The History of Football Agency: The Journey of Scouts, Lawyers, Intermediaries and Middlemen

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July 22, 2022

Introduction

The history of football agency, and sports agency in general is fascinating. Since before the start of the 20th century, individuals have taken on roles and responsibilities that are often attributed to our modern concept of what an agent does. After the first half of the 20th century, several names began to emerge as the dominant forces across the sports industry in the talent management field. The work of an agent has also progressed and evolved alongside the changing dynamic and norms of modern sport. Many new skill sets, challenges and responsibilities have become a part of an agent’s duty whilst others that may have been integral to the traditional role of an agent in the beginning are no longer a significant component of the job. The future of agency is unpredictable but there are several possible pathways which the profession might go down and different areas it might venture into.

In the next three blogs, under the umbrella of the new series, ‘The World of Football Agents’, I will be exploring these ideas. In this blog I will endeavour to examine the history of the field of football agency. From the moment men, external to a football club, became involved in scouting, to the days of Gigi Peronace in the 1950’s, right up until the deregulation in 2015 and the modern era of ‘superagents’. In doing this, I will also refer to the emergence of ‘intermediary work’ and talent representation in other sports and the impact this had upon football. I will follow this up next week with a detailed insight into how the roles, responsibilities, duties, tasks and generic job description of a football agent has changed so dramatically over the last century and the reasons behind this continually-adapting and evolving field. The trilogy of the series will culminate in suggesting the possible futures that might await football agency and what factors influence the journey the profession continues on.

In the Beginning

It could be argued that some men that operated within football from around the beginning of the 20th century up until 1950 were a form of football agent. These men conducted work on behalf of clubs in scouting players and had a role in mediation for their contracts and transfers. This was particularly prominent in England as well as some other European countries. During this time, football had not reached its professional era. Whilst players were paid, the wages were minimal and capped and they all worked other jobs on the side. Football was more of a hobby but the involvement of external third-parties in the movements and loyalties of the players was beginning to emerge.

Back in this era, players were viewed as commodities. This is an accusation that is often made in the modern era as well. It is an age-old worry that with clubs exchanging money (and large sums of it in the modern era) for the services of a human being, it is possible to lose sight of their rights, footballing autonomy and ‘humanness’. Consequently, an anti-intermediary sentiment began to rise within football as clubs and fans believed they were an unhealthy addition and encouraged the commodification of young men playing a sport they enjoyed.

The term ‘agents’ wasn’t used during this time and still seemed an alien concept. On the face of it, all that was happening was a handful of men willing to involve themselves in a football club would take on some kind of scouting or mediation capacity within the club. In a pre-professional era, there was no regulation in place to control, guide or restrict their activities. At this stage, it was a very primitive and basic occupation rather than a professional livelihood and commissions in the millions seemed an unrealistic development.

The earliest indication of the future that sports agency might present was through the work of the legendary Gigi Peronace. In 1957, his first ever deal broke the football transfer record as he moved John Charles from Leeds United to Juventus for £65,000, an enormous transfer fee at such a time. Peronace identified that he could utilise his status and power to entice players in the UK to opportunities in Italy. The biggest selling point was that the wages limits were still in place in the UK at the time whilst the salaries available in Italian football were unrestricted. This was epitomised when Charles collected £10,000 as a signing-on bonus at Juventus when the norm for signing-on fees in the UK was £100. Peronace had leaped at the opportunity and went on to represent clients such as Jimmy Greaves and Denis Law, continuing his pattern of finding them buying clubs in Italy where they could earn far more for their services as football players. Peronace had begun to pave the way to the future of the agency field in football.

The 1960’s: The True Birth of Agency

In 1961, the maximum wage legislation in UK football was abolished and the FA adopted the same regulation as the Italian system which Peronace had used to his advantage. Playing football in the UK became more attractive as the average salaries of footballers rose by 61% by 1964. For agents, this meant there was a far greater extent of bargaining and negotiation power for them to become useful to clients. Their importance and value to players increased in direct correlation with the rise in professionalism of football and the income that they could earn from the game.

Across the pond, Mark McCormack was bringing the profession of sports agency and talent representation into the eye of the general public for the first time. Beginning in 1960, having graduated from Yale University with a degree in Law and meeting golfer Arnold Palmer on the golf circuit, McCormack rose to fame by taking on the responsibility of representing some of the world’s major sports stars at the time.

As his career developed, McCormack diversified his client roster across several sports, particularly tennis and became the agent of Brazilian football legend Pelé. He founded the International Management Group (IMG) which continues to be a global powerhouse in the modern era of talent management and was part of a major merger with William Morris Endeavor (WME) as detailed in the previous blog.

One of the biggest progressions in sports agency that was made by McComack was his extension of the agency profession into client endorsements and sponsorships. He reframed an agent’s perspective of their responsibilities to their client to include prioritising boosting their marketability and popularity. He believed that in the era that sport had entered, the concept of an athlete as their own popular personal brand could “transcend borders, language, cultures and even sports itself”. It was a revolutionary approach to agency and he can be credited with laying the foundations for the role of agents in modern sports and in football.

Football underwent the process of globalisation during this period of time. The sport had become a regular on television and was being viewed across the world. As a result, the popularity of football itself and the players that played it was rising exponentially. This presented further opportunities and possibilities for football agents. The metaphorical ceiling to what agents could achieve for their clients was disappearing and the scope of their responsibilities in the job description was lengthening almost endlessly.

This idea grounded itself in the 1970’s. Football agents were tasked with continuing the promotion of internationalisation for the sport and the players that they represented. Their clients were now globally marketable and a new age of commercial deals and endorsements added an additional area of expertise and negotiation aptitude demanded of agents. Furthemore, part of the sport’s globalisation was a relaxation in transfer restrictions and overseas deals. Agents began to ignore the traditional transfer channels within individual countries and went about forging new pathways between football clubs from across their continent and beyond.

During this decade, a couple of major figures emerged in the world of football agency. Dennis Roach was one of the best known agents at the time. He began in 1973 with none other than Johann Cruyff as his first client which helped to quickly establish himself as a desirable agent for footballers globally. Before the decade was up, Roach claimed the very first £1million deal in football as he transferred Birmingham’s Trevor Francis to Nottingham Forest for the groundbreaking fee. Over his 20-year career, Roach continued to represent top talents such as Glenn Hoddle, Mark Hughes and Harry Redknapp.

Elsewhere, the now world-renowned Pini Zahavi started out on his journey in football agency in 1979. After managing clients such as Rio Ferdinand and brokering Roman Abramovich’s acquisition of Chelsea Football Club, many acclaim that Zahavi is the true godfather of modern football agency and he continues to represent players of the calibre of Polish superstar, Robert Lewandowski. He has operated through the height of the transition period for agents as a broad focus across legal advice, contractual negotiations, client branding and endorsement deals became the norm of an ever-increasingly professional and lucrative sport.

Professionalisation: The 1990’s and Millennial Boom

The agency field had to keep up with the evolution and modernising dynamic of football as the 21st century approached. Agents had become an integral part of football by the 1990’s and after a period of many players receiving inadequate salaries after naively appointing close family relatives as representatives, they had been rightly recognised for their importance and value to players. Consequently, by the beginning of the decade, the majority of players called upon the services of an agent to assist with contract negotiations with clubs and legal advice as a minimum; and for those that were more marketable and popular with the public, also to help seek lucrative and appropriate endorsement opportunities. The number of agents in the world of football had soared as many hopeful individuals cited it as an opportunity to make a desirable income in one of the top sports in the world. It was only a matter of time before the football industry recognised agents as professionals of the sport.

This momentous occasion came in 1994 as FIFA formally repositioned agents as professionals. With this, they implemented regulation, guidelines and criteria. This included a structured licensing system in order to obtain a licence that granted permission for individuals to operate as an agent. Many national associations implemented their own examinations that agents were required to pass, incorporating FIFA’s legislation. This was in recognition of the alarmingly high rate at which new agents were entering the industry. The hope was that the exam, licensing and application fees would discourage those that were entering the industry for the wrong reasons or with an insufficient and inappropriate skillset from ever applying.

In 1996, one of the first well-known agents to pass the exam and to obtain his licence was Jorge Mendes. He has been a mainstay in the world of football agents ever since and has represented or continues to manage some of Portugal’s finest footballing talent and beyond. His clients include Cristiano Ronaldo, Ruben Neves, Angel Di Maria, Joao Cancelo, Darwin Nunez and manager Jose Mourinho, to name a handful of superstars on his roster. He entered the field at a time when agency was undergoing a distinct stage of reformation but Mendes established himself as a major figure and has experienced great success since the turn of the century.

Several factors over the next few years before 2000 further added to the attraction of being a football agent and the potential lucrativeness of the profession. In 1995, the Bosman Ruling once again caused a significant alteration to the pattern of transfers in global football and the freedom that players and their agents had. With ‘free agents’ able to negotiate higher wages for a free transfer, the bargaining power of agents was enhanced even further and the possible commission remuneration for themselves rose in situ.

Paid television also emerged in the world of sport. Paying subscriptions to broadcasting companies in order to watch football and other sports was a new concept but one that immediately caused a jump in the financial value of the sports. Broadcasting and television rights payments were distributed amongst football clubs and player salaries benefited substantially. As always, with more money available to players, there was also more money available to their agents. Despite the implementation of licensing and examination, the number of agents in football continued to rise as the chance of representing a client who earned a large sum of money each year was too attractive to ignore.

Needless to say, popular culture also played its part in launching the agency profession into the public spotlight. The 1996 Tom Cruise film, Jerry Maguire, was Hollywood’s interpretation of the world of agency. Modelled upon the life and career of NFL agent Leigh Steinberg, the film depicted agency as a glamorous, exhilarating, ultimately rewarding and lavish lifestyle. It was very successful at the box office and exposed the general public to the life of an agent, or at least what Hollywood made it out to be.

The result of this decade of change was a new wave of agents entering the business. Agents were now coming from all walks of life. Lawyers, bankers, ex-footballers, scouts, marketers, journalists, directors and almost any other profession were trying their hand in the football agency field. There was a large list of transferable skills from other industries that were readily applicable to the agency profession. However, the vast scope of agent responsibilities, capabilities and services they were demanded to provide to their clients meant that very few reached the top level and worked with the best clients. Nevertheless, across the first decade of the century and the start of the 2010’s, the full force of the new wave was felt. In 2001, FIFA had 631 agents registered globally under their relatively new licensing system. By 2009 there were 5,193 across the world.

2015-2022: The Age of Deregulation

Prior to 2015, an emerging trend presented itself that coupled with the other areas of evolution in the field of football agency. There was an alarming volume of ‘player representatives’ that were operating without a licence. These individuals were often carrying out the same responsibilities and services for players that a licensed agent was. The difference lay in the way that they sought remuneration and commission through other forms away from the contracts and below the books through kickbacks or ‘benefit in kind’ payments. However, this was easy enough and meant that fans, media and football authorities observed that the growing value of agency fees being paid by clubs each year were perceived as leaking money out of the game.

