The journey of Gibraltar’s Football Association – Part 2: growing pains in the professional leagues

Published 19 May 2015 By: Philip Vasquez, Julian Santos

Gibraltar_Rock_and_Football_Stadium. Photo: Johnny Napoli

Part 11 of this article explored the key legal milestones of the progress of Gibraltar Football to date including the Gibraltar Football Association’s (“the GFA”) applications to join UEFA and FIFA. In Part 2 of this article, the authors turn to look at the growing pains of the local football association in having to regulate and professionalise the nation’s favourite game.

Gibraltar’s transition from amateur to semi-professional football has not been without its difficulties. Within the last 2 years the GFA has experienced an embarrassing controversy in relation to qualification for the UEFA Europa League, a seismic re-shuffle of the association’s executive, a new club licensing regime and continuing concerns as to how best preserve the interests of Gibraltarian footballers in the light of increasing numbers of international players at domestic competitions. These matters are all perhaps to be expected of an association that has had to learn very quickly while very much in the nascent stages of its new life as a professional sporting association.

The UEFA Europa League Debacle

At the end of the 2013/14 season, its first season as a member of UEFA, the GFA was embroiled in a highly contentious dispute as to which team was entitled to take up its single Europa League spot available.

In September 2013 the GFA adopted a policy stating that Gibraltar's single Europa League place would be taken up by the Premier Division runner-up. This policy was subsequently agreed by all clubs at a meeting on 3 October 2013.

However, shortly before the Rock Cup Final (the GFA's equivalent of the FA Cup) between Premier Division champions Lincoln Red Imps and College Europa, the GFA became aware of Article 2.04 of the Regulations of the UEFA Europa League, which states as follows:

"If the winner of the domestic cup qualifies for the UEFA Champions League, the domestic cup runner-up qualifies for the UEFA Europa League”2

There followed an uncomfortable period of time (including the Rock Cup Final itself) when it remained unclear whether College Europa or Manchester 62 (the second place team in the Premier Division at the time) would take up the coveted spot. It was only after the cup final and following discussions between the GFA and UEFA, as well as both of the affected teams, that the GFA announced that UEFA's rules prevailed over the GFA's policy, and therefore it was the Rock Cup runners-up who would compete in the Europa League.3 Manchester 62, understandably aggrieved by the change of position (no doubt they would have wished to rely on the principle of venire contra factum proprium which worked so well for the GFA in the CAS!), agreed a compensation package with the GFA.4

 

GFA Executive Shuffle

Early 2015 saw a changing of the guard and brought further controversy for the GFA’s administrative hierarchy, with GFA President Desmond Reoch resigning citing “personal reasons”;5 national team manager Allen Bula being sacked after only 4 competitive games (and bringing Employment Tribunal proceedings which were later settled);6 and the GFA Council being re-shuffled, admitting new members.7 This Council re-shuffle has included the appointment of Gibraltar’s new Attorney General, Michael Llamas QC, as the Association’s new President, which he claims will be more of a ‘symbolic’ role.8 The appointment of Mr Llamas QC came as no surprise as he was a key individual who served the GFA as counsel and leading advisor throughout its application process to UEFA and FIFA.

 

The GFA’s Executive Re-Structuring

At present, the GFA’s executive structure (which can be viewed here)9 may be described as somewhat antiquated, inefficient and not representative of local players and clubs. As a result of the possibility of a more efficient and representative structure as well as the re-shuffle of the GFA’s Council, the GFA will soon be redesigning the structure of its executive.

According to local sources, following the continued support from the GFA at a technical and legal level, as well as an involvement from a local accounting firm, a Club Association has been set up so that there is, among other things, a fair representation of the football clubs at decision-making level and so that there is an appropriate distribution of funds from all football related activities. This Association has been the result of on-going work, which is expected to come to fruition when the GFA finalises its own the structure.

The GFA’s new structure will be inspired by the English FA’s structure, with a figurehead President and Vice President who will hold overall responsibility for policy.10 Aside from this there will be an executive, a Grass Roots Management Board and four Representatives from the respective leagues and/or club association. Dennis Beiso, CEO of the GFA, has stated to the authors that the structure will become ‘much more streamlined and representative of the local football clubs’. At present, the relevant committees (which consist predominantly of volunteers) do not meet frequently enough to enable the relevant clubs and the GFA to work wholly constructively towards professionalising the GFA further.

