1
Court of Justice ruling in the Bosman case, December 15, 1995
The European Communities Court of Justice declares certain European football federations rules incompatible
The rules relating to the transfer of players and the limitation on the number of community players in matches between clubs have been declared illegal in an awaited ruling by the Court of Justice on December 15, 1995.
The Court concluded that the restrictions imposed by the UEFA as to the number of foreign players allowed to be ligned up on a team is contrary to the rules relative to the free circulation of workers in the European Union.
The exclusion of foreign players is justifiable only when it concerns the composition of nationals teams, in accordance with the ruling given by the Court in 1976 (Dona case).
The Court also ruled against the principle of free circulation in the UEFA system of transfers, which states that a professional football player who is a citizen of a Member State at the expiration of his contract to a specific club, can not be employed by another club in another Member State unless the new club pays the old club a transfer indemnity, for formation or promotion.
It now belongs to the sports federations of the 15 Member States to conform their rules with the ruling of the Court of Justice.
THE COURT OF JUSTICE GIVES JUDGMENT ON THE
COMPATIBILITY OF FOOTBALL FEDERATION REGULATIONS
WITH COMMUNITY LAW
The rules on transfers of players and the limits on the number of Community players in inter-club matches are contrary to the Treaty of Rome
I. Operative part of the judgment
The Court has ruled:
'1. Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations, under which a professional footballer who is a national of one Member State may not, on the expiry of his contract with a club, be employed by a club of another Member State unless the latter club has paid to the former club a transfer, training or development fee.
2. Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations under which, in matches in competitions which they organize, football clubs may field only a limited number of professional players who are nationals of other Member States.
3. The direct effect of Article 48 of the EEC Treaty cannot be relied upon in support of claims relating to a fee in respect of transfer, training or development which has already been paid on, or is still payable under an obligation which arose before, the date of this judgment, except by those who have brought court proceedings or raised an equivalent claim under the applicable national law before that date.'
II. Factual and legal background
A. The football associations' rules
In its judgment, the Court describes the rules governing the organization of football (paragraphs 3 to 5), the transfer rules (paragraphs 6 to 24) and the nationality clauses (paragraphs 25 to 27). Subject to minor variations between the different sets of rules (the regulations of the world confederation FIFA, the European confederation UEFA and the Belgian association URBSFA), the transfer rules provide, essentially, that when a professional footballer's contract expires and he is signed up by a club in another Member State, the new club must pay his old club a fee calculated on the basis of, in particular, his age and earnings.
The nationality clauses in the UEFA regulations and the rules of most of the national football associations of the Community's Member States provide that in all official matches (championship, national or European cup matches) a club may not field more than three players who are nationals of other Member States, plus two players who are counted as 'assimilated' on the strength of the period of time they have been playing in the host Member State, particularly as juniors (the '3 + 2' rule). According to UEFA, that rule was approved by the European Commission.
B. Facts of the case
Jean-Marc Bosman is a Belgian national, born in 1964. As from May 1988, he was employed as a professional footballer by RC Liège. His contract, which expired on 30 June 1990, assured him an average monthly salary of some 120 000 Belgian francs.
In April 1990, RC Liège offered Mr Bosman a new contract for one season, reducing his monthly pay to 30 000 francs, the minimum laid down in the URBSFA rules. He refused to sign that contract and was put on the transfer list. Under the relevant federal rules, his transfer fee was set at 11 743 000 francs in the event of his being transferred without the agreement of RC Liège.
Since no club showed any interest in a transfer on those terms, Mr Bosman contacted US Dunkerque, a French second-division club, which was willing to take him on for a monthly salary of some 100 000 Belgian francs, plus a signing-on bonus of around 900 000 francs. A separate contract was signed between RC Liège and US Dunkerque on 27 July 1990 for his temporary transfer for one season in exchange for a fee of 1 200 000 Belgian francs. At the same time, US Dunkerque was given an irrevocable option on a full transfer for 4 800 000 Belgian francs. However, both contracts Ä between Mr Bosman and US Dunkerque and between RC Liège and US Dunkerque Ä were conditional on the transfer certificate being sent by URBSFA to the French football federation before 2 August 1990.
RC Liège had doubts about US Dunkerque's solvency and did not ask URBSFA to issue the transfer certificate, so neither contract took effect. In addition, RC Liège suspended Mr Bosman on 31 July 1990, which prevented him from playing for the entire season.