This was recognised in 2009 and plans were made to change the regulation system for agents to try and encourage all agents to work above the books in accordance with FIFA’s legislation. These plans came to fruition in 2015. They materialised in the form of a complete deregulation. National associations were given the option of generating their own individual regulations for agents. Apart from France and Italy who upheld their exam processes, other footballing nations withdrew such requirements. Instead the process of becoming an agent became astoundingly straightforward. An aspiring agent simply needed to pay a relatively small fee and verify that they do not have a criminal record and they were able to obtain a licence. As expected and as I have discussed in previous blogs around the football agent regulation system, the number of agents has inevitably risen once more and the money spent by clubs on agency fees continues to rise. The number of agents operating in the UK alone peaked well over 4,000 during this time.

There has been new terminology adopted within the world of football due to the altered positioning, regulation and hierarchy of the field. Agents became known and referred to by FIFA as ‘intermediaries’ to indicate their change in role and perception as mediators and ‘middlemen’ for transactions. Some individuals at the very top of the agency industry have also become known as ‘superagents’. They boast some of the biggest names in the sport as their clients and have a significant level of power over major football clubs and control over transfers whilst collecting enormous commissions, having acted on behalf of more than one party in a single transaction. One of our previous blogs has explained how multiple representation manifested itself in transfers and how FIFA plans to prevent it.

FIFA has recently done a U-turn and as our exploration of the history of football agency reaches the present, 2022 is the year when regulation will come back into force. These regulations extend further than before in recognition of the relentlessly increasing commissions and power that agents receive in football. The regulations establish new laws regarding commission caps, licensing, a new exam and a ban of multiple representation. The details of this can be found in our previous blogs.

Summary

Beginning from the 20th century, this blog has followed the journey which football agency has taken. It is obvious that the profession has experienced drastic changes and evolution as the game of football itself has altered. It is important to provide context to the agency industry before our next episode which will assess how the exact responsibilities and job description of a football agent has adapted to modern football. We will follow this by exploring how the future of football agency might unfold.

Uniting Forces, Power and Income: Why Do Football Agencies Merge?

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Dr. Erkut Sogut , Jamie Khan

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July 15, 2022

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Introduction

Forbes has estimated that the market for football or soccer agencies globally stands at a value of around $7billion. Many modern agencies do not simply stop at football. The global powerhouses such as Octagon, Wasserman and CAA venture far beyond football into the realms of golf, rugby, boxing, American sports and athletics and even into different spheres in the music and entertainment industry. These agencies grow in physical size, employing thousands around the world, and in terms of power, control and wealth. The overall value peaks far past the $7billion for soccer alone and it can be an attractive financial proposition for businessmen and women looking to enter the unique industry of sports agency and talent management and representation.

Over the last decade or so, a pattern has begun to emerge. The opportunity of wealth and power within the agency industry has materialised in the willingness of many well-established and financially gifted agencies to enter into mergers. In this blog I will analyse the reasons behind why agencies are choosing to merge with previous competitors and rivals, the benefits and issues that might arise as a result and will demonstrate these through the use of case studies.

Where Merging Began

In April of 2009, the William Morris Agency (WMA) merged with Endeavor Talent Agency in a landmark case in the history of talent representation. Endeavour had formed almost 15 years prior to the merger and had established itself as Hollywood’s major talent representation company. The William Morris Agency also operated within the entertainment sector and had done so for over 50 years. The opportunity was identified that if the two were to merge, it would create what has become known as a modern ‘superagency’. An agreement was reached and the company became William Morris Endeavor (WME) and was the single dominant force in talent representation in Hollywood.

So why is a monopoly over Hollywood’s best talents relevant to football and sport? Well, following the first few successful years of WME in the world of entertainment and Hollywood, a new and exciting opportunity rose once more. In 2013, a second merger took place as WME combined with the International Management Group (IMG). They acquired IMG for $2.4billion and consequently expanded far beyond their previous boundaries of Hollywood and entertainment talent.

IMG itself was already established as a major player in the world of sports talent management. The agency looked after clients from a wide array of sports from football, basketball, motorsports and tennis to the likes of martial arts, surfing and figure-skating. The merger was part of the ambitions of the Endeavor Holding Group, as it was now known, to position themselves as the very first ‘mega-agency’. This dream materialised as over the following years the group continued to expand and their power, control and wealth grew in situ. For example, in 2015, WME/IMG purchased ownership of the Miss Universe contest from Donald Trump in the entertainment industry, swiftly followed by acquiring the Ultimate Fighting Championship (UFC) ownership in 2016 for $4billion. As time has continued they have also developed other initiatives within the agency such as an Esports division and established control in the National Football League (NFL) and National Hockey League (NHL).

The extraordinary presence and volume of power that had been generated by WME, as a single organisation in the sports and entertainment sphere triggered a movement in the world of talent management. As I will explain, it demonstrated that there was a significant benefit to companies who were able to merge with other agencies in order to increase and improve their business. I will analyse more recent examples of major mergers within the sports world although I will also demonstrate that the impact of such a business move is not all positive.

Why Merge?

There are several significant attractions for agencies looking to enter into merger agreements with other similar companies. The American model resonates around diversifying the network and clientele that the company has access to. This involves merging into other industries such as the entertainment and music sector. Agencies such as Octagon have been successful across several industries and merging can help companies access areas they were previously not established within.

In the world of football, however, the motivation behind merging with other agencies is slightly different and can occur on a smaller scale. In a football talent agency the earning potential is very simply directly correlated with the volume and value of clientele. More players means an increased market share, more income, more influence, more control, more power and a wider network. It helps football agencies to not only survive from being driven out of business if their players move elsewhere, it provides additional finances and sources of income. The greater security of their business is amplified by a growing volume of clients that results from merging with other agencies.

In this modern era of football, the significance that players/clients possess and their worth as a financial asset is ever-increasing. As shown by the extraordinarily high player wage bills that clubs are obliged to pay each year, a lot of money is being distributed to the players at the heart of the game. The value that players come to have has further risen in recent times through off-field opportunities in commercial and business deals. Furthermore, as demonstrated in the recent case of Kylian Mbappe at Paris Saint Germain, players are also granted greater power and control over the proceedings and decisions that are made at their clubs. For agencies, this means that merging with other companies can enhance their accessibility to these players, opening up new and more powerful streams of revenue and control in transfer windows and contract negotiations.

2021 Mergers: Case Studies

In 2021, there were two significant mergers that took place in the world of football and sport. As the financial impact of the COVID-19 pandemic had been felt across the globe, it initiated a desire for agencies to unite forces in a bid to reignite their business and achieve greater financial and functional stability and robustness. The advantages of merging agencies were even more attractive after the pandemic and I have outlined the two most significant case studies below:

1. Creatives Artists Agency (CAA) acquired International Creative Management (ICM)

CAA, as the name suggests, was originally more concerned with representing talents in the world of arts and boasted several large names in the Hollywood industry. However, in 2019, prior to the pandemic, CAA had acquired Base Soccer, the UK based football agency. Base became known as CAA Base and continued to represent over 300 players and managers under the new umbrella of CAA. Sports was not an entirely foreign concept to CAA at this point having already ventured into Basketball by acquiring the Los Angeles-based Kauffman Sports Management agency as part of its plans to diversify the company’s power, network and clientele.

Meanwhile, International Creative Management had been doing some of their own diversification. As another music and entertainment focused organisation, they had added sport to their list of expertise after acquiring the Stellar Group at the beginning of the pandemic in 2020. Stellar had a respectable reputation, led by the agent, Jonathan Barnett, and represented over 800 athletes across multiple sports. The most notable clients in the world of football include Gareth Bale, Jack Grealish and Eduardo Camavinga. They had also merged with the Select Sports Group in the US which added several NFL clients to their roster.

In 2021, CAA reached an agreement with ICM to acquire part of the agency. It was an equity based deal which meant a significant increase in control, revenue and power and a step towards reaching the heights of a ‘mega-agency’. The executives of the agencies described it as a chance to broaden the scope of opportunities for their clients. It is obvious to say that two major agencies merging in such a manner facilitates access to almost every corner of the sports, entertainment and music worlds.

As expected, the merger was identified by the Wall Street Journal as the largest merger since WME/IMG in 2013. They estimated the value of the conjoined agencies to be at around $10billion across all the industries that they were now a part of. The clientele of each agency as well as the staff remained largely the same. However, the global outreach raised the limits and prospects of what could be achieved within the agency.

2. Unique Sports Management (USM) joins International Sports Management Group (ISMG)

This collaboration demonstrates a slightly different style of merger that a collective of agencies can enter into. Perhaps this example epitomises the benefit of business security that merging can provide as well as opening up further opportunities across Europe.

The example of CAA and ICM demonstrated how agencies that begin in the world of entertainment and music can also establish themselves in the world of sport and gain traction and clients through merging with previously established sports agencies. However, this case study varies in that it occurred between two well-known and already football-focussed agencies in an attempt to respond to growing global powerhouses such as CAA, ICM and the likes of Wasserman and Octagon.

ISMG is a Germany-based football agency with a well-established and recognised network throughout European football. It has access to all of Europe’s top leagues and clubs although the agency itself did not have a particularly highly valued clientele base. It was spotted by UK-based USM as an exciting business opportunity that would enable them to improve their handhold in the European market.

USM concluded a deal with ISMG to unite with the agency. The 300 players that were a part of USM and worth a total market value of over £670million, are now also registered under the joint umbrella with ISMG. This includes the likes of Reece James, Aaron Wan-Bissaka and Callum Wilson. The partnership is now branded as Unique Sports Group (USG) and is acclaimed to have been a part of over £1billion in football transfer transactions across 12 different European countries.

A CEO of USG explained that the merging was part of a “joint vision to maximise the European network of both agencies”. The potential is great, especially with an agency that operates within the Bundesliga, the league that boasts the youngest average player age and has received UK youth talent such as Jadon Sancho and Jude Bellingham, as well as the other major European leagues.

Whilst mega-agencies are emerging as a result of billion-dollar mergers that span across all talent management industries, football agencies are holding their own by uniting with each other to secure their business status and grow their power and network within the game. The USG merger demonstrates how merging with other football agencies can bring financial and business benefits to the companies.

Another Case Study: Wasserman acquires Key Sports:

At the beginning of March 2022, prior to the pandemic, the globally-renowned Wasserman agency acquired the UK-based Key Sports. Wasserman began as a Media Group in 1998 and quickly established itself as a major corporation in the world of agency. The focus of the company began in sponsorships before venturing into NBA and MLB clients at the beginning of 2006. Their first venture into soccer occurred towards the end of that same year as they acquired SFX, another UK-based soccer agency which represented the likes of Steven Gerrard, Jamie Carragher. Michael Owen, Emile Heskey and Park Ji-Sung. Over the next decade or so they also acquired agencies in other areas such as Golf, Boxing, media rights and a social media influencing agency.

By 2020, they were once again looking to expand their foundations within football in the UK and Europe. The aim was very clear, to boost the business, revenue and power of their football division. Key Sports presented a fitting purchase. Key already represented some big names in English Football such as Jamie Vardy, Harvey Barnes Nathan Ake and Tyrone Mings. Such an acquisition inevitably strengthens the position of Wasserman and its respectability within football agency. The CEO of Wasserman acknowledged the ease of taking over an agency that had already become well-established by itself and amassed a highly-valued client list. It was seen as a suitable next step forward for Wasserman. On the other hand, for Key Sports it also provided many potential benefits. By joining with one of the most global sports agencies, Wasserman facilitates Key Sports and its clients to have access to the worldwide network of football and of endorsement deals. This will add to the wealth of services and opportunities that they can provide to their clients.

