Introduction
In 1995, the European Court of Justice made a landmark ruling following a court case involving a little-known Belgian midfielder and a small club called RFC Liege. For a legal case and judgement that pitted two minor parties against one another, it had major consequences that are still felt within the modern football era today.
The case instigated the creation of brand new terminology in the football world; namely ‘free agency’ and ‘free transfers’. In this blog, I will explore the concept of free transfers and free agency that have become commonplace since the ruling as well as aiming to understand the impact, both positive and negative, that they have had upon the beautiful game. Importantly for our understanding of why such measures were brought into football, I will outline the 1995 Bosman Ruling for those that are not currently aware of the history behind the implementation of free transfers and free agency.
Free Transfers and Free Agents
What do Sol Campbell, Andrea Pirlo, Michael Ballack and Robert Lewandowski have in common? Aside from performing at the highest level of football since the turn of the century, these four legends are united by the common factor that they are amongst the most famous examples of free agents since their creation in 1995.
Free agency refers to players that have reached the expiration date of the employment contract they were under with a club. At this stage, if no new terms are agreed upon and a contract extension is not signed, the individual player is released and is no longer legally affiliated and contractually obliged with the club and hence, they become known as ‘free agents’.
Free agency grants players the ability to sign with another club in what is known as a ‘free transfer’. In other words, the buying club is not under any obligation to compensate the player’s former club with a transfer fee. The signature of the player is instead obtained simply by agreeing personal terms such as wages, bonuses and other contract clauses. These are agreed upon solely in the best interests of the player and their agreeability with the contract proposed, it does not involve negotiation nor any other business with their former club.
The examples I previously mentioned refer to major free transfers that have taken place. The names included are players that had high market values and could have been sold for significant sums if they were still under contract. However, for various reasons, their contracts expired and they were able to leave for free and their previous clubs missed the opportunity for a lucrative transfer income. The most well-known examples of free transfers include:
- Sol Campbell: In 2001, the English international defender moved for free from Tottenham Hotspur to their North-London rivals, Arsenal. His market value at the time was estimated at around £10million.
- Andrea Pirlo: In 2011, the legendary Italian midfielder moved from AC Milan to Juventus for no fee despite his market value still being proposed at around £10million after they had signed him for over £15million a decade earlier.
- Michael Ballack: In 2006, Ballack left Bayern Munich in his home country to join Chelsea free-of-charge whilst his market value was sitting at around £30million but Bayern were not able to prevent his contract expiring.
- Robert Lewandowski: Bayern were able to benefit from free transfers themselves in 2014. The Polish striker moved on a free from Borussia Dortmund to rivals Munich. His market value at the time was over £40million and rose to £80million a couple of years later. A devastating loss for Dortmund at the hands of the free transfer ruling.
- Edgar Davids: In 1996, Davids became one of the first high-profile free transfers when he moved from Ajax to AC Milan. During his career, Davids also moved to Spurs and back to Ajax on free transfers once again around a decade later.
- Steve McManaman: The current BT Sport commentator was also a well-known free transfer case in 1999 as he became the biggest English example after moving from Liverpool to Real Madrid before the attacker returned to Manchester City in 2003, also on a free transfer.
As a player nears a state of free agency, they are able to begin to discuss options with prospective clubs once there is less than six months remaining on their current contract. If their current club has failed to find agreeable renewable terms with the player or are likely to release them, the player and his agent will seek free transfer opportunities.
This can be an exciting and lucrative time for the player as their wages and bonuses are likely to be higher as the signing club is not burdened or restricted by having to also pay high transfer fees. This allows the club financial freedom to attract the player by offering high salaries and the signing-on bonus is often higher than a typical figure that is invested into a player which the club has paid for the transfer of. I will discuss the impact of this in greater detail below.
Free agents can also be signed outside of a transfer window. This was the case in the recent signing of ex-Spain striker Diego Costa by Wolverhampton Wanderers in the English Premier League. Despite the English transfer window being closed, Wolves were able to sign Costa as he was a free agent. They benefited from this rule greatly having lost their two frontline forwards to injury in the previous week, they were still able to seek a top-level replacement from the market of ‘free agents’. This rule means that players that are released from clubs are not stuck without opportunities until the window reopens and can still try to find a new contract elsewhere.
The Bosman Ruling
In order to fully understand the concept of free agency and free transfers, it is important to have knowledge of what is known as the Bosman Case. It was a historic legal battle that altered the landscape of transfers in modern football. As a consequence of the so-called Bosman ruling that resulted from the court case, free transfers are also referred to widely as Bosman transfers in recognition of the part that Belgian midfielder Jean-Marc Bosman played in helping future players move to a new club for free once their contracts expired.
The situation began in 1990 when Jean-Marc Bosman’s contract with Belgian first division side RFC Liege had expired and renewal terms had not been proposed. Bosman was just 25 years old at the time so sought other options. His main target was a move to Dunkirk but an issue arose when the French club failed to meet the transfer fee that was being demanded by Liege. Consequently, RFC Liege refused to let Bosman leave causing his career to stall dramatically; his wages were reduced by 70% as he was no longer a part of the first team. As he approached the typical peak of a footballer’s career, his progress was abruptly and unfairly blocked as Liege were demanding a transfer fee that was not obtainable.
