Fútbol

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The COVID-19 crisis is affecting the sports industry, and many questions are being raised in a crisis with scarce or zero precedents. Just yesterday, the Royal Spanish Soccer Federation (“RFEF”) announced a package of social and financial measures for Spanish soccer to ensure the viability of clubs and the payment of wages, of which the following are notable: (i) a loan of €4 million for amateur clubs to pay wages during the season hiatus, to be repaid over two seasons with no interest; and (ii) the possibility of a preferential credit facility of a minimum of €500 million through a syndicated loan, for first- and second-division clubs.

Also, and as reported in our blog, last week, RFEF published a document rejecting the early termination of competitions underway and opting for all pending matches of the season to be held once the Spanish health and sporting authorities determine that this poses no health risks to athletes (even if it means extending the dates for its conclusion).

However, extensions to competition dates would raise two major dilemmas in the soccer world: What will happen with soccer players whose contracts terminate at the end of the season, i.e., on June 30, 2020?  And what will happen with the recruitment market this summer?

First, we should remember that article 6 of the FIFA Regulations on the Status and Transfer of Players (“RSTP”) establishes only two annual registration periods, known as “recruitment windows,” that are set by each association, meaning that there would be different dates for each country. However, FIFA establishes that the first registration period should start after the end of the season and end before the start of the new season, with a maximum duration of 12 weeks. The second period starts mid season and should not exceed four weeks. Both periods must be included in FIFA’s Transfer Matching System at least 12 months before their entry into force.

Therefore, if the Spanish soccer federation decides to extend the deadline of the 2019-2020 season, the recruitment window periods will have to be changed. A priori, it appears that this does not pose any legal impediment nationally or internationally, as: (i) article 188 of the RFEF General Regulations, in coordination with the Spanish Professional Soccer League, enables the RFEF to extend and reduce registration periods in cases of force majeure or exceptional circumstances; and (ii) article 5 of appendix 3 of the RSTP establishes that, under exceptional circumstances, associations can amend and change registration period dates before their start.

We also wonder what will happen with players’ contracts that expire on June 30, if the season extends beyond that date?

First, it should be considered that specific cases may vary greatly based on the deadlines or termination structure, or both, stipulated by the parties in each contract. However, as a starting point, Royal Decree 1006/1985, of July 26, regulating the special employment relationship of professional athletes, applicable to soccer players, and the Collective Bargaining Agreement for Professional Soccer, determine that any contract between a club/public limited sports company (“CLUB/SAD”) and a professional soccer player will always have a specific term, either because of a set end date or by reference to a specific competition or number of matches.

Therefore, if the season extends beyond June 30 and the player has signed a contract establishing that its expiry coincides with the end of the 2020 season, the player will continue to have an employment relationship with the CLUB/SAD throughout the extension of the season (meaning that there would be no problem).

However, and this is the key point, it would be another matter if the player contract specifies that it terminates on June 30, 2020 (i.e., it establishes a specific date such as June 30). In this case we could find ourselves, at least from a dogmatic approach, with players who a) could refuse to take part in matches after that date, with the devastating effects that this would have on competition and fair play (specifically for the final matches of each season); or b) could demand payment of additional wages for the weeks during which the competition is extended after June 30. 

Although this is a possibility and a real risk, it seems reasonable in this situation to arrange for a fixed extension to the contract, i.e., until the end of the 2019-2020 season without the need for the CLUB/SAD to pay any additional compensation.

All these issues are the topic of debate in several of the major European leagues (Germany, Italy and Portugal) whose recruitment markets, like Spain, start on July 1, 2020. Due to this, last week, FIFA announced that it will create a FIFA-Confederation work group to agree on a coordinated strategy to address the effects of this pandemic. One of the main issues is the adoption of variations in the RSTP to address problems regarding the transfer window, to protect the contracts of players and clubs.

It is not surprising that the soccer industry is affected by this unprecedented situation; given the broad range of issues raised, the marked global quality of the problem and the exceptional nature and afflictions experienced, we believe that now is the time to address the consequences of the pandemic, with the leagues, national federations and supranational organizations adopting joint measures.

This post is also available in: Español

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lidia.margareto@cuatrecasas.com