Club Registration, Licensing and Anti-Money Laundering

When it comes to the registration of a football club under the GFA, due to the traditional amateur level of domestic football, there have never been stringent requirements as to the legal, financial and administrative structuring of these clubs. Today, the registration process for clubs to compete domestically is similar to the way it was prior to the GFA’s admission into UEFA. However, as a result of the admission, the association has introduced its Club Licensing Regulations in order to regulate those domestic clubs who wish to compete at UEFA competition level, and ensure their compliance with the relevant UEFA rules. The authors understand that the GFA may be planning to implement a domestic club licensing regime which will set stringent hurdles for the legal, financial and administrative structuring of domestically competitive clubs requirements in order for them to register and compete in Gibraltar.

In order for clubs to participate in UEFA Competitions such as the Champions League and the Europa League, such clubs need to be compliant with the UEFA Club Licensing and Financial Fair Play Regulations.11 Due to the fact that the maximum expected revenue of a Gibraltarian club is expected to be in the region of €350,000 from club competitions alone,12 it is the authors’ opinion that the relevant requirements of transparency of the Financial Fair Play provisions will not have the same arduous effect as they would for those leading clubs throughout nations such as England, Spain and France.

In order to facilitate Gibraltarian clubs being compliant with UEFA’s Club Licensing Regulations, the GFA’s Club Licensing Regulations requirements are divided into five categories: sporting, infrastructure, personnel and administrative, legal and financial. To the authors’ knowledge, of the 7 or so clubs which had applied for licensing in the previous application round, 6 of those applicants were successfully approved by the GFA’s Club Licensing Unit (the administrative arm of the GFA which renews and approves club licensing applications). The current application process commenced on the 2 February 2015, with the decisions on granted or refused licenses to take place on the 29 May 2015.13

While domestic clubs do not need to be licensed under the GFA’s regulations in order to compete domestically, they do need to be licensed in order to compete at UEFA competition level. This distinction is currently a key concern as local clubs have recently seen a considerable influx of interest and investment from foreign entities. Given the fact that these clubs are not all presently required to hold a Club Licences under the GFA’s regulations, the lack of a professional sporting, personnel, administrative, legal and financial structuring of these clubs can be concerning. The GFA holds professional and arguably legal obligations to ensure that these clubs are not harbouring any illicit activities, such as match-fixing, corruption and money laundering, and the implementation of a structured professionalised domestic club licensing regime will help eradicate such activity.14

While the introduction of the UEFA club licensing regulations may be seen as the first step in the professionalisation of domestic clubs as a number of clubs have set themselves up as legal companies with structured financial accounts, administrative staff and sporting personnel such as doctors and paramedics, there is still a long way to go in the professionalisation of domestic clubs. As a majority of domestic clubs under the GFA are still not set up as legal entities, and are not required to disclose legal and structured financial accounts, the GFA are therefore unable to cast an eye over the clubs’ activities to see whether they are involved in anything untoward.

The exact language and implementation timeline, if any, of these regulations are not known at the time of writing but it is anticipated that they will come either in the 2015/16 or 2016/17 season. Although money laundering in football is by no means a new phenomenon, it is the clubs in maturing footballing nations that become prime targets for such activities.15 The introduction of such Domestic Club Licensing regulations will act as a precautionary measure to prevent domestic clubs becoming vehicles of illicit activities such as match-fixing and money laundering. As Gibraltar is effectively in its embryonic stages as a professional regulatory body, it will want to keep its image untainted from such activities so that it can focus on professionalising domestic football as efficiently as possible.

In a similar vein, the GFA has also considered the implementation of a regulation preventing an entity purchasing or having ownership of more than 49% of a club. At present this is done in Germany in the form of the ‘50+1’ rule to prevent Abramovich styled takeovers from occurring. Whilst it is feared that such regulations may deter foreign investors, such a regulation will prevent a disparity between clubs on the field of play as a result of disparate financial conditions.

