Impact of football academies on the (future) labour position of talented minors Master dissertation ( )

Transcription

1 Impact of football academies on the (future) labour position of talented minors Master dissertation ( ) Anne M.J. Wils Under supervision of Dhr. mr. R.C. Branco Martins 1

2 Table of contents Chapter 1 Introduction 4 Chapter 2 Compatibility of training agreements with (inter)national law Introduction: what training agreements entail Conformity with international legislation United Nations Convention on the Rights of the Child (UNCRC) European Convention on the Exercise of Children s Rights (ECECR) European Union Football associations FIFA regulation Conformity with national Belgian legislation 27 Chapter 3 Do training agreements violate the principle of privity of contracts? 29 Chapter 4 Impact of football academies on (future) labour position of minors 31 Chapter 5 Regulatory proposals to increase autonomy of the minor Minimum age Permit system Default training agreement European Social Dialogue 36 Chapter 6 Conclusion 37 Annex 41 Literature 42 Table of cases 43 2

3 Abbreviations CAS DRC ECECR ECJ FSDC EU FIFA FIFPRo TCS TFEU UEFA UN UNCRC Court of Arbitration for Sport Dispute Resolution Chamber European Convention on the Exercise of Children s Rights European Court of Justice European Social Dialogue Committee in Professional Football European Union Fédération Internationale de Football Association Fédération Internationale des Associations de Footballeurs Professionnels Training Compensation System Treaty on the Functioning of the European Union Union of European Football Associations United Nations United Nations Convention on the Rights of the Child 3

4 1. Introduction Sport plays an important role in modern society as it is commonly accepted that it improves the overall well being of participants and it enhances social cohesion. It is therefore a popular leisure activity amongst both adults and children. Although the image of sport is predominantly positive, there is, however, a broad consensus that the advantages of sport correlate with the conditions under which participation takes place. 1 While recreational sports have a positive effect on both physical and mental health, these benefits for (semi) professional sportsmen are often undermined because of the enormous pressure they are under, in particular with regards to young athletes. This dichotomy between amateur and elite sports cannot be underestimated. Elite sports are characterised like any other labour market by a so-called war for talent. 2 In sport, this leads to a situation of early talent identification and specialisation where young children become committed to strict training schemes. 3 The pressure and expectations imposed on these minors undermine the positive impact of sport. Many have encountered negative effects such as emotional harm, sexual harassment, physical self-harm and sexual harm. 4 Although the intensive training, sacrifices and efforts of some minors may lead to fame, fortune and success, only few reach the top. Moreover, only five per cent of talented minors will ever earn a living from professional sports. 5 Hence, the remaining 95 per cent ends up unemployed and with no relevant academic qualifications. These practices are familiar in all sports, but the last decade there has been a particular up rise of exploitation of minors in football. First, there is the issue of international trafficking of young players from developing countries to developed countries. Referring to the numerous 1 Farstad, Protecting Children s Rights in Sport: The Use of minimum Age [online] 2 Hendrickx, Jong gejongleerd is oud gedaan: minderjarigen en profvoetbal, R.W. 2015, p S. Farstad (n 1) 4 Alexander, Stafford and Lewis, The experiences of children participating in organized sport in the UK, p. 5 [online] 5 S. Farstad (n 1) 4

5 studies that have been published relating to this problem, this research will not further deal with this topic. 6 Second, the establishment of football academies is of a growing concern. 7 In, inter alia, the UK and Belgium, sports academies conclude a contract with the parents of talented children. The academy commits itself to provide professional staff to both train and educate the children and it pays the parents a lump sum as a form of reward. In return, the parents agree that their child will be enrolled in an intensive sports program for a period of no less than six years, with the unilateral possibility to prolong the contract. Furthermore, the parents waive their right to negotiate the player s subsequent professional contracts. Even more alarming are the so-called surety provisions that the training agreements often entail. In such a provision, parents promise that, once their child acquires the legal capacity to conclude contracts, he/she will sign an employment agreement with the club that the academy proposes. Although FIFA is aware of the precarious position of minors in football, little protection is offered to encounter the specific problem caused by football academies. Moreover, one can question whether FIFA is the appropriate institution to deal with this issue, as football academies are often linked to a club, but are established as a separate legal entity which is not a member of the (inter)national football association. Hence, the latter cannot take the measures needed to deal with these abuses. The purpose of this research is to examine whether training agreements are compatible with international and national law, and if so, to what extent it undermines the (future) labour position of minors which are enrolled in a football academy. Hence, the focus will be on the limitations of training agreements on the contractual freedom of the athlete to conclude its first professional employment contract. In addition, this paper makes suggestions on how this problem can be tackled and on which level action should best be taken. The thesis will start with an analysis of the lawfulness of the training agreements concluded between football academies and parents of young athletes from both an international and a national perspective. 6 See for example: Lembo, Fifa Transfers Regulations and UEFA Player Eligibility Rules, Emory Int'l L. Rev. 2011, p See for example European Parliament, E-6501/08, Written question by Ivo Belet: Private football academy and special training agreements, (included in annex I attached to this paper) 5

