Smaller clubs threatened by transfer ruling

The Football Association and the players' union were united yesterday in warning that the collapse of the transfer system, which was earlier declared illegal by the European Court of Justice, may have damaging consequences for the smaller clubs. A Football League spokesman claimed that "75 per cent" of its players could lose their jobs.

The submission of an interim hearing in Luxembourg, which followed a five-year legal battle by a Belgian player, Jean-Marc Bosman, could lead, if ratified, to a revolution in football and the way it is financed. A player at the end of his contract would be free to negotiate a move to another club - without any fee being paid.

A spokesman for Uefa, the game's governing body in Europe, stressed that the ruling represented "an opinion rather than a judgement". But the precedents point to the advice of the Court of Justice's advocate-general, Carl Otto Lenz, being rubber-stamped by the full court by the end of the year.

Uefa last night pledged to fight the decision. "We are right. Lenz is wrong," theirsecretary general, Lennart Johansson, said.

The Court also deemed that Uefa is in violation of European Union law by restricting the number of foreign players a club can use in Continental competition to three. Under this rule, which has hampered the progress of British clubs, Scottish, Welsh and Irish players with English teams are considered foreigners.

Bosman, 31, claimed a "total victory" that would be welcomed by footballers "across Europe". He said the case, in which he is claiming damages totalling pounds 675,000 from Uefa and the Belgian FA, had been difficult "morally and financially".

He began his action in 1990 when, after reaching the end of his contract with FC Liege, he received an offer to join Dunkirk in France. Under the English system, Bosman would have been entitled to a free transfer. Liege not only refused to release him, but demanded a pounds 500,000 fee and cut his salary by 75 per cent.

According to Bosman's lawyers, this was a restraint of trade. They argued that under the Treaty of Rome footballers were entitled to the same freedom of movement as other EU workers. While accepting that its rules breached the Treaty, Uefa argued they were necessary to prevent a cartel of rich clubs dominating the sport.

Yesterday's decision, although vindicating Bosman's stand, provoked largely negative reaction in Britain, where turnover from transfers is around pounds 100m a year. As a result of George Eastham's dispute with Newcastle in 1963, clubs were able to ask a fee for an out-of-contract player only if they offered him terms at least equalling his previous deal. Otherwise he was entitled to a free transfer.

The arrangement was refined in 1978. A player can now reject new terms and join the club of his choice. If the clubs cannot agree a fee, the sum is decided by an independent tribunal.

The English model remains a "fair, balanced system" to which the negotiators for Uefa and Europe's players' federations should aspire, Graham Kelly, the FA's chief executive, said. Kelly expressed concern, however, about the repercussions for lower-division clubs who depend on nurturing players and then selling them on.

"The effect of the ruling would be to widen the gap between the rich and the less well-off players and between big clubs and smaller clubs," Kelly said. "We'll do everything we can to keep football alive at smaller clubs and allow them to continue producing players for the bigger clubs."

Kelly did not expect the transfer market to change overnight, saying: "This won't change anything in the short term. A lot depends on the talks between Uefa and the European Commission, and on continuing dialogue between Uefa and the international players' unions. I would urge compromise."

Kelly's stance found support from the Football League, whose spokesman, Chris Hull, argued that the present English system offered the best way to preserve players' jobs and the existing full-time structure.

Gordon Taylor, chief executive of the Professional Footballers' Association, was in Luxembourg and acknowledged Bosman's "right to justice". He added: "Hopefully, never again will a footballer be denied the right to join the club of his choice when his contract expires."

But Taylor, who is also president of FIFPro, the international body of players' associations, feared the long-term impact. "What's best for a star player may not be good for all our members," he said. "We've got 92 clubs and 4,000 members, yet if there was literal freedom of contract we could see a contraction of clubs and jobs."

Doomsday scenarios found scant support from Rick Parry, chief executive of the FA Premier League. "Talk of a fundamental threat to the future of football is premature and ill-judged," he said. "If there are changes to the transfer system and the three-foreigners rule, football and the market will adjust and find a new balance."

The PFA had predicted a "bonanza" for top players and their agents if Bosman won. Eric Hall, agent for several England players, did not hide his elation at the news. "It was time managers and chairmen came into the real world. In any other business, when a contract's over, it's over."

Doubts over the survival of lower-division clubs were "monster rubbish", Hall maintained. "What these clubs must do is try to sign 17-year-olds on eight-year contracts. If they're any good they'll be sold at a nice profit. I think the little clubs will benefit."

One such club, Wrexham, have their doubts. David Rhodes, their club's managing director said: "I think the next six months will be very difficult for football. People will be looking at transfer fees to decide whether or not it is worth investing the money in players who may be able to walk away at the end of short-term contracts."

The fear factor, page 27

How the transfer system works in Britain

At the end of his contract a player is entitled to a free transfer unless the new terms at least equal those of his previous deal.

If he still leaves, the club is entitled to compensation (i.e. a transfer fee), to be worked out by negotiation between the clubs or by a tribunal.

If a player leaves in mid-contract, the selling club is entitled to a fee, which is negotiated with the buying club.

At the end of his contract a player rejects an offer of new terms and signs for another club. His former club receives no compensation. Mid- contract moves would still incur transfer fees, though future legal challenges could reduce these to a fee worked out by a formula, not market prices.