What’s happening?

The Court of Justice of the European Union (CJEU) will rule on Friday in Fifa’s case against the player “BZ” – also known as former Chelsea, Arsenal and Portsmouth midfielder Lassana Diarra. It concerns the functioning of the transfer market and the ruling could throw a stick of dynamite under the system.

Why does it happen?

In the summer of 2014, Diarra played for Lokomotiv Moscow. The France international had a row with the club over his salary. The club decided that this amounted to a breach of contract and terminated the contract. They then took Diarra to FIFA’s Dispute and Resolution Chamber and demanded damages. Despite a counterclaim from Diarra, the DRC ruled in Lokomotiv’s favor and fined the player €10.5 million. At the same time, Diarra received a contract offer from Belgian club Charleroi. However, there was a condition: Charleroi wanted confirmation from FIFA that Diarra could move and that his new club would not be liable for the costs owed by Lokomotiv. FIFA has not given these guarantees because its rules require an international transfer certificate to be issued by the league a player is leaving before a deal can take place. Because no money had been paid to Lokomotiv, the permit was not obtained. As a result, Diarra took legal action against FIFA and the Belgian football league in December 2015, claiming loss of revenue and starting a long process that led to this week’s ruling.

What is the heart of the matter?

Diarra’s lawsuit is still pending in the Belgian courts, but was referred to the CJEU by the Court of Appeal for its opinion on how it relates to two important principles of EU law: the right to free movement of individuals and maintaining competition within the internal market. markets. This year, the Advocate General of the CJEU, Maciej Szpunar, issued a legal opinion on this topic, an opinion that will guide the court’s thinking. According to Szpunar, the key questions were: Did FIFA, as football’s governing authority, act in violation of Diarra’s right to freedom of movement when he was denied permission to join Charleroi? Does the obligation imposed on a buying club to cover the costs of a player’s departure from his previous club affect his ability to trade? And do FIFA’s transfer rules achieve such results by design? In all three cases, Szpunar argued that the answer was yes. If the court decides the same, there are clear structural challenges to the nature of the transfer system. It should be noted that Szpunar noted that the rules as they stand “generally appear to promote contract stability” and contribute to “balance” in sports competitions “by maintaining a degree of equality of opportunity.”

What are the possible outcomes?

One option remains: the court rules in FIFA’s favor and everything remains the same. At the other end of the scale, the court would rule that a player should be able to terminate a contract without affecting his ability to find a new club or imposing costs on that new club. There are also numerous outcomes in between, most of which would involve a technical or legal solution to the current system. For example, a burden of proof is required to show that a purchasing club was party to a player breaching the contract without “just cause”.

What could be the consequences?

A decision against FIFA rules would fundamentally shift the bargaining power in transfer and contract negotiations from the clubs to the players (and their agents). It would lead to more breaches of contracts and greater uncertainty about the transfer fee. It would likely necessitate the creation of a new body to determine what compensation, if any, a club is owed (and by whom) in the event of a player walking away.

The knock-on effects can be enormous. For many clubs in Europe, transfer transactions are an essential means of keeping their heads above water. A ruling against FIFA would counter that and likely favor bigger clubs who could convince players to terminate their contracts in a way that is not possible now. On the other hand, the kind of trading models that underpin multi-club groups would also become more uncertain, with clubs effectively losing control over career paths.

Will this be Bosman part two?

It depends which way you look at it. The 1995 Bosman ruling concerned each player and his ability to freely leave a club at the end of his contract. In the meantime, not every player may want to take advantage of the option to break their contract, but a ruling against FIFA would mean a player could leave his club at any time during his contract. There is also no guarantee that the court will agree with the Advocate General’s argument or fully adhere to it. Furthermore, as is often the case, this ruling will not be the final judgment and the case will return to the Belgian courts.