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Evolving Issues And Trends In Contractual Negotiations In Sport

From the Roman Coliseums to the modern stadia, Sports has always captivated the attention of millions. Sports has shown its power to unite millions and be an enormous sector in any economy. Sporting icons such as Muhammed Ali, Serena Williams, David Beckham and Michael Jordon have inspired younger generations and transformed their sports into a global phenomenon that attracts followership and monumental revenue from sponsorship and sales. Thus, the world has been treated to a deluge of sporting celebrations such as the African Cup of Nations. FIFA World Cup (Male and Female), Wimbledon, Cricket World Cup etc. Contractual negotiations largely regulate these global sporting events, and this sphere has become more lucrative and hazardous in terms of delineation of legal rights and duties.

Contractual negotiation in a sport just like general contract negotiation involves the creation, formation and termination of contracts involving athletes and sportspersons. Sports enthusiast certainly at one point or the other wondered on what goes on in the transfer rooms, the negotiations, the counteroffers, the million-dollar deals and the A list sportsmen.  A Contract is a voluntary, deliberate, and legally binding agreement between two or more competent parties. Essential elements are offer, acceptance, consideration and legal capacity. Contemporary issues in sports revolve around the capacity of minors and the rights of parties in situations that under the general contract law might appear to be an issue of frustration.

Legal capacity in a sporting contract is peculiar for it is not rare for there to be young prodigies entering into a sporting contract. By law, one cannot contract with a minor as he/she lacks capacity. However, the world over, minors are scouted as it is at youth level often that talent is discovered. A prime contemporary example is Coco Gauff, who exceeded all expectations at Wimbledon 2019 where she had a fantastic outing beating Venus Williams and other seeded players.

Thus, in the case of minors, parental/guardian consent is a necessary prerequisite when contracting with underage star prospects. Therefore, in such negotiations, the parents are responsible for transacting on behalf of the minor. However, the world governing body for football, FIFA, has a rule against the international transfer of under18 players. This rule is provided under Article VI of FIFA’s Regulations on the Status and Transfer of Players. However, the rule is subject to the exception of:

  1. Movement of both the player’s parents to the country in which the new club is located for reasons not linked to football; and
  2. Both clubs concerned are within the territory of the European Union or European Economic Area, and the player is not less than 16 years old;
  3. The maximum physical distance between the home of the player and club is not more than 62 miles or 100 kilometres.

The Football bodies are very strict with these rules, and the punishment for default is quite steep. Chelsea football club was given a transfer ban and fined £460,000 by FIFA, after being found guilty of 150 rule breaches involving 69 academy players over several seasons, says a judgement. It is understood that the transfer ban was as a result of 27 breaches of Fifa rules, with others considered administrative or procedural. The two-window ban, which ended in January 2020, was upheld by the world governing body in May after an appeal. FIFA’s investigation showed how Chelsea claimed many academy players were only trialists and did not play in organised matches. But one player described in this way took part in 75 games between September 2013 and February 2016.

Parties enter into a contract to be bound by it, but scenarios change, and disputes may occur. In January 2019, Cardiff City made their Emiliano Sala from the French club Nantes their record signing. Unfortunately, the player tragically died in a plane crash on January 21, 2019. The legal issue arising from the tragedy is as to Cardiff’s obligation to pay the contractual sum to Nantes. Cardiff City refused to make the first scheduled payment for the Argentine as it alleged that there remained details in the deceased striker’s contract which were yet to be agreed although terms had been agreed with Nantes. Parties are currently still in dispute as to if the contract was completed or not. In October 2019, Cardiff announced its intention to appeal to the Court of Arbitration for Sports over FIFA’s ruling that it has to pay Nantes the overdue fee of 6million Euro for the deceased Sala. Interestingly, the player status committee declined to make a ruling on the validity of the second and third instalment that Cardiff had agreed to in the transfer of Sala.

Another example of frustration is that of Kendrick Norton, a 2018 seventh-round pick of the Panthers who joined the Dolphins late last season in the NFL. Sadly, the 22-year-old was hospitalized after a near-fatal car crash that saw him lose a hand. Should this vitiate his contract and if so, what remedies are the player (if any) entitled to? To answer, it is essential to understand that each negotiation and contract should be looked at on a case by case scenario. Therefore, the clauses of each contract and careful consideration of the governing laws of the relevant sport is very important.

However, if the ruling in the Adrian Mutu against Chelsea FC is anything to go by then parties can opt-out of contracts under the auspices of repudiatory breach. In the case, Mutu was sacked by the club after testing positive for cocaine. He was subsequently banned and ordered by the Court of Arbitration of Sports to repay his signing fee to the club.

The law is also balanced on the sportspersons side, and they have the opportunity to walk away from their teams when their contracts expire. This has been the case since the decision of the European Court of Justice in Luxembourg in Royal club liégeois SA v Jean-Marc Bosman. Prior to the Bosman ruling, professional clubs in some parts of Europe had the power to prevent players whose contrcts had expired from joining a club in another country. The Bosman ruling meant that players could move to a new club at the end of their contract without their old club receiving a fee. Players can now agree to a pre-contract with another club for a free transfer or as commonly called now a bosman transfer if the players’ contract with their existing club has six months or less remaining.

The Bosman ruling also prohibited domestic football leagues in EU member states, and also UEFA, from imposing quotas on foreign players to the extent that they discriminated against nationals of EU states. At that time, many leagues placed quotas restricting the number of non-nationals allowed on member teams. Also, UEFA had a rule that prohibited teams in its competitions, namely the Champions League, Cup Winners’ Cup and UEFA Cup, from naming more than three “foreign” players in their squads for any game. After the ruling, quotas could still be imposed, but could only be used to restrict the number of non-EU players on each team. It was felt by the European Court of Justice that that quota system breached Art 39 of the European Community Treaty on the free movement of workers. This portion of the decision is interesting becacuse some have contended that the FA Premier League homegrown rules which were adopted at the beginning of the 2010/11 season run foul of Art 39.

The homegrown rules state that all 20 Clubs in the English Premier League must include eight homegrown players out of a squad of 25 for that Premier League season. Homegrown players are defined as players who, irrespective of nationality or age, has been registered with any club affiliated to the Football Association or the Football Association of Wales for a period, continuous or not, of three entire seasons or 36 months prior to the players 21st birthday (or the end of the season during which he turns 21). However, it is unlikely these homegrown player quota rules would fall foul of the EU free movement of persons rules as the homegrown player rules apply irrespective of nationality and players who originate from other EU member states can be regarded as locally trained in, e.g., England if they satisfy the criteria. Indeed, the European Commission confirmed that the UEFA rule was legal in a statement in May 2008.

In Nigeria, pressing issues in Sports contracts are issues of exploitation of minors/ academy athletes via unfair & unequally bargained contracts. Likewise, transfer of athletes and third party ownership is becoming a trend in which the athlete can be likened to a chattel for the former UEFA President, Michel Platini, likened the practice to slavery. Furthermore, as the Nigerian sporting environment further develops, players are signing beneficial sponsorship deals that without recourse to legal practitioners may inhibit their commercial value as same could restrict future sponsorships and transfers.

Therefore, parties must be educated on their rights and the effect of utilising their contractual rights. Athletes are always urged to remember they are bound by their agreements, subject to their being elements of illegality, and they must always ensure that they fully understand the impacts that contractual terms may have on their careers.

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