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Role of law expands in evolving football transfer market

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This post was contributed by Nick Eisen, Business Engagement Reporter, Birkbeck School of Business, Economics and Informatics

Football transfer deals require greater legal input than ever before, being more complex and involving more money, parties and issues than in the past. A presentation organised by the Birkbeck Sport Business Centre (BSBC) focused on these developments.

Titled The Football Transfer Market Uncovered: An Insider’s Perspective of How Things Work in Football, the presentation took place at the British Medical Association in Tavistock Square on Monday 22 February, and was part of the BSBC’s Public Seminar Series.

The speakers were Daniel Geey, Partner, and Jonny Madill, Associate, at the Sports Group of media law firm Sheridans, a long-term supporter of the Public Seminar Series. The two lawyers offered an overview of current issues in a complicated and often-misunderstood subject, and facilitated extended and lively question-and-answer sessions, in which the presenters and audience of sports industry professionals, academics, students and public explored evolving issues.

The evening divided into four main areas: the player contract, the lawyer’s role in the transfer process, the transfer window, and key commercial issues. On another level, lawyers had also been advising on intermediary (agent) regulation.

Football-transfer-market---Sheridans

Individuals, organisations and change

In an era of big money, new markets and revenue streams, new media, increased media coverage, and globalisation for football, one general theme was reconciling individual and organisational interests (such as player and club). Another theme could be seen as the sheer pace and level of change to which lawyers and others have to adapt.

Parties requiring legal advice in a transfer include the buying and selling clubs, player, player’s agent and the leagues and federations involved. Documents that lawyers negotiate and draft include the transfer agreement, employment contract, image rights, performance-related pay, release clauses and work permit. Failure to agree any one of these could mean the failure of the entire deal.

With such multiple parties and issues, one example of a contract strikingly indicated the challenge of adapting some mid-20th century procedures to the 21st century, and showed that rapid change in one area might not always entail rapid change in another: a multimillion-euro transfer deal was framed in a contract effectively less than five pages long. Daniel Geey pointed out that it was very unlikely that any other business would handle such a valuable deal and all its component parts so briefly.

Performance-related pay

Pay is one indicator of the changing relationship between clubs and players: there has been a shift away from unvarying, guaranteed remuneration and towards variable, performance-related reward: “giving players more control over their earnings”, as Jonny Madill described it. Here, the objective is to incentivise the player to aim for team benefit rather than personal benefit. Performance analytics (explored in an earlier BSBC/OptaPro event) help in devising incentives. Some have objected to the lower guaranteed earnings. Others stress the potential to earn more through performance rewards. Further tensions have arisen when rewards have not matched expectations.

Such structures can also create anomalies; sporting success can threaten financial failure: bonuses due to players for competition success at one club (Barcelona) led it into financial difficulties in paying those bonuses. The FA allows clubs to insure against such a possibility, though insuring against negatives (such as relegation) is prohibited.

In another area, changing approaches have also threatened to increase individual players’ liabilities. In one case, a club (Chelsea) sued a player for breach of contract and compensation on his transfer fee, due to an issue of illegal drug use. The club subsequently dropped the lawsuit. Players’ representative body FIFPro has questioned why players should be held liable for transfer fees negotiated between clubs without involving the players concerned or their advisers.

Release clauses

To balance the interests of player and club, release clauses also require careful drafting, consisting, among other things, of multiple triggers specific to different contingencies (such as approaches from certain clubs, relegation or time period).

Image rights

In the UK, image rights can now be 20% of a top-level player’s earnings (limited by UK tax authorities) and a valuable endorsement tool for that player’s club. Legally agreeing how the club can use the player’s image is therefore vital. Paying such earnings to a player’s image rights company rather than to the player reduces tax liability. Here therefore, the lawyer’s role is to negotiate between club and player’s company, as well as between club and player.

Work permits

The FA has an intricate new work permit regime, with one tier for European Economic Area (EEA) players and the other for non-EEA players. Lawyers have to navigate a complex system of qualifying points dependent on what minutes a footballer has played in which league in which jurisdiction and can appeal points decisions before an Exceptions Panel – divided into two levels… The UK’s EU referendum result could change the situation again.

