Notes on 3rd-Party Influence: Consent and Rivals Clauses
FIFA’s Regulations on the Status and Transfer of Players include two provisions that restrict third-party influence on clubs: Article 18bis, which limits influence from other clubs, and Article 18ter, which limits influence from outside entities. Through FIFA’s enforcement, these two rules have matured into a thick body of law — one that covers almost any attempt to infiltrate a club’s decision-making. This can apply even where the control is indirect and only relates to a small fraction of the club’s operations. The bottom line is that FIFA values independent clubs enough to devote a chunk of its jurisprudence to ensuring they remain independent.
Third-party influence is a broad topic that cannot be confined to a single post. So the analysis will come in pieces. This post will confront Article 18bis and two types of clauses it prevents in transfer agreements: (1) Clauses requiring the selling club’s consent for the player’s next sale (“consent” clauses); and (2) Clauses imposing penalties if the player’s next sale is to one of the selling club’s rivals or competitors (“rivals” clauses).
Article 18bis forbids clubs from entering into a “contract which enables the counter club/counter clubs, and vice versa, or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.”
Most often, the “contract” that triggers an inquiry under 18bis is a clause in a transfer agreement. In a typical case, the clause will not relate to the transfer being consummated, but rather the buying club’s subsequent decisions regarding the player. In some instances, the rules allow selling clubs to benefit from the player’s future sale. A sell-on clause would be an example. But other times, the selling club retains too much control over the buying club’s future decisions. This can violate 18bis. Between the acceptable and the unacceptable, the distinguishing feature is whether the provision forces or encourages the influenced club to choose an option they otherwise would not have. If it does, the selling club’s influence goes too far.
Third-party influence can arise when the selling club retains too much control over negotiating or approving the player’s next sale. Here, the third-party influence can be direct in that the selling club may retain the right to participate in the buying club’s future decisions. Argentinos Juniors falls on the more intrusive end of this spectrum. The case concerned the transfer of winger Enrique Araujo from General Diaz (in Paraguay) to Argentinos Juniors. The clubs’ agreement allowed Diaz to keep 50% of Araujo’s economic rights — in effect, a 50% sell-on. Diaz also maintained significant power to dictate Ajauro’s next transfer. Indeed, the agreement prohibited Juniors from transferring Ajauro without Diaz’s written consent. This meant Diaz could block Araujo’s transfer to a third club even if Juniors and that club had agreed to the move. Further, if Diaz did consent to a transfer, the agreement also required both clubs to agree on the transfer’s essential terms. Again, this allowed Diaz to block a transfer even if both the transferor and transferee clubs had agreed on it.
The FIFA Disciplinary Committee ruled these provisions violated Article 18bis due to the heavy influence they granted Diaz over Juniors’ transfer decisions. In the panel’s view, 18bis requires that clubs enjoy “total freedom” in sporting and economic matters. Here, that was not the case, in particular, because the agreement forced Juniors to consult Diaz and gain their written approval on the future transfer of Juniors’ player. A “truly independent club” would not have to do this. As such, the transfer agreement ran afoul of 18bis.
In this case, the agreement granted General Diaz extensive and thorough influence over Juniors. This included not only the right to approve Juniors’ transfer, but also the power to approve its terms. That said, to violate 18bis, an agreement does not have to provide the selling club with quite that much control. For example, multiple cases have ruled against agreements that merely entitled the selling club to written consent on a future transfer — even where this power was conditional. The lesson is that independent clubs make their own transfer decisions, without having to answer to other clubs. So any provision requiring another club’s consent risks violating FIFA regulations.
Nonetheless, 18bis does not spread a blanket ban over the selling club’s involvement in the next sale. Take Phillip Lienhart’s 2019 move from Real Madrid to Freiburg. As part of the deal, Madrid kept a big sell-on fee: the first €2M of Lienhart’s next sale, plus 30% of the remaining amount. In addition, if Freiburg received an offer for the Austrian center back, they would have to notify Madrid in writing and give Madrid seven days to match.
The FDC upheld the matching clause. While none of the parties requested written grounds for the decision, two issues could have led to this result. First, by giving Madrid the ability to match an offer Freiburg already received, the clause did not grant Madrid any role in the ultimate transfer decision. Freiburg could still reject the offer. And if they wanted to accept, they would receive the same amount, regardless of whether Madrid or the other club paid. Second, the matching clause functioned like a buy-back clause, which are relatively common. The standard buy-back will set a future date when the selling club can buy the player back at a fixed price. Here, arguably, Madrid’s right was weaker in that the agreement set no date certain or fixed price and included no requirement Freiburg accept the buy-back.