The Issues

There are several worries and concerns that may arise as a result of this new pattern of merging agencies. The danger is summarised in the possibility for agencies to lose sight of their principles and the primary objectives of talent management and representation. For example, it is almost an inevitability that large increases in the volume and status of clientele in a merged agency will result in clients, particularly less lucrative clients, not being given the services and personal attention that was previously provided.

It could be argued that smaller agencies are much more readily able to provide personal and holistic services to their clients to ensure that they are dedicating themselves to finding the best opportunities and achieving the best outcomes for each individual. In a large, global agency it may no longer be possible to establish a sense of a personal, direct service and relationships with clients who become a part of a large corporation.

The importance of valuing the purpose of talent management is integral and imperative for a successful sports agent and agency. Their role is to care for their clients and enhance the rewards that their clients obtain throughout their career in football, other sports, entertainment or music. No matter how large an agency might become through merging with other companies, this purpose does not change; there should be an emphasis on personal and dedicated care and services to the clients.

Trials, Tribulation and Termination: Football Coach Employment Contracts and How Sacking Has Become the Norm

By

Dr. Erkut Sogut , Jamie Khan

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July 8, 2022

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Introduction

Chants of “you don’t know what you’re doing”, “you’re getting sacked in the morning” or banners inscripted with “*insert boss’ name* out” are non-existent in everyday industries and offices. It is unheard of for people to take such an aggressive and undermining approach towards the individual who is in charge of their team. However, in the football industry, the sacking of coaches, and the outspoken displeasure expressed towards the job they are doing or have done is commonplace. Consequently, employment contracts are often unfulfilled and the sacking of coaches in the football world year upon year is almost inevitable.

In this blog, I will outline the modern approach to coaches, otherwise known as managers in the UK particularly, the structure of modern managerial employment contracts and assess the inclusion of clauses that are known as ‘ejector seat clauses’. I will also attempt to explain the legalities and intricacies that may justify the termination of a coach’s contract and the impact of managerial dismissals upon commercial and financial sustainability.

The Situation

The ‘sacking’ of coaches has become a regular and accepted occurrence in the modern game. This is epitomised in the UK where clubs in the top four divisions have spent upwards of half a billion pounds sterling on dismissing nearly 1000 coaches since the appointment of Arsene Wenger in 1996. A club enduring a single coach for a significant duration of time has become unheard of. The days of Wenger and Sir Alex Ferguson serving for almost a quarter of a century have disappeared. Instead, clubs seem to be demanding almost immediate success and if this is not achieved, they simply move on to the next coach in the hope that they can deliver. Some clubs are more prone to a change than others. Since 2000, Crystal Palace have accumulated the most coaches with 28 different appointments, closely followed by Leicester (27) and Southampton (24). It is not uncommon for over 100 coaches to be sacked in a single season across the four English Football League divisions.

The longest serving coaches in the Premier League at the moment; Jurgen Klopp, who is about to serve his eighth year at the helm of Liverpool since 2015 and Pep Guardiola entering his seventh year at Manchester City, have gone well beyond the expected lifespan of a modern day Premier League coach. Whilst this is, of course, due to some incredible feats, successes and achievements, some are not so lucky to have been given the chance to enjoy such a lengthy tenure at a single club before they are passed on.

In 2012, the average ‘sell-by date’ of a Premier League coach was over two and a half years. Now, a decade later in 2022, achieving two seasons at one club is an impressive accolade with the average stay now less than a measly one and a quarter seasons. This is despite the traditional managerial contracts that are signed being multi-year fixed contracts. For example, Alan Pardew signed an eight year contract with Newcastle in 2012 after a couple of seasons of considerable success although he failed to serve more than two years of this extension before he was sacked. Similarly, David Moyes signed a lengthy 6-year contract in 2013 with Manchester United after leaving his decade-long tenure at Everton. His contract at Everton had expired and as a rarity for coaches in modern football, Moyes made the personal decision to explore a different venture. This time round, Moyes was sacked after the first year for reasons that I will explain later. It seems peculiar that coaches might sign such lengthy contracts despite the high possibility and likelihood that they will fail to keep their job for this period of time.

The Causes and the Legalities

As mentioned, coaches are often moved on after failing to appease the owners and decision makers within their club. These sackings have become more regular than coaches retiring or freely choosing to take on new opportunities. Owners and fans have varying amounts of patience and a prolonged period of drought of wins or successes will ultimately lead to the coaches being widely condemned by the fan base and shown the door by the owners. Often, teams that are teetering on the edge of relegation battles have new coaches introduced due to the historic reputation of some kind of ‘new coach syndrome’ that causes a short term but relegation-avoiding boost to the team. Whilst there is no exact or obvious explanation for this, psychologists have pointed towards the intrinsic human nature of trying to create good first impressions and players outperforming their average displays in front of a new audience. Those that bring in a fresh change in coach whilst in a dismal spell of form will often observe a dramatic improvement in performance.

The dismissal of any individual under contract will be scrutinised legally and ethically in any industry. This is the same in football and is more regularly considered due to the normality and regularity of sackings. Football legislations and the Court of Arbitration for Sport (CAS) analyse the proportionality and enforceability of dismissing a coach under contract which are encouraged as imperative elements. The sacking is supposed to be a last resort option rather than a compulsory response to losing several matches. However, the routes around these regulations are to include clauses within coach contracts that allow for early dismissal and termination.

Any coach that has a contract that is prematurely terminated will be entitled to compensation. However, if their contract contained details that are termed ‘ejector seat clauses’ or underperformance criteria, the remuneration they are entitled to is mitigated and may not be as high as a coach that is unfairly dismissed out of accordance with their contract would be eligible to receive. For example, David Moyes was able to be dismissed by Manchester United after a single season due to his failure to obtain a UEFA Champions League place which his contract clearly stipulated was a just reason for dismissal before the end of his five-year contract. Rather than the rest of his contract being paid out as compensation, the clause allowed United to legally give Moyes a single payout of just £5million; a single year’s salary.

Some clubs do not include such clauses and consequently, as well as opportunity costs, sacking coaches can accumulate extortionate financial costs. Chelsea have a history of large compensation payouts to coaches such as Luis Felipe Scolari in 2009 (£12.6million) and a further £12million to Andre Villas Boas in 2012. This demonstrated Roman Abramovic’s reign of Chelsea in which he happily dismissed coaches that didn’t meet his extraordinarily high expectations and standards. The questions over the commercial and financial sustainability of such a relaxed approach to sackings are considerable. Under financial fair play rules and unstable economic circumstances in football, splashing millions just to sack a coach and bring in a new one can lead to financial trouble. This is compiled and accentuated, for example, if a club brings in a coach to try and save them from relegation and they then fail to do so. This was the case for Wolverhampton Wanderers who brought in five different coaches in 13 months and slid from the Premier League into League One; the English third tier.

There can be many reasons for a coach being sacked by a club’s board. Owners have given causes that have spanned across ‘losing the dressing room’, an inappropriate embedded culture, overwhelming fan disapproval and questionable strategies as well as the obvious shortfalls such as winless campaigns and relegation scares. Clubs may still aim to adopt a policy of planning and building for the long term although this may no longer be the reality with the seemingly revolving door of coaches that come into and out of the club.

In the press and amongst fanbases, it only takes a small series of losses or an unattractive style of play for debate, speculation and rumours begin to circulate that question and undermine the respectability of the coach. However, legally there must be a proportionate and enforceable reason to be a final straw for the coach to be sacked. The legal issues that might arise include restraint of trade and unfair dismissal or breaches of contracts which have to be addressed and suitably compensated. Release and underperformance clauses may well be the best way of overcoming such possibilities although clubs and owners must tread carefully and ensure that coaches are suitably remunerated once they are moved on.

Conclusion

This blog has outlined much of what avid football fans will already know; that coaches are readily sacked more often than ever and that some clubs are more than prepared to dismiss numerous coaches over short periods of time in the hope of finding the perfect match to achieve success. Fans, owners, the board and the press play significant roles in the dismissal of a coach. However, losses and underperforming along with other factors mentioned in this blog are often to blame for a premature termination of a coach’s contract.

I have also shown within this blog that there is a significant financial impact and consequence that results from a club sacking a coach. Clubs have begun to include ejector seat clauses in order to legally and contractually justify early dismissals. However, ultimately there is compensation that is due to be paid out to departing coaches. It is far less taboo to sack coaches in the football industry than in other areas of employment; it is a well documented and accepted factor of football but it often comes under scrutiny and club and ownership policies are questioned by fans and the press. This was epitomised in the backlash to Marcelo Bielsa’s departure from Leeds this year and Rafa Benitez’s drawn out exit from Everton.

It is apparent that the ever changing list of coaches of football clubs globally is likely to continue. Clauses that avoid extortionate compensation are now commonplace and coaches seem prepared to take on jobs that may possibly not last more than a season. It is a part of the modern game and as long as legal legislation is adhered to, it will continue to be regularly practised.

A final point to note, after the new FIFA agent regulations are implemented, for the first time, agents will be able to represent coaches as long as they are licensed. This will alter how coaches operate within football and it will be interesting to see the impact this has on the stability of their careers. Perhaps this might be a significant level of power to the coaches. However, there must also be concerns over an agent managing both players and the coach in a single team. This would create a conflict of interest although FIFA has not stipulated that this is disallowed.

Is the UEFA Nations League Necessary for Football?

By

Dr. Erkut Sogut , Jamie Khan

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July 1, 2022

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23105191752_1f2a11c5d1_o — Photo by Nazionale Calcio (https://www.flickr.com/photos/nazionalecalcio/) on Flickr (licensed under CC BY 2.0)

Introduction

Following discussions and a decision made back in 2013, the inaugural UEFA Nations League took place across 2018 and 2019. It consisted of four tiers, A,B, C and D which was made up of 12, 12, 14 and 16 teams respectively from 54 European national football associations. League A was won by Portugal who became the first UEFA Nations League Champions.

In this blog I will explore the motivations and reasons behind the creation of this new format of international football and will attempt to understand the potential and possible obstacles or challenges that it has faced or may have to overcome in the future. I aim to assess the necessity and extent of the impact that this new competition has had and will have.

Why Create the Nations League?

The aim of the biennial UEFA Nations League was to take on the role of reviving international football. There had been widespread criticism surrounding the value and utility of international friendlies. Friendlies were taking place that interrupted and halted the European domestic league fixture schedules and attendances had been wavering. These friendlies sometimes saw European giants such as Italy, Spain, Germany and England take on minnows such as San Marino or the Faroe Islands. These were seen as futile and lacking in any meaningful significance for international football as the games tended to begin with a foregone conclusion.

This is why the UEFA Nations League was brought in. Its primary goal was to revitalise international football in the eyes of the fans and reintroduce the utmost importance and second-to-none privilege of a player representing their country in highly competitive international football. The tournament aimed to pit national associations against countries of a similar standard and rather than playing simply for a friendly affair, it was hoped that the competition would add a significant amount of meaningful competitive value to more international football fixtures. Furthermore, this has an additional effect of justifying the interruption of domestic leagues in order to stage international fixtures.

How Does the UEFA Nations League Work?