Transfer window

The transfer window can also pit individual players against clubs. Some see restricting periods in which players can change teams as providing clubs with some stability. Others argue this restriction conflicts with normal employment rights. FIFPro has complained to the European Commission (EC) that the transfer system is incompatible with EU law, questioning transfer fees and why players’ employment rights should be different from other employment rights (again, how this will affect the UK will depend on the result of the UK referendum on EU membership).

Players’ agents also have a dispute about regulations. The Association of Football Agents has complained to the EC that world football governing body FIFA’s regulatory 3% cap on agent commissions constitutes price-fixing incompatible with EU law.

Jonny Madill concluded the evening by heralding ongoing and likely future issues, including that of transparency in football.

The evening was another event in the BSBC’s active strategy of engagement for all. Closing the evening, BSBC Director Sean Hamil emphasised the role of the Public Seminar Series as a forum for academia, industry and public to meet and explore important developments in sport

Image: Courtesy of richardobeirne under CC via Flickr.co

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Growing Your Ecosystem

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This post was contributed by Miranda Weston-Smith, who on 10 March was a guest speaker at an event hosted by the Transforming Institutions by Gendering contents and Gaining Equality in Research (TRIGGER) team – a research project in Birkbeck’s Department of Management.

biobeat-brandingAt a joint Birkbeck School of Science and TRIGGER event, Miranda Weston-Smith discussed her experiences in founding BioBeat together with opportunities for scientists and business graduates in bio-sciences. Miranda helps early stage biomedical businesses attract investment and develop their business strategies.

Miranda has worked with many entrepreneurs and is experienced in fundraising, business planning and technology transfer. She is a long standing Mentor for Cambridge Judge Business School’s Entrepreneurship Centre, contributes to the University of Cambridge Masters in Bioscience Enterprise course and is a member of the St John’s Innovation Centre Training Team.

Miranda studied Natural Sciences at the University of Cambridge and has a Diploma from the Chartered Institute of Management Accountants.

 

She brings experience as a Technology Manager at Cambridge Enterprise, where she assessed and marketed life science technologies, negotiated licences and spun-out companies. She was responsible for technology transfer at the University of Cambridge for the Cambridge-MIT Institute. In her five years at the seed capital firm, Cambridge Research and Innovation, she invested in early stage technologies. Miranda co-founded Cambridge Network with Hermann Hauser.

 

As a result of working with researchers, Miranda founded and runs BioBeat, a programme to inspire the next wave of bio-entrepreneurs and business leaders. It is a way to engage with successful women entrepreneurs and she explained that in her experience women adopt different strategies to issues such as working in teams, risks, and raising finance. Doctor Helen Lee, Director of Research, Department of Haematology, University of Cambridge and Founder, Diagnostics for the Real World, and Dr Jane Osbourn, Vice President Research and Development, MedImmune and Head of Site MedImmune Cambridge were hugely important catalysts for BioBeat getting underway and for the first Bio Beat conference in 2013, with an all-female panel.

Introducing the Cambridge bio cluster

Miranda introduced the Cambridge bio cluster that involved a range of organisations involved in medicines, R&D Support, clinical diagnostics and consumer health. Many of the companies involved in these areas have connections with Cambridge University. Those involved in medicines may have direct intellectual property (IP) relationships with University. For others, the relationships may be more indirect through networking between individuals and groups.

Miranda discussed the differences between the Cambridge biocluster of 2010 and of 2015. Lines are much tighter and investment has significantly increased through a range of funders. For example, Axol Bioscience after setting out to obtain £600,000 through a crowdfunding campaign, managed to bring in £1 million.

On advice for entrepreneurs, Miranda stressed that it is Important to find out where strengths of a company lie. The company needs to find where it sits in the market – where its customers are – and then funding can speed-up. For example, one company set out to exploit exhalation technology through non-invasive equipment that was developed as a veterinary product for horses and other animals. However, having discovered that managing severe breathing attacks such as asthma costs the NHS over £1 billion per year, the company is now developing the technology for human patients. The approval procedure, finances and returns are completely different in these two sectors.

Another aspect stressed by Miranda is linking-up the product and the market with the financial details. Investors are really interested in the two aspects of market and finance as well as the product, so providing projections of three-year cash-flows can be very important. Investors will be seeking creativity in potential problem-solving from an early stage.

Q&A

Miranda then took questions in a lively session during which most delegates to the seminar participated by asking specific questions or joining in the discussion that ensued.

