FIFA is dismayed with the decision taken by the Court of Arbitration of Sport (CAS) in Lausanne (Switzerland) on 30 January regarding the case of the football player Andy Webster. World football’s governing body is of the opinion that the verdict in favour of the player will have far-reaching and damaging effects on the game as a whole.
CAS dealt with an appeal lodged by Scottish club Heart of Midlothian and its former player, Andy Webster, against a previous decision concerning the player’s breach of contract after the protected period. On 4 April 2007, the FIFA Dispute Resolution Chamber (DRC) had passed a decision on the case, finding Webster guilty of having breached the employment contract without just cause outside the protected period. As a consequence, it ordered him to pay Heart of Midlothian compensation amounting to GBP 625,000. CAS has now reduced the amount of compensation to GBP 150,000, corresponding merely to the remaining value of the employment contract between Webster and Heart of Midlothian.
“The decision which CAS took on 30 January 2008 is very damaging for football and a Pyrrhic victory for those players and their agents, who toy with the idea of rescinding contracts before they have been fulfilled,” FIFA President Joseph S. Blatter stated. “CAS did not properly take into consideration the specificity of sport as required by article 17 paragraph 1 of the Regulations on the Status and Transfer of Players. Because of this unfortunate decision, the principle of contractual stability, as agreed in 2001 with the European Commission as part of the new transfer regulations and which restored order to the transfer system, has been deemed less important than the short-term interests of the player involved.”
FIFA’s transfer regulations, which all stakeholders – including player and club representatives as well as the European Commission – agreed upon in March 2001 after protracted negotiations, are based on the central pillar of maintaining contractual stability between professionals and clubs. Unilateral early termination of an employment contract concluded between a professional and a club without just cause by either party, even if committed after the protected period, still remains an unjustified breach of contract.
In assessing the amount of compensation due to his former club, the DRC applied article 17 paragraph 1 of the FIFA Regulations on the Status and Transfer of Players, which lists some of the objective criteria that may be applied to evaluating the amount of compensation due as a result of breach of contract. The Chamber observed that the aforementioned list was not exhaustive and, therefore, retained its legitimate right to decide ex aequo et bono (i.e. dispensing with consideration of the law and taking into account solely what is fair and equitable in the case at hand).
Subsequently, both parties appealed to CAS against the aforementioned decision. CAS decided to start the entire proceedings to calculate the compensation due by the player from scratch, by reassessing the matter in accordance with article 17 paragraph 1 of the’FIFA Regulations on the Status and Transfer of Players.
The decision implies that the amount of compensation to be paid by a player who terminates his contract prematurely without just cause after the protected period can easily be calculated in advance. This will be detrimental to the system but probably advantageous for players’ agents, who, as in Webster’s case, will offer their clients to new clubs with a price tag on them. Small clubs that are already now struggling to keep their squad together, in particular if they have promising players in their team, will be faced with an even more aggressive approach towards their players once the relevant contracts have passed the protected period. Furthermore, the motivation to train and educate new players will probably diminish, in particular among wealthy clubs. At the same time, such clubs may sign a greater number of players, knowing that the contracts may be terminated at calculable costs. This will undermine players, who will be less secure about planning their career.
The DRC will now analyse the CAS decision in depth and evaluate its impact on protecting contractual stability. Further, it remains to be seen if CAS’s decision will become constant jurisprudence with CAS. Should the protection of contractual stability finally indeed be subverted, FIFA will consider appropriate measures to safeguard the special nature of sport with regard to employment contracts.