The International Sports Law Journal

https://doi.org/10.1007/s40318-018-0118-y (0123456789().,-volV)(0123456789().,-volV)

ARTICLE

Third-party ownership prohibition in football and European Union

fundamental freedoms: CAS decision on RFC Seraing case
Pedro Henrique Rebello de Mendonça1

 T.M.C. Asser Instituut 2018

Abstract
Third-party ownership used to be an important financing mechanism in football. It allowed some clubs to be more
competitive in the global transfer market, as they could attract and retain footballers whom they would otherwise not have
been able to attract if the clubs had to acquire the totality of the players’ economic rights. However, this mechanism was
banned by FIFA in 2015 after the inclusion of Article 18ter in its Regulations on the Status and Transfer of Players. This
prohibition has been very controversial and was challenged before the CAS by the Belgian club RFC Seraing. The decision
in the case considered the parties’ arguments: The club’s argument was that Article 18ter violated European Union law,
including the fundamental freedoms; FIFA’s argument was that such a measure was necessary and proportionate to
preserve the integrity of football. Throughout this paper, the reasoning adopted by the CAS panel in its decision will be
analysed, taking into consideration the allegations regarding the legitimacy of FIFA’s objectives in banning TPO as well as
the adequacy and proportionality of such a measure to achieve those objectives. Therefore, it will be possible to verify
whether the TPO prohibition is truly compatible with the European Union’s fundamental freedoms.

Keywords Third-party ownership
Football
Sports law
European Union
Fundamental freedoms

1 Third-party ownership prohibition
FIFA’s concern about third-party influence over decisions
connected to players’ transfers and employment is not new.
In 2007, the creation of Article 18bis in its Regulations on
the Status and Transfer of Players prevented clubs from
entering into contracts that enabled the exercise of such
influence by third parties and thus affected the clubs’
independence. In other words, the rule aimed to ensure that
any decisions regarding players’ transfers and contracts
were made exclusively by the clubs and athletes them-
selves, without any external interference.
Through the aforementioned provision, FIFA apparently
intended to preserve the integrity of football based on two
fundamental aspects of the relationship between a club and a
player: From the player’s perspective, the importance of the
employment contract and the development of a successful (in
both financial and sporting terms) professional career, and
& Pedro Henrique Rebello de Mendonça
1 3
Rio de Janeiro, Brazil
from the club’s point of view, the attempt to attract and retain
the best players in order to enhance the team’s performance
and win trophies. The player and club deciding to enter into
an employment contract is thus a direct consequence of their
economic and sporting interests being coincident at that
time—and FIFA wanted to ensure that any decisions con-
cerning transfers were restricted solely to their interests.
While FIFA’s intent has not changed at all,1 the ruling
on this matter did: Since 2015, following the creation of
Article 18ter, third-party ownership (‘‘TPO’’)2 of players’
economic rights3 has been expressly prohibited. This
1
FIFA (2015).
http://www.fifa.com/mm/document/affederation/footballgovernance/
02/59/55/80/third-partyownershipofplayerseconomicrights-background
information_neutral.pdf. Accessed 22 August 2017.
2
FIFA’s option for such wording is often criticized based on the
grounds that the player is not literally ‘‘owned’’ by any parties (either
clubs or investors). In this connection, several authors suggest that
third-party investment (TPI) or third-party entitlement (TPE) would
be more adequate expressions; despite that, we hereby follow the term
adopted by FIFA, considering that it makes a reasonable reference to
the ownership of economic rights—not to the player himself—in line
with the transfer system in force.
Van Maren et al. (2016), p. 234.

123

provision prevents any club or player from entering into
‘‘an agreement with a third party whereby a third party is
being entitled to participate, either in full or in part, in
compensation payable in relation to the future transfer of a
player from one club to another, or is being assigned any
rights in relation to a future transfer or transfer
compensation’’.
