Sports Q&A - What are your top five legal tips for the transfer window?
25 January 2019
Whether you’re a junior lawyer whose recently started work in a football club or are just a fan who wants to know what legal issues might be holding up a deal to get a player signed, this month's Q+A on the top five legal tips for the transfer window should be of interest.
What are your top five legal tips for the transfer window?
TIP 1 – KNOW AND COMPLY WITH KEY TRANSFER RULES
FIFA’s Regulations on the Status and Transfer of Players lay down binding rules concerning mainly the international transfer of players whilst domestic transfers are regulated by the FA rules and applicable league rules such as The Premier League Rules or English Football League (EFL) Regulations. Key rules include:
- In most cases, before a club can approach a player regarding a transfer, the player’s current club must first give permission to the buying club to negotiate a contract with the player;
- All payments and/or benefits made to a player must be set out in a written contract between the club and the player;
- Any signing-on fees payable to the player must be paid in equal annual instalments over the length of the contract;
- No club or player can enter into an agreement with a third party under which a third party is granted any rights in relation to the future transfer value of a player. Clubs must buy out the interests of any existing third-party owners prior to any transfer being completed;
- The international transfers of players under the age of 18 are generally prohibited unless one of the limited exceptions apply; and
- Players may be registered with a maximum of three clubs during one season but during this period the player is only eligible to play official matches for two clubs unless the transfer is between clubs with overlapping seasons.
TIP 2 - TAKE CARE WHEN DRAFTING TRANSFER RELATED DOCUMENTATION
Template transfer agreements and standard player contracts (e.g. see pages 273 and 301 of the Premier League Handbook) are commonly used, but that doesn’t mean it is paint by numbers.
- Ensure that transfer agreements and player contracts are clearly drafted and contain all the agreed terms including necessary condition precedents (e.g. transfer subject to registration and work permits being granted), remuneration, sell-on/buy-back/release clauses, obligations, confidentiality provisions and jurisdiction clauses;
- Remember that intermediaries can only carry out intermediary activity if they have entered into a validly executed written representation contract containing all the terms required by the FA. The representation contract must be lodged with the FA within 10 days of being executed (and in any event no later than at the time of the registration of the transfer), be for a maximum duration of two years and must be countersigned by the player’s parent or legal guardian if the player is under 18.
TIP 3 – REMEMBER THE IMPORTANCE OF THE INTERMEDIARY REGULATIONS
Clubs, as well as intermediaries, need to be familiar with the FA’s intermediary regulations. Key rules include:
- A player or club must not use or pay any person for intermediary activity unless that person is registered with the FA and is entitled to act under a valid representation contract;
- Intermediaries must not approach or enter into any agreement with a player before the 1st day in January of the year of the player’s sixteenth birthday;
- Players and/or clubs that engage the services of an intermediary are prohibited from making any payments to an intermediary if the player concerned is under 18; and
- Dual/multiple representation is only permitted if the intermediary has a pre-existing representation contract with one party to the transaction and the parties are aware of the full particulars of the proposed dual/multiple representation, are given the opportunity to seek independent legal advice, and provide prior written consent.
TIP 4 - KNOW THE WORK PERMIT AND VISA REQUIREMENTS
Immigration issues can often cause delays if you’re not ahead of the game:
- Be aware of the dates and times that the Exceptions Panel is considering work permit appeals. You should prepare the paperwork to submit to the FA two working days prior to the date the Panel will review the appeal;
- Check your sponsorship licence to ensure that you have an allocation of Certificates that you can assign to a new player if required. You can check your allocation by logging in here. The Home Office has introduced an additional premium service to expedite requests for additional allocation’;
- Before submitting a visa application check the player has a valid passport with at least one blank page (both sides). The start date on the sponsorship certificate and the ‘intended date of arrival in the UK’ on the Access UK application will dictate the start date of the visa;
- Check if the player has any outstanding criminal proceedings or charges or a negative immigration history. This can slow down the visa application process and should be addressed at the outset of the application;
- Players coming from some countries may need to visit a clinic and obtain a certificate to show they are free from Tuberculosis, prior to obtaining a visa; and
- If timing is tight check to see if the country where the player will submit his visa application offers a priority (usually five days) or super priority (24 hours) processing of the application. A useful point to note is that if a player is coming in on a Tier 5 visa and holds a valid residence card for any European country, they are eligible to make their application in any other European country.
TIP 5 – DON’T FORGET IMAGE RIGHTS AGREEMENTS
Image rights can be very valuable and need special consideration from a commercial, licensing and tax perspective:
- Although limited rights are granted in standard playing contracts, clubs should always consider entering into a separate image rights agreement with a player in order to be able to exploit the player’s name and image in a wider context. The extent of rights the club will want to acquire, and which the player will be willing to grant, will depend on the player’s public profile and marketability;
- Make sure the image rights agreement is entered into with the party holding those rights: many players will have transferred their relevant rights to a corporate entity, their ‘image rights company’ so the deal will need to be entered into with that entity, not the player himself;
- Ensure that the player’s pre-existing sponsorships which are to be carved out from the image rights deal are expressly referred to in the image rights agreement and consider whether the club should have a right to approve any variation, renewal or extension of such sponsorship agreements; and
- Always seek specialist tax advice!