6 The main international instruments that will be examined are the legislation adopted within the European Union, the International Labour Organisation, the football associations and, in addition, various treaties such as the United Nations Convention on the Rights of the Child (UNCRC) and European Convention on the Exercise of Children s Rights (ECECR). On the national level, the legislation of Belgium will be discussed extensively. The choice for this country is two fold. On the one hand, the topic of football academies is frequently discussed today in prominent Belgian legal circles as well as in the local media due to a conflict between R.S.C. Anderlecht and Jason Eyenga-Lokilo. This conflict will be used throughout the research as a case study. On the other hand, from a sports-perspective, Belgium is an interesting country because of the specific sport laws that it has adopted over the years. In addition, before answering the main research question, it will be examined if, and to what extent, the training agreement between parents and clubs can impose obligations on a third party (the minor). In this context, a brief description of the (limitation) of parental power of attorney in sports cannot be left unmentioned. Taking into account the nature of the main research question, a descriptive methodology is applied throughout this thesis. Both international and national legislation are analyzed and interpreted in order to define the legal position of minors enrolled in a football academy. Nevertheless, the last section is prescriptive as it aims to be a normative part that explains how the law should be in order to provide sufficient protection for minors. 6

7 2. Compatibility of training agreements with (inter)national law 2.1. Introduction: what training agreements entail Training agreements are, for the purpose of this master thesis, defined as agreements which have been concluded between a football academy and the parents of a talented minor. It is a reciprocal agreement, meaning that the contract confers rights and imposes obligations on both parties. Before substantially examining training agreements, it is important to briefly consider the contractual parties. The reason for contracting with the parents instead of the child itself, is of a legal nature. In Belgium, for example, minors are in principle - incapable of concluding contracts. 8 The Employment Contracts Act makes an exception by providing that a minor can bind himself by an employment contract if his mother, father or guardian gives an express or tacit authorization. 9 However, the Professional Sports Employment Contract Act only allows a minor who has reached the age of 16 to conclude an employment contract as a professional sports player. 10 Taking into account that enrolment in a football academy often starts for pupils aged 10 11, the only way to legally bind the child to the academy is by contracting with its parents, as legal representatives of the child. When looking in more detail to the substance that a training agreement contains, it becomes clear that several standard clauses are included. In what follows next, these different provisions will be enumerated and it will briefly be explained what they entail. First, the rights of the parents will be discussed, followed by the rights which a training agreement confers to football academies. 8 Art Belgian Civil Code ( Burgerlijk Wetboek ) 9 Art. 43 Employment Contracts Act ( Arbeidsovereenkomstenwet ) 10 Art. 6 Professional Sports Employment Contract Act ( Wet betreffende de Arbeidsovereenkomst voor betaalde sportbeoefenaars ) 11 European Parliament, E-6501/08 (n 7) 7

8 When a prestige football academy identifies a child as being talented, parents are generally flattered and proud that their child is eligible as an elite sportsman. The football academy promises the parents to provide intense football training by a highly qualified staff and to provide secondary education by means of home tuition. 12 The feeling of haughtiness which the parents experience might cloud their objectivity when concluding a contract. Besides of the unique chance that their child is offered, the training agreement often entitles the parents to a lump sum. In the case of the Belgian football player Jason Eyenga-Lokilo, for example, his parents would receive euro if they could convince their son to sign his first professional contract with R.S.C. Anderlecht. 13 When the training agreement was concluded, the Lokilo family felt like the stronger party. Their feeling of triumph changed, however, when their son turned 16. It was at this moment that it became clear to what extent they had renounced the child s rights by signing the contract. This brings us to the rights to which the football academy is entitled because of the training agreement. First, a standard training agreement includes the exclusive right for the football academy to negotiate the first professional contract of the child. This empowers the academy to unilaterally decide where the child will be employed, regardless of the best interest of the child. This will often be with the club which is willing to pay the highest amount to the academy, and this is not necessarily the club which guarantees the best conditions for the player. Furthermore, such a clause is often accompanied by a provision which, implicitly or explicitly, deprives both the child and its parents to contract with any other agent of their choice. This basically means that the football academy has the exclusive right to act as broker, not only to act as an intermediary between the child and a club for its first professional contract, but also to deal with all other legal and commercial activities. Second, a clause is included which obliges the child to play with the academy s partner club for as long as the minor is enrolled in the academy. It has been argued by, inter alia EU parliamentarian Ivo Belet, that football academies are founded, managed and controlled by football clubs, but are conferred a separate legal identity in order to circumvent the legislation of football associations. In other words: the contract may mention a partner club, although it 12 Ibid 13 Van Laeken, De helaasheid der Belgische voetbaldingen, DR [online] 8

