Solidarity mechanism: The forgotten revenue stream.

July 2001. Four months after the far-reaching agreement with The European Commission over football’s transfer system, FIFA’s Executive Committee met in Buenos Aires to (amongst other things) vote on revised international transfer regulations.
One of the new articles within the regulations – article 21 – would be solidarity mechanism; An article which is unknown to a number of fans and even to some clubs, but yet is also controversial to those who feel the article should have a much broader jurisdiction than it currently does.

“Article 21: Solidarity Mechanism
 If a professional is transferred before the expiry of his contract, any club that has contributed to his education and training shall receive a proportion of the compensation paid to his former club”

The article, per se, it relatively simple to understand.
Any time a player transfers between clubs of different associations, five percent of the transfer fee is split up between all the clubs who had a role in the development of the player from the ages of twelve and twenty-three.
For example, if a club had a player on their books for one year when he was twelve, whenever he transfers between countries they will receive 0.25% of the total transfer fee. If they had him for one year when he was eighteen, they get 0.5% of the fee, and if they had him from ages twelve until twenty-three they will get the full 5%  (See annexe for a table with all percentages).

However for what is, in theory, a great means at providing clubs (especially of the lower-league variety) with revenue from any transfer involving one of their ex-players, there are issues.

Knowledge of the article – I know of at least one top English club who were unsure on how the regulations worked and had not sought monies owed to them.
De jure, the player’s new club holds responsibility to pay all former clubs within 30 days, and FIFA’s Disciplinary Committee may impose disciplinary measures on clubs that do not observe the obligations.
De facto, the onus seems to be on the player’s ex-club(s) finding out he has transferred, and then making contact to ensure they are paid. Several Brazilian clubs in that respect hire lawyers to routinely check international transfers for any signs of one of their ex-youth players being involved so the club can make sure they are duly paid.

Knowledge (or rather the lack of) pales into insignificance though in relation to the most contentious issue, a matter which has seen clubs repeatedly take FIFA to their Dispute Resolution Chamber (DRC) – each time to no avail.
The scope of the article.

Solidarity mechanism is one of the key articles on which the regulations are founded on, due to the resolution between FIFA and The European Commission arising out of Bosman. And it is with that in mind that it is hard to see why the scope has narrowed over time.

To start with, The DRC ruled that foreign clubs could claim for solidarity contribution from internal transfers in another country. Using one of the real-life cases as an example, it was ruled that Crumlin United (a club from The Republic of Ireland) could claim solidarity from Robbie Keane’s transfer from Leeds United to Tottenham Hotspur (two clubs within England) – a claim opposed by The English Football Association, The FA Premier League, and The English Football League.

That interpretation of the article was reversed less than a year later.
On 22nd July 2004, The DRC ruled unanimously that it had been wrong in previous cases in applying the regulations. In the case involving the internal transfer of player “C” between Italian clubs “Z” and “B” the ruling stated:

“(T)he members of the Chamber present at the meeting were of the unanimous opinion that the previous jurisprudence of the Dispute Resolution Chamber needs reviewing and concluded that the principle regarding the solidarity mechanism contained in the Regulations is not applicable to national transfers, not even in cases where the club claiming the payment of the relevant contribution is affiliated to another association.”

Their reasoning was that the preamble of the Regulations on the Status and Transfer of Players document (of which the article in question is defined) states that:

“These regulations lay down global and binding rules concerning the status
of players…. and their transfer between clubs belonging to different associations” [emphasis added]

From the Considerations of the Dispute Resolution Chamber in the case:

“The deciding body lent emphasis to the wording of the last part of the aforementioned clause and concluded that, in fact, the Regulations are not applicable to transfers of the federative rights to a player between two clubs affiliated to the same association.“

This ruling is one which clubs have repeatedly tried to reverse.
Uruguayan Danubio Fútbol Club in the transfer of Fabián Carini between Italian clubs Juventus and Internazionale. Club “A” in the transfer of player “K” from club “M” to club “B”. Club “F” in the transfer of player “B” from club “A” to club “M”.
The list goes on. All have tried, and failed, to reverse the decision.

The idea of not applying internal transfers to the article seems to go against the spirit of, if not the raison d’être, of the regulations.
Designed to reward clubs for developing and nurturing youngsters, the fact it now only applies if the players moves from country to country is neither fair on the development club nor encourages the development of players (especially at a lower level).

National Football Associations can implement a similar rule at a national level if they wish. Scant few have. The changes in Brazilian Sports Legislation of 16th March 2011 are a notable exception.
The Brazilian system offers the same principle as FIFA’s and the same 5% overall compensation, but the breakdown of the percentages per age-group is different. Fourteen to seventeen is 1% per year, and eighteen to nineteen is 0.5% per year.

Whilst procedures exist within The English Football Association regarding Training Compensation (not to be confused with solidarity mechanism), there seems to be no – public at least – solidarity mechanism-like rule which rewards all of the player’s youth clubs after every transfer throughout the player’s career in proportion to his transfer fee(s).

In a cursory review of the January 2011 English transfer window, made all the harder by undisclosed fees, approximately £1.2m would have been distributed to Football League clubs, while non-league/Amateur level clubs would have seen around £400k if the English Football Association introduced a system with identical compensation figures to the FIFA one.

As an example, if an amateur club was fortunate enough to have a player on their books at the ages of twelve to fourteen who then went on to have a successful career,  they would receive £18,750 every single time he transferred for £2.5m. That would be a huge amount to the club in question.
And that amount is only with a 0.25% per year figure, The Football Association would be free to set the compensation even higher if they wished.

Have a look at the next transfer the club you follow is involved with. Would 5% of the fee be of benefit to any clubs the player was at from ages twelve to twenty-three?
And next time you see a transfer between other clubs which involve a player your club had for those ages, would 5% of that fee be of use to your club? The answer, especially to fans of lower-league clubs, is surely “Yes”.

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FIFA’s Solidarity contribution table:

– Season of 12th birthday: 0.25% of total compensation;
– Season of 13th birthday: 0.25% of total compensation;
– Season of 14th birthday: 0.25% of total compensation;
– Season of 15th birthday: 0.25% of total compensation;
– Season of 16th birthday: 0.5% of total compensation;
– Season of 17th birthday: 0.5% of total compensation;
– Season of 18th birthday: 0.5% of total compensation;
– Season of 19th birthday: 0.5% of total compensation;
– Season of 20th birthday: 0.5% of total compensation;
– Season of 21st birthday: 0.5% of total compensation;
– Season of 22nd birthday: 0.5% of total compensation;
– Season of 23rd birthday: 0.5% of total compensation.
– Total – 5% of total compensation.