Webster and Matuzalem How they affect CAS jurisprudence

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1 Rechtsanwälte Webster and Matuzalem How they affect CAS jurisprudence Player Issues: Regulations &Contracts 2009 Falkenstrasse 27, 8024 Zürich

2 FIFA Dispute Resolution Court of Arbitration for Sport (CAS) Appeal Committee Dispute Resolution Chamber (DRC)/ Single Judge Disciplinary Committee Players Status Committee Infringement of FIFA rules (sanctions) Player / Club disputes CIES Masters

3 The Role of CAS Independent arbitration court, subject to Swiss arbitration law. Arbitrators appointed by the parties, chairman by ICAS Appeals against Decisions of the FIFA Dispute Resolution Chamber (DRC). Full power of review of the facts and the law (CAS Rules R57) Limited appeal to the Swiss Federal Tribunal CIES Masters

4 Breach of Contract The world after Bosman: Long term labor agreements Education and training compensation Stability of contracts Protection of minors Education and training compensation Early termination of a contract (Article 17) by a club by a player CIES Masters

5 Webster and Matuzalem compared (1) Webster CAS 2007/A/1298 Hearts of Midlothian v/ Andrew Webster & WiganFC Matuzalem CAS 2008/A/1519 FC ShakhtarDonetsk(Ukraine) v/ Mr. MatuzalemFrancelinoda Silva (Brazil) & Real Zaragoza SAD (Spain) & FIFA Re-newed 4-year contract, termination by player 18 month before expiry Termination without just cause as defined in article 17 of the FIFA Status Regulations Beyond protected period Unilateral termination must be viewed as breach of contract even outside the protected period. Unilateral breach of contract by player leads to payment of compensation. 5-year contract, termination by player 2 years before expiry Termination without just cause as defined in article 17 of the FIFA Status Regulations Beyond protected period Article 17 does not provide a legal basis for a unilateral termination of a contract between a professional player and a club. Player is liable to pay compensation. CIES Masters

6 Webster and Matuzalem compared (2) No buy out-clause agreed Webster Law of the country concerned = Scottish laws, but irrelevant since Art. 17 FIFA Regulations is more specific. Specificity of sports : Finding a reasonable balance between the needs of contractual stability and the needs of free movement of players. Protected period: Particular need for contractual stability (i.e. higher compensation due, especially initial investment). Method of calculation of compensation must be as predictable as possible. Value of the player on the transfer market is not a lost profit of the club. - Not listed as an element in Art. 17 FIFA Regs. - Efforts of club already covered by compensation for training and education. Initial investment of club: Relevant but must be amortised over the total term of the initial contract. Matuzalem Clause 3.3 of contract not regarded as buy out-clause Law of the country concerned = law of the club (Ukraine). May be considered as adjusting factor but not relevant in this case. Specificity of sports: =... keeping in mind that the dispute is taking place in the somehow special world of sport. Led to additional payment. Protected period: open issue whether breach within protected period may lead to higher compensations. Predictability not a factor when calculating compensation. Missed transfer fees (lost profits): May be taken into consideration if specific transfer failed because of departure of player. Market value/offers may be considered when calculating the value of the player s services. Was not relevant in that case. Initial investment of club: All payments to be included but to be amortised. CIES Masters

7 Webster and Matuzalem compared (3) Webster Outstanding remuneration due until expiry of the term of the contract as decisive criterion. FIFA: Beyond protected period, a player may walk away for a predictable sum of money, namely his outstanding salary. Matuzalem Remuneration of the player under the existing and the new contract are elements to detremine the value of the services of the player. Outstanding remuneration must be deducted (saving). Value of the services of the player at the time of the termination must be determined. In the event of a breach by a player, a panel has therefore to analyze the amount necessary acquire and keep the working force of the player. In doing so, the economic reality in the world of football is recognized, i.e. That services provided by a player are traded and sought after on the market, are attributed an economic value and are worth legal protection. Elements: Initial investments, remuneration, third party offers, replacement costs Further elements such as the status and the behaviour of the player may increase the compensation. FIFA: Relieved! CIES Masters

8 How will future CAS-panels decide? CAS-Panels are not legally bound by precedents. When discussing Webster and Matuzalem, the specific facts and circumstances must be considered. Applying the Webster-approach does not necessarily lead to low and predictable compensations. Applying the Matuzalem-approach is not a guarantee for high compensations. Player Issues: Regulations & Contracts

9 Thank you! CIES Masters

10 Contact Dr. Stephan Netzle is specialized in sports law. He became a member of the Court of Arbitration for Sport in Lausanne (CAS) in He has been a member of the ad hoc-division at the Olympic Games 2000 Sydney and 2008 Beijing. He wrote a doctoral thesis on sponsoring contracts. He participated in the Olympic Games 1980 (Moscow) and 1984 (Los Angeles) and was a World Champion in Rowing Netzle Rechtsanwälte, Falkenstrasse 27, 8024 Zürich stephan.netzle@netzle.com CIES Masters

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