TPO and its prohibition have been very controversial so
far. On one side, some specialists state that TPO effectively
generated third-party influence over transfers and affected
clubs’ sustainable development4; on the opposite side,
some argue that the prohibition is not justifiable5 and harms
some clubs’ capacity to attract and retain talent (mainly in
countries where TPO used to be largely employed, such as
Brazil,6 Portugal, Spain, Greece, Belgium, Holland and
Turkey),7 thus increasing the disparity between wealthier
and poorer clubs and representing an advantage for
wealthier leagues in a globalised football market.8
In addition to these practical and policy issues, the TPO
prohibition has also raised legal concerns. For example,
FIFA considers the player himself a third party for TPO
purposes based on the premise that the two parties involved
in a transfer are the selling and buying clubs. This rea-
soning, however, is incompatible with the fact that the
player indeed represents the essential party of such eco-
nomic rights, and in this regard we must remember that the
so-called ‘‘free transfers’’ involve exclusively the athlete
and the acquiring club. As a consequence, it does not seem
reasonable to consider the athlete a third party in such a
transaction and remove from him the entitlement of owning
rights derived from his professional activity.
However, the key legal controversy regarding the TPO
ban refers to its compatibility with European Union
(‘‘EU’’) law. In 2015, for example, the Spanish and Por-
tuguese football leagues formally challenged the ban
before the European Commission,9 but no decision has
been made yet. Nevertheless, the most important case so
far was initiated in 2016: After being sanctioned by the
FIFA Disciplinary Commission for violating Articles 18bis
and 18ter of the FIFA Regulations on the Status and
Transfer of Players, the Belgian club RFC Seraing
appealed10 to the Court of Arbitration for Sport (‘‘CAS’’)
4
Ibid, pp. 238–239; 248–251.
5
Lombardi et al. (2014), p. 35.
6
Motta and Fida (2015), pp. 13–16.
7
Villas-Boas Pires (2016).
https://www.lawinsport.com/articles/item/a-review-of-fifa-s-tpo-ban-
and-alternative-financing-models-for-clubs. Accessed 17 August 2017.
8 and (v) promote transparency in connection with players’
Van Maren et al. (2016), pp. 236–237; 246.
9 transfers.
Reuters (2015).
https://www.theguardian.com/football/2015/feb/10/portugal-spain-
fifa-ban-third-party-ownership. Accessed 22 August 2017.
10
TAS 2016/A/4490 RFC Seraing c. FIFA.
123
The International Sports Law Journal
alleging the TPO prohibition was illegal. Amongst other
arguments, the club raised incompatibilities between the
FIFA ruling and the fundamental freedoms provided by the
Treaty on the Functioning of the European Union
(‘‘TFEU’’).
Through this paper, the CAS decision in this case will
be examined regarding the specific conflicts between the
FIFA rule and the EU’s fundamental freedoms. There
will thus be the opportunity to analyse the arguments
presented by FIFA (in favour of the TPO prohibition)
and RFC Seraing (against it) and raise some practical
issues and policy matters, including the consideration of
further rules enacted by FIFA and other football gov-
erning bodies. Finally, at the end of the essay, we expect
to answer the fundamental question: Is the TPO prohi-
bition truly compatible with the EU’s fundamental
freedoms?
2 EU fundamental freedoms
The TFEU establishes, in its Title IV, the four fundamental
freedoms that are to be observed in the EU: (i) movement
of workers (Articles 45 to 48), (ii) establishment (Articles
49 to 55), (iii) provision of services (Articles 56 to 62), and
(iv) movement of capital (Articles 63 to 66).
According to RFC Seraing, three of them were violated
by the TPO prohibition (freedom of establishment being
the only exception), and FIFA’s justification for creating
Article 18ter did not reflect any legitimate public interest
that could justify the restriction of these freedoms. Fur-
thermore, the club stated that even if FIFA’s interests in
amending its rules were legitimate, the TPO prohibition
could not be held as a proportionate measure. Conse-
quently, the limitations imposed to the fundamental free-
doms would be inadmissible.
