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

How the ban on emergency loans in English football will affect clubs and players
Friday, 19 August 2016 By John Shea

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

 

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About the 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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