Yohan Cabaye (now sporting coordinator at Paris Saint-Germain)

[AyeDubbleYoo]

Buying out a contract is a moot point really, yes it's difficult but it also rarely gets tested because players usually get their way when they want a move.

[LRD]

CAS curbs perceived 'player power' – the Matuzalem ruling

 

Shepherd & Wedderburn LLP

Kenny Scott

Global

July 3 2009

 

The Court of Arbitration for Sport (CAS) last month delivered an important decision on the issue of termination of football players' contracts without just cause. The ruling in the Matuzalem case, is the latest landmark decision regarding buying out contracts and transfers, following in the footsteps of the Bosman and Webster cases.

 

Facts

 

Brazilian Matuzalem signed for Ukrainian side Shakhtar Donetsk in 2004, on a five-year contract running from 1 July 2004 – 1 July 2009. On 2 July 2007, Matuzalem notified Shakhtar in writing that he was unilaterally terminating their contractual relationship with immediate effect. Two days later, Matuzalem signed a three-year contract with Real Zaragoza of Spain, to run until 2010.

 

Shakhtar, who had written to Matuzalem before he signed for Zaragoza indicating that they deemed his contract with Shakhtar was still in force and ordered him to report for pre-season training, initiated proceedings with the FIFA Dispute Resolution Chamber (DRC). Shakhtar sought payment from Matuzalem and Zaragoza jointly and severally of EUR 25m (this being the amount specified as a minimum release fee in Matuzalem's contract). The FIFA DRC awarded Shakhtar EUR 6.8m in November 2007. Both Shakhtar and Matuzalem and Zaragoza appealed to the CAS in March 2008. Matuzalem has since joined Lazio in Italy on loan, with an option to make the transfer permanent.

 

Previous Position – the 'Webster Rule'

 

Before this ruling, the decision in the case involving Scotland international Andy Webster was believed to have shifted the balance of power in football transfers firmly in favour of the player.

 

Essentially Webster was allowed to transfer from Heart of Midlothian to Wigan Athletic by terminating his contract with Hearts and paying a nominal fee, which was simply the residual value of his contract with Hearts i.e. a sum equivalent to his remaining salary. This 'buy-out' could take place without the threat of sporting sanctions after the expiry of the "Protected Period" as is defined in the FIFA Regulations on the Status of Transfers and Players (FIFA Regs). For players who signed the contract in question before reaching the age of 28, this is 3 seasons or 3 years (whichever comes first), and for players who signed the contract after reaching the age of 28 this is 2 seasons or 2 years (whichever comes first).

 

Article 17 of the FIFA Regulations

 

Article 17, entitled 'Consequences of terminating a contract without just cause', had to be amended to reflect the Webster decision.

 

Where the breach takes place within the Protected Period referred to above, then sporting sanctions set down in Article 17 shall be imposed on the guilty party (this can be either a player or a club). Further, sanctions shall be imposed in the case of breach by a player where notice is not given within 15 days of the club's last official match of the season.

 

Where a player subsequently signs for another club after he terminates his existing contract, it is presumed (unless established otherwise) that this club has induced the player to commit the breach. Where a player is required to pay compensation for the breach, the player and his new club shall be jointly and severally liable for payment.

 

The Matuzalem Ruling

 

The CAS raised the amount of compensation ordered by the FIFA DCR to approximately EUR 11.85m plus interest. It was undisputed before the CAS that Matuzalem terminated his contract with Shakhtar unilaterally, prematurely and without just cause. The CAS stressed that:

 

Article 17 does not provide a legal basis for a party to freely terminate an existing contract at any time, prematurely, without just cause; and

even if the termination occurs outwith the Protected Period, this remains a serious violation of the obligation to respect the existing contract.

Compensation was therefore payable in accordance with Article 17 of the FIFA Regs. Matuzalem and Zaragoza argued that it should be EUR 2,363,760 (or in the alternative EUR 3.2m), whereas Shakhtar sought EUR 25m due to the release fee referred to above. They claimed this was a contractually agreed amount by Matuzalem should he leave Shakhtar before the expiry of his contract.

 

The CAS ruled that:

 

the clause Shakhtar sought to rely on could not be said to be addressing a situation of unilateral, premature breach and therefore the factors of Article 17 were applicable in assessing compensation;

it is not possible to evaluate the amount of compensation that will be due in advance – the judging party will have to establish the damage suffered on a case-by-case basis, taking into consideration the circumstances of the individual case, the arguments raised and the evidence produced; the purpose of Article 17 is to reinforce contractual stability; and in determining the compensation, the judging authority should aim at determining an amount that puts the injured party in the position that the same party would have had if the contract was performed properly.

 

The CAS evaluated the amount due to Shakhtar applying the following criteria:

 

the value of the lost services of Matuzalem to Shakhtar;

the amount of salary expenses that Shakhtar did not have to pay to Matuzalem; and

the status and behaviour of the player. Matuzalem left the club just a few weeks before the start of the qualification rounds for the 2007/08 UEFA Champions League, after a season in which he had become Shakhtar captain and been voted player of the year. As a result the CAS awarded an additional amount equal to 6 months of his salary.