 

Local talent

Arguably the most challenging matter facing the GFA in relation to the national Senior League at present is the lack of Gibraltarian national players playing in the Premier Division on a regular basis. In order to try and remedy the deficiency of domestically developed players at Senior level, the GFA are looking to adopt similar regulatory regimes surrounding domestically trained player restrictions as other jurisdictions.

Gibraltar's entry into UEFA has seen a complete transformation of local football. Whereas beforehand its leagues were played almost exclusively by local amateur players, the last two years have seen substantial investment in many of the local teams, presumably driven by the lure of European football and the financial rewards that accompany the same. This influx of investment has given teams the financial capacity to pay players amounts hitherto unheard of on the rock, which in turn has made the Senior League an attractive proposition for many players previously playing for Spanish teams in the local area (particularly given the short route to European football). In some cases investors have also sought to introduce a new level of infrastructure in their teams, employing scouts and Directors of Football who are encouraged to seek talent from even further afield.

Currently, the Senior League boasts of players from Italy, Tunisia, Brazil, Argentina, Estonia, Senegal and Equatorial Guinea, as well as Spain, Morocco and Gibraltar. While the arrival of investment, infrastructure, talent and knowledge brings with it tremendous benefits to the local game, many have lamented the sharp decline in local representation in Premier Division fixtures. This has had serious consequences, not least for the national team, which until recently consisted mainly of players who were key to their club's ambitions and now contains several players who are struggling to achieve regular Premier Division football.

Constitution of the leagues & locally trained players

  • At present, 68% of all players registered at Premier Division level are of Gibraltarian nationality.
  • In the 2 game weeks preceding Gibraltar’s first international UEFA Euro 2016 Qualifying match against Germany, the percentage of players who were eligible for the Gibraltar national team and were starting for their Gibraltar Premier Division clubs was 40%. In comparison to San Marino, being a country of a comparable size and nature to Gibraltar, 68% of players playing top flight football in San Marino during the same period were San Marino national players, with the minimum amount of national players selected in any given team being 7.
  • Second Division Teams: Angels F.C., who recently lost in Gibraltar’s Second Division Cup Final, have 84% of their registered players being of Spanish nationality. Phoenix’s registered team is 64% Spanish and Scorpions have 85% of their registered players being of Spanish nationality.16

The situation has arisen as a result of the lack of a limit on European non-local players in clubs and match-day squads. Before the commencement of the 2013/14 season, the GFA's first season as a member of UEFA, it was reported that clubs had reached a 'gentlemans agreement' not to register more than 3 'foreign' players. The definition of ‘foreign’ in this instance is understood by the authors to have meant individuals who did not hold a British passport. It was not long before a debate was raging as to whether some of the teams were breaching this agreement. Subsequently, following advice from UEFA that the rule was de-facto in breach of EU law as the system placed a restriction on the free movement of workers, the GFA changed these rules ahead of its following season.17

Rule 6.6 of the Senior League Rules for the 2014/2015 season18 states that a squad of 25 must have 8 places reserved for 'locally trained' players, and that a maximum of four of these 8 places can be taken up by 'association trained' players. 'Locally trained' players (LTPs) are defined in Schedule 4 to the Rules, which states that LTPs can either be 'club-trained' players (ACTs) or 'association trained' players (AATs). ACTs are players who, irrespective of their nationality, were registered by their current club for at least 3 entire seasons (or 26 months) between the ages of 15 and 21. AATs are players who were registered with another GFA team for at least 3 entire seasons (or 36 months) for at least 3 seasons.19 These rules are very similar to those set out in Article 18 of the Champions League Regulations.20

Similarly, pursuant to Rule 6.7, a team of 35 players must have a minimum of 12 places reserved for 'locally trained' players, with a maximum of 6 of those being 'association trained' players.21 There is therefore an incentive for teams to include locally trained players (and particularly their own youth products) in their teams. However, it will be noted that there is no restriction on the number of non-local players included in a match-day squad; indeed, it is feasible for teams to field a team of 11 non-locally trained players. Further, while places in a team's squad must be 'reserved' for LTPs, there is no positive obligation on teams to have LTPs in their squad. The effect of the rule is that a team would simply forfeit a one of the reserved places if it cannot include an LTP. Interestingly, the position can be contrasted with the GFA's Futsal League Rules, which state, for example, that squads must contain a minimum of 5 'Home Grown' players (similar to ACTs), and that all match-day squads must contain a minimum of 4 Home Grown players (out of a maximum of ten players).22