To understand the rivals clause, suppose Barcelona has a good player who is surplus to their requirements. Naturally, they would not want him to end up on Real Madrid, where he could torment them every time the two rivals met. And though not a domestic rival, Barca probably would not want the player on Bayern Munich or Manchester City, where he could help knock Barca out of the Champions League.
Now, when Barca first transfer the player, this result is easy enough to prevent. They simply do not transfer him to any clubs on their quasi-blacklist. But once that initial transfer happens, controlling the player’s next club becomes more difficult, opening the possibility he gravitates to a rival or competitor.
Faced with this dilemma, clubs have inserted clauses into transfer agreements making it more expensive for the buying club to transfer the player to certain clubs — usually rivals or competitors. These measures — creative as they are — can box the player’s new club into decisions they would not otherwise make. And this implicates the kind of third-party influence 18bis was designed to prevent.
At least in part, the way the FDC treats rivals clauses shows how complete it believes clubs’ independence should be. Consider the case of Black Bulls, a robustly-named club in Mozambique’s top division. Between late 2018 and early 2019, Black Bulls sold three players to Portugal’s Amora. The Bulls retained 50% of each player’s economic rights. Further, if Amora sold the player in question to another club in Mozambique, they would owe the Bulls an additional €1M.
The FDC declared the €1M penalty a “blatant breach” of Article 18bis. As the panel noted, 18bis desires a market where clubs enjoy “total freedom,” including the power to “choose independently” the clubs they engage for transfers, without “financial consequences.” Here, Amora lacked this independence in that transferring the three players to certain clubs was prohibited, unless Amora paid a significant penalty.
Above all, Black Bulls demonstrates the vast scope the FDC envisions for 18bis. Here, the agreements only blocked out a speck of Amora’s transfer market. Out of all the club’s players, the transfer restriction covered three. Further, out of all the countries in the world, Amora could not transfer those players to one — Mozambique — a country on another continent, with little history of footballing prowess. In short, the restriction took almost nothing from Amora, but that was still enough to violate the third-party influence rules.
A choice between offers
In examining rivals clauses, the FDC will often use a hypothetical as their standard. The scenario is a future date when the buying club has to decide between two transfer offers for the player — one from a club forbidden by a rivals clause and another from a club that does not fall within the clause. To the FDC, the rivals clause pollutes the buying club’s independence by attaching a penalty to the rival’s offer and, thus, discouraging the club from accepting it.
The FDC turned to the hypothetical in a 2019 case examining Juventus’ transfer of Moroccan defender Mehdi Benatia to Qatar’s Duhail. The agreement contained a rivals clause. Specifically, Duhail would owe Juve a €5M penalty if they transferred Benatia to certain competitors. The agreement identified these forbidden clubs: Serie A rivals Napoli, AC Milan, Inter, and Roma, and French powerhouse Paris St. Germain.
The FDC held that the clause violated 18bis. Specifically, the panel feared a situation where Duhail “receives two similar and/or identical offers” for Benatia. The looming €5M penalty would make them “more inclined to accept the one not coming from the aforementioned [rival] clubs.” As such, the penalty allowed Juve to restrict Duhail’s freedom in transfer-related matters.
Roughly a month later, the FDC struck another rivals clause for similar reasons. The relevant transfer sent midfielder Brahim Diaz from Manchester City to Real Madrid. The agreement gave Man City a sell-on fee, with a conditional percentage. The amount would be 15%, unless Madrid transferred Diaz to a club in the “region of Greater Manchester,” in which case it would rise to 40%. The provision carried an obvious subtext: “Do not transfer the player to Manchester United.”
For reasons, and in language, mirroring the Juventus decision, the FDC struck the “Greater Manchester” clause. Once again, the panel raised the hypothetical — in this case, imagining Real Madrid, received two similar offers for the player — one from a club outside Greater Manchester and another from a Manchester-based club. Like Duhail, the clause would direct Real Madrid to accept the offer from outside the region, regardless of what was best for the club. As such, Man City’s clause encroached upon Real Madrid’s independence in their sporting decisions.
At least regarding Article 18bis, FIFA’s restrictions on third-party influence support a fundamental principle: Healthy competition demands competitors that are independent of each other. FIFA protects this ideal with thorough enforcement. Thus, any agreement that diminishes a club’s independence, even in an isolated situation, could find itself stricken.