On the other side, FIFA rejected the alleged incompat-
ibility with EU fundamental freedoms, contending that any
eventual restrictive effects on the freedom of workers and
services would be merely random and indirect, while there
would be no limitations to movement of capital at all, as
the TPO prohibition does not preclude other types of
investment by third parties in football. Moreover, FIFA
listed the alleged objectives of the new rule, stating that it
aimed to (i) preserve the stability of players’ employment
contracts, (ii) ensure clubs’ and players’ autonomy
regarding transfers, (iii) safeguard integrity in football and
equity in the competitions, (iv) prevent conflicts of interest
The CAS panel initially recognized that the TPO pro-
hibition indeed restricted the movement of capital. How-
ever, following CJEU precedents in other key cases
The International Sports Law Journal
(Bosman,11 Kraus,12 Lehtonen13 and Olympique Lyon-
nais14), the CAS panel stated that such a restriction would
not necessarily mean that Articles 18bis and 18ter were
illegal. The Articles would still be admissible as long as
they effectively pursued a legitimate objective and were
duly necessary and adequate to achieve that objective. The
same reasoning was also applied to the restrictions on the
free movement of workers and services. The panel thus
focused on examining the objectives alleged by FIFA—to
evaluate their legitimacy—and on verifying whether the
TPO prohibition was adequate and proportionate to ensure
the accomplishment of these goals.
In its decision, the CAS Panel stated that RFC Seraing
had not provided any elements that could undermine the
validity of FIFA’s objectives and then concluded that the
objectives were legitimate. In addition, the panel noted that
the TPO prohibition was an adequate and proportionate
measure to achieve these objectives after identifying that
third-party ownership was capable of generating some
specific risks to football activities: (i) the participation of
opaque investors who escaped from being adequately
controlled by football regulators; (ii) the risk to the players’
professional freedom since they might be transferred due to
purely speculative interests; (iii) conflicts of interest and
match-fixing if one party’s investments were related to
more than one club in the same competition; and (iv) an
ethics risk if the investors’ interests were merely specula-
tive and not of a sporting nature.
Therefore, the key to verifying the accuracy of the
panel’s decision is to scrutinize each of FIFA’s alleged
objectives to confirm if they are legitimate and if the TPO
prohibition is an adequate measure to achieve them.
2.1 Stability of players’ employment contracts
If the TPO prohibition aimed to enhance the stability of
players’ employment contracts, its logical result would
ideally be a decrease in the quantity of players transferred.
To confirm if that objective was accomplished, FIFA’s
annual reports on international transfers may provide sub-
stantial data.
According to the Global Transfer Market Report 2017,15
13,156 international transfers were carried out in 2014. In
the following year (when, based on Article 18ter, TPO was
entirely banned from May on), the quantity of international
transfers increased to 13,601. In addition, finally, in 2016,
14,591 international transfers were registered.
11
Case C-415/93.
12
Case C-19/92.
13
Case C-176/96.
14
Case C-325/08.
15
FIFA/TMS (2017), p. 5.
The same report also provides interesting information on
the types of transfers carried out16: In 2016, 66% of the
international transfers involved players out of contract,
which means that there was no payment for economic
rights by the acquiring club; on the other side, only 12%
related to permanent transfers that demanded payment for
the acquisition of economic rights. If compared to previous
years,17 these figures demonstrate that the proportion of
permanent transfers with payment for economic rights in
2016 (with the TPO prohibition fully in force) was higher
than in 2015 and higher than the average from October
2010 to 2015.
Although these numbers only refer to international
transfers, they are evidently representative of the general
transfers worldwide and lead to two logical conclusions.
First, the TPO prohibition did not reduce the quantity of
transfers; on the contrary, the number continued to
increase. Therefore, it can be said that Article 18ter did not
have any real positive impact on the stabilization of play-
ers’ contracts. Second, banning TPO did not change the
profile of the transfers: The so-called ‘‘free transfers’’ were
already dominant before the existence of Article 18ter and
remain in that position. If TPO eventually led to interfer-
ence with clubs’ and players’ decisions regarding transfers
because the investors intended to make profits, the effects
of that intervention were limited to approximately 10% of
the international transfers—which were the ones that
required payment for the acquisition of the players’ eco-
nomic rights.
Consequently, it is not reasonable to argue that TPO
threatened players’ contract stability in a market in which
more than two-thirds of the contracts are executed until
their final terms, and only approximately 12% of the
transfers can be potentially profitable (whenever they do
not represent a loss) to the owners of the players’ economic
rights. In other words, the aforementioned numbers
demonstrate that (i) the stability of employment contracts is
not a legitimate reason for the violation of fundamental
freedoms and (ii) even if it were, the TPO prohibition is
clearly an inadequate measure to safeguard and improve
that stability.