After the inaugural 2018-2019 UEFA Nations League, the format was immediately changed. The new regulations and system now facilitates 55 European Football Associations (there were 54 in the 2018-2019 competition). These are still split into the four leagues although the volume of teams in each tier has changed. There are now 16 teams, split into four groups of four, in leagues A, B and C whilst there are just 7 nations in league D. These 7 nations include the likes of San Marino, Faroe Islands and Gibraltar, who are unable to compete on a level playing field with the top ranked countries in leagues A and B.

The ‘Nations League Access List’ is used to determine which teams are put into which league and which group. Based upon a country’s previous year’s success, results and their national association ranking, they are placed into four pots for each league. The names are drawn from these pots in order to allocate a group to each competing country.

Each team will then compete against the three other members in their group in both a home and away fixture. In the 2022-2023 edition of the competition, these group fixtures will take place in June and September of 2022, allowing for the winter FIFA World Cup schedule. The knockout finals will then occur in June in the summer of 2023. In total, the competition produces 168 highly competitive and appealing international fixtures. This is demonstrated by the average of 2.41 goals per game, which equates to a goal every 37 minutes on average and hence, has seen consistent interest from European and global football fans.

There is significant reward or consequence for a national team’s success or failure in the UEFA Nations League. The four group winners in league A qualify for the knockout finals and aim to join Portugal (2018-2019) and France (2020-2021) as winners of the UEFA Nations League. There is an emphasis on motivation to reach this stage as one of the countries in the top four will be given the financial and social benefits of hosting the knockout stages. The group winners of B, C and D will also gain promotion into the corresponding higher league. Similarly, those that finish at the bottom of their group in leagues A and B will be relegated to the lower league. Only two countries will be relegated from league C to take the place of the two group winners of League D that are promoted. These two relegated sides are decided by a play-off process between the four countries that finished last in their groups in league C.

Is it Necessary?

The biggest question around the necessity of the UEFA Nations League is whether or not it is having the desired impact upon international football and whether there is an alternative approach to the international stage that is necessary for greater benefit to competing associations. The argument here is whether friendlies are a better way of allowing national team managers to rotate their squads and give sufficient rest to those that play an unforgiving domestic season as well. The competition still facilitates warm-up games for major international competitions but does place more pressure and demand upon the players at other times when they are more likely to be rested or be under less scrutiny in friendlies. It could be argued in this instance that perhaps it indicates another benefit of the nations league in highlighting the depth that countries have. Managers can continue to rotate their starting XI’s but still with the ambition and competitive will to win and hence leading to a rise in the standard and intensity of the international fixtures that was previously faltering through purely friendly games.

The competition has also been labelled as a response to FIFA’s suggestion that there should be a biannual world cup rather than one that takes place every four years. This claim seems to be materialising as the 10 South American CONMEBOL associations are confirmed to be competing in the 2024-2025 edition of the competition although the exact format it will take has not been finalised. Presumably countries such as Brazil and Argentina will enter league A. It is likely to divide opinion under the possibility that it could be seen as undermining the pinnacle of the world cup and its value as the most important competition in football.

It has been suggested that perhaps the Nations League could become implemented into the system for European Championship and World Cup qualification that it is currently detached from. This would position the UEFA Nations League as simply part of the stepping stones towards the major tournaments and would avoid the suggestion that it is of similar worth. Winners or overperformers in the Nations League could possibly be given second chances or alternative pathways into the two major competitions.

Summary and Questions

In summary, the principle aims and motivation behind the UEFA Nations League is admirable. A competition that improves the standard, attractiveness and significance of international football is positive. However there are several questions that remain around the necessity and impact of the tournament that are worth thinking about:

Does the Nations League prevent players being able to be rotated and places too high of a demand and pressure upon them?
Should the Nations League be completely detached from the World Cup and European Championship qualification process?

Will introducing CONMEBOL nations be counterproductive for the significance of the tournament?
Could the Nations League ever overtake the World Cup as the biggest tournament in football?

The Future of Footballer Contracts: Mbappe and The Growing Power of Players

By

Dr. Erkut Sogut , Jamie Khan

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June 7, 2022

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Introduction

Despite the numerous finales and events that have taken place across the world of football, from the Champions League Final to pitch invasions, one of the biggest stories that emerged in the month of May was the news that Kylian Mbappe had chosen to stay at Paris Saint Germain(PSG) and had signed a three-year contract extension.

There have been dozens of reports and articles that presented various snippets of information regarding the Mbappe saga that has continued for years. In this blog I will be assessing the Kylian Mbappe contract saga as part of a wider evolution that is taking place in football. I will aim to explain this change, its impact upon the game and how it could become a part of modern football.

Kylian Mbappe

I was fortunate enough to meet Mbappe’s father at the 2018 world cup final and stood in close proximity to him as he watched through tears as his son lifted the greatest prize in football. At 19 years of age, Mbappe became one of the youngest world cup winners in the history of football as France triumphed in the 2018 tournament and was one of their top players. In 330 appearances for Monaco, Paris Saint Germain and his country, Mbappe has already amassed 221 goals and 124 assists and he is still only 23 years old. He seems a top favourite to be a future Ballon D’Or winner. Consequently, he is a player that is in the highest of demands. Any club around the world would love to have his services but very few can afford a young player with such talent.

Two of the richest club giants in the world, Real Madrid and Paris Saint Germain have always been the more realistic possibilities for Mbappe to commit his future to. He learned his trade in the youth academy of Monaco and developed into a prodigy of superstar potential which was recognised in 2018 when he was sold to PSG for £162million at just 19 years of age and he has played and thrived at the French powerhouse since. However, interest from Real Madrid is not a new phenomenon. Over a decade ago, when Mbappe was just 11 years old, he was approached and invited to join Los Blancos’ academy although this never materialised and he remained in Monaco.

Madrid’s enthusiasm and desire for Mbappe has never waivered. It reached a critical point last year in the 2021 summer transfer window when a significant bid was made. Mbappe is looked after and advised by his parents and his mother seemed to publicly imply that he was more than open to a move to Spain to join the iconic club. Their bid of €160million was swiftly rejected by PSG in a show of resilience against Madrid. PSG were determined to keep their star and during the financial impact of the COVID-19 pandemic, it was difficult for Real Madrid to match the enormous sum required to prise Mbappe away from his home country and the dominant capital city club.

Real Madrid had demonstrated their focus on Mbappe by conducting business over the last few years in a manner that was aimed at accommodating for his transfer and wages. This became recognised as ‘The Mbappe Fund’. For example, they had sold players such as Sergio Ramos, Raphael Varane, Sergio Reguilon and Martin Odegaard to accumulate in excess of £100million and their signings have been limited to no further than Austrian International, David Alaba from Bayern Munich. Real Madrid have been formulating a strategy in a post-Cristiano era and Kylian Mbappe was a priority, ahead even of Erling Haaland.

Another reason why Madrid may not have topped up their original offer of €160million is because Mbappe’s contract with PSG was set to expire in the summer of 2022. It was an attractive option to let the contract run its course and pursue his signature the following year when he became a free agent. This was made more desirable when Mbappe failed to commit his future to PSG despite being offered several lucrative contract renewals and also expressed his dream to represent Los Blancos in the future. Following an unusually unspectacular European Championship, coupled with the rumours of him leaving, Mbappe was booed at the start of the Ligue 1 2021-22 season by his own fans and people speculated that he also felt belittled by the introduction of Lionel Messi to the team as well as his other, preexisting star teammate in Neymar Jr.. It seemed as though everything indicated a likely exit in the 2022 summer transfer window and Mbappe would fulfil his desire to play for Real Madrid.

On the 21st May, 2022, Real Madrid’s chances of signing Mbappe this summer disappeared. Following their game against Metz in which he scored an appropriately well-timed hat-trick, Mbappe’s new three-year contract extension was announced in front of the home crowd. Details of the contract were reported over the following days:

● €100million signing on bonus
● Approximately €40million salary a year but this could go up to €1million per week based on performance bonuses

This makes Mbappe, quite clearly, the highest paid player in the world and completely overshadows his teammate Lionel Messi’s contract which is only worth a ‘measly’ €25million annually. It is a contract that echoes the style of mega-money deals that are agreed with a select number of ultimate superstars, icons and ‘brands’ in the NBA in the US.

The most significant discussion points around the new contract are the clauses that give Mbappe an unprecedented level of influence, control and power within one of Europe’s top clubs. It was reported that Madrid had offered a contract of similar financial remuneration and had even offered complete control of his own image rights. However, what potentially swayed Mbappe to stay at PSG, other than playing in his home country, may be the opportunity to have such an important role in the club. Mbappe’s new contract grants him a voice that has an influence and impact on many major aspects and strategic components of the club. He will give his opinions on transfer strategies, individual comings and goings of the players and the staff including the manager and the sporting director. Leonardo has just left his role as the sporting director of PSG and has been replaced by a good friend of Mbappe from Monaco in Luis Campos. His job is, at least partially, in the hands of the club’s star player. The contract therefore not only makes Kylian Mbappe the most financially rewarded player in history but also the most powerful and influential upon their club.

What Does This Mean for Football?

Could mega-money contracts that position players in a powerful role within a club be the future of football? As I mentioned, Mbappe’s contract extension displayed obvious similarities to the NBA-style contracts that can reach up to $1billion in value. However, it is a relatively new phenomenon in football although it could mark a significant moment in the evolution of the modern era of the beautiful game. There are also questions about whether it is problematic to allow for a player to have an influential role in matters that they may not have the knowledge, expertise or experience for, such as transfers and managerial appointments. Whilst these concessions were made by PSG in a desperate attempt to create an attractive and irresistible offer to persuade Mbappe to remain at the club, there must be important consideration given to such a matter and the impact it could have on football if it was to become the norm.

There has been an understanding of the concepts of ‘old money’ and ‘new money’ in football for a while. The introduction of billionaire businessmen such as Roman Abramovich was the beginning. This has continued with the likes of Sheikh Mansour and now state-owned football clubs. Paris Saint Germain is one of these, it is Qatari owned and overseen by the president, Nasser Al Khelaifi.

There was an immediate and damning response from Real Madrid following the announcement that Mbappe would not be moving to the Bernabeu this summer. The La Liga President, Javier Tebas, promptly labelled Paris Saint Germain and their business as ‘dangerous’ and an ‘insult’ to football. The Real Madrid President, Florentino Perez, reiterated Tebas’ sentiments and it was clear that Madrid and Spanish football were not impressed. It was a sporting and political loss for them. With Messi and Ronaldo no longer in La Liga and future starlets choosing Manchester City and PSG over Barcelona and Madrid, the reputation of La Liga as a home to the world’s biggest football names could be seen as diminishing. Politically, there was an element of a Spain versus France battle which led to French President, Jean-Michael Macron, personally ringing Mbappe and urging him to stay. Secondly and arguably more importantly, it indicates the rapidly growing stature, reputation and brand of the world’s richest state-owned clubs and PSG itself.

Real Madrid’s objections towards PSG’s business are likely grounded in a resentment that they were unable to sign Mbappe. However, there are other factors contributing to the dispute. For example, Madrid continue to voice support for the generation of a European Super League whilst PSG have always advocated against it. The ESL was widely criticised for both financial reasons and accusations that it undermines the fair competition element of the sport. It is possible that Madrid will view PSG in the same light in the face of their business. Paying such extraordinary sums for their players and allowing them to have such an influence could be seen as being problematic in the same manner as it arguably belittles and damages the financial stability of football, the integrity of competition and its sustainability.

