Brazil’s 2014 Football World Cup has ended and, with it, the football fever that captivated football fans all around the world for a month. However, the football business has not ended, as evidenced by the multi-million international transfers of football players recently announced by media outlets.
Although Peru has not participated in the last football world cups, we could ask ourselves whether or not the legal framework applicable to these multi-million transfers afford any benefit or compensation which could also benefit Peruvian football clubs.
International transfers of football players are mainly governed by the provisions set forth in the “FIFA Regulations on the Status and Transfer of Players” which, inter alia, establish two mechanisms that benefit football clubs training players: (i) the “training compensation”, and (ii) the “solidarity mechanism”.
Training compensation is paid to football clubs training players between the ages of 12 and 23. Based on a table which is updated by FIFA on an annual basis, clubs acquiring rights to a football player must economically compensate the “training” club (that’s why this compensation is called “training compensation”). The logic behind this benefit is that the football club that acquires a player must pay the training club a compensation equivalent to the money that the latter has invested in training the player. That’s how any Peruvian football club transferring a player to another club will be entitled to compensation for the years of training that it provided to the player being transferred (between 12 and 23 years old).
On the other hand, the solidarity mechanism means that if a professional player is transferred during the term of his contract, then 5% of any compensation paid to his former club (except for the training compensation) will be distributed between the club (or clubs) which contributed to his training and education (from 12 to 23 years old). FIFA has established a scale for the distribution, on a proportional basis, of this percentage (5%) on a yearly basis.
From the above it can be inferred that the above mechanisms are aimed at encouraging clubs to help discover new talents, effectively rewarding training clubs (on many occasions South American clubs and even Peruvian clubs).
Finally, it is worth pointing out that FIFA’s Regulations establish the legal means available to training clubs to resort to the competent entities (for instance, to FIFA’s Dispute Resolution Chamber) and collect the corresponding compensation. As a matter of fact, disputes are referred to FIFA more and more frequently and it’s not by chance that there are already lawyers and law firms specializing in football litigation.