9 is in fact this club which is equated with the academy in practice, but is a separate legal entity in legal terms just for the purpose of avoiding mandatory provisions which protect the minor. Third, training agreements contain a compensation clause which entitles the academy to a training fee up to euro per year of training if the parents breach the said contract or if they cannot convince their child to sign its first professional contract with the club which the academy proposes. In the case of Jason Eyenga-Lokilo, R.S.C. Anderlecht claimed a fee of euro from the player s parents because the player refused to sign his first contract with that club while they had made a surety that he would. 14 Fourth, a provision is included with regards to the duration of the training contract. There have been cases in which the training contract covered a duration of six years. 15 This implies that a child aged 10 who enrols in a football academy is obliged to live, train and be educated on the academies campus until he reaches the age of 16 (not coincidently the age on which he may sign his first professional contract), under the threat that prematurely exiting the program will impose a disastrous financial burden on his parents. Moreover, the contract may contain a clause which unilaterally entitles the academy to prolong the contract. Finally, the agreement stipulates that the Court of Arbitration (CAS) is the only legal body with jurisdiction in the event of disputes. 16 By inserting such provision, jurisdiction of domestic courts and tribunals are excluded. Hence, the parents renounce their right to find relief with domestic courts. Training agreements should, ideally, aim at finding a balance between the freedom of movement of players on the one side and contractual stability on the other. 17 As research of the different clauses pointed out, parents are often the weaker party as football academies dictate the substance of the contract. In what follows in the next section, it will be examined if, and to what extent, the weaker party is protected by both international and national legal instruments. 14 Ibid 15 European Parliament, E-6501/08 (n 7) 16 Ibid 17 Compaire, Planas and Wildemann, Contractual Stability in Professional Football, Law in Sport [online] 9

10 2.2. Conformity with international legislation In the previous section it became clear that training agreements concluded between football academies and the parents of talented sportsmen contain dubious provisions which put the parents in an inferior position. It now needs to be examined whether international and national legislation limits the contractual freedom of the parties involved, and thus, if training agreements are compatible with these legal instruments. First, two treaties dealing with the rights of children will be dealt with. In this context the United Nations Convention on the Rights of the Child plays a key role. The UNCRC, which is the most widely ratified international human rights treaty in history 18, aims at the full and harmonious development of a child s personality by proclaiming that childhood is entitled to special care and assistance. 19 Hence, the best interest of the child s development prevails over contractual agreements and cannot be undermined by the specificity of sport. Another important treaty which promotes children s best interest is the European Convention on the Exercise of Children s Rights, adopted by the European Council. This treaty emphasizes the importance of the parental role in protecting the rights of their children. 20 Next, an extensive analyze will be made of the position of the EU towards sports in general and, more specifically, towards training agreements. The main focus will be on primary sources of EU law, such as legislation and jurisprudence. Nevertheless, where necessary, reference is made to secondary and tertiary EU sources. Within this context, a connection will be made to the relationship between the EU and football associations. Regulation of the latter, such as the FIFA, will also be discussed briefly. Finally, the provisions of training agreements will be examined under domestic Belgian legislation. This will reveal the practical implications for a country of the legislation adopted by international institutions. 18 UNICEF, The UN Convention on the Rights of the Child, [online] 19 Preambule United Nations, Convention on the Rights of the Child (New York, 20 November 1989). (hereafter UNCRC ) 20 Preambule Council of Europe, European Convention on the Exercise of Children s Rights (Strasbourg, 25 January 1996) (hereafter ECECR ) 10

11 United Nations Convention on the Rights of the Child (UNCRC) A first international legal instrument that is analyzed is the UNCRC. No less than 194 states are party to the treaty, including all EU countries. 21,22 Moreover, the UN General Assembly adopted the instrument without a vote. 23 Hence, there is a consensus in the international community about the substance of the treaty. The convention is innovative because it confers choice rights instead of protection rights to children. 24 This basically means that it aims at protecting the child from the power of parents by recognizing that children should have rights identical to adults. With this in mind, a training agreement concluded between a football academy and parents about the child s development is hard to reconcile with the autonomy that the UNCRC confers to children. Talented minors should thus have a say in the formation of any agreement binding them for the next six years. Article 6 of the UNCRC explicitly confers the child the right to express his opinion whenever it is capable of forming his own view. This being said, it is thinkable that a child that is offered the chance to fully commit to his sport by means of enrolment in a football academy will be excited about the opportunity and will probably not oppose any agreement between the academy and his parents. It has to be noted that the treaty not necessarily prohibits any kind of training agreement for children, as it emphasizes that the education of the child has to be directed to the development of the child s talents to their fullest potential. 25 There are, however, other interests of the child that has to be balanced against the right to develop its talent. First, there is the right of equal opportunity to education. 26 It goes without saying that engagement to a football academy implies an unconditional devotion to the sport and, as a 21 United Nations, State parties to the UNCRC, OHCHR, [online] 22 Note that the United States of America and Somalia are signatories, but no state parties and that South Sudan has taken no action to comply with the convention 23 Hafen and Hafen, Abandoning Children to Their Autonomy, Harv. Int'l. L. J. 1996, p Ibid, p Art. 29 UNCRC 26 Art. 28 UNCRC 11