The first question related to the institutional anchors that underpin the bio-science cluster. Miranda said that Cambridge University provided local industry links and was there as a strong, constant presence. The corporates that are present are a mainstay that can provide sponsorship as well as international connections and perspectives. BioBeat is also a way of opening up fresh energies and a way of encouraging people to do more.

In answer to later questions about the university’s role, Miranda confirmed that the institution does not usually seek absolute control of enterprises, but tries to support incubate, and accelerate ideas. Cambridge University’s IP policy is that of retention of the first right to file patent applications; but copyright rests with the researchers. This means that there are many ways to exploit the ideas and not just go through the University. In addition, Cambridge Enterprises puts in seed money, but this is generally done in a low key way. Generally the University sees itself as an enabler and incubator.

A series of questions and some discussion followed about how to get involved in networking from a student business perspective, rather than as a scientific researcher. Miranda suggested that the first thing to do is to just try it after scoping-out what events are going on. Miranda candidly admitted that when she first started, she didn’t really understand what networking was all about and that you have to learn on the job. Porosity and being interested in what others are doing are important. Also, if you go out with one or two colleagues, it is important not just to stand together; just go up to people and start talking to them.

In the discussion it was mentioned that potential entrepreneurs could attend interesting networking events. Such events are regularly attended by service providers, head-hunters, institutions and sometimes investors. In London, One Nucleus holds regular events. Miranda confirmed the value of attending them.

Asked about how the Cambridge bio-cluster compared with others in Europe, Miranda suggested that one of ways is to look at companies that are moving into the area, such as   Ilumina. Microsoft has its European R&D office in Cambridge. Astra Zeneca (AZ) already has various laboratories around Cambridge, but eventually some 1600 – 2000 people will move in to their new building. The impact on the cluster will be for example, there will be opportunities for sub-contracting work and for early stage collaborative projects.

Finally, on the subject of how Miranda saw the cluster evolving, she said she expected Cambridge University to continue to spin-out biotech companies, and with spin-outs from other companies, the cluster will grow further. Spin-outs will also come from Barbaham Institute and Addenbrookes Hospital and from companies such Illumina.

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Understanding the European financial crises: Martin Sandbu at Birkbeck

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Martin Sandbu, the economics leader writer for the Financial Times (FT), was the special guest at a recent talk at Birkbeck on 19 February. This event was organised under the auspices of the Birkbeck Politics Department’s MSc programme in European Politics & Policy in association with Birkbeck’s Departments of Management and Economics, Mathematics & Statistics.

As one of the UK’s most influential UK economics commentators, Martin provided his insight into whether Europe’s economy has turned a corner, and whether the Eurozone’s fragile recovery is sustainable. Here, Charles Shaw and Ahmed Razzaq of the Birkbeck Economics and Finance Society report from the event

In a recent talk at Birkbeck, FT’s Martin Sandbu located the economic failure of the Eurozone in institutional arrangements and policy choices that laid the basis for organisational deficiencies.

Financial Times columnist, Martin Sandbu

Financial Times columnist, Martin Sandbu

During the Eurozone crisis, the message from European policymakers was abundantly clear: that the euro fostered many of the recent problems, or at least was a strong contributor to the high budget deficits at the heart of the crisis, and that there was no alternative to the bailout packages. Subsequent large transfers from Germany to the debtor countries were therefore justified along these lines, in exchange for harsh austerity, overly tight monetary policy, and structural reforms.

In his new book – “Europe’s Orphan: The Future of the Euro and the Politics of Debt” – Martin Sandbu perceptively argues that this accepted orthodoxy is in fact at odds with history and evidence from the period. Nothing is wrong with the euro itself, he suggests. It is rather the policies of the governments of the Eurozone and the European Central Bank that were and are wrong. If true, what implication does this have for our understanding of the wider economy and the implementation of policy initiatives? Further, what can we expect in the short to medium term, given the costly spillover effects of a sustained drop in energy and commodity prices, and revived fears of a new recession in advanced economies?

BNP Paribas recently noted that last month was “the worst for risky assets for many years, if not on record.” Given this current affairs backdrop – of a recently announced date for the UK’s referendum on EU membership, and extremely negative levels of sentiment and investor positioning – Martin’s talk on the politics of Eurozone debt could not have been more timely.

