As the founder and a principal of UK single-family office and advisory company Aethos Capital, Arif Efendi is involved in a range of different industries and sectors, including sport. This article will look at the football transfer market, examining post-pandemic developments, including a recent ruling by the Court of Justice of the European Union (CJEU) that highlighted inconsistencies between FIFA rules and EU laws on cartel prohibition and free movement of workers.
In the wake of the COVID-19 pandemic, the 2024/25 season is predicted to mark the first decrease in collective transfer expenditure. Nevertheless, the total 2024/25 transfer spend remains approximately 70% higher than seasons most affected by COVID-19.
In the English Premier League, a handful of top clubs control the lion’s share of transfer spending. Among the other ‘Big Five’ leagues there are even bigger disparities, with transfer spending heavily concentrating on a few traditional clubs.
With football clubs increasingly focusing on younger talent, several teams outside the ‘Big Five’ have leveraged strong demand from elite clubs by positioning themselves as talent developers. Meanwhile, most high-profile signings have failed to maintain a high market value over time, either due to injuries, sub-par performances or a range of other factors.
Analysis conducted by Football Benchmark focusing on the football seasons from 2018/19 to 2024/25 suggest that the transfer market is reverting to the norm. England’s most dominant clubs seem to be adopting a more cautious approach to the 2024/25 season, with new Profitability and Sustainability Rules limiting the number of losses clubs can incur over a given period. In addition, UEFA has also tightened its Financial Sustainability Regulations, forcing English teams to adopt a more sustainable approach.
In addition, pundits speculate that the Lassana Diarra case may mark the beginning of a new chapter for FIFA’s transfer regulations. CJEU recently delivered a landmark judgment regarding FIFA’s international transfer regulations, highlighting incompatibilities between FIFA rules and EU law.
According to FIFA Regulations, players who end their contracts ‘without just cause’ can be held liable to pay compensation to their former club. When a new club signs such a player, the rules state that the club is to be held jointly and severally liable for the compensation. The club may also face a ban on recruiting new players for two transfer periods if they fail to prove that they did not induce the player to terminate their contract. Additionally, to lawfully transfer to a new club, the FIFA Regulations stipulate that a player must obtain an International Transfer Certificate from their former club. However, this certificate cannot be issued where there is an ongoing contractual dispute between the football player and their former club.
In 2013, Lokomotiv Moscow entered a four-year contract with Lassana Diarra. The club subsequently reduced Diarra’s salary and he decided to leave before his contract ended. In response, Lokomotiv terminated his contract, bringing the case before FIFA’s Dispute Resolution chamber.
While waiting for the case to be heard, Lassana Diarra received an offer of a new contract from the Belgian team, Sporting Charleroi. However, the club subsequently withdrew its offer after FIFA and the Belgian Football Association refused to clear his registration. FIFA’s Dispute Resolution Chamber upheld Lokomotiv Moscow’s claims, ordering Lassana Diarra to pay the club €10.5mn in damages.
Lassana Diarra launched legal action in a Belgian commercial court, which was appealed at the Court of Appeal Mons, which then referred the case to the CJEU. The CJEU found that FIFA Regulations ‘by their very objective’ infringe cartel prohibition and restrict competition. In addition, CJEU also found that FIFA Regulations also impinge upon EU laws governing the free movement of workers.
In future, experts predict that this could have huge ramifications for football transfers forcing FIFA to overhaul its regulations. The CJEU ruling could effectively lead to the elimination of mandatory compensation payments for players terminating contracts without just cause, as well as putting an end to restrictions on player transfers and joint liability for new clubs.