2.2 Clubs’ and players’ independence
and autonomy
It is very controversial to say that TPO harms clubs’ and
players’ independence and autonomy when deciding upon
a transfer, as that statement seems to ignore a few funda-
mental aspects of the football transfer system.
16
FIFA/TMS (2017), p. 6.
17
FIFA/TMS (2016), p. 7.
123

Initially, it must be remembered that any influence from
third parties on decisions regarding transfers has been
already prohibited by Article 18bis since 2007. Therefore,
Article 18ter and the consequential TPO ban were unnec-
essary if the objective was to merely avoid third-party
influence. This is ratified by the fact that FIFA sanctioned
several clubs for third-party influence based on earlier
editions of the Regulations on the Status and Transfers of
Players with only Article 18bis providing the grounds for
those decisions.18 Although those sanctions do not neces-
sarily correspond to final decisions—as the concerned
clubs might appeal to the CAS—they clearly demonstrate
the enforceability of Article 18bis as an effective measure
to prevent third-party influence over clubs’ and players’
independence and autonomy.
Furthermore, the existing transfer system requires the
player’s written consent as a mandatory requirement for the
execution of any transfer. This basic rule derives from the
fact that players and clubs have an employment relation-
ship, which must implement not only FIFA’s and the
respective national federation’s rules but also the Labour
Law norms in force in the relevant country. Therefore,
raising doubts over the players’ autonomy to choose their
employers corresponds to improperly questioning (i) the
legal nature of the relationship between players and clubs
and (ii) the players’ right to freedom of movement.
FIFA’s reasoning also lacks consistency with regard to
the clubs’ independence. If a club decides to enter into a
contract with any third party, it is already exercising its full
independence to conduct its businesses. Thus, when a club
agrees to share players’ economic rights with investors, the
assumption is that this model meets the club’s best interest,
especially in building a more competitive team. In contrast
to what FIFA’s reasoning may indicate, clubs were not
victims of third-party investors in the TPO model; indeed,
they were partners. It is thus clear that clubs have always
had absolute independence to choose the most suit-
able model of acquiring players, and that choice is an
unequivocal demonstration of the clubs’ autonomy to run
their own business in accordance with their particular
financial status and based on the economic reality of the
league and the country to which they belong.
In this connection, the alleged objective of preserving
both players’ and clubs’ autonomy through the TPO pro-
hibition reveals itself as absolutely illegitimate, and the
violation of EU fundamental freedoms remains unjustified.
18
See Santos Futebol Clube and Sevilla FC on:
FIFA (2016b).
http://www.fifa.com/governance/news/y=2016/m=3/news=several-
clubs-sanctioned-for-breach-of-third-party-influence-third-par-27729
84.html. Accessed 22 August 2017.
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2.3 Integrity in football and equity
in competitions
Integrity and equity are indeed key values for sports in
general. Their importance dates to the amateur era, when
players and fans were moved exclusively by purely sport-
ing interests, competitiveness and passion. Currently, in the
professional era, match-fixing arises as one of the greatest
threats to those values, as it affects one of sports main
characteristics: the unpredictability of the result. In this
connection, it is vital that FIFA take appropriate measures
to prevent any actions that may harm the integrity or
equity. However, was TPO a real threat to integrity and
equity?
Football is full of third-party interventions. Intermedi-
aries, for example, are not part of the football core con-
stituted by players, clubs, leagues and federations, but they
still play a significant role in the transfer market. As
intermediaries have an active and direct participation in
players’ transfers, it is reasonable to assume that they may
duly influence clubs’ and, mainly, players’ decisions. In
this regard, however, FIFA seems to be much more sen-
sitive to handle the matter: Instead of simply banning
intermediaries, FIFA regulates their activities19 in order to
minimize the risks of unwelcome interference.
In addition, FIFA does not seem much concerned about
club owners. There is no specific regulation for transactions
involving club ownership, and there are only brief infor-
mation requirements related to the clubs’ ownership and
control in the Club Licensing Regulations.20 This is surely
a much softer approach than the one designed to TPO—
even though any influence in the controlling bodies of a
club may be much more dangerous to the integrity of
football than the influence on any specific player transfer.
