An Introduction to Player Contracts
The football player contract is the principal agreement by which a player goes from being a free agent to football property, it governs his relationship with the team, and through him the club’s relationship with a third party. At its most basic it is a simple transaction: this individual agrees to play football for this club for a period of time and this club agrees (gly) to pay this player an amount of money.
In practice it is much more complex, both in terms of the detail and the importance of the obligations it creates. Like any other contract, it is effectively just an agreed list of promises, but the consequences of breaking any one of them can be very severe a player can be dismissed as a result of a breach by the club or the club can try to claim significant damages from the player.
With literally hundreds of thousands of these contracts now having been signed many of the key terms have become relatively standardised.
The starting point of any player contract is the set of FIFA regulations which stipulate the minimum terms that a contract must contain, including the specification of a fixed duration , a payment basis (more on which below) and a jurisdiction in which any disputes must be heard. In addition there are also some mandatory requirements from other governing bodies. For example, the FA Rule F.2 states that the contract has to specify the length of a registration period and confirm that the player has been or will be registered for this period.
Over and above these basic requirements, the FIFA Player’s Agents Regulations stipulate that there must be certain terms in a player contract, which include the player’s written consent to the appointment and representation by the agent, details of the transfer fee and the entire compensation due if the player is dismissed without just cause by the club (or, if their registration is suspended, what happens to their contract).
Beyond this everyone’s contracts are different. In particular they will differ depending on whether the player is a minor or an adult, whether it is for an amateur or a professional, and in the case of a professional, whether the player is a footballer or another member of football staff (eg the manager) or ancillary staff (such as a doctor).
Key Components of a Football Player Contract
Football player contracts will generally contain the following essential elements.
Duration
The duration of a football player contract is usually set out in terms of years and months from the start date of the contract. The duration of a football player contract may also be subject to an option by either party. Common examples of options include:
(1) The Contracting Body adding months to the term of the football player contract.
(2) The Contracting Body’s option to extend the football player contract for another an additional year without the player’s consent.
Salary
The terms of a football player’s salary must be expressed in the football player contract. Such terms should include the commencement date, duration, currency, amount of money payable to the football player. Parties may also include the frequency of such payments. In most instances the agreed terms of a football player’s salary will be paid to him monthly in advance.
Bonuses
Football player contracts may also contain provisions that provide for the payment of bonuses to a football player. Football player bonuses may be linked to: (1) Additions to the football player’s present salary. (2) Performance incentives for the football player, which are tied to a sporting achievement for the football player or the club for which he is contracted.
Football player contract provisions may also contain:
- (1) An express power for the Contracting Body to double a football player’s salary if he plays the next game.
- (2) Cut price clause, whereby a player will pay a portion of his wages as a penalty for future breaches of his contract.
- (3) Loyalty bonus, whereby a football player receives a payment from their club as part of a contract extension
- (4) Agent fee and manager fees to be paid by the club where an agent has assisted in the transfer of the player.
Clauses
A football player contract will also contain standard contractual clauses, these include:
Football Player Breaches
Where a football player breaches the terms of his contract, a club may have a right to:
- (1) Terminate the contract.
- (2) Claim damages.
- (3) Claim a right to mitigation.
- (4) Claim a right to variation of the terms and conditions of the football player contract.
A football player may have a right to:
- (1) Claims damages.
- (2) Claim a right to mitigation.
- (3) Apply for an injunction.
- (4) Claim a remedy in equity.
A Look at a Standard Player Contract
For the purposes of educating fans, let us break down a hypothetical example of a football player contract. Here is a sample contract language that you may see in any player contract, broken down below:
"THIS AGREEMENT, made this ____ day of ___________, in A.D., 20__, between and among_____________________________________ ("Club"), a member of The National Football League ("NFL"), and ______________________("Player")."
Generally speaking, an NFL standard player contract will have an introduction, which lays out the names and identities of the parties. In this case: a club, like the New York Giants and an individual such as Odell Beckham, Jr.
"In consideration of the mutual covenants herein contained, Owner, the Club and the Player agree:…"
This general clause states that the club and the player are making a contract and they will consider the contract’s mutual terms. The "owner" is the specific person or group of people that has team ownership of the player’s club under NFL policy.
"The Player agrees to play professional football for the Club on the following terms, all subject to and in accordance with the Constitution and By-Laws, Playing Rules, Policies and Procedures of the National Football League….for Four (4) Contract Years."
Using this example, the player agrees to represent the New York Giants in a standard NFL player contract.
"Beginning on the ________ day of _____________, 20__ and ending on the _____ day of ___________, 20__, the Player’s Base Salary shall be _______ for each such Contract Year and paid in accordance with the practice of the Club."
Here, the player must play for the Giants for four years, starting in this particular season and ending four years later. Now, he will be paid a certain salary for each of those four years.
"Beginning on the _____ day of _________, 20___ and continuing through the last day of the Contract Year, the Player shall be paid a signing bonus of $______ in accordance with the practice of the Club."
In accordance with NFL policy, the player will be paid a signing bonus to join the team, rather than a "signing fee". The signing bonus is then distributed through the term of contract.
"The Player agrees to play during the Term hereof for the amount of (i) the initial Base Salary or (ii) 11% of the Contract Salary, whichever is greater. The base salary is to be paid in cash and distributed in accordance with the practice of the Club."
