practical reasons consistent with the aforementioned values. On the other hand, exception (iii) is probably the result of the influence brought on the world of sport by internal market principles. This exception is partly tempered by the requirement that a club registering a young player between 16 and 18 should provide the player with academic/school as well as football education and should take all possible arrangements to ensure that the young player is looked after in the best possible way. However, in practical terms the consequence of said exception is that the European football market enjoys an area of freedom for players over 16 years old.
2.2 – Training compensation
FIFA training compensation (14) is inspired by the same rationale that underpins the provision of the domestic compensations, i.e. rewarding the efforts made by clubs in developing their youth rosters. However, the discipline of FIFA training compensation differs in many respects from the national provisions.
As a first remark, FIFA training compensation is only due until the season when the player turns 23 years old. During this period, the entitlement to it is triggered either by the player signing his first employment agreement or by any subsequent transfers. However, in the first case training compensation is due to all clubs for which the player was formerly registered and that have contributed to his training from the season in which he turned 12, whereas in the second case it is only due to his last former club for the time that the club effectively trained him.
As a general rule, training compensation is to be calculated on fixed parameters, the amount of which is based on the category in which the purchasing club plays. Notably, the category of the club selling the player has no bearing on the calculation of the training compensation when the purchasing club is of an upper category. However, the Dispute Resolution Chamber has clarified that said parameters can be adjusted when there is clear evidence that they are not proportionate to the case under review, being either too low or too high with respect to the effective training costs incurred in the case at hand (15). Finally, no compensation is due to the last former club when this has not offered the player a contract , except in exceptional circumstances (16).
2.3 – Solidarity contribution
The solidarity contribution is a peculiar FIFA provision (17). Its underpinning rationale is to impede clubs from buying and selling players when they are still under a contract, i.e. to safeguard the value of contractual stability in the football market. Such objective is not pursued by any specific FIGC rules.
In fact, the event that triggers the application of the solidarity contribution is the purchase of a professional player by a club before the expiry of his contract. In this situation, the purchasing club has to pay the solidarity contribution to any clubs that have contributed to the player’s education and training, in proportion (around 5%) to the purchase consideration or of any compensation (18) due as a result of the purchase. No time limitations (such as the one described in reference to training compensation, which is due until the season of the player’s 23rd birthday) apply in the case of the solidarity contribution. Accordingly, this is applicable throughout a player’s career.
3. Comparing domestic and European rules
Comparing the Italian and the European system will highlight the discrepancies existing between the two and their consequences.
At national level, young players registered with a professional club are bound to it until they enter into their first employment contract. Except for particular cases (19), from the age of 16 to 19, players can only enter into a professional contract with the club with which they are registered. The young player is free to obtain registration and to enter into an employment contract with another club only after the season of his 19th birthday, provided that his club does not offer him an employment contract; on the contrary, if such an offer is made, the player is bound to accept it. Should the player either sign with another club before the season of his 19th birthday or refuse the offer made by his club before the end of said season (whatever the offer is within the collective bargaining agreements minimum wages), he would be in breach of his club’s right to first employment, with the risk of incurring disciplinary sanctions and being liable for damages. Clearly, such rules leave little or no room for young players to negotiate the terms of their first professional engagement and effectively foreclose any transfer to the Italian clubs without the consent of their club. On the other hand, freedom of choice is left to the training clubs, which in this manner are rewarded for their efforts and investments in the youth sector.
At international level, despite FIFA’s general prohibition of transfers of players under 18, the exception that applies in the EU area for players over 16 opens the gate for contractual offers coming from football clubs belonging to different national football associations.
Given these premises, and considering that obviously the rules of the Italian Football Association do not have any bearing on other national football associations, it must be concluded that the domestic protections provided at FIGC level do not achieve their goals outside the Italian boundaries. Indeed, the ‘young of series’ status and the technical training relationship are certainly not equivalent to a contract, this implying that nothing prevents a foreign club from making a contractual offer to a young player registered with an Italian club under those terms. At the same time, players aged over 16 can freely transfer to another European country without the risk of being in breach of FIFA rules nor the rules of the association where they are destined, unless they are under contract with their domestic club. Given the rather unattractive hypothesis of being bound to accept a non-negotiated contract under FIGC rules, the young athlete is highly likely to welcome employment offers from abroad before he turns 19. This is why the only way that an Italian club can secure its young players from flattering offers made by foreign clubs is to put them under contract as soon as possible after they turn 16.
4. Some questions from an EU law perspective
The European Court of Justice jurisprudence has recently affirmed in several decisions that the so- called “specificity of sport” does not generally exempt the world of sport from the application of EU law. The last milestone in this process is represented by the Meca-Medina judgement (20), where the ECJ maintained that “sport is subject to Community law in so far as it constitutes an economic activity within the meaning of Article 2 EC”. Moving on from this standpoint, the Court clarified that the specificity of sport can justify the adoption of rules that would otherwise be in breach of internal market principles only to the extent that the rules in question pursue a legitimate objective and their restrictive effects are inherent in the pursuit of that objective and proportionate to it. Furthermore, the Meca-Medina decision endorsed the principle that national sports associations should be considered as undertakings or as associations of undertakings under the meaning of EC Treaty (art. 81). In this respect, it is also undisputed that professional football clubs are undertakings under that meaning.
