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Determining the level of compensation for out of contract football players

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Wednesday, 04 August 2021 By Daniel Lowen, Liz Coley

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)[1].

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:

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Written by

Daniel Lowen

Daniel Lowen

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

Liz Coley

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.

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