Mr Bosman then took his case to the Belgian courts, arguing that the transfer rules and nationality clauses, which were likely to reduce his chances of being signed on in another Member State, were contrary to Community law. Following a series of court proceedings (paragraphs 34 to 48), the case came to the Court of Appeal in Liège, which stayed the proceedings and asked the Court of Justice to rule on a set of preliminary questions concerning the compatibility of the transfer rules and nationality clauses with Article 48 of the Treaty of Rome, which guarantees freedom of movement for workers between Member States of the European Community, and with Articles 85 and 86 of the same Treaty, which contain competition rules applicable to undertakings (paragraph 49).
III. Grounds of the judgment
A. Preliminary issues and scope of the judgment
First, the Court dismisses a request for measures of inquiry made by UEFA, because it was submitted too late (paragraphs 52 to 54). Then, disposing of a series of objections raised by UEFA, URBSFA and certain Governments, it rules that it has jurisdiction to answer the questions submitted (paragraphs 55 to 67).
As to the substance of the case, the Court's judgment concerns only the interpretation of Article 48 of the Treaty. The answers given on that issue mean that it is not necessary to give a ruling on the competition rules (paragraph 138).
B. The transfer rules
On transfers, the Court first considers whether Article 48 of the Treaty is applicable to rules laid down by sporting associations (paragraphs 69 to 87).
Referring to its earlier judgments in the Walrave case (1974) and in Donà (1976), the Court points out that sport, in so far as it constitutes an economic activity, is subject to Community law (paragraph 73).
Several objections had been raised on that point by the football federations and by some Governments. The Court considers them all unfounded. In particular, it finds that the suggested analogy between sport and culture, an area in which the Community has only limited powers, is irrelevant since the questions submitted by the national court concern freedom of movement for workers, which is a fundamental freedom under the Treaty (paragraph 78). The arguments based on freedom of association and the principle of subsidiarity must also be rejected, as the rules which the Court is asked to examine are not necessary to ensure freedom of association, nor are they an inevitable result thereof (paragraph 80), and the principle of subsidiarity cannot have the effect of limiting the rights conferred on individuals by the Treaty (paragraph 81).
The Court goes on to point out that, as was held in 1974 in the Walrave judgment, Article 48 does not apply only to the action of public authorities but also extends to private rules regulating gainful employment (paragraphs 82 to 87).
It then examines whether the transfer rules constitute an obstacle to freedom of movement for workers, contrary to Article 48, which, it points out, is a provision having direct effect, so that any individual may rely on it before the national courts (paragraph 93). On the basis of its previous case-law, it replies that they do. Such rules prevent or deter players from leaving their clubs on the expiry of their contracts to play in another Member State (paragraphs 92 to 100).
That principle does not apply in the case of a player transferring between clubs within the Member State of which he is a national (paragraphs 88 to 91), nor does it concern relations between clubs in the Member States of the Community and clubs in other countries (paragraph 112).
While recognizing the social importance of sport in general and football in particular, the Court considers that none of the arguments put forward to justify such an obstacle to freedom of movement can be upheld (paragraphs 105 to 114). In particular, the transfer rules do not maintain financial and competitive balance in the world of football since they do not prevent the richest clubs from securing the services of the best players on the market (paragraph 107).
Nor are the rules in question an adequate means of encouraging and financing clubs which provide training for young players, in particular the smaller clubs, since the prospect of receiving fees is uncertain and the amount of any fee is unrelated to the actual costs borne (paragraph 109).
Such aims can be achieved by other means which do not impede freedom of movement for workers (paragraph 110).
C. The nationality clauses
The Court points out that it is clear from the judgment it gave in the Donà case in 1976 that clauses which limit the number of players who are nationals of other Member States constitute discrimination prohibited by Article 48 (paragraphs 116 to 119). It is irrelevant that the restrictions in question do not concern the possibility of employing players but the right to field them in official matches (paragraph 120).
Such restrictions can be accepted only for matches between national teams from different countries, on grounds which are of sporting interest only, as the Court had already held in the Donà judgment (paragraphs 127 to 129).
That conclusion is not affected by the fact that the '3 + 2' rule may have been negotiated with the Commission, as UEFA asserts. The Commission does not have the power to authorize practices which are contrary to the Treaty (paragraph 136).
D. The temporal effects of the judgment
Taking into account the uncertainty which may have surrounded the legality of the transfer rules and the consequences which this judgment could entail for clubs which have entered into legal relationships in good faith, the Court has decided to exclude, exceptionally, any retroactive effect of its interpretation on that point, except for persons Ä such as Mr Bosman Ä who have taken steps in good time to safeguard their rights.
The Court's judgment cannot, therefore, be relied on in support of claims relating to fees already paid on, or still payable under an obligation arising before, 15 December 1995 (paragraphs 139 to 145).