Football clubs to be compensated for losing young players

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European football clubs who train young players only to see them sign their first professional contract with another EU team can now claim compensation for the loss, European judges ruled yesterday (16 March).

The verdict relates to a case involving 29-year old French player Olivier Bernard, who signed professional terms with English club Newcastle United in 1997 despite having undergone a three-year youth training scheme with French team Olympique Lyonnais beforehand.   

French rules at the time required players on such training contracts to sign for the club that trained them if offered a permanent deal. But Bernard decided not to take up Lyon's offer of a professional contract and joined Newcastle instead.

Lyon sued Bernard and his English employers for damages in the French courts. French judges referred the case to the European Court of Justice (ECJ), asking whether the requirement that players trained by a particular club sign their first professional contract there constituted a restriction on the free movement of workers. 

The European Court of Justice agreed that "Bernard's gainful employment constitutes an economic activity, and as such is subject to European Union law".

But it ruled that "a scheme providing for the payment of compensation for training where a young player, at the end of his training, signs a professional contract with a club other than the one which trained him can, in principle, be justified by the objective of encouraging the recruitment and training of young players".

Despite deciding that obliging players to stay would infringe their right to free movement, the judges were keen to stress that given the "considerable social importance" of football in the EU, "the objective of encouraging the recruitment and training of young players must be accepted as legitimate".

Therefore "in the court's view, the prospect of receiving training fees is likely to encourage football clubs to seek new talent and train young players," read a statement from the Luxembourg-based institution.

The court's decision, which applies to players aged 16-22, will ensure that clubs are adequately compensated for their investment in training youngsters and should help prevent disputes like the Bernard case from arising again. 

The amount of compensation is to be determined "by taking account of the costs borne by the clubs in training both future professional players and those who will never play professionally," the court ruled.

Yesterday's judgement means Lyon will seek compensation from Newcastle. 

UK Conservative MEP Emma McClarkin, European Conservatives and Reformists group spokeswoman on sport, reacted to the ruling by saying the EU was right to recognise the specific nature of sport.

"We could have seen a root-and-branch shake-up of the entire player transfer system"had the court ruled differently, McClarkin warned, adding that the judges' decision "will encourage football clubs to continue investing in young talent without the fear of their cash being used for another club's gain".

"In this area, EU rules should not apply to football. The majority of the rules surrounding player transfers should be set by the governing bodies who understand their sports," McClarkin concluded.

Welcoming the decision, German MEP Doris Pack (European People's Party), chair of the European Parliament's culture and education committee, said "this decision corresponds to the belief of the European Parliament as pronounced in its resolutions on the White Paper on Sport and on the Future of Professional Football in Europe that educating and training young athletes is in the interest of our societies and that such training deserves appropriate compensation".

"I am in particular glad to see that the recent inclusion of sport in the Treaty has helped the Court to argue in favour of the specific characteristics of sport and its important social and educational function, thereby justifying compensation schemes for the training of young players," Pack said.  

"European football needs European young talents. Young talents need to be trained properly and clubs need an incentive to invest in young talents and to train them. This decision will hopefully have a positive effect on the training of young athletes in the EU," she added. 

English Premier League spokesman Dan Johnson told the BBC: "The Premier League has always supported the principle of proportionate compensation for young players and is pleased to see the judge has recognised that a regulated environment for the transfer of young players is desirable."

Article 165 of the Lisbon Treaty gives the European Union a competence on sport, but stresses that the EU should contribute to the promotion of European sports issues "while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational functions".

European sports governing bodies have expressed concern regarding the EU's interference in sports rules and hope the Lisbon Treaty's reference to "the specific nature of sport" will guarantee that rules are exempt from EU legislation.

A recent (2006) judgement by the European Court of Justice (ECJ) in the so-called Meca-Medina case was considered by some experts to mark the end of the 'sporting exception', as it stated that anti-doping regulations fall under the bloc's competition laws.

The court ruled that anti-doping regulations contravened the bloc's competition laws by removing the two banned swimmers' freedom to compete after positive doping tests.

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