Could Liverpool sack Suarez?

Published 27 June 2014 By: John Mehrzad

Luis Suarez
Luis Suarez has been banned for nine matches and four months from all football-related activity for biting Italy defender Giorgio Chiellini.1 The world-wide reaction to Suarez’s latest shocking indiscretion has prompted both outrage and ridicule.

The World Cup in Brazil has currently been overshadowed by his actions. Whilst recent talk has centred on the effect of his ban on a proposed transfer away from his employer club, Liverpool, a more interesting question is whether Liverpool even has to sell Suarez in order to recoup his market value?

 

The contractual position

In terms of Suarez’s contract with Liverpool, the standard form Premier League player contract provides, amongst others, that “Gross Misconduct shall mean serious behaviour by the Player”.
 
Such a Player also agrees to “observe the Laws of the Game when playing football”.
 
Under the standard termination provisions in the same contract, “A club is entitled to terminate the employment of the Player by fourteen days’ notice in writing to the Player if the Player shall be guilty of Gross Misconduct”.2
 
Given the stark findings about Suarez by the FIFA Disciplinary Committee, in particular that “such behaviour cannot be tolerated on any football pitch, and in particular not at a FIFA World Cup when the eyes of millions are on the stars on the field”3, Liverpool can arguably now contend that Suarez’s behaviour amounts to “Gross Misconduct” for the purposes of his player contract. 
 
But does it make any difference that his misconduct took place at the World Cup rather than when Suarez was playing for Liverpool?
 

Conduct for Uruguay rather than Liverpool

The answer to that question depends on whether Liverpool can reasonably contend that its own reputation has been brought into dispute by Suarez’s conduct during a game between Italy and Uruguay in Brazil?4
 
The answer must be “yes”. Hardly a single, recent headline about Suarez has failed to mention his club, Liverpool.5 Speculation has been rife about the views of the club’s owners, what rehabilitation should be offered when he returns, and in particular whether a possible transfer abroad may be affected? At least for the time-being for Suarez, one must also read Liverpool and visa-versa. Both reputations have clearly been tarnished by his bite.

 

Commercial reality

That all said, would Liverpool really want to terminate? 
 
On the one hand, football means business, which militates against terminating the contract of a club’s most valuable asset. Recent commercial wisdom has been to hold onto a valuable, unruly player until an appropriate transfer fee can be agreed or he can be reintegrated back into the team. That approach worked well for Manchester City when Carlos Tevez reportedly refused to come on a substitute in a Champions League game against Bayern Munich and then refused to return from an extended golfing-holiday in Argentina. He eventually returned (after hefty fines6), helped City win their first Premier League title and then was sold to Juventus. 
 

Practical reality 

On the other hand, Liverpool is now faced with a serial offender who has not only damaged their reputation but also potentially lowered his own value and is now even banned from attending training or Anfield for four months. In those circumstances there are sound reasons in favour of termination.
 
First, it would be big statement from Liverpool that enough is enough. By doing so, the club would seize the moral high ground. Secondly, in commercial terms, the club’s valuable sponsorship rights may not be threatened by holding onto such an unpalatable player. After all Suarez’s own sponsor, Adidas, has already apparently begun to reconsider its commercial deals with the player.7 Thirdly, in financial compensatory terms, Liverpool would have good grounds to argue that the proper market value of Suarez was in the region of £80m8 – as that was the sum both the club and the player agreed to be a fair value for his buy-out clause – and suitors were apparently prepared to pay prior to his bite.9 Fourthly, if Liverpool instead chooses to delay a decision for several weeks, they may be viewed to have waived Suarez’s breach of contract, rendering it too late for the club to terminate legitimately in practical terms.10 
 

Regulatory position and compensation 

Liverpool would then claim that such a termination was without “just cause” and, therefore, it is entitled to Suarez’s market value by way of compensation under FIFA Regulations.11 That was essentially the successful argument made by Chelsea made when it sacked Adrian Mutu for failing a drug’s test.12 Since then the Court of Arbitration for Sport case law has repeatedly found that the proper assessment of compensation to be the market value of the player rather than the unexpired portion of the player contract. That analysis would mean Suarez could be landed with a bill of around £80m to pay Liverpool plus interest and costs.13
 

Difficulties 

The flies in the ointment of terminating Suarez’s contract are delay and enforcement. It must not be forgotten that Mutu has still not paid Chelsea the €17m plus interest and costs he was ordered to pay in compensation after various appeals some 5-years ago.14 Indeed, in that case, costly litigation dragged on from early 2005. In reality, even though he is no doubt extremely wealthy, Suarez would also simply not be able to pay £80m. 
 
Ultimately, the likelihood of Liverpool sacking Suarez now is remote when, even as a tainted asset, he would still nevertheless command a sizeable transfer-fee for pure footballing reasons. In reputational terms, the easiest solution for Liverpool is to cut their losses and sell Suarez to the highest bidder out of his present suitors, even if the fee now to be commanded will be some way below the reported £80m buy-out clause.
 
 

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Author

John Mehrzad

John Mehrzad

John is recognised as a leading barrister specialised in employment, commercial and sports law, practising from Littleton Chambers where he is the Head of the Sports Law Group.

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