12 consequence, to strict training schemes. This may, however, be to the detriment of the secondary education of the minor. One can then argue that children enrolled in football academies are disadvantaged when compared to other children. A training agreement, as discussed earlier, implies that it is the academy that provides home tutoring for the child. No details are, however, provided on the quality and duration of the education. This fact is indeed problematic because, as was mentioned in the introduction, only five per cent of talented minors will ever earn a living from professional sports. 27 Hence, the remaining 95 per cent ends up unemployed and with no relevant academic qualifications. Thus, this indirectly disadvantages minors in their future labour position, assuming the majority will never be professional sportsmen. Second, the treaty recognizes the right of the child to freedom of association 28 and the right to participate freely in cultural life 29. A provision in the training agreement which obliges the child to play with the academy s partner club, clearly violates the UNCRC. Third, the treaty protects the child from economic exploitation. 30 Such protection is hard to reconcile with the exclusive agent-clause that a standard training agreement contains and which confers the academy the right to negotiate all commercial activities of the child. Basically, the child is used to generate money through transfers and sponsorship deals. Moreover, it is unlikely that the child (or his parents for that matter) profit from these activities. Rather, it is the academy and its partner club that will benefit from this. Hence, it is clear that the child is being economically exploited and it has no legal remedy to counter act these practices. Fourth, the exclusive agent-clause is also problematic with regards to the treaty provision which prohibits the sale of or traffic in children in any form. 31 The training agreement reserves the right for the academy to negotiate the child s first professional employment 27 Farstad (n 1), p Art. 15 UNCRC 29 Art. 31 UNCRC 30 Art. 32 and 36 UNCRC 31 Art. 33 UNCRC 12

13 contract. The child can thus, so to speak, be sold to any national or international football club from the moment he turns 16. A final remark cannot be left unmentioned with regards to the enforceability of the UNCRC. Although a consensus in the international community exists about the rights of the child, the convention remains to be soft law. Just like most other treaties, the UNCRC has no direct effect in a national legal order. 32 Hence, there are no sanctions provided in case a state party does not act in compliance with the treaty. This means that even though training agreements are not in line with the UNCRC, there is no legal remedy unless the national state has implemented the treaty provisions in their national legal order European Convention on the Exercise of Children s Rights (ECECR) The ECECR was adopted by the Council of Europe and can be regarded as supplementing the UNCRC. It does not substantially deal with children rights 33, but it rather grants procedural rights by allowing children to participate in the proceedings before a judicial authority which affect them. 34 More specifically, the convention confers the right to children to apply for the appointment of a special representative in proceedings before a judicial authority affecting the child where internal law precludes the holders of parental responsibilities from representing the child as a result of a conflict of interest with the latter. 35 If a conflict should arise out of the training agreement, the interests of the child can potentially conflict with the interests of the parents because the latter are hold to pay compensation to the academy if the child breaches the contract. Allowing the child to be represented by an independent third person, increases the protection of the child s best interests. Moreover, the treaty encourages mediation or other processes to resolve disputes. 36 The arbitration clause in favour of the Court of Arbitration for Sport (CAS) that is included in training agreements are in line with this treaty provision. As ANDERSON correctly points out, 32 Stalford, Children and the European Union, 2012, p Jeleff, The child as citizen, 1996, p Preambule ECECR and art. 1 (2) ECECR 35 Art. 4 ECECR 36 Art. 13 ECECR 13

