Cashing in

Nearly every football club in Australia is looking for money to stay alive. Many have no idea what they are entitled to, others do, but have been struggling to get their hands on what they are eligible to receive.

To prevent the big clubs poaching players from smaller clubs and enticing the best players with money, cars, houses and the like, FIFA brought in rules and regulations to ensure that the clubs that developed ‘that player’ were compensated for their time, and their investment. The aim was to encourage the smaller clubs to keep developing talent.

With a large number of Australian clubs being run purely by good-hearted volunteers many clubs have no idea of their entitlements, and some simply have not taken the time to pursue monies due to them.

The truth is across Australia semi professional and amateur clubs are owed what one expert believes is millions of dollars; Money that would be an undoubted windfall for many of these struggling clubs.

The “Solidarity Mechanism” in FIFAs rules and regulations is very clear on a club’s entitlements should a player who has played at a club since the age of 12 sign a professional contract.

From the age of 12-15 the club is entitled to 5% of any compensation paid to his former club. This is to be “deducted from the total amount of compensation and distributed by the new club as a solidarity contribution to the clubs involved in his training and education over the years.”

If the player has been at a club from the ages of 16-23yrs of age the compensation goes up to 10%.

FIFA state that “Training compensation is due when: i. a player is registered for the first time as a professional; or ii. a professional is transferred between clubs of two different associations (whether during or at the end of his contract) before the end of the season of his 23rd birthday.”

FIFA is very clear on the timelines for payment, “the deadline for payment of training compensation is 30 days following the registration of the professional with the new association.” In Australia it is fair to say that many clubs have not received payment within that timeframe.

One problem for many of the smaller clubs in Australia is the – as far as we can deduct, unwritten – agreement between A-League clubs and State League Clubs (now NPL) that only a one off payment of $5000 be paid for a player making the step up as a full time professional. However each club that the player has been at would still be entitled to their slice of that $5000.

FIFA’s regulations state “Training compensation shall be paid to a player’s training club(s): (1) when a player signs his first contract as a professional, and (2) each time a professional is transferred until the end of the season of his 23rd birthday. The obligation to pay training compensation arises whether the transfer takes place during or at the end of the player’s contract.“

If a player is re-signed by a club no further monies are due, only if they change clubs.

Interestingly talking to some A-League clubs they too have stated that they have not received any training compensation fees for young players who they have developed through their youth teams and who have signed for another A-League club.

FIFA has introduced the Transfer Matching System (TMS), where all of the details are now submitted electronically when it comes to International transfers. A FIFA Spokesperson advised Not the Footy Show “Any payment actually made in relation to the international transfer of a professional player must be entered in the Transfer Matching System (TMS).”

This will show how much compensation has been paid, and when, by the club that the player is with now, to all of his previous clubs.

This is good news for clubs around Australia as the wait for compensation has been a long and slow one. Clubs have in the past been forced to apply via their state body, which in turn applied to the FFA, who then went off to the club overseas for compensation. The FFA then apparently took a percentage of the money by way of a “handling fee” and then processed the money back along a similar path.

According to FIFA, the Association of the country concerned “is entitled to receive the training compensation which in principle would be due to one of its affiliated clubs, if it can provide evidence that the club in question – with which the professional was registered and trained – has in the meantime ceased to participate in organised football and/ or no longer exists due to, in particular, bankruptcy, liquidation, dissolution or loss of affiliation. This compensation shall be reserved for youth football development programmes in the association(s) in question.”

Not the Footy Show made two attempts to contact the FFA in relation to the current system and their views on the TMS, and also for feedback on the fact that a FIFA spokesperson advised us that transfers and compensation contact “is left at the discretion of the various stakeholders concerned.” No response was received and nor was an acknowledgement of our request.

The one problem that A-League clubs face in all of this is that apparently their franchise contract states that they must work through the FFA and not directly with an overseas club, even though that is in direct opposition to FIFA’s regulations. To bypass the FFA could see them in breach of their agreement and risk expulsion from the league.

Based on this information however, clubs developing players need no longer apply for training compensation via the FFA but have every right to go directly to the club concerned. It is important to remember that should a player transfer from an A-League club to an overseas club, the non-A-League club is entitled to the stipulated fee, which can be taken from the monies received for the transfer. The other piece of good news for clubs around Australia is that FIFA does not put any timeline on how long after the signing of a player you can claim the funds owed, just that you should receive them within 30 days.

It is time clubs paid a great deal more attention to FIFAs rules and Regulations, as it could end up being the lifeline many require, especially with no money filtering down to the NPL clubs, and operating costs rising.

 

 

 

 

 

Cashing in
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2 thoughts on “Cashing in

  • May 9, 2014 at 8:33 pm
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    All White sorry for the late reply. I believe it was because the franchise owners did not want to have to pay for players. I agree they now pay more for players than they necessarily would if there was a transfer fee. I do not understand why NPL/State League clubs don’t sign players on pro contracts – well I do – as now the salary cap prohibits that and also their chance of claiming a fee should a player be picked up by an A-League club.

    I looked into the matter of a class action by clubs owed the percentage taken by the FFA and or monies owed for development fees. What should happen is if monies are not received then the clubs should go to the FFA with their complaint. Sadly they cannot in this instant.

    I spoke to a lawyer versed in such issues and FIFA usually suspends the player concerned from playing until the fees have been paid. This could in fact have massive ramifications on the A-League if they went down that path.

    As for monies not being passed on the national Association faces serious consequences from FIFA. Ukraine were suspended from international football for holding onto transfer monies.

    This is a serious issue and if clubs choose to do nothing then in my opinion the deserve to continue to struggle. FIFAs rules and regulations are there for their protection, so use them.

  • May 6, 2014 at 8:01 pm
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    Why are there no transfers in the A-League? If clubs had to pay for players then the wages would go down and money would filter down to the areas developing the game. Strikes me the FFA have bowed to the owners again but not thought about the big picture.

    It would be interesting to see all the clubs who have had a percentage deducted put in a class action against the FFA to claim back these funds. That is unlikely as the clubs cannot stick together.

    Football is run so badly in this country it is sad.

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