Dispelling some of the post-crisis myths

European Central Bank in Frankfurt (Image copyright Eoghan OLlonnain via Flickr)

European Central Bank in Frankfurt (Image copyright Eoghan OLlonnain via Flickr)

On the evening, Sandbu lucidly examined the case for the Euro, not by focussing on virtues of a single currency, but focusing instead on the failure of European macroeconomic policy and in particular the inflexibility of the European Central Bank, European Commission, and Member State Governments to allow for restructuring of private, and later sovereign, debt.

Many analyses of the crisis blamed an unholy trinity of weak financial regulation, ineffective supervision, and profligacy on the periphery. Sandbu was able to provide an important corrective to such gross simplifications and dispel some of the post-crisis myths by pointing out, for example, that profligacy was not at the core of the problem. With the exception of Greece, the economies that had to resort to bailouts were not those with the highest debt-to-GDP ratios.

This and other forms of evidence allowed Martin to convincingly make a nuanced case for the Euro being more of a scapegoat than catalyst in this affair. If there was a smoking gun in the run up to the crisis then, Sandbu argued, it was not the Euro per se. He went further, stating that the sovereign debt crisis would have likely occurred without the single currency due to the magnitude of nominal rigidities observed at macro level, incomplete institutional infrastructure, and the fact that Eurozone governments that ran into trouble had no lender of last resort.

When questioned on whether he would agree that a more centralised Europe would be better able to cope with these issues in the future, Sandbu would not be coaxed. Whilst sceptical of the utility of European fiscal and political union, Sandbu did identify efforts made in establishing Eurozone equity markets as conducive to heading off some of the risk of a similar debt crisis in the region going forward.

The ‘liquidationist’ alternative

If there was one take away from the evening it is that the Euro may not have caused the crisis but the main actors, in dealing with the crisis, compounded the severity of events. In what Martin Wolf described as the “liquidationist” alternative, Sandbu made the case for restructuring of debt and a softer landing, albeit with the pain of haircuts for bond holders.

This was a point of view recently echoed by Professor Lord King, Governor of the Bank of England throughout the period, who, in a recent talk at the London School of Economics, supported Sandbu’s call for a restructuring of Greek debt as the only way out of a Depression that he could not fathom getting so out of hand in the post-war period, let alone in the twenty-first century.

Sandbu is not a lone voice on this issue. Others, such as Ashoka Mody, the former IMF bail-out chief in Europe, have argued that ECB not only failed to provide stimulus to the Eurozone economy when needed, but, as a result of an apparent battle between political will and economic arithmetic, allowed it to slip into a “low-inflationary trap” (i.e. a negative feedback loop where inflation is dropping because the economy is weak, whilst the same economy being weakened by falling inflation).

According to Mody, the fact that ECB allowed the Eurozone to slip into such a predicament is a reflection of the monetary union’s faulty architecture. Such comments echo Milton Friedman’s infamous 1997 letter to The Times, which suggested that the economic foundations for the Eurozone are built on sand, and that the demise of the euro is possible, if not probable.

The Eurozone crisis appears to be in remission. However, with the expectation of a U.S. Federal Reserve interest rate rise, combined with the possibility of global shocks due to China’s rebalancing, the Eurozone cracks look set to increase in prominence. Martin Sandbu’s timely analysis is carefully defined, clearly presented, and one that serves as an important contribution to the current debate. His book, “Europe’s Orphan”, should be required reading for anyone seeking to understand the European financial crises, and is a sophisticated and accessible insight on an otherwise too commonly obfuscated and misrepresented topic.

Further Information

The School of Business, Economics and Informatics will hold an Open Evening on Thursday 14 April 2016. Find out more

Homonationalisms and Criminalized Queers: A panel discussion about global sexual politics

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This post was contributed by Dr Tara Atluri, visiting research fellow in the Birkbeck Institute for the Humanities (BIH) and the Department of Geography, Environment, and Development Studies. Here, Dr Atluri gives an insight into her forthcoming public lecture on 16 March 2016

 

Supreme Court of India - Retouched

The Supreme Court of India

Slavoj Žižek suggests that the task of philosophy is not to solve problems but to reframe what we conceive of as problems. Rather than providing succinct answers, critical thinking involves asking questions. An assemblage of critical thinkers will gather to dialogue, debate, and question global sexualities and sexual politics today.