It is no coincidence that several Belgian clubs have
recently been acquired by foreign investors.21 Even though
Belgian league it is not among the most prestigious in
Europe, the country offers good conditions for those
investors to develop a variety of business strategies through
the acquisition of clubs. Enabling young players to develop
in order to succeed in foreign clubs owned by the same
group, allowing non-Europeans to gain European citizen-
ship in a relatively short period of time, and creating a
19
FIFA (2014). https://resources.fifa.com/mm/document/affedera
tion/administration/02/36/77/63/regulationsonworkingwithintermedia
riesii_neutral.pdf. Accessed 22 August 2017.
20
FIFA (2007), p. 38 and 43 (Article 9.2.1, L.03 and Article 10.4,
F.01). http://www.fifa.com/mm/…/club_licensing_regulations_en_
47341.pdf. Accessed 17 August 2017.
21
Smith (2017).
https://www.nytimes.com/2017/09/09/sports/soccer/belgian-clubs-
and-foreign-money-a-modern-soccer-mix.html. Accessed 11
September 2017.
The International Sports Law Journal
football ‘‘reality show’’ are examples of those totally
diverse strategies. Despite presenting such different
approaches, the Belgian context clearly reveals that club
ownership is more significant than TPO has ever been as a
threat to the integrity and equity in football: After all, it
seems much less harmful for the Belgian league to have the
clubs using the TPO mechanism to strengthen their squads
than to have them be fully controlled by investors whose
objectives may be largely dissociated from the clubs’ best
sporting interests.
FIFA also grants a large space in which sponsors can
operate. It creates a variety of situations that may raise
doubts about the integrity of football and competitions,
such as competing clubs being sponsored by the same
company and, moreover, the possibility that clubs might be
sponsored by the same company that sponsors the league in
which they compete.22 Furthermore, even betting compa-
nies are freely allowed to sponsor football clubs,23 leagues
and federations24—which does not seem to be entirely
aligned with FIFA’s alleged interest in preserving integrity
and equity, especially at a time when betting and match-
fixing are intimately connected.
It is therefore clear that several types of third-party
influence in football are absolutely tolerated by FIFA,
although they appear to be much more harmful to integrity
and equity, especially when they have any connection to
club ownership or betting. Therefore, while it is not pos-
sible to objectively verify if TPO effectively harms integ-
rity and equity, its prohibition on these grounds seems
harsh and dubious if compared to FIFA’s attitude regarding
those potentially more damaging issues; in this connection,
the TPO ban is not the most adequate nor a proportionate
measure to protect integrity in football and equity in
competitions.
22
For example, the telecommunications company ‘‘NOS’’ sponsors
the Portuguese League (the so-called ‘‘Liga NOS’’) and is also
Sporting CP’s main sponsor.
23
Wright (2017).
http://en.calcioefinanza.com/2017/07/03/gambling-companies-do
minate-premier-league-sponsorship-deals-no-beer-sponsors-201718-
first-time-ever/. Accessed 22 August 2017.
24
The English Football Association used to be sponsored by
Ladbrokes, for example, but the FA spontaneously decided to
terminate that contract and refrain from entering into any other
sponsorship deals with betting companies. On the other side, the
English Football League is still sponsored by Sky Bet. More details
on:
Kelner (2017).
https://www.theguardian.com/football/2017/jun/22/fa-announces-
end-to-sponsorship-deals-with-betting-companies. Accessed 11
August 2017.