In the case in question, the distorting effects on the competition among European football clubs created by the interaction of FIGC and FIFA rules appear to be, upon first glance, hardly reconcilable with internal market principles. In fact, as a result of the same, Italian clubs cannot hire a young player registered as ‘young of series’ unless they find an agreement for his transfer with the club that holds his registration; on the contrary; foreign clubs can deal with the same Italian ‘young of series’ market as free agents, avoiding the competition of Italian clubs and dealing in the market as privileged actors towards their contractual counterparty, the underage player.
In light of the viewpoint expressed by the ECJ jurisprudence, one should ask whether said FIGC rules pursue a legitimate objective and if their restrictive effects are inherent in the pursuit and proportionate to the same. In this regard, the interaction of Italian and European rules indeed results in significantly boosting the migration of young players outside the national boundaries. In fact, where FIGC rules prevent wealthy from frustrating the investments made by smaller Italian clubs on their youth sector, there the same rules allow for foreign clubs to act as privileged agents and do precisely that. Indeed, this looks like FIGC rules have failed in the pursuit of their own objectives.
5.Conclusions By way of conclusion, it can be noticed that, at Italian as well at international level, the football regulations show the intention to protect the youth sectors of professional clubs and the interests of young players. At domestic level, the reasons for this are primarily to reward the investments made by clubs in developing their young footballers in order to ensure that Italian academies produce quality players and that Italian football remains competitive worldwide. Internationally, the protection of minors and the fight against their exploitation and trafficking within the world of sport has become an issue of paramount importance, on which FIFA is working closely with the European Commission, as well exemplified by the White Paper on Sport of 2007. Furthermore, FIFA rules pursue the objective of contractual stability through the provision of the solidarity contribution and also foresee rewards for the training clubs of a nature similar to those provided at national level. Today, it is generally acknowledged that sport is subject to EU law. However, the pursuit of certain objectives can justify the adoption of sporting regulations that would otherwise clash with internal market principles when this is functional to “the good of the game”. In other words, exceptions to EU law principles can be accepted based on the specificity of sport. This is the field where the restrictions regarding young players find their justification and among others the 6+5 proposal has been made and is being carefully discussed. With regards to the FIGC rules that currently pose significant limits to the contractual freedom of athletes and clubs in relation to young footballers, it appears disputable that they could be held acceptable in said terms. The main reason for this is that those rules create a distortion in the competition among top European clubs that on international scale end up producing effects contrary to the objectives that they pursue. In fact, it has been shown that the current Italian regulatory framework creates a fertile field for the phenomenon of “feet drain” to foreign countries. Therefore, greater alignment between Italian domestic rules and FIFA rules appears desirable as it could prevent further cases of said phenomenon as well as inconsistencies with EU law that might be relevant not only in terms of academic exercise, but also of actions brought by concerned parties on that basis.
(1) The “Feet Drain” phenomenon is commonly referred to the trade of players from underdeveloped countries to developed one within the football industry. Nevertheless, it can also refer to young players’ transfers between clubs from developed countries although it has drawn less attention. (2) FIGC stands for Federazione Italiana Gioco Calcio, i.e. the Italian Football Association. (3) In Italian, Norme Organizzative Interne Federali, which is usually shortened into N.O.I.F. (4) This rule is indeed highly criticized. Indeed, in this manner amateur players are subject to a bond that is paradoxically longer than if they were professionals. (5) In Italian, “Giovane di Serie”. The discipline of the young player of series is set out at art. 34 of the Association Internal Rules). (6) I.e., a club whose senior team plays at a professional level (Serie A, B, C1 or C2). (7) For clubs playing in Serie A, the indemnity amounts to a minimum of € 1,000 per month (8) In this case, the duration of the contract cannot exceed season of the player’s 22nd birthday. (9) Precisely, during the last month of said season. (10) The offer could therefore also be at the minimum wage established by the footballers’ collective bargains (some 1,800€/month in Serie A). (11) For young of series, this latter case implies that no employment offer was made by the training club. (12) Which means that six players out of eleven have to be eligible for the national team of the country in which the club is domiciled. (13) In this respect, the White Paper on Sport published by the European Commission in 2007 reads as follows: “The exploitation of young players is continuing. The most serious problem concerns children who are not selected for competitions and abandoned in a foreign country, often falling in this way in an irregular position which fosters their further exploitation. Although in most cases this phenomenon does not fall into the legal definition of trafficking in human beings, it is unacceptable given the fundamental values recognised by the EU and its Member States. It is also contrary to the values of sport. Protective measures for unaccompanied minors in Member State immigration laws need to be applied rigorously. Sexual abuse and harassment of minors in sport must also be fought against”. (14) Art. 20 of the Regulations of the status and transfer of players; Annex 4 sets out the figures of the proportion on which compensation is calculated. (15) Specify. (16) Either the first employment contract or a subsequent contract. (17) Art. 21 of the Regulations for the status and transfer of players, Annex 5 sets out the figures for the proportions on which the indemnity is calculated. (18) This means that even compensation due as a result of a breach of contract, such as compensation due as per art. 17 of the Regulations for the status and transfer of players may trigger the payment of a solidarity contribution. (19) This occurs when the player has a temporary registration with a third club, and has achieved the number of official games entitling him to a professional contract. In this case he can obtain employment with the club for which he is temporarily registered, subject to the failure of the club for which he is registered on a definitive basis to employ him as a professional. (20) Case C-519/04P, Meca Medina v. Commission, ECR 2006.
Tags: FIFA Regulations on the Status and Transfer of Players | Football | Italy | Player Registration | Player Training & Development