The focus of Madrid’s condemnation of the deal is the financial backing and plausibility of such a deal. It is hard to see where and how the contract will be afforded by PSG in a manner that adheres to the Financial Fair Play regulations. This issue is accentuated in the knowledge that PSG’s squad costs a total of €650million and the Parisian club has made a €700million loss over the last three years. This is well beyond the previous FFP rules as well as the new Financial Sustainability and Club Licensing Regulations which only permits a yearly average loss of €70million. PSG has also been criticised for its questionable sponsorship income statistics and other financial infringements.

The consequences of this financial malpractice could be felt following Madrid’s complaint to UEFA and the European Club Association (ECA) after Mbappe’s new contract was announced. They are determined to ensure that PSG are found guilty of FFP misconduct and it is possible that this will be heard in European courts or the Court of Arbitration for Sport (CAS). However, one obstacle that this challenge faces is that Al Khelaifi, the PSG President himself, is one of the top authorities at the ECA and sits on the executive committee board at UEFA. The first response that PSG could give is to point towards the very similar financial package that Real Madrid had offered Mbappe which is exactly what they are criticising their Parisian rivals for.

Summary

It remains likely that Kylian Mbappe will one day be seen in a Real Madrid shirt scoring goals at the Bernabeu. However, the rising reputation and stature of Paris Saint Germain as a European powerhouse has delayed this reality for now. His contract renewal may be looked back upon as a vital moment in the evolution of football towards a system of mega-contracts for the game’s biggest superstars.

The new contract also opens a gateway for more similarly structured contracts in the future that grant the player a substantial amount of power and an influential role over major club decisions and strategies. The loss of complete control of a club’s sporting director, President and Manager, coupled with an extraordinarily high financial cost could be a slippery slope that ultimately damages the integrity, sustainability and stability of football. Alternatively, it could be an integral step for football to progress and continue to adapt and modernise and this type of contract could become the new norm.

Away Goals, League Stages and Coefficients: Simplifying the Changes to the UEFA Champions League

By

Dr. Erkut Sogut , Jamie Khan

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May 29, 2022

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Introduction

For the last several years there has been substantial debate and speculation regarding possible alterations to the format of UEFA’s club competitions; the Champions League, the Europa League and, as a consequence of these discussions, the Europa Conference League that has reached its very first conclusion in the 2021-22 season on Wednesday with Roma emerging as champions in the inaugural competition.

The Champions League (1955) and the Europa League (1971) were both founded over fifty years ago and are historically iconic football competitions. Although their names have been changed over time, they have been mainstayers as highly regarded, top level competitions between the best teams across Europe’s most competitive football leagues. They provide an opportunity for European clubs and domestic champions to showcase their strength against clubs of a similar standard from around the continent. The footballing spectacle of European competition is an enormously attractive entity to football fans, broadcasters and to commercial opportunities.

In this blog I will lend more of a focus specifically to the UEFA Champions League (UCL) and the format changes that have occurred so far and that are also set to be implemented in the 2022-23 season. I will delve into the main topics of discussion, the motivations for the changes and the impacts that they might have upon the game. However, I will also touch upon the similarities and differences in the changes that are set to be made to the Europa League and the Conference League as well.

The Away Goals Rule

A sensible place to begin is the alterations that have already been made to UEFA’s competitions. The newly adapted format for the away goals rule has been in place for the 2021-22 UCL, Europa League and Conference League competitions. Since its introduction in 1965 as a method of removing the need for a ‘tiebreaker’ or ‘replay’ game and to encourage teams to attack away from home, the away goals rule has been an integral part of European football competitions.

For those that are unaware, the away goals rule fundamentally doubles the value of scoring against an opponent away from home in a European competition. For example, two teams whose aggregate scores are tied over two legs are differentiated based on the number of away goals scored. The team with the most away goals qualifies for the next round ahead of their opponent.

In recent years, many have argued that this rule has become outdated. The UEFA President, Aleksander Ceferin, conceded that the rule was now contradicting its original aim of increasing attacking-minded sides and was instead dissuading home sides from attacking. This was due to the fear of conceding a goal at home which was a valuable advantage to the away side under the away goals rule. This is evident in the statistics in European competition since the mid-1970’s. Since this time, the average number of goals scored by the home side has fallen from 2.02 per game to just 1.58. Furthermore, the win percentage has similarly dropped from 61% to 47% whilst winning away from home has increased in likelihood. It is an unusual statistic for home sides to be less than 50% likely to achieve a victory. This is the result of the away goal rule creating more defensive minded home teams whilst away teams are more attacking and try to capitalise on the possibility of scoring a valuable away goal.

After lengthy consultations and on the recommendation of the UEFA Club Competitions Committee and the UEFA Women’s Football Committee, the ‘outdated’ rule was confirmed to be changed for the 2021-22 European football season. Under the new alterations, away goals no longer carried more value than goals scored at home. The aim, as was originally the intention of the away goals rule, is to reopen up the games and to reintroduce attacking tactics. It was hoped that for the 2021-22 season and beyond that home sides would once again become more attack-minded and the opposition would treat scoring in the away leg with equal regard to scoring at home. The aims of the new changes have been reflected in its first season with the average goals per game rising to over 3 and a majority of open, attacking games in the knockout stages. So far, it seems to have had a positive impact on European football competition.

The New Format: One-Legged Semi-Finals and League Stages

UEFA Club Competitions have a historic importance in European football. They attract large, global audiences and showcases the best that European football has to offer. The European Clubs Association (ECA) have called upon this significance of the competitions and have urged UEFA to continue with a balanced and progressive evolution that ensures sustainability, inclusivity and success of the competitions. As a result, over the last few years, UEFA have been exploring options to ‘progress’, ‘evolve’, modernise and rejuvenate its competitions. The process has reached its pinnacle and whilst there still may be further changes and adaptations in future, the 2022-23 European football competitions will adopt new formats.

For the Champions League, the conclusions of the consultations have leaned towards the Swiss model. For the first time, the preliminary stages of the UCL will take the structure of a league phase rather than a group stage. The number of teams participating in the competition will grow from 32 to 36 teams. All 36 teams are guaranteed 8 games, 4 home and 4 away against 8 different opponents, during the league stage. Originally this was proposed as 10 games but this was overruled as it was deemed unreasonable to expect such a high volume of games to take place and it has been reduced to just 8. This differs from the traditional group stage which involves a draw for clubs to be placed into groups of 4 followed by 6 fixtures against the three other teams in the group, an away and a return fixture.

Once the league phase has concluded, the top 8 teams will automatically qualify for the knockout stages whilst the teams that finish between the ranks of 9th and 24th will compete in a two legged play off process for the final 8 places in the last 16. The format will be the same in the Europa League with 8 league games and 36 teams whilst the Europa Conference League will only consist of 6 games in the league stage and 34 teams. However, despite some concerns previously, UEFA have confirmed that all matches apart from the UCL final will occur on weekdays as they historically have done and will not interfere with domestic league schedules.

Importantly for the Champions League, the new structure widens the outreach of the competition by opening up four additional spaces in its increase from 32 to 36 teams. These four teams will be decided based upon three distinct criteria:

One spot for the club that finishes third in the top division of the nation that is ranked in fifth position in the National Association rankings. This could possibly be between Ligue. 1 or the Portuguese Primeira Liga.
Another place for the domestic champion of another qualifying country via the Champions path qualifying process.
Two additional positions for the clubs that are part of the two countries that perform best collectively over the previous season. This is calculated by dividing the total number of points for a team in a league by the number of participating clubs. If this rule was to be in place this season, the two clubs would have been admitted from Holland and from England, from the next position outside of the originally allocated Champions League places. The second significant difference is the abolishment of two-legged semi-finals.

This will now be replaced by a single fixture to decide who progresses into the final. This was an idea that materialised following the COVID-19 pandemic and lockdown which prevented fans and players from travelling abroad. Whilst the rest of the knockout stages will continue to adopt a two-legged format, the semi-finals are now set to be decided based upon one match played at a neutral venue, with the final taking place the following week at the same venue. The aim of this is to reduce the volume of travelling supporters across a more widespread period of time and to different locations.

There will be several substantial impacts that a single-legged semi-final will have on the UCL, some arguably positive and others that will be of detriment to the competition. For broadcasters and for fans, the new change will mean there are less high quality matches to watch. Furthermore, the historical tradition of fans travelling around Europe to follow their team across the continent in the semi-final of the biggest competition available to them is one that is treasured by many and will be missed as a result of the loss of an away leg in the semi-finals. For clubs and cities, this also means a significant loss of matchday revenue and tourism to the home club’s city, damaging the financial benefits of a club reaching the semi-final.

An argument in response to this is that the increased volume of games during the preliminary league stage will counteract the losses made at the semi-final phase. However, arguably it is far more attractive to broadcast games of higher quality and at a more critical period of a competition such as the semifinal. Broadcasters will continue to lose out on being able to show higher numbers of higher standard games.

One outcome that may be seen as a result of one-legged semi-finals is an increased unpredictability of which clubs make the final. This may be seen as enhancing the uncertainty of competition and lessening the advantage to major clubs. For example, it is more likely for an underdog to overcome a European giant in a one-off game rather than having to consistently produce an aggregate victory over two legs. An increased number of upsets and uncertainty could act to benefit the attractiveness and diversity of the competition. However, for broadcasters and for commercial opportunities this may have a negative consequence in that their top earners and attractions to viewers such as Real Madrid, may miss out on a final due to a one-off upset. The worry is that this might also be seen as undermining the historic tradition of the competition as a fair assessment of the best clubs on the European continent.

Abandoning the Club Coefficient Idea

The reform that attracted the most media focus, discussion and opinions was the suggestion of using a club coefficient system in order to fill the additional four places available in the Champions League. I have explained how these positions will now be filled but it is worth explaining and understanding this alternative alteration that seemed possible for a significant amount of time.

It was proposed and seriously considered that a possible method of determining the four additional teams participating in the UCL next year would be selected based upon a club coefficient system. The system formulated those that were “most deserving” of the extra available Champions League places based upon historic success, particularly over the previous five years. This raised concerns from many European leagues as it seemed to hold connotations of the discarded European Super League. The strategy seemed to be purposefully designed to ensure that European giants such as Manchester United or Arsenal would be able to meet the criteria required to qualify for the competition under the coefficient system despite not making the top four ‘Champions League places’ in the English League.

This is because of the historical significance of clubs such as these and the commercial and broadcasting value and attraction of having them as part of Europe’s major competition rather than the Europa League or below. However, the system would have had many consequences beyond simply belittling the importance of the ‘race for top four’ in the English Premier League. It undermined the value and growth of clubs such as Atalanta or Leicester City and was more concerned with financial benefit rather than footballing merit. The system becomes particularly complicated when having to consider factors such as a club’s commercial status, business appeal, fanbases and broadcasting statistics in combination with the strength of the league they are a part of.

The coefficient approach would also have been a problematic and unfair system for other, arguably more deserving clubs around Europe that the places could have gone to. Before the final decision on how the additional four places would be allocated as I have outlined above, there were other suggestions that were made that were far better and positive for European football than the coefficient system. For example, the places could have been given to the next best countries that are not currently included in automatic qualification such as Serbia, Ukraine or Belgium. Despite the far lesser commercial and financial attractiveness of this suggestion, it would have enhanced the distribution of the Champions League across more of Europe and encapsulated a wider footballing variety.

