Determining the level of compensation for out of contract football players
The decision of the Professional Football Compensation Committee (PFCC) to award Fulham guaranteed compensation of £1.5m in February 2021, plus a further £2.8m in contingent sums, in respect of then under 16 player Harvey Elliott once again thrust the concept of compensation for out of contract players under the age of 24 into the spotlight.
A common misconception is that players who move clubs before signing their first professional contracts, or at the expiry of a professional contract under the age of 24, are moving “on a free”, or at most subject to the payment of minimal compensation. The reality is that, for moves within England at least, in the absence of agreement between the two clubs, the PFCC is tasked with considering the appropriate level of compensation to be paid to the club that has invested in developing the player. As has been seen consistently over many years, compensatory awards can be considerable.
The Harvey Elliott award was notable in that it amounted to the highest ever award for an under 16 player. However, it was still only a fraction of the compensation awarded to Burnley following England international Danny Ings’ signature for Liverpool FC in the summer of 2015, following the expiry of his contract with Burnley FC. The tribunal’s award, handed down in April 2016, remains the largest compensation award for an out-of-contract player in the history of professional football (£6.5m plus £1.5m on appearances and a 20% sell-on fee).
In this article Dan Lowen, who represented Burnley in its claim for compensation for Danny Ings and Liz Coley, who has represented numerous clubs before the PFCC, consider the background to the compensation system and the PFCC’s methodology in determining the level of compensation. Specifically, this article provides:
- The legal background and international regime for:
- The PFCC’s remit and procedures
- How the PFCC determines compensation
- 3.1: The status of each of the clubs
- 3.2: The age of the player
- 3.3: The Training Model on which the player was engaged
- 3.4: Any fee paid by the former club in acquiring the player’s registration
- 3.5: The length of time the player was registered with the former club
- 3.6: The terms of the new contracts offered to him by both clubs
- 3.7: The player's playing record including any international appearances
- 3.8: Substantiated interest shown by other clubs in acquiring the player’s registration
- Regulation 4
- Previous decisions of the PFCC
- The PFCC’s award in respect of Danny Ings
- Post Danny Ings
- Rationalising the PFCC’s decisions
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- Tags: England | European Court of Justice | FIFA | FIFA Regulations on the Status and Transfer of Players | Football | Football League | Football League Rules and Regulations | Governance | PFCC Regulations | Premier League | Premier League Rules | Professional Football Compensation Committee | Regulation | Training Compensation | Treaty on the Functioning of the European Union (TFEU) | United Kingdom (UK) | Wales
- Key case law on attempts to circumvent FIFA’s Training Compensation System
- The on-going football dispute over training compensation and player loans II: Dundee Utd -v- Club Athletico Velez
- A guide to training compensation and solidarity payments in football
- A legal guide to training compensation in football under the FIFA Regulations
Dan Lowen, Level Law
Dan is a sports lawyer who is recognised as a leading adviser in the football industry. He has over 15 years’ experience advising players and agents on all aspects of their careers. For advice on choosing an agent, or if a player, family member or agent has any questions arising out of this article, Dan’s contact details can be found at www.level.law
Liz Coley is a Partner at LEVEL.
Liz is a highly experienced sports lawyer, who offers clients an indepth understanding of the world of professional football. Liz had almost 20 years experience working for 4 professional football clubs and for The FA prior to qualification as a lawyer. Since that time she has worked exclusively in sports law, representing a large number of clubs in relation to player contracts and transfers, compliance and regulatory issues and disputes.