This allows the player to be paid a certain percentage and gives him the choice of being paid more by playing a lot of snaps or being paid less by not playing so much during the contract.
"Subject to the right of offset contained in Article 15, the Base Salary of the Player shall be deemed fully earned regardless of whether the Player is placed on Injured Reserve.
Article 15 provides a right of offset which allows the club to withhold the player’s salary if he is under contract, but he is injured and unable to perform his duties. Even if the player is injured, he still receives his salary.
"This Agreement must be executed before the Player can participate in any activities of a Club, including training camp."
The player must sign the contract before he is allowed to play or participate in any other club activities such as training camp and individual workouts.
"This Agreement shall be construed under the laws of the State of ____________.
The contract shall be in accordance with New York law in our example, not New Jersey law.
Common Clauses and Prospective Negotiation Tips
Once negotiations reach the point where a club is expressing interest in acquiring a player, the parties will begin to exchange contract and financial details. The player’s agent typically makes one of three arguments for a proposed amount of money. The first suggested figure is high, and justifies the agent’s presumably large cut of the deal. The second figure represents the absolute minimum amount the player is willing to accept. The third figure is a compromise between the first two figures that ultimately satisfies all parties involved.
The figures may not be premised on any objective criteria, but rather reflect a combination of the player’s ego and the agent’s desire to extract the largest possible compensation from the club. A player who expresses no interest in the teams making inquiries is likely to have few followers. Clubs competing for the player will focus on other targets until they realize his hold on them is tenuous. Similarly, a club that does not express a strong desire to acquire a player may learn that it is relegating itself to the back of the line.
Both players and clubs will attempt to avoid including clauses that are disadvantageous to them. Players try to ensure that any injury clauses protect their future economic interests by giving them financial assistance when they are injured. Clubs try to eliminate transfer agreements which prevent players from playing for other clubs for a period of time after leaving a club. Other common issues clubs and players will negotiate about include amendments to salary and bonuses based on game performance, pre-approval for the player to take leave to tend to personal matters, and the ability to terminate the contract without liability.
Football Player Contracts and Potential Legal Issues
Legal aspects always play a role in contracts, and there is no shortage of legal nuances involved when it comes to football players’ contracts. Of course, there are agents and other representatives of the player. Agents/brokers that work on behalf of soccer players can only be registered with FIFA, or the US Soccer Federation, or another national federation that is a member of FIFA. The MLS Players Union works to protect the rights of the MLS players.
The governing body overseeing the world’s game is FIFA, and it has its own regulations concerning employment contracts. FIFA also has rules concerning the release of players from professional contracts. There are over 300,000 players registered with FIFA, but there are far fewer actually employed by clubs.
Labor laws are not applicable in the United States to football players as players are not employees of the club that signs their transfer contract . The contract is between the club and the player to play football for the season. Some teams have their players sign on for the pre and post-season as well. If a player has been hired by a third party, but not the club, they are considered an independent contractor, and not an employee of the club. The freedom of movement as an independent contractor can lead to what some might term as exploitation of players. Legal remedies for players in the U.S. are for breach of contract, Economic Espionage Act of 1996, and the Computer Fraud and Abuse Act of 1984.
FIFA also provides for a remedy when players are made to leave clubs early or under duress. This goes towards helping to support the transfer market. A player who may be under a lot of pressure to leave the club, such as a player who has agreed to terms with a new club, but the club will not release them, can alert FIFA, and FIFA will issue an order to the club to release the player from the contract.
Current Trends in Football Player Contracts
Recent trends on players contracts are linked to the evolution of the players image rights and the existence of the digital economy.
Today, image rights have taken a very important place in footballers contracts especially for players at the top level. Hence, a player’s compensation package is not only linked to the amount paid by the club to the player, but also the amount of money he can earn through his image. Indeed, the image rights component in football players contracts can make the total value of a player’s contract much larger than the sum of his compensation package. Whilst the traditional contract between a player and a football club has remained more or less unaltered over the past years, the rules that govern the relations between them have had to evolve more rapidly in light of recent developments in the field of players’ image rights.
New technologies have helped to emphasize the figure of the player as the centre point of the show. On this basis, in some cases, pop stars are no longer more important than the players themselves but instead find themselves reduced to side acts within a football show in order to attract a larger audience.
Players prepare themselves familiarise with technology in order to earn money:
This is a huge change in the traditional ways in which clubs control their players. It seems that clubs are gradually renouncing to control their players regarding their image rights because it is now known that, if you want to control your players so that they earn you money, you have to be ahead of the technology and then offer players the tools to extend your control over them.
Wrap Up
In conclusion, this brief analysis provides a glimpse into the complex world of football player contracts. Each contract is unique to the player and the team, with various terms that may seem daunting to understand. It is important for all stakeholders involved, including players, agents, teams, and fans, to have a basic understanding of the key components of football player contracts, such as salary cap considerations , guaranteed money, incentives, and termination provisions. By breaking down the different aspects of the contract, we can gain insight into the economic relationships within the football industry. This understanding is vital for those working in the sports industry, as well as those simply looking to gain a deeper understanding of how contracts work in the world of professional football.
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