Speaking on 7 March of this year, recently appointed Chairman of the GFA Michael Llamas, noting this predicament, stating that he was 'very concerned' about the effect on local talent and expressed his desire for a restriction to be placed on non-local players, stating that this was being explored and that conversations were taking place with other associations in order to assess the options open to the GFA.23

The GFA is not alone in encountering this problem. In September 2013 the English FA launched the England Commission, with the express intention of increasing the number of English players in the Premier League.24 In late March 2015, FA Chairman Greg Dyke announced the FA's plans to address the situation by (1) making the rules on work permits for non-EU players stricter, (2) lowering the age by which a player must qualify as a 'home grown' player from 21 to 18 years, and/or (3) increasing the number of 'home grown' players in a 25-man squad from 8 to 12. It is likely that the GFA is keeping a close eye on developments in England.25

Although changes to the work permit rules may only have a minimal effect on the GFA's competitions, it is considered that tightening the rules on 'home grown' players would certainly alleviate the situation, even if only to a modest extent. These proposals would still appear to allow clubs to field an entirely non-home grown first eleven. As a result, the GFA are looking closer to the way Malta and Luxembourg regulate as their rules nurture the development of local players by implementing restrictions on the amount of non-‘Youth Sector’ players which can appear on the match-day team sheet. Whilst the GFA’s current rules are in similar to these in essence, the rules in Malta are much more in favour of domestically trained players than those rules in Gibraltar.

The Maltese regulation essentially requires senior team match day team sheets to field a team which consist mainly of those players who have been registered and participated, for four years or more, at a domestic club’s youth or junior level competitions (‘Youth Sector’). This therefore means that senior football by definition would be excluding, on the most part, non-national players. In Premier Division games in Malta for example, only 5 players who are not Youth Sector players can be on the field of play at any given time and only 6 non-Youth Sector players can be listed on a match day team sheet. Furthermore, when it comes to first division and subsequent leagues, the restrictions on how many non-Youth Sector players can be on the field at any given time is even higher, with only 3 and 1 respectively being allowed on the field of play at any given time.26

Effectively should the GFA implement similar restrictions they will be able to curtail the dominance of international players at lower-league football being experienced at present, whilst still guaranteeing that over half of players on the field at Premier Division games will be national or at least domestically developed. The GFA still continues to liaise with UEFA on the options available to deal with this thorny topic.

 

Future Plans & Considerations

The Stadium

One issue which the GFA has been seeking to address since joining UEFA is the need for a national stadium. The Rock’s current stadium, Victoria Stadium, does not meet UEFA’s minimum requirements for hosting competitive international matches (i.e. a Category 4 stadium). In February 2014, the GFA announced plans to build an eight-thousand capacity stadium at Europa Point, the Southernmost point of Gibraltar.27 The proposal was for the new stadium to serve as the national stadium and also be used by the community as a sports facility and as a venue for concerts, conferences, functions and broadcasting.28

This announcement was immediately met with mixed reactions. Many were in favour of the proposal, but a significant section of the public was strongly opposed to it, considering that the plans would ruin the geographically, economically and environmentally significant site of Europa Point, a site which enjoys great views of the Straits of Gibraltar as well as the neighbouring coasts of Spain and Morocco.29

On 7 April 2014 the matter was considered by Gibraltar’s Development and Planning Commission, the decision-making authority in relation to proposed developments. By this point a pressure group had collected over 6,000 signatures (i.e. over 20% of the population of Gibraltar) to a petition opposing the proposal. The Development and Planning Commission requested an Environmental Impact Assessment of the proposal.30

The opposition to the proposal suggested that rather than building a new stadium, the GFA should explore the possibility of upgrading Victoria Stadium to Category 3 instead in order to seek permission from UEFA to hold international matches there.

