Why is June 30 suddenly the key date in European football?

Posted in Football Employment, labor and pensions

As football governing bodies across Europe attempt to formulate plans on how to complete the remainder of the 2019/20 season, one date is central to all of these discussions: June 30 2020.

What is the issue?

In the vast majority of player contracts in the Premier League and the English Football League (EFL), the expiry date will be 30 June of the final year of the contract. In normal circumstances, all domestic and European competitions are completed in advance of  June 30 so as to avoid players’ contracts expiring prior to the end of the competitive season.

As it looks increasingly unlikely that the Premier League and the EFL will be able to complete the 2019/20 season before 30 June 2020, a significant number of players would therefore be out of contract and free to leave their current club prior to the end of the season. Richard Bevan, Chief Executive of the League Managers’ Association, has stated that there will be up to 1,000 players who fall into this category across the three divisions of the EFL, as well as some high-profile players in the Premier League.

What is FIFA’s proposed solution?

FIFA’s response to this issue, which can be found here, was to announce a new set of COVID-19 guidelines to be applied by national associations and governing bodies.

FIFA’s proposed guiding principles on this particular issue are:

“Where an agreement is due to expire at the original end date of a season, such expiry be extended until the new end date of the season.

Where an agreement is due to commence at the original start date of a new season, such commencement be delayed until the new start date of a new season.

In the event of overlapping seasons and/or registration periods, and unless all parties agree otherwise, priority be given to the former club to complete their season with their original squad….”

In practical terms, this means that players’ employment contracts that are due to expire on June 30 2020 should be extended till the agreed end date of the 2019/20 season. Similarly, the contracts of players who have signed a pre-contractual arrangement with a new club that is due to come into effect on July 1 2020 (such as Hakim Ziyech at Chelsea FC) should be delayed until the new start date of the 2020/21 season. Where a player is due to transfer to a new club on July 1 2020, that transfer should be delayed and the player should remain at their current club in order to complete the 2019/20 season unless all parties agree otherwise.

It is worth bearing in mind that FIFA’s proposed guiding principles are designed to act as “general (non-binding) interpretive guidelines” to FIFA’s wider regulations on player contracts. These guidelines are subject to change as the impact of COVID-19 on football becomes clearer and are also reliant on effective implementation by national associations and other stakeholders.

Comment

  1. It is not yet confirmed that the 2019/20 season will finish at all. The majority of clubs would most likely be reluctant to extend players’ contracts, thus continuing to pay their wages beyond June 30 2020, with no certainty that those players will play for the club again. This is particularly relevant to those clubs in the EFL where finances are becoming increasingly tight and they may be relying on the Government’s COVID-19 job retention scheme.

  2. The FA does not currently have the ability to force clubs automatically to extend players’ contracts that are due to expire on  June 302020. If such extensions were made obligatory, the FA’s scope of intervention would need to be clearly defined before the clubs begin unilaterally extending players’ employment contracts. If the FA advises clubs that contract extension is optional, there will be serious questions asked by clubs whose key players would be out of contract if the 2019/20 season finishes after  June 302020.

  3. For those players who are currently on loan at another club, the loan agreement will generally expire on  June 30 2020. Unless these loan agreements are extended, loan players would return to their parent club on July 1 2020, potentially leaving EFL clubs without their key players for the remainder of the 2019/20 season. Although it appears that a player would not be able to play for their parent club for the remainder of the 2019/20 season, parent clubs may request a further loan fee from the loanee’s current club before agreeing to an extension of the loan agreement.

  4. Could players and their agents use these unprecedented circumstances to request an increase in their remuneration as compensation for agreeing to an extension of their contract beyond June 30 2020? Players may be understandably concerned about getting injured while playing or training with their existing club for the remainder of the 2019/20 season – this would inevitably reduce their chances of earning a new contract with another club for the beginning of the 2020/21 season. Alternatively, players may request new long-term contracts with their current club as a pre-condition for agreeing to any extension of their existing employment contract.

  5. It is common for extension option clauses to be included in players’ contracts, whereby a club has the option to automatically extend the contract upon a certain trigger (e.g. a specific number of appearances). If that trigger has not yet been met but was due to be activated during the course of the remainder of the 2019/20 season, it is unclear whether that option remains valid or not. This will depend on the wording of the specific clause and the FA’s decision on the remainder of the 2019/20 season but clubs should consider whether a variation agreement may be required to preserve their extension option.

The issues relating to players’ employment contracts is only one of a number of wider issues that clubs are attempting to resolve. Clubs are taking their time and awaiting further guidance from the governing bodies before agreeing to any extension of player employment contracts. However, it is clear that these decisions will be crucial for clubs hoping to avoid significant negative PR attention and future legal disputes with players and their representatives.

About

Inside Sports Law provides you with up to date legal and business commentary and analysis on key sporting topics from across the globe.

Our global sports law practice

Blog Network

Topics

Archives