14 alternative dispute resolution by means of CAS has the advantage that it is neutral, efficient and input of experts is given. In my opinion, however, CAS is not the most suitable institution to deal with conflicts arising out of training agreements. Taking into account that the child s best interest is at stake, it seems more appropriate that a civil court deals with the conflict, rather than an arbitration court that might let sports interests prevail European Union Before dealing with EU law more substantially, it is important to describe the legal relationship between sport governing bodies and the EU. Thus, this section will start with a brief analysis to see if sport in general falls within the scope of EU law, and if so, to what extent training agreements are covered by community legislation. Subsequently, it is examined whether training agreements are compatible with EU legislation. Sports exception The way in which sport is dealt with within the EU has a long history, dating back to the mother of all sports law jurisprudence, the Walrave and Koch judgement. 37 It was in this case that the European Court of Justice (ECJ) for the first time recognized that sport is subject to Community law only in so far as it constitutes an economic activity. 38 A sporting activity, which takes the form of gainful employment, which is true for the activities of semi-professional and professional sportsmen, falls within the scope of EU law, more specifically within the scope of the free movement rights. 39 Hence, a question of purely sporting interest that has nothing to do with an economic activity, falls outside the scope of EU law. 40 This was, in subsequent years, reaffirmed in other free movement cases, such as Dona 41, Bosman 42, Deliège 43 and Lethonen ECJ , C-36/74 (Walrave and Koch) [online] 38 ECJ , C-36/74 (Walrave and Koch) (n 31), 4 39 ECJ , C-36/74 (Walrave and Koch) (n 31), 5 40 ECJ , C-36/74 (Walrave and Koch) (n 31), 8 41 ECJ , C-13/76 (Donà), 12 [online] 42 ECJ , C-415/93 (Bosman), 73 [online] 43 ECJ , C-51/96 and C-191/97 (Deliège), 41 [online] 44 ECJ , C-176/96 (Lehtonen), 32 [online] 14

15 Where the ECJ s position on sport in relation to EU free movement rights was clear after the abovementioned rulings, the ECJ was not inclined to rule about the relation of sport with EU competition rules until its ruling in the Meca-Medina case in In Meca-Medina, the view of the ECJ changed in the sense that it no longer accepted that if a rule is purely sporting in nature, it is removed from the scope of EU law. 45 Hence, even if a rule is regarded as purely sporting, it still needs to satisfy the conditions laid down by EU law with regards to free movement rights and competition rules. In the aftermath of the abovementioned cases, the football community set up an extensive lobby strategy for the inclusion of a EU treaty article on sport, confirming the specificity of sport and recognizing the autonomy of sports governing bodies. 46 It feared that, without such inclusion, their autonomy would be further undermined. As a consequence, sport was brought within the explicit reach of EU law when the Treaty of Lisbon was adopted in Article 165 of the Treaty on the Functioning of the EU (TFEU) stipulates that the EU shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function. When considering this provision, it appears that the added value of the treaty article is rather limited. 48 At first sight it seems that the article merely reaffirms the ECJ s case law by explicitly recognizing the specificity of sport. However, the second paragraph of article 165 TFEU adds a new element by encouraging the development of the European dimension in sport, by promoting fairness and openness in sporting competition and cooperation between bodies responsible for sports, and by protecting 45 ECJ , C-519/04 P (Meca-Medina), 27 [online] 46 Geeraert, Scheerderb and Bruyninckx, The governance network of European football, International Journal of Sport Policy 2013/5, p Weatherill, Fairness, Openness and the Specific Nature of Sport, ISLJ 2010, p Weatherill, EU Sports Law, SSRN 2011, p. 11 [online] 15

16 the physical and moral integrity of sportsmen and sportswomen, especially the youngest amongst them. Up until now, it remains unclear how the concept fairness should be interpreted. Does this provision mean that it, for example, is fair that football academies include training compensation fees in the contract that compensate their investment in the player, or is it fair that such clause is prohibited? It all depends from whose point of view one deals with the concept of fairness. In my opinion, the EU will eventually prohibit such clause as the treaty provision clearly emphasises that sportsmen need to be protected, especially the youngest. In other words: it is likely that the EU will develop the concept of fairness in favour of sportsmen, to the detriment of the stronger party, the football academies and clubs. As WHEATHERILL correctly points out, this is a battle to come. 49 Coverage of training agreements by EU law Now that it has been established what the position of sport in general is within the EU, it should be examined how training agreements fit in this framework. As article 165 TFEU merely refers to the specific nature of sport, it leaves us clueless to what extent this sporting exception needs to be taken into account. As a consequence, it seems appropriate to fall back on the criteria set by the ECJ. It follows from the Meca-Medina case that it is not possible to provide general guidelines on the application of EU law on sport issues. 50 This means that, the compatibility with EU law should be examined on a case-by-case basis. Moreover, the ECJ s judgement must be interpreted in such a way that, the specificity of sport must be taken into account in the sense that the restrictive effects of training agreements are not in breach of both the freedom of movement rights and the EU competition rules, provided that these effects are proportionate to the legitimate genuine sporting interest pursued Weatherill (n 47), p Siekmann, Introduction to International and European Sports Law, 2012, Ibid 16