Whether or not an international match can be held at a particular stadium depends of the rules of the competition in question. For example, the Regulations of the UEFA European Football Championship31 state as follows:

"28.01 Unless stipulated otherwise in these regulations, European Qualifiers matches must be played in a stadium which meets: a. the structural criteria defined in the UEFA Stadium Infrastructure Regulations for Category 4 stadiums, or for Category 3 stadiums if no Category 4 stadium is available; b. the stadium requirements defined in the Commercial Regulations for the European qualifying matches for UEFA EURO 2016 and the 2018 FIFA World Cup.

28.02 The UEFA administration may grant an exception to a specific structural criterion for the stadium category in question in cases of particular hardship and upon reasoned request, for instance owing to the current national legislation or if the fulfilment of all the required criteria would force the association to play its home matches on the territory of another association. An exception can be granted for one or more matches in the competition or for the whole duration of the competition. Such decisions are final."

The exception allowed for by Article 28.02 has been used in the past, for example by Luxembourg, which was allowed to hold its qualifier against Spain at its national Josy Barthel stadium in June 2014 in spite of its failure to meet the requirements of Article 28.01.32 In March of this year the GFA announced that it was awaiting a report from UEFA as to the possibility of holding international matches at Victoria Stadium.33 The authors understand that this report has been pending for approximately three years.

Agents

As football players’ activity in Gibraltar’s top-flight division increasingly involves financial remuneration by clubs, there is a growing opportunity for players and professionals to be represented by agents. Currently football agent activity is not regulated under the GFA other than under the club licensing rules but the increasing presence of players representation may influence the introduction of a more formal stance on the activity. Currently, whilst agent activity in Gibraltar is not an incredibly lucrative opportunity (few players receive more than £800 a month for training six days and playing one match every week) there is a growing trend of representation among players, coaches and clubs.

There have been instances where some Spanish players have been signed with agencies based in other jurisdictions. In particular there have been situations where scouts employed by such agencies, who are not qualified agents in any jurisdiction themselves, have claimed that due to letters from their employing agency outlining the delegation of agent responsibilities to them as ‘scouts’, they have a sufficient right to represent certain players in Gibraltar. Such a model of representation, while not be in contravention of the current GFA rules, should be considered with caution as it is difficult for clubs and the GFA itself to understand the financial relationship between parties. Furthermore with such loosely structured relationships, it is difficult to guarantee the protection of players and professionals from undue or unethical practices.

In an attempt to capitalise on the professionalisation of local football, local players and lawyers have set up a representation agency ‘Ingenium Football’ for players, coaches and clubs.34 This agency represents a number of local players, clubs and coaches, including the former GFA National Men’s Team Coach, Allen Bula. While this attempt appears to be more structured in its nature towards player and professional representation, the GFA still do not have a formal way of acknowledging and overseeing such representation.

As UEFA does not require all agent activity to be regulated, other than in the form the disclosure of Agents’ fees under its club licensing regulations, the GFA’s only other reason to regulate and oversee agent activity on the Rock is to prevent undue practices such as money laundering, corruption and match-fixing. Furthermore, should Gibraltar wish to form part of FIFA, it will inevitably need to introduce regulations on ‘intermediary’ activity. It is therefore the authors’ opinion that there should at the very least be the introduction of a requirement to register as an agent or professional representative. While this would not be going as far as requiring the disclosure of fee arrangements between clients and their representatives, this will serve as an initial step in the formalisation and regulation of an exposed part of the game.

Player Conduct & Third Party Ownership

Recognising that the shift from amateur social football to professional competitive football involves a considerable shift in discipline and conduct, the GFA have introduced measures outlining best practices guidelines for football professionals as to how they should conduct themselves on social media, as well as guidance on anti-doping which ban the use of certain substances such as Lemsip Max Flu and Sudafed before match-days (which are also banned medications under the English FA).35 The GFA has also expressed its continuing concerns over the remote possibility of match-fixing as its premier division and international games frequently feature on betting companies such as Bet 365 and recently commenced its ‘Integrity’ training workshops which focus on the exposed risks of match fixing and corruption in the sport.36 These workshops have revealed that around €4 million worth of bets had been placed in Gibraltar’s first division and cup matches, with the figure expected to multiply by 30 up to €120 million euros on the coming years.37

Another important aspect of regulation involving domestic players recently has been surrounding the global disapproval by FIFA and UEFA of Third Party Ownership over players’ commercial rights. Whilst the GFA does not presently regulate on the matter, the authors understand that it is in agreement with FIFA and UEFA’s stance on TPO and condemns the practice.