2.4 Conflicts of interest
As abovementioned, while sponsorships and investments in
general are vital to football as a business, they may threaten
the equity of competitions in specific circumstances. Such a
possibility is intimately related to conflicts of interest. It is
not unusual, for example, for one single company to
sponsor more than one team in the same league; however,
depending on the relationship between the club and the
sponsor, the scenario can raise suspicions about conflicts of
interest.25
The qualification of FC Red Bull Salzburg (‘‘FCS’’) and
Rasenballsport Leipzig (RB Leipzig) to the 2017/2018
UEFA Champions League raised concerns about two teams
allegedly controlled by the same company participating in
the same competition.26 Surprisingly, FIFA does not have a
specific rule to prevent this from happening27 (an extre-
mely lenient approach if compared to the harsh TPO pro-
hibition). In contrast, the Regulations of the UEFA
Champions League, issued by UEFA, provide a specific
article28 referring to the integrity of the competition
through which UEFA intends to prevent those conflicting
situations. In the concrete case, the Adjudicatory Chamber
of the UEFA Club Financial Control Body decided that
there was ‘‘insufficient evidence (…) to justify a conclu-
sion that one of the Clubs exercises decisive influence over
the other’’, based on the conclusion that ‘‘Red Bull does not
have decisive influence over FCS’’ as ‘‘the Red Bull and
FCS relationship resembles only a standard sponsorship
relationship’’.29
In addition, it is also possible that players themselves are
involved in situations of conflicts of interest. As pre-con-
tractual agreements have become more and more common
(especially regarding free transfers), it is really possible
that a player could compete against his future club while a
pre-contractual agreement between them is already in
force. This possibility is clearly tolerated by FIFA as
Article 18 (3) of its Regulations on the Status and Transfer
of Players30 expressly permits professional players to
25
Van Maren et al. (2016), p. 236.
26
Ford (2017).
http://www.dw.com/en/could-rb-leipzig-be-banned-from-compet
ing-in-the-champions-league/a-38027087. Accessed 22 August 2017.
27
Except for a small reference in the Club Licensing Regulations.
28
UEFA (2017b), pp. 15–16 (Article 5). http://www.uefa.com/
MultimediaFiles/Download/Regulations/uefaorg/Regulations/02/46/
71/38/2467138_DOWNLOAD.pdf. Accessed 17 August 2017.
29
UEFA (2017a), pp. 9–10. http://www.uefa.com/MultimediaFiles/
Download/OfficialDocument/uefaorg/ClubFinancialControl/02/48/50/
34/2485034_DOWNLOAD.pdf. Accessed 22 August 2017.
30
FIFA (2016a), p. 19. resources.fifa.com/mm/document/affedera-
tion/administration/02/70/95/52/regulationsonthestatusandtransferof-
playersnov2016weben_neutral.pdf. Accessed 22 August 2017.
123

‘‘conclude a contract with another club if his contract with
his present club (…) is due to expire within six months’’.
Despite having noticeable merits with regard to the pro-
tection of footballers (by granting them a six-month period
to search for a new employer before the current contract
expires), such a provision may insert players in serious
conflicts between the interests of their present and future
clubs.
These examples demonstrate that TPO is not among the
core causes of conflicts of interest. Instead, the variety of
cases and possibilities indicates that conflicts of interest are
inherent to football. Either from an economic perspective
(as the clubs need to raise funds through sponsorships),
from a legal standpoint (as the freedom of movement of
workers is reinforced by the possibility of players con-
cluding contracts even before the expiry of their present
contracts), or from a purely sporting point of view (as the
players want to be transferred in order to play more or play
for a better team), modern football is not immune from
conflicts of interest—and, once again, the TPO ban is not
an adequate and proportionate measure to address it.
2.5 Transparency
In order to justify the TPO prohibition as a necessary
measure to enhance transparency in football, FIFA argued
that several investors were legally opaque entities, which,
among other causes, hindered the possibility of knowing
the beneficial owner of the players’ economic rights under
TPO. The panel accepted this argument and stated that
FIFA was not able to regulate third parties that were not
directly or indirectly affiliated with it.
Nevertheless, investors are by no means different from
intermediaries in this regard: Neither of them is naturally
connected to football by purely sporting links but only due
to economic interests. Despite that, FIFA admits interme-
diaries’ activities as legitimate and indeed regulates
them—as already mentioned. This reveals that FIFA not
only can control and supervise third parties’ activities
related to football (and more specifically transfers) but also
knows the proper means to do it; consequently, there is no
point in arguing that investors are outside of FIFA’s reg-
ulatory scope. If FIFA regulated TPO—which would be the
best alternative to enable the enjoyment of the benefits of
such mechanism while mitigating its negatives31—it could
have, for example, (i) limited TPO to transparent legal
entities, (ii) imposed the requirement that the beneficial
owners of the economic rights had to be expressly indi-
cated by the clubs, and (iii) limited the percentage of TPO
over a player’s economic rights.
31
Lombardi et al. (2014), p. 44.
