Developing young rugby players – is it worth it?

Published 14 February 2013 | Authored by: Nilo Effori, Alex Henderson

The recent transfer of Zeki Fryers from Manchester United to Standard Liege and then to Tottenham Hotspur has focused the spotlight on compensation payments paid to clubs for developing young talent in football. It also highlighted an interesting issue on the disparity in compensation payments between international and domestic transfers. No one can argue that if a sports club invests its time, expertise and money in training a young player that they want to keep but who decides to leave, some form of compensation should be paid. FIFA and the Premier League have mechanics in place for training compensation but do other sports reward clubs who are successful in developing young players? This blog looks at recent transfers in the AVIVA Premiership (rugby union’s top division in England) and the system in place in rugby union.

The beginning of 2013 has seen the start of players agreeing new contracts with clubs for next season. Two of the more noteworthy announcements concerned promising young English players moving from one AVIVA Premiership team to another. Saracens agreed to sign 20 year-old Billy Vunipola from Wasps, while Gloucester signed the 20 year-old Matt Kvesic from neighbours Worcester. Wasps and Worcester had nurtured and developed Vunipola and Kvesic respectively through their academies. Both players progressed significantly and have been called up to train with the England senior side ahead of the 6 Nations1. Having invested considerable amounts of time and money in developing the two players to the brink of international recognition, both clubs will not benefit from their performances as they enter the prime of their career. How does the IRB and national rugby unions ensure these clubs are compensated for the time and money they invested in those young players?

 

International rules

Regulation 4.7 of the International Rugby Board’s Regulations Relating to the Game (IRB Regulations) provides that:

where a…player whose written agreement has expired enters into a written agreement for the first time with a Union, Rugby Body or Club outside his Home Union, his Home Union…shall be entitled to compensation for his training and/or development”.

The trigger for these IRB mandated compensation payments is the player moving away from his Home Union for the first time. The compensation payable is calculated by multiplying a “Standard Annual Development Investment” figure by the number of years, between the ages of 17 and 23, a player spends in development programmes of his Home Union. Factors included in calculating the figure include (i) training costs (salary paid to coaches, board and lodging expenses; and proportionate costs of training infrastructure); (ii) general costs related to player education, training and development, and (iii) costs of representative teams. According to the explanatory notes to the IRB Regulations, the maximum compensation amount payable is £35,000. All payments are paid to the player’s Home Union who has discretion to allocate those funds as it sees fit.

Vunipola and Kvesic’s transfers were between domestic clubs rather than internationally between Unions, therefore the IRB Regulations do not directly apply in their case. However, regulation 4.3 of the IRB Regulations requires that “each Union shall provide its own system for the movement of Players within its jurisdiction”. It also stipulates the system should properly reward constituents for their player identification, training and development activities. So how does the system work in England and is it fit for purpose?

 

Domestic rules

Regulation 7.6.2 of the RFU Rules and Regulations (the RFU Regulations) sets out when English clubs may seek compensation for young players. Under the RFU Regulations a club may seek compensation when:

  1. a Club has made a contract offer to an England Academy Player;
  2. the Academy Player Scholarship agreement has been completed;
  3. that Academy Player moves to or trains with or has any arrangement to move to another Club;
  4. that Academy Player has appeared on a registered list for the Club for not less than 12 months; and
  5. that England Academy Player was under the age of 20 years old on the previous 31 August.

An “England Academy Player” is a player of “at least 16 years of age who is a member of an RFU Academy and whose name is on the list of England Academy Players… and/or an England U20 Player in the Season…”

Unless otherwise agreed by the clubs involved, compensation is calculated by reference to the number of years the player has spent as an England Academy Player (£10,000 per year) and the number of years spent as an “Elite Player Development Group” (EPDG) member (£5,000 per year) at the original club. According to the England Rugby Academy player development structure, a young player can be an EPDG member between the ages of 14 and 16 at which point the player will then join an England Rugby Academy. This means that in most cases the maximum a club could be compensated would be calculated as follows:

EPDG

U14 Season                                          £5,000

U15 Season                                          £5,000

U16 Season                                          £5,000

England Rugby Academy

U17 Season                                          £10,000

U18 Season                                          £10,000

U19 Season                                          £10,000

U20 Season                                          £10,000

Total                                                    £55,000

 

Does this properly reward the clubs?

As rugby union becomes increasingly professional and now, in the aftermath of the BT Vision television rights deal, increasingly lucrative, it may be time for the RFU to reconsider the value attributable to the development of young players. After all, it is in their interest to have as many young English qualified players being identified, trained and developed as possible. But does £55,000 accurately reflect the costs of training and developing a player over seven years? Does £55,000 accurately reflect the loss to a club of losing such a player at that stage of his career? Does it adequately compensate a club for developing a potential future international?

The Premier League and Football League have a more flexible process overseen by the Professional Football Compensation Committee for determining the correct compensation fee payable for the transfer of young players. If the clubs involved cannot agree a fee, the Committee has the power to consider the merits of the individual case. For example, the Committee can provide for contingent payments depending on future events, such as the number of appearances the player makes or whether he wins international caps. With the existing agreement between the RFU and Premier Rugby up for renewal in 2016, it will be interesting to see whether clubs with particularly successful academies seek a new formula, perhaps based on football’s approach, for calculating compensation payments.

 


1 An annual competition played by England, Scotland, Ireland, Wales, France and Italy.

About the Author

Nilo Effori

Nilo Effori

Nilo is the founding partner of Effori Sports Law (Effori Sociedade de Advogados), a boutique law firm based in São Paulo and London, specialising entirely in all manner of international sports disputes.

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Alex Henderson

Alex Henderson

Alex is a commercial lawyer at Dentons with a particular emphasis on the media and sport sector. Alex has worked on media rights related matters for a number of clients including, the England and Wales Cricket Board and Chelsea Football Club as well on various commercial arrangements in sports such as football, cricket and formula 1.

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