A proposal for training compensation in line with European law
In the previous part, the jurisprudential developments regarding training compensation were outlined. Below is a concrete list of criteria that can be distilled from the aforementioned case law and that a system of training allowances must meet in order to pass the test of the Court of Justice.
A first observation is that the Court of Justice does not establish a system of training allowances a priori excludes. A training allowance can certainly encourage clubs to invest in youth training. The Court of Justice has repeatedly confirmed that encouraging the training of young players is a legitimate aim, given the socio-economic importance of football in the EU.
Some necessary criteria
When one reads the previously discussed judgments together with the associated conclusions of the Advocates General, one arrives at the following list of cumulative conditions:
- A training allowance is possible after the end of the training period when concluding a first professional contract with a club other than the training club.
- A training allowance must cover the actual training costs. Both Advocate General Lenz in the Bosman case and the Oberlandesgericht in the Wilhelmshaven case state that a training allowance may not be calculated on the basis of: the market value of the player in question.
- A proportionate share of the training costs of players who did not become professionals must be included in the calculation of the training allowance. In the Bernard case, Attorney General Sharpston concludes that only a minority of youth players are eligible for a professional contract. However, to make this minority visible, a club must train a large number of players. In other words, the efforts for one player extend beyond his own education. The Oberlandesgericht imposes this condition in order to somewhat alleviate the uncertainty about obtaining a training allowance, inherent in a system linked to the transfer of a player.
- A training allowance must be distributed proportionately among all clubs that contributed to the player’s training.
- A training allowance should be reduced proportionately for each year a player remains with the club after training.
- A system of training compensation in which the player must pay part of his compensation himself is possible. In that case, the share that the player must pay relates only to his own training costs and not to the proportionate share of the club’s total training costs, as explained in the second condition.
A system of training allowances that takes into account the above elements could pass the adequacy and proportionality test of the Court of Justice.
However, as long as training allowances are linked to a player’s international transfer, they constitute an obstacle to free movement. As mentioned, such an obstacle could be justified, but this still brings with it some uncertainty.
An alternative mechanism: revenue sharing
To remedy this, the doctrine has developed some alternative mechanisms that do not hinder the free movement of people.
The most discussed alternative is a system of revenue sharing. Money is collected in a fund, after which it is distributed among the clubs, depending on their training performance.
The typical example of such a mechanism is the youth fund of Basketball Flanders. Each club must make a contribution to this, the amount of which is directly proportional to the level at which the club is active. Larger clubs will therefore bring in more than smaller clubs, while the latter clubs will get more out. In this way the system has a redistributive effect. In addition, the payment of compensation from the fund will be decoupled from the transfer of a player.
Such a mechanism does not constitute an obstacle to the free movement of persons. Some practical questions still arise about the introduction of a similar system in the context of football, but these are beyond the scope of this series.
Decision
In conclusion, although the payment of training fees is an established practice in modern football, there are some legal points to be made about it. Over the years, the judiciary has criticized the existing training compensation systems, but at the same time provided criteria to develop a system that is suitable to encourage clubs to invest in youth training and that is at the same time proportionate to this goal.
However, because a system linked to the transfer of a player is by definition an obstacle to the free movement of people, it is worth considering alternative training compensation mechanisms.