Eventually, UEFA decided to abandon the coefficient idea and publicly announced their reasons for doing so. They had seen the issues that would have arisen as a result of such a system and agreed instead to commit to principles of open competition and sporting merit. Furthermore, it is hoped that the final system for allocating the four additional places will help to protect and promote domestic leagues and will judge clubs on no more than their short-term history from the single previous year of competition. Fortunately, this seems to have overcome the politically-charged and financially-motivated motivations behind a suggestion such as the coefficient system.

Summary

There is a significant volume of competing interests within UEFA and underlying factors and considerations that govern the European football competitions. The interests and desires of fans, broadcasters, brands and other commercial entities are taken into account. Often this results in an oversight of what is most beneficial for the game of football, sporting merit and fair competition. It is hopeful that next year’s adaptation of the UCL, Europa League and Europa Conference League, coupled with this year’s abandonment of the away goals rule will enhance the standard and competition across Europe and improve the spectacle of European competitions for all concerned parties. This does not mean that further adaptations cannot be made. UEFA will most likely always be planning and evolving in order to ‘perfect’ their competitions and adapt to an ever changing society and footballing fanbase and this is hopefully a healthy attitude for European football to continue to flourish.

FIFA’s Agent Consultation: An Elaborate PR Stunt? And The Legal Implications of the New Regulations

By

Dr. Erkut Sogut , Jamie Khan

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May 22, 2022

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Introduction

In this blog I will explain how, since 2018, FIFA has documented several ‘consultations’ between themselves and with agents from all around the world to discuss and review the proposed new regulations for agents in the industry. As well as simply explaining what has happened, I will also share my concerns and my experiences with how the governing body in football have conducted their operation. In doing this I shall highlight the errors that they have made and expose the process to predominantly be a publicity stunt to lure those with an interest in the good of the footballing world into the false belief that the new regulations are adequately informed and adapted in line with the best interests of football and agents to achieve its aims. I will also consider how the legal implications of the regulations may develop within a European Court of Law.

Dictionary.com defines a consultation as a meeting for deliberation, discussion, or decision held as a conference. Conference also indicates that two or more parties ‘confer’ between one another over a certain topic. A properly conducted consultation takes the form of a two way process and discussion, allowing stakeholders to give each other advice and assistance. Throughout this blog, it is important to remember therefore, that the aim of a consultation is to provide a platform from which parties can express opinions and give feedback on an issue. The result of a consultation is compromise and adaptation of the original plans to achieve the greatest, most effective, efficient or successful outcome.

The Consultations

Many agents from around the world, including several of the biggest names in the industry, arrived for the first agent consultation with FIFA in Zurich in 2018. They held high hopes and anticipation for the opportunity to have their voices heard in front of the major stakeholders in the game; FIFA, FIFPro, UEFA and the European Club Association amongst others. Whilst agents are not currently stakeholders in football, they play a large part in the industry and this seemed like the chance to come face-to-face with the decision makers in football and influence the future for agents. The importance of the consultation was reflected by the attendance of Pini Zahavi, Rob Jansen, Giovanni Branchini, Richard Motzkin and Mino Raiola. The general feeling towards football’s stakeholders was a satisfied and hopeful one. It was an encouraging sign that the stakeholders in football were allowing agents to express their concerns, worries and feedback on the proposed regulations for agents that the lawmakers were set to bring in.

Although some agents were against any regulation at all, most agents, including myself, agreed that new regulations in the industry are needed to raise the ethical and professional standards of agents globally. The motivations behind and fundamental aims of the changes in regulation were also agreeable. Outcomes such as increased transparency, licensing, education, enhanced player welfare and stability as well as a centralised system to monitor transactions are all concepts that will improve agency and protect our rights (such as claiming commissions from clubs directly through FIFA) and football as a whole. For example, foreign players’ incomes are protected and ensured by FIFA, this should now be the same for agents and their remuneration. However, for the regulations to be effective and successful in their aims, they must be reasonable, fair, legally correct and feasible to implement. For this to occur, agents themselves must be involved in the process of developing the new legislation. In 2018, the agents that were invited to Zurich were under the impression that the consultation was for exactly this; for them to express their opinions and help inform FIFA and other stakeholders of the best ways of implementing new regulations on the industry.

The Reality

The first meeting in Zurich was framed by FIFA’s ‘Task Force Transfer System’ as a ‘collaborative and constructive’ review of the regulation proposals. FIFA and football’s decision makers and stakeholders were present and agents directly faced them during the conference. Little did we know, this was the only time we would actually meet face to face with those that could make a decisive difference and change.

From the second meeting onwards, rather than the two way dialogue that should occur during the consultations, it seemed that FIFA had already decided on the regulations and were simply telling the agents what was going to happen. There were no actual decision makers in attendance. However, they continued to publicise the meeting as ‘collaborative consultations’.

The pattern continued in the future meetings but FIFA seemed even less willing to collaborate with agents. Despite the promise that agents would be able to meet face-to-face with football’s authorities and stakeholders again, future meetings involved only representatives. This meant that even if they did listen to any of the concerns raised by the agents in attendance, there was unlikely to be any changes as the information and solutions had to be relayed through to the decision makers who were unlikely to listen to second hand accounts.

At my final meeting in January of 2022, after I had made my intentions to leave clear, I was promised that if I remained part of the consultations then I would be able to meet with decision makers and stakeholders at the final consultation in February. I trusted my instinct, stepped away from my role at ProFAA and my fears were confirmed when no stakeholders were in attendance at the next meeting. The reason given for this was that they decided they did not want to confront agents directly. This was problematic and confusing as it was assumed that agents and the stakeholders were going to work in conjunction towards a positive outcome.

An additional issue that arose from January’s meeting was that agents rejected FIFA’s request for permission to publish media and photos from the consultation. Despite their objections and a decision not to grant them permission, FIFA published material in another bid to publicise their ‘collaborative’ and ‘cooperative’ attitude towards these consultations with agents.

FIFA’s advertisement to the media and to the public that they were holding consultations was misleading. They pushed a narrative to football fans and to other stakeholders such as the EU Commission that they were cooperating with agents to protect their interests and ensure the regulations would not be damaging to them. The agents were being used and manipulated as part of an elaborate publicity stunt. The false reality of collaboration was showcasing FIFA as adapting their regulations after consideration of agent feedback. The performance was published through a rose tinted lens in order to gain the backing of stakeholders.

FIFA claimed that several proposals given to them by the agents in attendance have been implemented into the new regulations set to come into force this year. However, the distorted truthfulness of this situation was identified by many agents. For example, this claim had been published by FIFA following the most recent ‘consultation’ at the end of January 2022. Leading agents have questioned the robustness, genuineness and sensibility of this meeting as it occurred just days before the end of the winter transfer window. Many agents who would have had vital and significant opinions on matters would likely not have been able to have attended such a meeting as they would have been too busy with their clients at this stage in the window. Certain agents labelled this consultation fake as it was with only representatives from FIFA rather than authorities and only agents who weren’t currently engaging in business so could not give an informed challenge to the regulation proposals.

For a consultation between agents and the stakeholders, there must be an accurate reflection and representation of agents worldwide. The stakeholders gave this impression despite only really accessing less than 1% of agents who would adhere to their agenda. The false representation of agents was demonstrated in the ‘made-up’ unions that they claimed to be a part of. This has been the case for representatives from Africa, Asia and most recently, South America. This allowed FIFA to claim they were working alongside agents globally. The decision makers were claiming to be meeting agents from ‘every continent’ and major footballing countries. This was misleading. The process also pitted agents against one another as FIFA suggested that the opinions of agents given in the consultations would be used as litigation in future against other agents. Agents have different opinions but they are all in the same industry and hope for the same rights. It is important that we do not allow agents to undermine and battle one another using their own opinions against each other.

ProFAA, the organisation that I co-founded and left in January, intended to represent and educate agents worldwide. We also had the desire to become a stakeholder in football and I emphasised education for our members to improve the industry. As the consultations progressed, it became clear that ProFAA was simply used as an instrument to aid FIFA’s publicity stunt. The association was made up of a large contingency of upcoming agents and students, which outweighed the number of licensed agents in the association. It is an educational platform for those aspiring to become a part of the agency industry, other than a handful of well established agents.

The Problems

As I have noted, the fundamental motivation and aims of the new regulations are admirable and encouraged. However, without “real” or “proper” active agents as part of the process of developing and adapting the regulations, there is little hope that they will be implemented successfully and effectively. In my personal opinion, FIFA does not have enough of an understanding of the agency industry.

With the consultations so far being used simply for FIFA to make themselves look good and well-informed to external stakeholders, this has created this exact problem. The stakeholders have shown a stubborn unwillingness to discuss or compromise on the proposed regulations. The lack of collaboration will ultimately result in damaging consequences for the industry. The regulations that will be implemented will be flawed and fail to have the desired effect as FIFA did not cooperate with agents who were expressing reasonable solutions and adaptations to the issues that will arise as unwanted outcomes from these regulations.

The Legal Side

One likely reason why FIFA have utilised these false consultations to appease football fans and stakeholders is in case they are required to defend themselves and the new regulations in a court of law. It is highly likely that agents and agent associations will oppose the regulations such as the commission caps and the appeal may be filed in court to judge whether the proposals are in line with European Law. There are several main lines of argument that agents will turn to to object to the new regulations:

The proposed regulations undermine European Competition Law. A hard cap does not adhere to competition law. The hard cap entails that any deal worth above $200,000 must be capped at a maximum 3% commission. It would drive the majority of agents out of the industry and lead to an oligopoly. Any suggestion of a tiered system must ensure fairness and bracketed price ranges to allow for a reasonable commission rate.
It breaches antitrust law. This is where agents will argue that the harm to competition is greater than the benefits it brings to football.
The regulations place a restraint on trade in a free market.
FIFA is guilty of abuse of their monopolistic power over football’s governance.
Restrictions on freedom to provide services and agree contracts.
FIFA has not followed its own rules and procedures for developing and implementing these regulations. The consultations were not robust nor conducted appropriately for a fair collaboration with properly representative agents.

The process is likely to begin in a European civil or commercial court or even through the Court of Arbitration for Sport (CAS). However, it is possible that this dispute will be elevated to the European Court of Justice, just like the Bosman Ruling Court Case in 1995. It will inevitably be a difficult and complicated case. Agents will be faced with the challenge of battling in court with the global powerhouse of football, FIFA.

FIFA will be confident in their defence of the regulations. They are likely to use the ‘consultations’ as evidence that they have adequately cooperated with agents and considered their feedback and adaptations to the regulations. However, this argument is flawed. As I have explained, FIFA have led a false consultation process that has involved agents that are not established and have only accessed less than 1% within the industry. I would argue that this shows FIFA to lack the competence to regulate agents. Even if the process was a proper consultation, speaking to such a minority of agents and those that aren’t well-established does not give FIFA the grounds for authority. They would not have the competency to govern Lawyers or Doctors in football, so why do they have the right to govern agents when they are equally uninformed? The agency industry is outside of the football sphere that FIFA understands and comprehends. This is why a fair and proper consultation process would have been of monumental benefit, yet they failed to capitalise on such an opportunity.

