In light of the current and future commercial and regulatory issues facing football, we set out below an update on matters that we are regularly advising clubs on together with regulatory updates that are due to take effect in the near future.
#Transfer Receivables Financing
Given the ongoing effects of the C-19 pandemic and the resulting loss of revenue for clubs, we are aware of an increasing number of these transactions and indeed have been heavily involved in such transactions over the past few months, advising both selling clubs looking to assign their entitlement to receive funds and also buying clubs being asked to facilitate such assignments. In addition, we have also advised on more complex transactions involving the simultaneous acceleration of funds to the selling club and variation to the payment dates under the transfer agreement to assist the buying club with its cash flow.
Clearly the main motivation for such transactions is financial but, for both selling and buying clubs, there are football regulatory considerations that need to be taken into account that, from our experience, are not always reflected in the contractual documentation provided. In particular, these relate to approvals required by parties on both sides of the transaction from the relevant league and The FA in addition to alterations to be made within FIFA TMS (if required).
In addition, to avoid further complications down the line, transfer receivables financing should also be taken into account when drafting transfer agreements whether that is as a selling club anticipating accelerating funds in the future or as a buying club seeking comfort on the costs of facilitating such transactions.
We have advised on a number of these transactions involving both the most prevalent lenders in the sector and different accelerating mechanisms (including varying levels of risk on the club driving the transaction). As such, please let us know if we can assist with such transactions, whether as the selling or buying club.
#Brexit – Immigration
As you will be aware, the Brexit transition period comes to an end on 31 December 2020 with new immigration rules for EU/EEA citizens coming into effect after this date.
Clearly, this will have a great impact on a club’s ability to register players from the EU/EEA and The FA has now published new GBE criteria which will apply to the registration of all non-UK players from 1 January 2021. However, in respect of the January transfer window, it is worth remembering that applications for pre-settled status for EU/EEA players can be made provided they started to live in the UK by 31 December 2020. As such, and particularly for cases where a GBE will not easily be obtained, it is worth considering whether any agreements in respect of January transfers could be reached early to allow the player to physically enter the UK by 31 December.
As well as ongoing work on a range of commercial matters, in light of the pandemic we are regularly advising on: (i) specific issues arising out of existing agreements (e.g. force majeure provisions); and (ii) seeking to ‘future proof’ new commercial agreements going forward, in each case relating to arrangements such as ticketing, sponsorship (including kit and naming rights) and ancillary venue operations and arrangements with various service providers (e.g. catering providers).
The pandemic showed the importance of commercial agreements and the need to consider/cover-off ‘worst case scenarios’ within the context of different commercial arrangements. Please do let us know if we can assist in this regard.
Since our last update on the most recent changes to the FIFA Regulations on the Status and Transfer of Players (‘FIFA RSTP’), FIFA has published its long-awaited TPO/TPI manual. Whilst the manual offers some useful commentary in parts, questions still remain regarding FIFA’s recent zealous approach to its enforcement of Article 18bis that appears to draw narrow, and inconsistent, distinctions across a range of different contractual provisions. We have advised clubs on Article 18bis issues both in relation to the wording of transfer agreements and ensuing investigations from FIFA. As such, please let us know if you would like a call to discuss any of the issues raised in the manual or if you require any further assistance in the drafting of any contractual provision(s) which may raise compliance issues.
In addition to the TPO/TPI manual, FIFA has also published an updated version of its guide to submitting a minor application pursuant to Article 19 FIFA RSTP.
#Intermediary Arrangements – Dual Representation
HMRC is currently raising enquires/challenges in respect of a number of dual representation arrangements and the principles which apply very broadly across the industry. In essence, this relates to a challenge as to the scope and extent of club services provided by intermediaries and the value attributed to such services which result in the player’s tax liability being reduced below the position set out in the player/intermediary representation contract.
We have advised and are continuing to advise a number of players on this issue as well as clubs who receive related information requests – please let us know if we can assist in relation to this ongoing matter.
#Future Regulatory Developments
Female Players and Coaches
The FIFA Football Stakeholders Committee has recently published proposed reforms to the FIFA RSTP dealing with employment protections for female players and coaches. We have published a separate update dealing with the new proposed employment protections for female players, here. The proposals in respect of coaches will reflect the existing approach in the FIFA RSTP towards player contracts, i.e. protecting contractual stability and ensuring coaches are paid on time (including through creating a mechanism under which coaches can claim any overdue payables). If adopted, the new set of rules will only be applicable to employment relationships of an international dimension between coaches and professional clubs or associations.
Each set of reforms will be put before the FIFA Council for final approval in December 2020.
Article 19 FIFA RSTP
Last week, the FIFA Council approved an amendment to Article 19 of the FIFA RSTP to allow players between the age of 16 and 18 to move clubs within the UK ‘home nations’ from 1 January 2021 (as opposed to just allowing EU/EEA nationals to move into and within the EU/EEA in that age group). We understand that there have been discussions around broadening Art 19 generally to allow players of any nationality to move internationally between the ages of 16 and 18 where they have a family/ancestral link with the country of destination – however, it is not clear when or if such a reform will be revisited.
Whilst the above amendment will no doubt be welcomed by clubs within the UK, it is important to note that, as at the time of writing, clubs within the UK will no longer be able to sign players from the Republic of Ireland under the age of 18 following the expiry of the Brexit transition period on 31 December 2020.
As has been widely reported, we understand that FIFA has prepared draft amendments to its Regulations on Working with Intermediaries that reflect the reforms proposed by the FIFA Council and the Football Stakeholders Committee last year. As reported, these amendments involve:
We understand these draft amendments are now with relevant organisations for consultation/feedback and we will provide a further update in due course once the updated regulations have been finalised.
If you would like more information on any of the points raised above or any advice in connection with the same, please contact Matthew Bennett (Partner) – MatthewBennett@centrefield.law or Stuart Baird (Partner) – StuartBaird@centrefield.law