International -- International Business: EUROPE
A SMASHING GOAL FOR FOOTBALL PLAYERS (int'l edition)
A court ruling could make salaries soar--and cost clubs dearly
Jean-Marc Bosman, a former midfielder for the football club of Liege, Belgium, is certainly not the best player in Europe. But he could be the most influential player in the game, thanks to the successful outcome of a lawsuit he brought to the European Court of Justice in Luxembourg. The Dec. 15 decision could revolutionize professional sports in Europe by introducing the American concept of free agents and transforming team finances.
Bosman turned to the court out of frustration with the 100-year-old rules governing European football. Although his contract with RC Liege expired in 1990, he was not free to cut a deal with another organization. Under the archaic rules, he needed the approval of his old club--which could demand a fee from anyone interested in Bosman--even after his contract had expired. A club in Dunkirk, France, did agree on a fee for Bosman. But Liege then blocked the deal, citing concerns about Dunkirk's finances.
BOMBSHELL. Bosman was furious. "I either had to fight or give up football," he says now. He sued his old club, the Belgian football association, and the Union of European Football Associations in the Luxembourg court that covers the European Union. He argued that the transfer fee blocked his freedom of movement inside the EU. The court decision supports Bosman, declaring that clubs no longer can charge transfer fees for players whose contracts have expired and who want to play in another EU country. The court tossed out another bombshell, declaring illegal the practice of limiting the number of players from other EU states.
Ironically, Bosman's career has declined because of the five-year wait for a decision: He now plays for a tiny club in Vise, Belgium. But the ruling has set sports managers and legal specialists scrambling to figure out its implications for football and other European sports, such as ice hockey, that have similar trading practices. True, the ruling applies to cross-border deals only, not to transfer fees paid for players switching teams within the same country. But cross-border trades already are large; they accounted for almost half of the $228 million in transfer fees Italian clubs, for example, paid in 1995. And with limits lifted on the number of foreign players allowed on teams, the number of cross-border trades could soar.
Clubs freed from the burden of forking over transfer fees may also be willing to woo top players with much higher salary offers. European stars now don't even come close to the pay levels enjoyed by U.S. super-athletes: Deion Sanders, a player of American-style football and baseball, is reported to have made $16.5 million in salary and bonuses in 1994. In Italy, top football star Roberto Baggio gets $2.5 million a year, plus bonuses. Now, players may get a greater slice of the cake. "We are not yet into the realms of American sports salaries, but this decision [could] take us along that road," says Paul Stretford, owner of British sports agent Proactive Sports Management Ltd.
Without fees for cross-border trades, club finances will change. Before the ruling--the powerful AC Milan club shelled out $9 million in transfer and contract fees to buy Baggio from Italian club Juventus. Under the old rules, Milan could expect to get a similar fee if it ever sold Baggio to another team. But now, if Baggio heads for a foreign club after his contract expires in 1998, the team could not charge any transfer fee. Says Tarozzi: "Milan would lose all the money [it] paid to Juventus."
In Austria, football star Harald Cerny already has seen his December switch from an Innsbruck team to a club in Munich, Germany, delayed by the ruling. Now Munich wants to "rent" Cerny for a third of the original $1.1 million transfer fee. Then, when Cerny's Innsbruck contract expires in June, Munich can get him for free.
As European sports clubs ponder this decision, more dramatic change could be on the way. A case recently filed in Belgium challenges fees paid for in-country transfers among football clubs after contracts expire. If that suit succeeds, Europe's athletes could soon enjoy all the thrills and perils of the free market.By Heidi Dawley in London, with Imma Vitelli in Rome