The South African Premier Soccer League (“League”) January 2019 transfer or registration window opened on 2 January and will close at midnight on 31 January. Clubs (coaches actually) tried a few combinations in their squads during the first half of the season and will be looking to strengthen, or trim, their squads. For many, focus during this period tends to be on the technical (or is it tactical) aspects of their squads. This results in the neglect of other key matters such as legalities of the transfers or deals which, if not handled properly, may complicate the transfers or deals concluded during this period. In this Blog we consider five of the key legal issues (in terms of the general principles of the law, the League Handbook, SAFA and FIFA Regulations on the Status and Transfer of Players) that South African football clubs must consider before concluding transfers or deals.
1 – Validity transfers
We have, in the past, seen or heard of clubs “scoring own goals” by announcing that Club A and Club B have concluded a deal transferring a player from Club A to Club B, only for the clubs to be “caught offside” (and suffer reputational damage) when the player to refuses to join Club B because of lack of consultation before the deal was concluded or announced. It is therefore important for clubs to remember that transfer agreements in football are generally tripartite agreements. Every affected “person” (both clubs and the player) must agree to the terms of, and be party to, the transfer agreement or deal. Leaving one party out, especially the player, may result in the transfer agreement or deal being invalid or long drawn litigation as the transfer agreement may not be enforceable, especially against the player if he refuses to join the new club in terms of an agreement that he is not party to.
An equally important consideration is the transferring club’s right or power to release the player to the new club. Generally, where a club holds a player’s registration on loan, that club cannot transfer the player’s registration to another club before certain conditions are met. Difficulties have arisen in the past where a club holding a player’s registration on loan decides to transfer the player’s registration to another (third) club on loan. Under the old League’s rules a player on loan could not be transferred to another club other than his original club. However, the League’s Dispute Resolution Chamber (“DRC”) previously ruled that a further loan transfer was permissible where the previous club (holding the player’s permanent registration) consented to the further loan transfer. Rule 39.7 of the League’s Handbook now clearly stipulates that a player on loan can be transferred to another club on loan provided his previous club (holding his permanent registration) has authorised the further loan transfer in writing.
It stands to reason that a club holding a player’s registration on loan, cannot permanently transfer the player to another club. However, we have seen past instances in which Club A (holding a player’s registration on loan from Club B) purportedly transferred the player to Club C. The irregularity was not detected, and the transfer was registered, by the League. The transfer and registration were later declared invalid by the League’s DRC. The League’s Disciplinary Committee also found both Club A and C guilty of misconduct resulting in a hefty monetary fine for Club A, and a monetary fine and loss of points for Club C. While this seems straight forward, it is something that can easily go undetected during this short transfer or registration window during which most of the transfers are done within a relatively short period, with haste, and the irregularity is not detected by both clubs and the League until it is too late.
2 – Loan player quotas
Loan transfers are very common during the January transfer or registration window. Clubs try to strengthen their squads without necessarily taking on long term obligations or try to give some of their players who are “not in the coach’s plans” an opportunity to play competitive football while retaining them for further evaluation next season. Rule 39 of the League’s Handbook prescribes that a club can only register three loan players during a single transfer or registration window and can register a maximum of five loan players per season. Exceeding this number of loan players may result in the League rejecting applications to register certain players or where the irregularity is not detected at the time of registration, the registration being declared irregular or invalid at a later stage. The second scenario is the most worrying as where the irregularity is detected after the player has played for that club, the club may be subjected to disciplinary proceedings which may result in a loss of points and/or substantial monetary fines.
3 – Player eligibility to be registered and play for a club.
The “Ndorogate” is probably still fresh in the minds of many. Many clubs are likely to tread carefully when it comes to acquiring players who have played for other clubs during the current football season. However, there is a possibility due to a lack of clarity on the rules (an issue I believe has not been resolved despite the long litigation in the “Ndorogate”) that some clubs may find themselves in a situation in which they employ and register a player who may not be eligible to play for them. There may be doubt whether the player is eligible to play for a third club, for example where a player has already been registered with and played for two clubs before the current transfer or registration, but one (or both) of the registrations was (or were) in different leagues or different countries. If we restrict this to South Africa, a good example is where a club employees a youngster who, at the beginning of the season played amateur football for example for a club under the SAFA SAB League or the SAFA ABC Motsepe League, he then joined a club in the Premier Division (or National First Division) of the League and played one or two matches in the League before he fell out of the coach’s favour and has now been put on the loan transfer list. The next club that the player joins is likely to face difficulties regarding his eligibility to play for that club as the player would have been registered with and played for two clubs before the new (third) club, even though some of the matches he played were at an amateur level and not in the League. This can be very confusing and have devastating consequences. It is therefore important for clubs to approach such matters with caution and to seek advice for certainty on these matters before concluding some transfers or deals.
4 – Number of restricted players – foreigner players or Under 23 players
In terms of the League’s Handbook (rule 34.2), a club can only be contracted to a maximum of five foreign players. Foreign players are players who are not permanent residents or citizens of South Africa. Therefore, beyond the issue of being able to register and field foreign players, clubs need to ensure that the new players they employ in a bid to strengthen their squads, do not result in them exceeding their foreign players quotas. Clubs that have exhausted or are on the verge of exhausting their foreign players quota, may find comfort in the fact that they can de-register and replace foreign players. In terms of the previous League rules, the de-registration of a foreign player during the season did not free up a foreign player’s slot for that season. Once a club had registered five foreign players, that was the end for that season. The League’s Handbook now focuses on the number of foreign players employed, rather than registered, by a club.
Clubs in the National First Division (“NFD”) must have at least five South African Under 23 (“U23) players on the team sheet and at least two South African U23 players on the field for each match. Therefore, when releasing or acquiring new players, NFD clubs must ensure that they do not end up in a situation which makes it extremely difficult or impossible to comply with the League’s Handbook. We have in the past seen instances where NFD clubs started matches with injured U23 players just to comply with the rules and immediately substituting the injured players and replacing them with players over the age of 23. Such forced substitutions are undesirable, interfere with the coaches’ plans and must be considered when releasing or acquiring new players.
5 – Financial consequences of transfers – training, development and education compensation or solidarity payment.
In terms of the football rules (both domestic and international regulations on the status and players), certain compensation is triggered whenever a player is registered with a club as a professional footballer for the first time or a player is transferred from one club to another and a transfer fee is paid. Where a player is registered as a professional player for the first time, the registering club may be liable for payment of training, development and education compensation to all clubs that trained the player between the ages of 12 and 21 (League’s Handbook, rules 45 to 48). Likewise, where a player is transferred (permanently or on loan) from one club to another and a transfer fee is paid, solidarity payment may become due and payable to clubs that trained, developed and educated him. The new club must withhold 5% of the transfer fee and distribute it among all the clubs that trained, developed and educated the player. Failure to do so may result in the new club being guilty of misconduct and being ordered to pay the solidarity payment over and above the transfer fees. Therefore, clubs need to consider these additional costs in some of the transfer deals that they may conclude during this transfer or registration window as they may end up with more financial obligations than initially budgeted for.
Conclusion
There are many other factors that must be considered by clubs, but experience has shown that the above are the most common issues that arise during the January transfer or registration window. These issues are equally important and applicable to the July to August transfer or registration window. However, the risks are higher during the January transfer or registration window because transfers or registrations are likely to be stopgaps measures implemented hastily.