FIFA will also be required to show that the regulations are being brought in for sufficient reason. The main aim is to reduce the abuses in the agency industry and improve transparency. With over €2.6billion being paid in agency fees over the last three years, FIFA also believe there is a need to limit this. However, these fees have risen proportionately aligned with rising transfer fees and player salaries, as would be expected in a free market. FIFA must prove that these regulations are therefore fair, proportionate and in the public interest. In my opinion it seems that these regulations will fail to reflect the free market rise in agency fees and goes beyond the bounds of proportionality and reasonableness. Furthermore, whilst official statistics and financial reports may appear more favourable initially, it is likely that the regulations will cause a rise in ‘kickback’ payments and unofficial remuneration which is not beneficial for football and fails to meet FIFA’s aims.

The fact that FIFA does not consider itself as involved in the production and distribution of goods may be used to undermine the accusation that the regulations breach European Competition Law. However, there has previously been an example of when this argument failed to hold up in court. In 2015, a German agency took the Deutscher Fussball-Bund (DFB, the German Football Board) to the national court over a similar attempt to limit the money that agents were able to make through German football clubs and players. The German court voted in favour of the agency as it agreed that regulating and restricting earnings was not coherent with European competition law. It is possible that FIFA will face the same legal proceedings and outcome with their current proposal.

Summary and Unanswered Questions

In summary, it has been confirmed that my decision to step down from my role with PROFAA was justified and my fears were true. Once I had left, I was replaced immediately by someone who is not an agent and has a minimal understanding of our business. This made it become clear that ProFAA was not as independent and effective as I had previously believed. I accepted that the consultation process was not a fair one. PROFAA was simply being manipulated and publicised as a tool or instrument for FIFA to give the false impression that they were collaborating with agents to achieve the best outcome. I have demonstrated that this is far from the truth and that stakeholders and agents never truly met and ‘consulted’. I urged ProFAA to walk away from the consultation as a united association to take a stand against FIFA but ultimately it resulted in my own personal departure.

FIFA holds the authority of rulemaking in the beautiful game but I question whether they are competent enough to regulate agents for the benefit of the game. I examined the legal implications of the proposed regulations and I await seeing how this case might unfold in court.

There are several unanswered questions that are yet to be explained by FIFA and football’s decision makers. I would like to pose these now as my concluding thoughts. The consultation and the new regulations seem to fail to address these queries:

Why are the stakeholders not directly involved in the consultation process?
Why are agents that represent clubs capped at 10% commission whilst player agents at only 3%?
Are agents that represent clubs more valuable?
Is it time to separate club agents from player agents? Are club agents more consultants so they should not be regulated in the same way as player agents?
Why are the regulations solely directed at regulating agents rather than including limitations for club officials such as sporting directors who can currently earn and pay themselves bottomless bonuses?
If you cap agents, shouldn’t you also cap the entire football economy? For example, players income, coaches income, club officials income…
Why are they claiming to consult agents worldwide whilst less than 1%, many of which are not fully established and inadequate representatives?
Are they planning to use the “consultation” with these agents against others once the matter is disputed?
What are their reasons and motivations behind putting out media and publicity projects without the permission of agents?

Despite FIFA’s inability to hold constructive consultations and cooperate with proper agents from around the world, they have created their own executive programme in football agency. FIFA charges a substantial cost for this programme and are more than happy to receive money from the agents around the world but are far more reluctant to collaborate with them in order to improve football.

What Does Todd Boehly’s Consortium Bid Mean for Chelsea?

By

Dr. Erkut Sogut , Jamie Khan

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May 8, 2022

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Introduction

On March 2nd 2022, Chelsea Football Club was put up for sale by long-time owner Roman Abramovich. 10 days later, Abramovich was sanctioned by the British Government for his alleged involvement with the Russian Government. After over 19 years of ownership of the London club, 21 trophies and a global impact on the finances of football, his assets, including the shares in Chelsea were frozen.

Ticket sales, transfers, contracts and merchandise revenue were all prohibited. However, the Government granted a special license to allow for the sale of the club to take place. There were time restrictions and pressures also placed onto the club. The special license allowed up until May 31st to present a preferred bidder to finalise the sale of the club with. If this license had expired and a suitable bidder had not been found, the club would have been left in daunting circumstances and the possibility of remaining under sanctions at the time of the Premier League’s meeting to formulate the 2022/23 league campaign. This meeting takes place on the 8th June.

The Interest

Predictably for one of Europe’s major clubs, there was significant interest in the purchase of Chelsea. This was despite Abramovich suggesting an enormous price tag of over £3billion for the club and investments into a new stadium alongside other considerable areas of expenditure. Abramovich had also clearly stated that he did not expect the club to remunerate him for the ‘loans’ that he had given the club which were in excess of £1billion. He was determined that the sale of the club would be of benefit to its future and not put it in a difficult financial predicament.

Several consortiums and wealthy businesspeople were speculated within the media as having made notable approaches or expressed a reasonable interest in buying shares in the central London club. Names such as Serena Williams and Lewis Hamilton were seen in the media as agreeing to contribute millions to a consortium led by Sir Martin Broughton, the chairman of British Airways. Despite several false rumours of billionaires from around Europe and the US, another significant British interest emerged in the form of a consortium led by Sir Jim Ratcliffe, Britain’s wealthiest man. Ratcliffe came forward at the last minute and proposed a bid that contained appealing clauses to Chelsea fans, emphasising his interest in prioritising acting in ways that benefits the club rather than his own financial profitability. In doing so, he also expressed concerns over the American interest and their intentions and motivation for purchasing the club.

Todd Boehly’s Consortium

On May 7th 2022, Chelsea announced that they have agreed terms with their preferred bidder. Their official social media pages as well as renowned trustworthy sources and sport news platforms reported the developments. The sale of Chelsea Football Club is now at the stage of being finalised with a consortium led by Todd Boehly.

Forbes has reported Boehly’s net worth at £3.6billion. He already has significant shares in three American, Californian based sports clubs and franchises. He is the co-owner of the Los Angeles Dodgers Major League Baseball franchise, the Los Angeles Sparks Women’s Basketball team and the iconic Los Angeles Lakers National Basketball Association franchise.

The rest of the consortium consists of Clearlake Capital, Mark Walter, Hansjoerg Wyss and Jonathan Goldstein. Voting rights will be equally shared but Clearlake Capital, a Californian private equity and investment firm, will own the majority of shares in the club. Mark Walter, another American billionaire, already co-owns the Dodgers with Boehly and will be accompanied and assisted by Swiss billionaire Wyss. Goldstein is an important inclusion as he offers a vital British perspective and knowledge of Chelsea Football Club and its history.

The Deal and The Formalities

Whilst the official announcement has been made and it is clear that Boehly and his consortium will likely be the next owners of Chelsea Football club, there may still be a few weeks left in the process before the deal is finalised. The numbers that have been reported so far have been broken down as follows:

A total input of £4.25billion ($5.2billion) into the club as part of the full overtake.
£1.75billion of the investment will be focussed on benefitting the club itself. This includes improvements to the Chelsea academy, the women’s team and system as well as their Kingsmeadow Stadium and financial support for the Chelsea Foundation charitable cause.
£2.5billion for specifically purchasing the shares in the club from Abramovich.

The proceeds from the sale are strictly prohibited from reaching Abramovich’s accounts. The British Government will not approve of the sale of Chelsea without complete assurance and certainty that an ownership transfer agreement is in place that prevents any proceeds going to Abramovich. The club has sought financial advice from investment banks such as Goldman Sachs to help guide them through the process and ensure all details and criteria are adequately satisfied. Boehly and the rest of his consortium must also, as with any prospective owner, shareholder or director of a British football club, pass the fit and proper persons test conducted by the English Football Association. The deal must then also pass through the approval of the government once they are content that the process has not breached the sanctions that have been placed on Abramovich.

One of the ways of ensuring this that has been detailed so far is that the proceeds from the sale will be directly deposited into a frozen UK bank account. The intention is then to donate 100% of this amount to charitable causes. The media has reported that Abramovic is fully supportive of this policy and has encouraged the money to go towards victims in Ukraine.

Another important aspect of the deal and its intricate clauses, especially for Chelsea fans, is the manner in which Boehly and his consortium will be financially remunerated by the club following their purchase. In other words, there have been concerns over their attitudes towards profiting from the club and erasing or overwriting debts. So far, the consortium has successfully overcome this worry by agreeing that they will not pay themselves any dividends from the club, nor will they take management fees. There has also been calculations made to limit the debt that the club can take on which hopefully will provide more financial direction, stability and protection for Chelsea.

Summary

The basic and most important principles and factors of the Boehly purchase of Chelsea are now well documented. However, it is more than likely that over the rest of the month of May, the deal will meet obstacles and hurdles that may delay the completion of the sale. There is plenty of small print to address and determine and details to be refined. Nevertheless, the overtake will have an immediately positive impact on Chelsea Football Club, allowing them to capitalise on the summer transfer window, offer contracts to their current players, sell season tickets for the next campaign and return to a high revenue from team merchandise. It remains to be seen whether the sale will continue to have a positive effect in the long term or whether the new American owners, with financial rather than sentimental motivations for buying a major football club, have an adverse, detrimental impact on its future.

Reforming British Football: An Independent Regulator to Protect the National Game

By

Dr. Erkut Sogut , Jamie Khan

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May 5, 2022

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Introduction

In April 2022, the British Government approved a major reform initiative for football. The reform outlines proposals for radical changes to the system of the national game. The government’s endorsement of the initiative is a positive step towards implementing meaningful change to improve the football system and its financial competency.

The reform is part of a fan led review into the financial issues that British football faces. This was instigated following the downfall of the European Super League which called for a review of the governance of the sport in the country. The Football Supporters Association (FSA) are fully supportive of the proposed changes and hope that they will help protect the national game.

What does the reform involve?

Whilst the exact details of the plans are still being finalised and are set to be outlined by the end of summer, the general principles, motivation, direction and policies behind the reformation have already been established. The changes have several main aims:

Protecting the heritage and history of British football clubs
Addressing the distribution of wealth throughout British football
Increased fan engagement policies for club owners and directors
Enhancing financial competency and sustainability One of the most significant changes is the introduction of an independent

regulator to monitor the financial situations of clubs. The independent regulator will now oversee English football, rather than the Football Association, Premier League or English Football League conducting their own tests and having responsibility for ensuring appropriate financial conduct of clubs.

As well as an overhaul in the financial protection measures for English Football League clubs; integrity tests and due diligence policies for club directors and owners will be used. The hope of increased scrutiny on club board members is that it will prevent situations where clubs have been financially damaged by irresponsible ownership and directorship. Part of the change in approach towards club owners is to also include measures that require board members of clubs to engage and interact adequately with fans. The policy will create greater transparency of clubs and improve relationships between fans and boards.

The overall effect of the reform will improve the general health of British football through greater financial suitability of owners and more sustainable sources of funding and expenditure. The fans will become a more significant factor for clubs and can hopefully be seen as working alongside the board to improve their club.

Why is this needed?

The Premier League maintains that it is conducting its own adequate reviews of its owners and directors tests and improving the input that fans can have on their own club. However, the introduction of an independent regulator will ensure that a non-biased and efficient system becomes the norm.

The regulator will also assess the financial side of the game. The current state of British football rests upon a flawed financial system. The new changes will help overcome the shortcomings of the current financial management. Part of this will involve the Premier League supporting the English football pyramid and redistributing its wealth by contributing to the lower divisions.