Considerations to Date and the GFA’s Plans for the Future

Since the GFA has joined UEFA, there have been attempts by local professionals to set up environments for the constructive discussion of what regulatory and commercial decisions will need to be made in the future. These discussions have included a a conference held by EY Gibraltar on14 July 201438 and a subsequent televised debate on football governance.

The EY Conference was one which considered and outlined the key changes which would be required to be implemented by the GFA in order to be UEFA compliant, this included the key elements of good footballing governance such as the club licensing regulations, the regulation around the minimum requirements of player employment contracts, club structuring, governance and league models of similar FAs and the use of technology to build transparency and good governance. Most of the matters which were discussed at this conference have since been introduced by the GFA as, for example, the GFA has introduced the minimum requirements of player employment contracts in rule 12.2 of the GFA’s Senior Men’s League Rules 2014/15:

“A Professional Contract must contain the minimum requirements for standard professional football Player contracts, as stipulated in the ‘Agreement for Standard Player Contracts in the Professional Football Sector in the European Union and in the rest of UEFA Territory’ entered into between UEFA, the European Teams Association, FIFpro and the European Professional Football Leagues on 19th April 2012.”

The conference has also displayed that the local association and clubs are looking at commercial opportunities to capitalise on funding and revenue opportunities from match days, sport tourism and sponsorship or broadcasting deals. In particular there have been considerations to develop Gibraltar as a popular football tourist destination for warm weather climate training during the off-season. Such considerations have drawn inspiration from the success story of the Turkish city of Antalya which saw estimated football tourism revenues in 2012 hit 100 million USD as its facilities offer 42 hotels and a total of 137 pitches.39 These success stories, which apparently have come at a little to no cost to their respective governments will undoubtedly have an influence on where, when and how Gibraltar’s UEFA compliant national stadium will come to existence.

Most recently Gibraltar’s local media leaked the contents of the GFA’s internal audit for financial year ending 31 May 2014 that revealed largely unsurprising conclusions which are characteristic of an early growth stage association. In particular, it is also important to notice that the results of this audit are now almost more than a year old, so it is likely that the recommendations of the internal audit have been addressed.40

 

Conclusion

Gibraltar's quest to achieve competitive international football on the Rock has been a long and arduous journey. After years of efforts on the UEFA front, it finally achieved membership in 2013. This has been a huge boon for Gibraltarian football but has also brought with it considerable challenges. As local football will still be experiencing the regulatory fallout of trying to manage the transition of local amateur social football to professional competitive football, the GFA continues to look to other jurisdictions as model regulatory, commercial and infrastructural frameworks in order to design a bespoke model to fit Gibraltar’s unique circumstances.

Gibraltar’s story of its desire to compete at an international level of football stands as a beacon of character and grit. The story is also a living testament and poster-story of the rewards of hard work in sport as it has taken 18 years of applications and regulation changes for Gibraltar’s national men’s team, consisting of lawyers, policemen, firemen, bar managers and students to compete against the likes of Germany and Poland on an internationally accredited stage. The journey, however, remains unfinished as Gibraltar’s ultimate desire to compete in the FIFA World Cup remains in the balance. The next chapter in this story is yet to be written following the CAS hearing on FIFA membership on 21-22 May 2015.

Photo: Johnny Napoli

 

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Author

Philip Vasquez

Philip Vasquez

Philip Vasquez is a Barrister and Acting Solicitor who regularly advises on commercial law, regulation, technology and dispute resolution, Philip also appears regularly in the Magistrates & Supreme Court. Philip is highly active in supporting entrepreneurship and innovative businesses in Gibraltar as an organiser of the Gibraltar Startup Community. Philip is also a co-opted member of the Gibraltar Bar Council.

@PhilipVasquez

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Julian Santos

Julian Santos

Julian is a barrister at 5RB specialising in media and entertainment law, including defamation, privacy, harassment and data protection.