How the ban on emergency loans in English football will affect clubs and players

Published 19 August 2016 By: John Shea

How the ban on emergency loans in English football will affect clubs and players

An important regulatory change that football clubs and players in The Football League and Premier League must bear in mind for the upcoming 2016/2017 season is the abolition of “emergency loans”.

This article explains the reasons why emergency loans have now been prohibited and the effects this may have on clubs and players in the future.

 

What is an emergency loan?

The Football League Regulations previously allowed1 clubs in The Football League (plus some non-league clubs) to loan players for a period of between 28 and 93 days during a closed period outside of the two annual transfer windows. This closed period was 7 days after the end of the summer transfer window on 31 August until 5pm on the fourth Thursday in November and 7 days after the end of the winter transfer window on 31 January until 5pm on fourth Thursday in March.

Contrary to what some people may believe, there was actually no need to prove an emergency such as an injury crisis or a number of suspensions to take advantage of an emergency loan. Its purpose was to enable clubs in the lower leagues to survive with smaller budgets and playing staff by permitting them to utilise short term loans at minimal cost should they need to. During the 2014/2015 season it was reported that nearly 350 football league players were signed on an emergency loan basis.2

Also, whilst the option of an emergency loan was not available to Premier League clubs, they were allowed to loan players out on an emergency basis to clubs in The Football League. With Premier League squads as big as ever and Under 21 football lacking in competitiveness, it was a great benefit to Premier League clubs and their young players to go on loan and gain first team experience even if it was on a short term basis. For example, Tottenham and England striker, Harry Kane, previously joined Leicester City on an emergency loan in February 2013.3

 

Issues

The issue with emergency loans was that they directly conflicted with FIFA’s Regulations on the Status and Transfer of Players (RSTP), which are largely binding at national level and must be included in the national association's regulations in accordance with Article 1(3)(a).

Article 10(1) of the RSTP confirms that loans are “subject to the same rules as apply to the transfer of players” and this includes Article 6(1) which provides that “players may only be registered during one of the two annual registration periods fixed by the relevant association” i.e. transfer windows. Similarly, Article 10(2) of the RSTP confirms that “the minimum loan period shall be the time between two registration periods” and so a shorter loan period is not permitted. Allowing short term emergency loans between 28 and 93 days outside of the transfer windows, therefore, infringed both Articles 6(1) and 10(2) of the RSTP.

It, therefore, came as no surprise when in November 2011, FIFA's Players' Status Committee found that the emergency loan system affected the “sporting integrity of competitions4 and was “not compatible with general principles of the FIFA Regulations on the Status and Transfer of Players." FIFA initially granted a grace period of two and-a-half seasons until the beginning of the 2014/15 season, however this was subsequently extended until the end of the 2015‑2016 season.5

 

New Rules

In order to ensure compliance with Articles 6(1) and 10(2) of the RSTP the new Football League Regulations6 now confirm that any attempt to register a player outside of the transfer window will be declined unless the player is unemployed, was last registered as a scholar or academy player and/or was last registered with a club which has ceased to trade. The new regulations now only permit standard loans, the duration of which must be the time between two transfer windows and so can be for either half a season or a full season.7

The only loan now permitted outside of the transfer window is an emergency goalkeeper loan8 whereby a club may register a goalkeeper if all its other professional goalkeepers are unavailable as a result of injury, suspension or being called up for international duty. The period for such a loan is only seven days although this can be renewed.

 

Reaction

The ban has been widely criticised by many managers who believe the smaller clubs in The Football League will now struggle to assemble large squads of players and compete with the larger clubs who have bigger budgets. Peterborough Director of Football, Barry Fry, thought it was a crazy decision by Fifa"9 and former Millwall manager, Ian Holloway, believed the

rule change will be a disadvantage to the clubs with smaller budgets. You'll have to spend more before the window closes as you're not allowed to add to it if you get injuries, suspensions, loss of form to players and so on. It's going to make things tougher for the smaller clubs and hands the bigger clubs an advantage - end of story."10

There are also concerns of the effect the ban will have on youth development. Whilst the option of half-season or season-long loans will remain, lower league clubs may be reluctant to commit to longer-term loans thus restricting the opportunities for younger players at larger clubs to gain valuable first team experience. Current England manager, Sam Allardyce, was particular scathing of the proposed ban whilst he was manager of Sunderland:

Lower-league teams will have to take players on a full-season loan or a half-season loan, which increases the cost to those clubs’ budgets, which will put extra pressure on the manager not to take young players in case they don’t work out, which then cuts down our development of young players which has proven to be the best way to develop a player to play in the Premier League.11

However, the new Football League Regulations permit players on loan to continue playing for their parent club in non-first team matches.12 It is believed that this flexibility will lead to clubs agreeing more appearance based loan deals thus ensuring that clubs are not deterred from committing to longer term loans.13 Also, whilst players will now have to be loaned out for half a season or the whole season, this provision means the short term nature of emergency loans will remain to an extent and enable clubs to effectively recall a player if a loan is not going well for instance. Football League chief executive Shaun Harvey said

The flexibility this approach seeks to create will be crucial to the operation of our clubs and helpful to those players that find themselves out of the first-team picture or just cutting their teeth in professional football.14

Also, any cut back on the number of loan deals may actually force clubs to play their own youth players rather than look to take a player from a higher league club on loan. Exeter City manager, Paul Tidsdale, confirmed that he was

"not passionate about it one way or the other. We prefer to bring our own players through and if we have the choice to play a developing player at Exeter or someone else's developing player we will go for our own.15

 

Comment

The full effect of the end of emergency loans remains to be seen and it will be interesting to note how clubs will use the domestic loan system for in the coming seasons. The one thing that is for sure, however, is that clubs from the Premier League to League 2 must now plan ahead far more carefully and ensure that their squads are finalised prior to the summer transfer window closing on 31 August given that their next opportunity to revise their squads will not be until 01 January.

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Author

John Shea

John Shea

John is a senior associate in the Sports Business Group at Lewis Silkin specialising in contentious, regulatory and disciplinary issues for clubs, agencies, governing bodies and athletes

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