 

This panel discussion will question the politics of sexualities, focusing on key moments such as the decision made by the Supreme Court of India to uphold Section 377 of the Indian Penal Code, a colonial sodomy law that criminalizes queer sex and people. We will also address contentious issues such as European “gay conditionality” policies, which propose that financial aid to countries in the Global South should be dependant on the institution of LGBTQ rights. Finally, panellists will discuss `race,’ racism, sexualities, and citizenship. (The Better India article: ‘Renewed hope for LGBT community. Supreme Court will hear curative plea on Section 377‘).

In a time when “sexual freedom” is often inseparable within mainstream discourse from market based capitalist freedom, we will ask who put the “progress” in “progressive” sexual politics? In a time in which European governments act as benevolent saviors of queers in the Global South through aid conditionality proposals that threaten to further impoverish formerly colonized countries (where queerness was often originally made criminal through European colonial law) we will question who speaks on behalf of whom and why?

In our contemporary political milieu, where there is often little time and space for patient reflection and thoughtful discussion, this panel will offer the chance to enter into thoughtful dialogue and debate.

Panelists:

Mayur Suresh

Mayur Suresh is a lecturer at the School of Law, SOAS. His research focuses on ethnographic approaches to legal cultures. Previously, he was part of the legal team that successfully challenged section 377 of the Indian Penal Code (a colonial law that criminalizes diverse sexualities in India) in the Delhi High Court, and defended that judgment in the Supreme Court. Find out more

Dr. Alyosxa Tudor

Dr. Alyosxa Tudor is LSE Fellow in Transnational Gender Studies and Fellow at the Centre for Gender Studies, SOAS, University of London with focus on ‘Gendering Migration and Diasporas’ and ‘Queer Politics’. Their work connects trans and queer feminist approaches with transnational feminism and postcolonial studies. Alyosxa’s main research interest lies in analysing (knowledge productions on) migrations, diasporas and borders in relation to critiques of Eurocentrism and to processes of gendering and racialisation. In the past they have worked as an Assistant Researcher at the Centre for Transdisciplinary Gender Studies, Humboldt University, in Berlin (2008-2011), and were a Visiting Scholar at the Centre of Gender Excellence, Linköping University, in Sweden (2013-2014).

 

Alyosxa is the author of the 2014 monograph ‘from [al’manja] with love’, which revisits critical migration studies with the insights of postcolonial and decolonial approaches and carves out a perspective on power relations that brings together transnational feminism and trans (gender) politics. In their current research project on transnationalism, Alyosxa analyses links between conceptualisations of trans-gender and trans-national and aims for a critical redefinition of political agency. Through an analysis of theories on transing, passing and performativity in queer-, trans-, and transnational feminist knowledge production and illustrated by discursive examples from transgender communities and Romanian migrant communities they call for a conceptualisation of entangled power relations that does not rely on fixed pre-established categories but defines subjectivity through risk in political struggle. Find out more

Calogero Giametta

Calogero Giametta is a sociologist with a research focus on migration, gender and sexuality. More precisely, his work has concentrated on two forms of legal protection addressing non-EU migrants: anti-trafficking initiatives and the right of asylum (i.e. in France and the UK). He is interested in examining how these protection mechanisms, by being deployed as filtering instruments, follow the logic of sexual humanitarianism.

 

In so doing he questions the specific ways in which migration control operates through humanitarian interventions under neoliberal democracies. Between 2010 and 2014 his PhD research looked at the lived experiences of gender and sexual minority refugees, and on the discourses linking the politics of sexuality and the British refugee granting process. This included ethnography with gender and sexual minority asylum seekers living in the UK. Currently through his post-doctoral fellowship he is analysing broader humanitarian discourses and practices when gender and sexuality become rights-claiming objects within racialised migration regimes. Find out more

Tara Atluri

Tara Atluri has a PHD in Sociology. She is a lecturer at the Ontario College of Art and Design University. Drawing on research about the protests that followed the 2012 Delhi gang rape case and 2013 decision to criminalize queer sexualities in India, she recently published the book Āzādī: Sexual Politics and Postcolonial Worlds.

 

Tara Atluri is at Birkbeck College this term as a Visiting Research fellow in the Department of Geography, Environment, and Development Studies (GEDS). Find out more

Tara Atluri will deliver a BIH Public Lecture (titled “Homonationalisms and Criminalized Queers: A Panel Discussion about Global Sexual Politics”) on 16 March 2016 (6-8pm) Room 415, Malet Street Main Building. Book your place here

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