The current situation involves 16% of the Premier League’s TV and Broadcasting rights income being distributed amongst the lower leagues. The Premier League claims that they have paid approximately £1.3billion since 2019. The new reform is calling for this to be raised to 25% although it is more likely that an agreement will be made at a compromised figure between the two. Those in charge of the reform are currently in discussions with the FA over the exact details of redistributing finances within the leagues.

One suggestion for redistributing finances includes the proposal to impose a 10% transfer levy on Premier League clubs suggested as a result of the fan led review. In other words, Premier League clubs would be subjected to a ‘transfer tax’ to be paid to lower leagues. This would make it compulsory for Premier League clubs to redistribute a percentage of transfer fees to less financially thriving clubs. The consequence of this would be increased financial support for clubs below the Premier League in the football pyramid.

The European Super League debacle marked an additional worry for British football. The new reforms will act as a defensive mechanism against future ventures similar to the ESL. It is hoped that the system overhaul will prevent similar ventures from negatively impacting the finances of British football.

All of these changes could be necessary to try and avoid unfortunate footballing tragedies such as clubs entering administration, being irresponsibly run into the ground or, in the worst case scenario, ceasing to exist.

The Problems

One of the primary obstacles that the new reforms face is expected to be the Premier League’s reluctance to adhere to external instruction. The board of the PL favour the duties of regulation and financial management lying with the FA rather than a source independent from football. There remains hope in the possibility of open discussions and reviews of the proposed reforms gaining the trust of the league and leading to an agreement that the Premier League are happy with and will abide by the new reforms.

The most significant challenge is avoiding delays in the implementation of the new reforms. The Football Supporters Association have urged the government to ensure a fast and smooth implementation of the new policies. There is now a burden lying with the government that as long as the system is not implemented, any clubs that experience financial deterioration are their responsibility. To minimise this, any delays to the reforms should be minimised. Moreover, delays should be prevented in order to avoid the extent of the reformation being diluted and not having the meaningful impact that is desired. However, it is not as simple as just bringing the changes into force immediately. The stakeholders in British football and the government have cited this as a critical opportunity to change the sport for the better. Hence, they are cautious of finding the right balance and system. There is only one chance to get this right and transform the national game, it is not something that should be rushed and result in implementing another faulty system.

Summary

There is no doubt that a reform, to a significant extent, is necessary for British football. The implementation of an independent regulator and changes in the regulation of financial management and distribution will enhance the integrity of the game and protect clubs from drastic financial difficulties. The demand for greater transparency and fan engagement of club owners and directors is vital and long overdue. This will help repair the divisions and broken relationships between fans and boards that are currently rife within British football.

It is clear that introducing such radical change is not simple. Whilst there most definitely is a sense of urgency to implement these reforms before another iconic club succumbs to financial catastrophe, it is absolutely imperative that these new reforms are carefully refined to ensure they have the desired effect. All interested parties should help iron out the intricacies and details of the new reforms in a timely manner. The sooner the new and appropriate changes are brought into force, the sooner British football can be transformed for the better. It is an opportunity that no one wants to get wrong.

Who Benefits the Most from UEFA’s New Financial Fair Play Regulations?

By

Dr. Erkut Sogut , Jamie Khan

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April 25, 2022

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Introduction

UEFA President, Aleksander Ceferin, labelled the Financial Fair Play (FFP) rules as a great success. They were introduced in 2010 by UEFA to prevent clubs from spending unsustainably and outside of their means. This restricted the extent to which financial mismatches occurred between clubs competing within the UEFA jurisdiction. Ceferin argues that FFP laws were responsible for ‘saving’ European football.

Over a decade after FFP was first implemented, a new system has been devised and approved by UEFA in April of 2022. The system was presented in front of a committee that included the European Club Association, European League representatives, European Parliament, National Association representatives, FIFPro, Council of Europe, the European Commission and supporter groups from European clubs. Following significant support of the plans, the newly named Financial Sustainability and Club Licensing Regulations (FSCLR), more casually known as the ‘Squad Cost Rule’, is planned to come into force as soon as June 2022.

In this blog I will explain exactly what the FSCLR is and what is required to comply with these rules. I will then also examine why this change in financial regulations for clubs is necessary, the implications it will have and any issues that might arise.

Financial Sustainability and Club Licensing Regulations

The newly devised FSCLR relies on three separate pillars; solvency, stability and cost control. They are understood as follows:

A) Solvency

Solvency requires that clubs have no overdue payables to other parties.
This includes tax payments, money owed to other clubs and to the employees of their own club. This includes player contracts. In the past, in certain countries, some players have been persuaded to sign an agreement to dismiss the money they are owed and prevent their club breaching financial fair play rules.UEFA must introduce rules that ensure this is no longer a possibility.
This will be monitored closely by quarterly checks and automatic penalties will be given to those found not to be adhering to the rules. This is a stricter version of enforcement than was previously seen with FFP regulations.

These penalties will be predefined sporting punishments or financial measures such as point deductions, squad limits and fines.
There is also the potential for clubs to be relegated between competitions for serious or multiple breaches. For example, a club can be demoted from the Champions League to the Europa League.

B) Stability – ‘the football earnings rule’
1. The stability guidelines refer to the ‘acceptable deviation’ or, in other words, the amount of money that a club can afford to lose in a year.
2. There are new and different football earning requirements outlined by the FSCLR.
3. Whilst the FFP rules allowed for €30million to be lost over three seasons, the FSCLR now allows for up to €60million.
4. However, clubs that are deemed to be in sustainable, strong and financially healthy positions can lose up to an additional €10million.
5. This has been included in the face of the COVID-19 pandemic increasing financial losses across Europe.
  
  C) Cost Control – ‘Squad Cost Rule’
1. This simply stipulates that a club’s expenditure on transfer fees, player wages and agent remuneration must be equal to less than 70% of their annual revenue.
2. UEFA has decided that this third pillar will be gradually phased in to allow clubs to adjust to the changes.
3. In the 2023/24 season, clubs will have to fall under 90% of their revenue; 80% in 2024/25 and finally under 70% in 2025/26.Additional clauses of the FSCLR require an improvement in the recording of balance sheets and ensuring that clubs are aiming at reducing their debts, consequently increasing the stability of balance sheets for European clubs. A significant factor for ensuring this is the newly adapted understanding of Fair Value and Related Party transactions.

Previously, FFP regulations demanded that only related party transactions had to be of fair value. Fair value referred to the concept that any commercial deal and transactions that occurred between clubs and interested parties such as sponsors, were in accordance with the true market value of these transactions. The FSCLR now demands that all transactions and commercial contracts are monitored closely and will use external agencies to advise if deals are completed at a fair value, reflective of the real market value. In order to adequately judge the value of sponsorships and deals, using at least two agencies will produce the fairest assessments and avoid biased opinions.

Firstly, this removes the additional administrative burden of having to determine which transactions fall under the ‘related party’ category. Furthermore, it will prevent instances of clubs falsely inflating the value of sponsorship transactions in order to comply with financial regulations. This has occurred several times over the last decade and major European clubs have been found guilty of such offences.

Why Change from Financial Fair Play?

UEFA has decided that following the financial impact of the COVID-19 pandemic and changes in the football industry, there is a need for wholesale reform of financial regulations and new sustainability initiatives. The aim of FSCLR is to protect football by addressing financial imbalances and challenges, building a more sustainable future and preparing for mitigating future shocks.

This seems sensible once we consider the estimated €7billion that European football was estimated to have lost during the COVID affected 2020/21 season. The need for change is reinforced by the additional issues that during the 2019/20 season, wages increased by over 2%; transfer fees had risen by 18% in 2021 and profits from transfers had fallen by 41%. The compilation of these factors presented a starc financial worry for European football the UEFA needed to address. Their answer was FSCLR.

Will This Just Benefit Rich Clubs?

The first impression of the FSCLR regulations is that they will be of benefit to the more financially advantaged clubs. This is because there is an impression that wealthy clubs will simply continue to breach the rules and pay the fines that do not dramatically impact their financial situation. However, for less financially strong clubs, these fines would have a significant impact and they cannot afford to break the FSCLR.

This was the case under the original FFP regulations over the last decade. The regulations disadvantaged and punished smaller clubs whilst bigger clubs were often unaffected by the financial penalties given to them for breaching the policies. The regulations contributed to a growing inequality between the small and big football clubs across Europe.

UEFA aims to overcome this issue. They have ensured that the FSCLR is reinforced by progressive sanctions. In other words, sanctions are proportionate to the financial situation of the offending club and multiple, repeated offences receive a progressively increasing financial penalty. Furthermore, the ability to demote large clubs from the Champions League into a lesser competition should be enough to discourage these clubs from manipulating the system. It remains to be seen whether this new approach will solve the financial issues facing European clubs. Who do you think will benefit more from the FSCLR and will it create a fairer financial system?

Another advantage that FSCLR has over FFP regulations is that UEFA will aim to punish clubs more efficiently. In the past, FFP regulations have created long and drawn out legal battles in determining the extent of offences and the punishments that should be enforced. Under the new FSCLR, UEFA maintains that clubs will be handed their penalty within just three months of when their offence was first noted.

What About National Association Policies?

Another issue lies in the fact that some national associations have their own financial regulations to try and promote fairness within their jurisdiction. This undermines UEFA’s attempts to ensure fairness across international European competitions as the individual national associations create inconsistent, unique rules. For example, under the Spanish Federation regulations, Barcelona were unable to resign Lionel Messi and hence were forced to allow him to leave. However, the French football association does not adopt or enforce its own financial fair play regulations and Paris Saint Germain were able to sign Messi without any financial repercussions or fair play punishment.

This immediately creates a problematic inconsistency between different national financial fair play systems and consequently causes inequalities between clubs despite the magnitude of both Barca and PSG as powerful clubs. In this instance, the Real Federación Española de Fútbol (Spanish Football Federation) enforced far stricter financial regulations whereas UEFA allowed for PSG to go far beyond this.

The inconsistency between national association FFP enforcement and UEFA’s more flexible and lenient regulations has been a problem since FFP was first introduced. It could be argued that COVID-19 is simply being used as an excuse for the financial mismanagement of European football rather than causing it itself. To prevent inequalities between big and small clubs and even competing big clubs, UEFA and the European football national associations need to ensure that the FSCLR is consistently reinforced across all clubs within the European jurisdiction. It fundamentally undermines the new regulations if national associations are enforcing alternative and stricter measures. This would have the adverse effect of continuing to accentuate inequalities between clubs rather than minimising them.

Summary

FFP regulations began the movement for, as the name suggests, fair financial conduct of clubs across Europe. However, the evolution of football and a global pandemic has led to UEFA devising the new and improved FSCLR.

The primary aim for UEFA is to increase the transparency of financial regulations and create a more efficient and robust system for clubs to comply with. Furthermore, a stricter and more easily enforceable set of financial regulations has the added effect of enhancing the competitiveness of all clubs across all European competitions and leagues.

The new regulations are not a guaranteed solution. Unfortunately, there remains further issues such as national associations creating independent policies that could undermine the aims of FSCLR. It will be fascinating to see if the new regulations, despite their proposed intentions, do indeed benefit some clubs, more likely the larger ones, over others, the smaller clubs.

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