Sports News
1 April 2010
Olympic Lyonnais v Newcastle United – score draw!
Disputes involving compensation claims by clubs who have lost their promising best young players to the financially powerful Premier League is not new.
Advocate General Sharpston has recently delivered her decision following an appeal from the Court of Cessation in France on the question of the conflict between the European principle of freedom of movement for workers and the French football regulation which, at the relevant time, required a player who had completed his training and signed for a club in another member state to pay compensation to his training club.
Almost ten years ago the training contract for Olivier Bernard, a product of the Olympic Lyonnais youth system, was coming to an end. OL offered him a professional contract. Dissatisfied with the salary on offer and the lure of the Premier League he signed for Newcastle United.
Unsurprisingly OL sued the player and his new club. At that time French football regulations rendered the player liable in damages for the unilateral termination of his contract (‘joueurs espoir’). The case was won and Olivier and Newcastle United were jointly ordered to pay almost €23,000 in compensation.
On appeal to the Court of Appeal in Lyon the earlier decision was overturned and ‘joueurs espoir’ outlawed on the basis that it operated as a restriction on freedom of movement for workers and contrary to European law (Bosman revisited!)
Undeterred OL referred the matter to the Court of Cessation where Advocate General Sharpston confirmed that sport was subject to European law in so far that it constitutes an economic activity and that rules regulating employment in a collective manner would be enforceable if they were proportionate in pursuit of a legitimate aim, in this case the need to encourage the recruitment, development and training of young players. Compensation should therefore be commensurate with the actual cost of training and not based on the player’s prospective earnings or loss of profit.
What has not been addressed in this decision is what is an acceptable method for calculation of the cost of training a player, which leaves it open for future challenge.
This case is unlikely to drastically alter the recruitment policies of major clubs in Europe. Its importance lies in the implied ratification of FIFA’s approach to training compensation, which is directly related to the actual cost of training, as being compatible with European law.
For further information and advice on UK and international football regulation please contact Tim Bailey on +44 (0) 1782 205 000.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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