17 As a consequence, training agreements fall within the scope of EU law, even though they are of a specific sporting nature. Moreover, it should be examined if such an agreement has restrictive effects on free movement and competition, and if so, whether they breach EU law, taken into account the proportionality test. Compatibility of training agreements with EU law Consideration is now given to substantial EU law. In other words: whether the different clauses included in a training agreement are in compliance with EU legislation. The restrictive effect, if any, of the different contractual provisions will be examined and checked if they pass the proportionality test. First and foremost, the clause relating to a training compensation fee is dealt with. The ECJ has, in the past, dealt with this issue on several occasions. The rulings of the court on this matter will, in what follows next, be applied to the specific situation of such contractual clause between football academies and parents and the compatibility of it with the freedom of movement. Second, the exclusive-agent clause is analyzed in the light of EU competition rules. Third, compliance of the stipulation that obliges the minor to play exclusively with the academies partner club is checked with both the free movement rights and the freedom of association. Note that the unilateral prolongement clause and the arbitration clause are not dealt with because no specific EU regulation is in force relating to these issues. Hence, these provisions fall within the contractual freedom of parties and will therefore not be further dealt with in this section. Training compensation fee With regards to training compensation clauses, the ECJ ruled in its Bosman judgment in 1995 that such provision implies that a football player cannot pursue his activity with another club unless it has paid his former club a fee, and consequently, constitutes an obstacle to the freedom of movement for workers as laid down in article 45 TFEU. 52 This obstacle can, 52 ECJ , C-415/93 (Bosman), 100 [online] 17

18 however, be justified if the restriction pursues a legitimate aim which does not go beyond what is necessary for that purpose. 53 The ECJ recognizes the considerable social importance of sporting activities and in particular football in the EU, and acknowledges that: i) the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results, and; ii) of encouraging the recruitment and training of young players must be accepted as legitimate. 54 Although the ECJ considers the aims to be legitimate, it ruled that they do not pass the proportionality test. With regards to the first aim, the court argues that it does not prevent the richest clubs from securing the services of the best players nor prevent the availability of financial resources from being a decisive factor in competitive sport, thus considerably altering the balance between clubs. 55 The second aim for that matter, neither passes the test because it is impossible to predict the sporting future of young players with any certainty and because only a limited number of such players go on to play professionally, those fees are by nature contingent and uncertain and are in any event unrelated to the actual cost born by clubs of training both future professional players and those who will never play professionally. 56 Hence, the ECJ does not necessarily oppose the inclusion of a compensatory training fee because it has explicitly recognized the legitimacy of the aim of such clause. Nevertheless, in Bosman it questions the amount of compensation that is set in contracts. In Bernard the court further elaborates on the return on the investments in training. More specifically, in this case the ECJ condemns any training compensation that has the character of damages. 57 Moreover, HENDRICKX made a synthesis of the conditions as determined in Bernard that have to be fulfilled when calculating the amount of training compensation. 58 First, as already mentioned earlier, the training compensation must be related to the real and actual costs of training. 53 ECJ , C-415/93 (Bosman), 104 [online] 54 ECJ , C-415/93 (Bosman), 106 [online] 55 ECJ , C-415/93 (Bosman), 107 [online] 56 ECJ , C-415/93 (Bosman), 109 [online] 57 ECJ , C-325/08 (Bernard), 46 [online] 58 Hendrickx, The Bernard-case and training compensation in professional football, Eur. Lab. L.J. 2010/3,

19 Second, not only the individual costs of the player have to be taken into account, but also a relevant proportion of the club s overall training costs. The reason for this can be found in the fact that only few trainees become professionals and that a significantly greater number must be trained in order for that minority to be revealed. Third, the compensation fee should be calculated according to a proportionate mechanism, in case the player has trained with different clubs. That way, all clubs that have invested in the player will be compensated pro rata. Fourth, the compensatory obligation to pay training costs has to decrease over time. This basically means that the longer the player has stayed with the club after completion of the training, the less compensation is due. Fifth, it is argued that it is not only the new club of the player that is held to pay damages, but that this rather depends on the liability of the breach. If it is the player himself who were to bear the liability, the amount should be calculated on the sole basis of the individual cost of training him, regardless of the overall training costs. Finally, the amount of compensation may not make the free movement of the worker impossible. Taking into account all of these consideration, it can be concluded that a training compensation fee is compatible with EU law, in so far as it fulfils the abovementioned conditions. Having established this, it needs to be examined whether these conditions are the same for compensatory clauses in the context of a training agreement. In other words: it needs to be analyzed whether the facts in Bosman and Bernard are, more or less, the same as in the case of a training agreement concluded between a football academy and the parents of a talented minor. When making a factual analysis of the situation in Bernard, it becomes clear that the player in casu had signed a contract as a joueur espoir 59 with Olympique Lyonnaise, under a French 59 Promising player 19