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Unfortunately, that was not the case, as FIFA decided to
simply ban TPO. Despite that, the scandal32 involving the
English national team’s ex-manager demonstrated the
inefficiency of such a measure to prevent third-party
influence over transfers, and its uselessness in promoting
transparency in football transactions.
Another recent case also raised discussions about
transparency in football. Neymar Jr.’s transfer from FC
Barcelona to PSG for a record fee of 222 million Euros
brought the public’s attention to the financial fair play rules
and to PSG’s financing. Firstly, it must be recognized that
the financial fair play rules are more strictly implemented
by UEFA; FIFA’s Club Licensing Regulations33 do
establish a financial criterion for licensing, but the rules
restrict it to the disclosure of annual financial statements
audited by independent auditors. Moreover, the case brings
the aforementioned ownership issue back, as it is specu-
lated that PSG (owned by a Qatari) has been funded34 by
the Qatari government.35
It is thus evident that banning TPO is neither adequate
nor efficient for enhancing transparency in football. Instead,
the case referred to above reveals that other economic
aspects, such as club ownership and control, can more
significantly affect transparency. Furthermore, the regula-
tion of third-party owners’ activities would be more suit-
able to address the question, providing real solutions to the
negative impacts of TPO while allowing football stake-
holders (such as the less wealthy leagues, clubs and players)
to continue benefitting from that financing mechanism.
3 Conclusion
Following the analysis hereby developed, the legitimacy of
FIFA’s alleged objectives in prohibiting TPO remains
highly controversial. Moreover, this prohibition does not
reveal itself to be the most adequate measure to pursue
those objectives and is clearly disproportionate if compared
to other FIFA rules. In other words, FIFA’s approach to
TPO radically differs from its attitude regarding other
activities that are potentially more hazardous to the
32
The Telegraph (2016).
http://www.telegraph.co.uk/news/2016/09/26/exclusive-how-sam-
allardyce-tried-to-make-as-much-money-as-possi/. Accessed 22
August 2017.
33
More specifically the Article 10 of FIFA’s Club Licensing
Regulations.
34
In 2014, the UEFA sanctioned PSG for violating the Financial Fair
Play rules by receiving an allegedly inflated sponsorship value from
the Qatar Tourism Authority.
35
MacInnes (2017).
https://www.theguardian.com/football/2017/aug/02/psg-200m-ney
mar-barcelona-financial-fair-play. Accessed 22 August 2017.
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principles that FIFA allegedly intends to preserve and,
consequently, to football in general.
Therefore, the legitimacy of those objectives is not
crystal clear enough to justify the violation of EU funda-
mental freedoms. In addition, even if the objectives were
considered legitimate, the TPO prohibition clearly could
not be described as an adequate and proportionate measure
to accomplish those objectives, as was plainly demon-
strated by the analysis of each of them.
Since those objectives’ legitimacy is not uncontroversial
and the measure is evidently inadequate and dispropor-
tionate, the answer to the fundamental question proposed in
the introduction arises: The TPO prohibition is not com-
patible with the EU fundamental freedoms.
Although the CAS did not come to this conclusion in the
RFC Seraing case, the validity of Article 18ter of the FIFA
regulations on the Status and Transfer of Players may still
be challenged in further cases. In this connection, it is
important to mention that another panel, composed of
different arbitrators, might have come to a different con-
clusion due to the multiple weaknesses of FIFA’s reason-
ing. Moreover, even the club’s reputation may have played
a role in the panel’s decision to come to such a conclusion,
which raises an important question: Would the decision be
different if the appellant were a world-renowned club or
league? Although it is impossible to categorically answer
that, it is not difficult to imagine that the appellant’s rep-
utation might have affected the panel’s decision, and such
an influence may eventually be clarified if other TPO cases
are brought to the CAS in the future.
Independently of that, it is fundamental to remember the
key influence of EU law and EU institutions in the evo-
lution of Sports Law. In this connection, it is highly pos-
sible that the European Commission and the Court of
Justice of the European Union may once again play a vital
role in protecting the fundamental freedoms violated by
FIFA’s rule. Therefore, it is still too soon to declare the end
of TPO. Depending on how EU institutions may approach
the conflict between Article 18ter and EU fundamental
freedoms, that important financing mechanism may still be
considered valid again in the near future.
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