The winter transfer period has just ended and women's football was able to record a "million-dollar transfer" for the first time. Transfers in men's football have also broken records with transfer fees totaling USD 2.35 billion, according to FIFA (see the reports here January 2025 transfer window breaks multiple records in both men's and women's football and here Naomi Girma: Chelsea sign USA defender for world record fee - BBC Sport). However, it is doubtful whether transfer fees will continue to grow in the future, as current trends in CJEU case law could even lead to a decline in transfer fees.
This is the third post in a series of blog posts on the topic of Football and the Law. While the first post (here) looked at the competitions and the second at the clubs (here), this third post focuses on the players. The article highlights the latest legal developments in relation to players and explains why a large number of further legal disputes (litigation) can be expected.
Professional football players are fundamentally employees, which means that their respective contracts fall under national (employment) law while the rules of the various football associations also apply. These are laid down by FIFA, the world football association, but are implemented by each national association. The FIFA "Regulations on the Status and Transfer of Players" (RSTP) stipulate, among other things, that a professional football player cannot change employers at will. Instead, player transfers must be registered with the national association within certain time frames, the so-called transfer periods, and players are not allowed to participate in competitions without registration. Failure to comply with these rules can result in significant penalties for both clubs and players. Furtherrules of association law can be drastic for professional footballers.
The case of Spanish international Dani Olmo is an example of how of the overlaps between national employment law and the self-imposed rules of Football associations can restrict the activities of players and clubs. Following his transfer from RB Leipzig to FC Barcelona, Dani Olmo was recently denied registration and thus eligibility to play in the second half of the Spanish league because his club, FC Barcelona, allegedly failed to comply with UEFA's Financial Fair Play rules. It was only after FC Barcelona had improved its balance sheet by selling usage rights to VIP boxes that the Spanish FA granted temporary permission to play (see reports here Dani Olmo: Barcelona forward granted temporary permission to play - BBC Sport and here: Laporta cierra un acuerdo de 100 millones para inscribir a Olmo y Pau Víctor | Marca). A final decision on the registration is still pending.
However, the far-reaching effects of the FIFA Regulations, as illustrated by the Dani Olmo case, are subject to the limits of European law. These limits have been shifted in favour of the players in current proceedings. The proceedings are based on the case of the player Lassana Diarra, whose change of club failed due to a lack of registration in accordance with FIFA rules. The player sued FIFA and the Belgian national football association for damages. The case is pending before the Court of Appeal in Mons (Belgium), which referred the question of whether FIFA's transfer rules (RSTP) comply with European law to the Court of Justice of the EU (CJEU) for a preliminary ruling.
In its ruling of October 4, 2024, the CJEU (C-650/22 Link: CURIA - Documents) ruled that FIFA's rules on player transfers violate European law. Although FIFA may regulate the transfer market in the interest of sport, it must also respect the free movement of workers in accordance with Art. 45 of the Treaty on the Functioning of the European Union (TFEU) and may not unlawfully hinder competition in accordance with Art. 101 TFEU. The CJEU generally finds that the RSTP violates European law and criticizes in particular the harsh sanctions and the undefined legal terms of the RSTP.
The Diarra proceedings have not yet been concluded and will continue before the Court of Appeal in Mons (Belgium). However, it confirms a trend that is already known from the Superleague ruling of the CJEU (judgment of December 21, 2023 European Superleague Company, C-333/21, EU:C:2023:1011). In this case, the CJEU also found that competition was unlawfully impeded and ruled that the organisation of football competitions constitutes an economic activity to which European competition law applies. In the Diarra case, the CJEU applied this reasoning to the players. Consequently, the practice of sport by players (as well as the organisation of competitions) is also an economic activity to which the rules of EU law apply. Also with regard to players, the CJEU subjects FIFA and UEFA to stricter control than before and thus continues the development that began with the Superleague ruling (see the first blog post in this series here). Dani Olmo could also benefit from this development.
The CJEU has ruled that FIFA's rules are in principle contrary to European law. However, FIFA's rules could be covered by exceptions, the existence of which must now be decided by the Court of Appeal in Mons. In order to make use of the exceptions, FIFA would have to show that its rules are necessary for the proper conduct of club competitions.
However, the CJEU's clear criticism of FIFA's transfer rules should prompt FIFA to reform its transfer rules, regardless of the outcome of the Diarra case. The reform should lead to greater flexibility for players when changing clubs. This could in turn lead to lower transfer fees in the future, as the selling clubs would have fewer opportunities to retain a player. The record-high transfer fees of the last transfer period would then be a thing of the past.
In addition, an increase in legal disputes is to be expected. In disputes with clubs, players can invoke the increased control density of European law. At the same time, clubs may be prompted to take action against players in breach of contract using national contract and tort law. For the further disputes to be expected in the area of sport, the applicable arbitration agreements, which can supersede state jurisdiction, must always be taken into account. The Diarra case was also initially brought before arbitration courts before it reached the CJEU.
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Philipp Sahm
Chiara-Lucia Peterhammer