20 charter that has the status of a national collective agreement. 60 This charter entitled the club, at the expiry of the joueur espoir contract, to require that the trainee signs his first professional contract with this club. This fact reveals some resemblance with a training agreement, with the exception that in the case of Bernard the obligation to sign a professional contract was imposed by law, and not by a contract. This difference does not, however, prevents us to make an analogy because the free movement of workers, as laid down in article 45 TFEU, has direct horizontal effect which means that this right also has to be respected in the relationship between individuals. 61 Furthermore, it has to be noticed that in both Bosman and Bernard there was a cross border element present. In the former case the player wanted to leave his Belgian club for a French club, while the latter wanted to leave his French club to go and play for an English club. The presence of such an inter-state element is of major importance, as this is a constitutive condition for application of EU law. 62 As a consequence, when a conflict arises between a football academy and the minor s parents with regards to the training compensation, the parties can only rely on the conditions set forth in Bernard if it is not a purely internal matter. In conclusion, there does not seem to be an impediment to apply the Bernard criteria in case of training compensation provided for in training agreements. Thus, the inclusion of such a clause in a training agreement is compatible with EU law in so far as it is a decreasing obligation which aims at reimbursing the real and actual (individual and global) training costs, provided that it proportionately compensates all clubs with whom the player has trained and it does not make the free movement of the player impossible. Exclusive-agency clause As mentioned earlier, a training agreement often entails a clause which entitles the football academy to exclusively negotiate the first professional contract of the minor and to deal with all commercial activities of the player throughout the duration of the training contract. 60 ECJ , C-325/08 (Bernard), 32 [online] 61 Barnard, The substantive law of the EU, 2010, p Barnard (n 61), p

21 When examining whether such clause impedes EU law, it becomes clear that there is no specific EU regulation in relation to sports agents. As DEDECKER points out, this is unfortunate, taking into account the international character of sports agencies. 63 He strongly advocates a harmonisation on this matter in order to increase legal certainty and the level of protection for sportsmen. In absence of any specific regulation, we have to fall back on other existing EU rules to check the compatibility of the clause with EU law, more specifically the rules concerning the freedom of services. According to article 56 TFEU, restrictions on the freedom to provide services have to be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended. Hence, in order for this provision to apply it is, once again, required that there is a cross border element present. EU jurisprudence has shown that this freedom to provide services is not merely directed to public authorities, but that it also has a direct horizontal effect in so far as the private measure affects the freedom in a collective manner. 64 As a consequence, in the situation where a training agreement restricts the freedom of services by including an exclusive-agency clause in the contract, the parties cannot rely on article 56 TFEU as it merely affects the minor individually. Monopoly to play clause As referred to earlier, a default training agreement contains a clause which prohibits the minor to play with any other club than the academy s partner club. Taking into account that the core of the EU revolves around the free movement rights, such restriction of a player to join a football association of choice needs to be handled with the necessary caution. It first needs to be examined whether the minor can invoke any free movement rights under EU law. With regards to persons, the EU explicitly confers the right to free movement to 63 Dedecker, Handboek Sportrecht, 2013 p Verbruggen, The Impact of Primary EU Law on Private Law Relationships, E.R.P.L 2014/2, p

22 workers. 65 As BRANCO MARTINS emphasizes, even an athlete with an amateur status can still be qualified as a worker, provided that he fulfils the criteria for the existence of an employment contract, i.e. subordinate relationship, remuneration and duty to work. 66 Although there may be a subordinate relationship between the minor and the academy, the player is not remunerated and he has no duty to work (only to train). Hence, the minor has no personal obligation whatsoever with the football academy, nor does the academy financially remunerates the minor. It can therefore be concluded that the minor does not fall within the definition of worker as described in article 45 TFEU and, as consequence, he cannot rely on the freedom of movement as provided therein. Considering the abovementioned, it needs to be concluded that on the level of the EU no protection is offered which prohibits a clause that provides the monopoly to a club to call on the minor s activities Football associations FIFA regulation In the previous sections it has been examined whether training agreements are in compliance with international regulation adopted by intergovernmental organizations. In what follows next, regulation imposed by sports governing bodies is examined. Note that the focus in this section will be on FIFA regulation, while UEFA regulation is not dealt with here. The reason for this can be found in the fact that, although the latter has adopted important regulations concerning, inter alia, international transfer of minors 67 and financial fair play 68, it has not adopted any regulation which is relevant in the context of training agreements (yet). FIFA is well aware of the fact that clubs try to find loopholes in order to circumvent legislation that aims at protecting minors and has therefore adopted legislation to counteract 65 Art. 45 TFEU 66 Branco Martins, Freedom of Movement in Relation to Sport, Asser 2007/1-2, p Simons, Protection of Minors vs. European Law, European Sports Law and Policy Bulletin 2010/1 p Müller, Lammert and Hovemann, The Financial Fair Play Regulations of UEFA, IJSF 2012/7, p