Rightfully so, Bosman was frustrated and aggrieved by his predicament and decided to sue the Belgian Football Association and RFC Liege for restraint of trade. The matter was escalated to the European Court of Justice in Luxembourg who reviewed the case’s compatibility with articles such as the 1957 Treaty of Rome which guaranteed the freedom of movement of workers and of association in the European Union.
The case of Jean-Marc Bosman seemed to infringe on these laws and hence, in December of 1995, the court concluded that RFC Liege had directly caused a block on Bosman’s right to freedom of movement of labour and he received compensation of just €300,000. Furthermore, the court passed a new general law that granted the right to free transfer of players at the expiration of their contract as long as it was to another club in a European association. Clubs were no longer able to block moves and demand transfer fees. This exercised what is known as a court’s ‘rule of reason’ as the new measures were brought into place in pursuit of the legitimate aim of free movement of labour that was justifiable from the perspective of public interest.
In short, the main outcome of the legal case was that the European Court of Justice effectively banned any form of restrictions placed upon players moving to another club without a fee once their contracts had expired. However, there was an additional judgement made that also prohibited any clubs or national associations placing restrictions or quotas on the number of foreign players from other EU associations being selected in teams. Prior to the Bosman ruling, this was common.
In European Competitions, there had been a system implemented that was known as the “3+2 rule”. This meant that clubs were restricted to fielding teams that contained a maximum of three foreign players as well as two additional players that were originally foreign but came through the club’s academy. These types of quotes were declared unfair and illegal and prevented thereafter following the Bosman ruling. Subsequently, teams were now able to field an unlimited number of foreign players from other European Associations. I will analyse the impact this has had in the following section.
How Has the Bosman Ruling Impacted Football
Other than the obvious free transfers of players, the first impact upon the football landscape that was noticed following the Bosman rule was a change in strategy and approach towards transfers by club boards. In European Competitions such as the UEFA Champions League, the competitiveness was arguably reduced as a result. The nature of football business took the format of non-established, smaller clubs selling their players for higher fees prematurely, to avoid the risk of allowing their contract to expire and losing them on a free transfer.
The collateral consequence of this was an increasing divide between the biggest and richest clubs and the small clubs. The smaller clubs are unable to afford the same transfer fees that the more financially affluent clubs are able to spend. Transfer fees were rising for many various reasons, some of which I have touched upon in previous blogs, but the Bosman ruling added to this as clubs were looking to sell players sooner and before their contracts had expired. Additionally, contract renewals became more of a priority, meaning many players were offered extensions very early to prevent their contract nearing expiry and hence, the transfer fees that were needed to be paid rose further. In 2005, UEFA made what they referred to as ‘repairs’ to the aspects of the Bosman ruling that were seen as causing the growth in the gap between rich versus poor, small versus elite clubs.
The impact on competitiveness in the world of football was not only negative. It was suggested that the rule increased the intensity of national team football. This is because there was a greater emphasis placed upon youth talent development by clubs as they wanted to heighten the market value of their players in order to be able to sell them on before their contract expired and reduced the need for them to spend money on rising transfer fees. Having said this, the secondary outcome of the bosman ruling regarding removing restrictions on foreign players opposed this notion as homegrown talent found it harder to gain game time and opportunities at the top level. This has an adverse effect upon the development and standard of national teams.
Another important impact that the Bosman ruling has on football is related to the possibility of high wages and bonuses that I previously mentioned. Players have far more bargaining power. In the first instance, they are able to demand higher wages from their current club as they know that if they cannot reach an agreement for a contract extension, the club will have to let them go for free and the player will receive higher wages elsewhere. Secondly, if the current club cannot meet the demands and renewal terms of the player for a contract to continue at the club, then the player has the ability to seek higher wages from prospective clubs. It places the player in a position of power to obtain a suitable and attractive contract.
A further consequence of this is that players are now tempted to force their contract to expire in the hope that their current club eventually meets higher wage demands or, alternatively, that they are able to move elsewhere for a higher salary and bonuses. Away from financial incentives, this gives many factors of leverage to the player who could tell their current club that they will not sign a renewal unless they are promised a certain amount of game time in the first-team, or other clauses they could include. One thing to bear in mind for the players and the agents in these situations is the risk of injury. It is an attractive option to run a contract to expiry and reap the rewards of free agency wages but it can become a risk if the player was to be injured before they had agreed a new deal. An injured free agent is far less likely to be signed by a new club and it can damage a player’s career and their financial stability. It is a classic, football-specific, risk versus reward decision that is to be made by the player and his supporting team.
Conclusion
Thanks to Jean-Marc Bosman and the European Court of Justice, free transfers and free agents now have a firm place in modern football. Players and their careers are no longer restricted once their contracts expire and in fact are now able to achieve higher personal wages and bonuses should their original club allow their contracts to expire. It has given players bargaining power and changed the way in which clubs and their transfer strategies operate. I also acknowledged the broader impact that the Bosman ruling has had upon football in terms of banishing restrictions placed upon the number of foreign players within a team and the changes to transfer fees and competitiveness that the rule has brought about.