23 these practices and to enhance the position of minors in football. 69 First, it has developed a mechanism that deals with training compensation for players under the age of 23. Second, it has responded to the up rise of player s agents due to increase of players moving across frontiers. Third, it recently initiated action to constrain the tendency of football clubs to circumvent FIFA regulation by establishing academies with a separate legal personality. Fourth, it has introduced specific provisions dealing with the duration of training contracts. Each of these matters will be dealt with separately in this section. Training compensation fee In the aftermath of the Bosman case, followed by the Bernard case, FIFA was obliged to adjust its regulation concerning the compensation of training fees in order to comply with EU legislation. This has led to the adoption of the current FIFA Training Compensation System (TCS). 70 Although the compatibility of these new rules with EU law has not been challenged before the ECJ so far, the Commission has given its approval in a press release. 71 According to the FIFA TCS, training compensation has to be paid to a player s training club when: i) a player signs his first contract as a professional, and; ii) each time a professional is transferred until the end of the season of his 23 rd birthday. 72 This obligation to pay a training fee arises regardless whether the transfer takes place during or at the end of the player s contract. Thus, a training agreement that provides that a compensation fee is due when the minor signs a contract with a club other than the one to which the academy is affiliated, is compatible with FIFA regulation. Note, however, that according to FIFA a player s education starts with the age of Hence, when a training agreement is concluded when the minor is 10 years old and he subsequently 69 Lembo, FIFA Transfers Regulations and UEFA Player Eligibility Rules, Emory Int l L. Rev 2011/1, p. 575 [online via HeinOnline] 70 Art. 20 and Annex 4 FIFA Regulations on the Status and Transfer of Players 71 European Commission (2002), Commission Closes Investigations into FIFA Regulations on International Transfers, European Commission Press Release, IP/02/824, Brussels, 5 June Art. 20 FIFA Regulations on the Status and Transfer of Players 73 Article 1 Annexe 4 FIFA Regulations on the Status and Transfer of Players 23

24 signs a contract with another club when he turns 18, only six years of training ought to be taken into account for the calculation of the fee. Moreover, with regards to the calculation of the fee, FIFA TCS has divided clubs into four categories in accordance with the club s financial investment in the education of players. 74 More specifically, a distinction between the different confederations is made. 75 Taking into account that this paper merely focuses on European football academies, only the categorisation of European clubs are discussed. The division into categories basically comes down to the following: Category 1 clubs can ask up to euro/training year Category 2 clubs can ask up to euro/training year Category 3 clubs can ask up to euro/training year Category 4 clubs can ask up to euro/training year As a consequence, a training agreement which provides the payment of a compensation fee in case the player decides to sign a professional contract with another club than the one the academy proposes, is compatible with FIFA regulation. However, the amount of compensation that a training agreement provides varies depending on the club with whom the player signs his contract. In any case, a training agreement which sets the compensation fee at euro per year of training (as mentioned in section 2.1) is definitely not compatible with FIFA regulation. Exclusive agency clause Not only did FIFA introduce rules to counteract the problems revolving training compensation, it also initiated action to deal with the up rise of football agents due to globalization of the sport Pijetlovic, EU Sports Law and Breakaway Leagues in Football, 2015, p Ibid 76 Nafziger, Handbook on International Sports Law, 2011, p

25 According to the current FIFA regulation, players agents activities may only be carried out by natural persons who are licensed to carry out such activities 77 or by a practicing lawyer 78. It further requires a written representation agreement between the agent and the player 79, which cannot exceed the maximum period of two years 80. As a consequence, a training agreement that includes an exclusive agency clause will have to be complemented by an additional representation contract that assigns a specific licensed agent or lawyer in the contract. Moreover, this supplementary contract has to be renewed every two years. Furthermore, the agent is obliged to avoid all conflicts of interest and, more specifically, it is prohibited for the agent to have a representation contract with another party involved in the player s transfer. 81 The application of this rule implies that there cannot exist a prior (contractual) relationship between the player s agent and the football academy, nor the club affiliated to the academy. It is questionable whether this rule is respected in practice because the sole purpose of introducing an exclusive agency clause in the training agreement is for the academy to have authority over the future employment contract of the minor. Most interestingly, perhaps, is the FIFA rule which confers the player the possibility to retain the right to conclude an employment contract or a transfer agreement without the assistance of the representative. 82 From a labour perspective, this right is of significance importance because it aims at protecting the contractual freedom of the player in relation to his future labour position. This rule is obviously not respected when a clause is incorporated in the training agreement that deprives the child and its parents to independently negotiate a contract with a club or an agent of their choice. Monopoly to play with partner club FIFA recently became aware of the problems that may arise by the establishment of football academies. In the past, these academies have been established with a separate legal personality, although they were clearly affiliated with a football club. By making the academy 77 Art. 3, 1 FIFA Players Agents Regulations 78 Art. 4, 2 FIFA Players Agents Regulations 79 Art. 19, 1 FIFA Players Agents Regulations 80 Art. 19, 3 FIFA Players Agents Regulations 81 Art. 19, 8 FIFA Players Agents Regulations 82 Art. 19, 7 FIFA Players Agents Regulations 25