The amount of compensation awarded therefore was EUR 11,858,934 plus interest of 5% p.a. from 5 July 2007 until payment. Matuzalem and Zaragoza were held jointly and severally liable for the amount.

 

The decision essentially softens the perceived affect of the Webster ruling and signals a swing back towards football clubs, away from the perceived increase in 'player power'. That said, the decision did not specifically address the issue of buy-out clauses and further litigation in this area is likely. 

 

http://www.lexology.com/library/detail.aspx?g=fba98d9f-52d1-403a-8b6d-39a356cfec33

[LRD]

Jonas is the only player I can ever remember doing it other than Webster himself?

 

Some Brazilian Metuesulem or whatever his name was. Went to court too and was a big fee as well.

 

Matuzalem.

 

Not directed at you but wish people would go do some simple googling and realise the bullshite the media were spouting. If it was that easy, Arsenal would have paid less than half the 42m it took to sign Ozil.

 

Definately my pet hate, such a lazy and incorrect thing to say yet most media are pushing it every day.

 

All started with that lame Julien Laurens who didn't even get the outdated Webster Ruling right. Rest of the media bought onto it as gospel after that.

[Tisd09]

It'll be interesting to see what happens when Southampton and Swansea are established in the top 6-10, will they spend again to push for the CL?

 

Both teams have increased their expenditure year on year in the Premiership. Swansea sold some of their better players to bigger clubs after the first season but at least re-invested that in the squad. Swansea fans understood the situation they were in, yes they were gutted that better players left but the frustrations were not as bad because of the subsequent expenditure and re-investment.  We have a bigger revenue stream than both Swansea and Southampton and as a team are far more established around Europe than them. Players like Bony and Osvaldo would both improve our team yet we wouldn't have paid the prices that Soton and Swansea have.

 

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

Is it too much to ask to have a player lined up to replace Cabaye, it's not as if it is an out of the blue sale. I would imagine that many people expected a Cabaye sale, but why can't we show ambition and tell him "give us to the summer, let us sign some players and push for CL, if we don't get it then we'll grant you a transfer if our valuation is met" rather than just accept that everybody has their price. We don't need to be told that, other clubs don't need to be told that. Look at the difference in stances between us and Cabaye as opposed to Liverpool and Suarez or Man Utd and Rooney. Yes they are bigger clubs but the players involved are also bigger. We could have handled this a lot better.

[Guest DebuchyAndTheBeast]

I'm really disappointed but good to see him leave on a high and a very good performance

[AyeDubbleYoo]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

[merlin]

Does this now mean Cabs can "come clean" with what went down at the start of the season and Arsenal's bid and Joke's supposed involvement etc?

 

You must be joking - like everyone else that leaves he will be asked to sign some sort of 'confidentiality' agreement in which he guarantees NOT to give confidential info or bad-mouth the club...

He will do that just to get away...

[Guest Roger Kint]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Soton have spent about £75m in the last 18 months. How much more to go 5 places more? No chance imo

[colinmk]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Not sure why you would compare clubs the size of Swansea and Southampton with a club the size of us?

[LRD]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Aye, the likes of established sides like Everton and Spurs are bankrupting themselves trying to break into the top 4.

[BrettNUFC]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

The summer after we finished 5th we should have took a gamble, spent 30 million at least. We bought Anita then forced next summer signings in early as things got so bad. That cost us but we've got back in the position to challenge again and the summer coming up is where we should spend at least 30 million again. Will we learn from our last mistake? I hope so.

[Lotus]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

The summer after we finished 5th we should have took a gamble, spent 30 million at least. We bought Anita then forced next summer signings in early as things got so bad. That cost us but we've got back in the position to challenge again and the summer coming up is where we should spend at least 30 million again. Will we learn from our last mistake? I hope so.

 

Wtf

[Tisd09]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Who talked about putting themselves in massive debt? I said in my original post that I don't want us throwing money around like nobodies business. But this season we have spent no money on transfers, there is a massive windfall from new TV money, would have it been outrageous to spend 15-20 million? I think given our expenditure last January many would have seen that as perfectly acceptable??

 

Again where have I exaggerated the success of Soton and Swansea, in a way the Swansea example of mine was poor because despite good investment in money terms they have struggled this season. But overall I would say both teams are ahead of themselves from when they came up, though Swansea would have hoped to push on this season but seems like Europe has crippled them this season similar what it did to us.

[BrettNUFC]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Aye, the likes of established sides like Everton and Spurs are bankrupting themselves trying to break into the top 4.

 

Spurs took massive gambles. They were throwing huge sums of money around without really being in a position to afford that. Paid off in the end though.

 

Everton have got there on good management rather than spending power. Something Ashley just overlooks.

[Minhosa]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Interesting to see Spurs sign all of their replacements BEFORE the Bale sale was completed.

 

The Luke Shaw thing becomes irrelevant if the club are on an upward projectory.

 

Ask Saints fans what they think of their club right now and I'm sure the general mood would be positive in terms of application from the manager and playing staff and general progress. They are playing good football whilst investing money and generally improving in league position. Same with Everton.

 

Why can't we?

[AyeDubbleYoo]

Aye, the likes of established sides like Everton and Spurs are bankrupting themselves trying to break into the top 4.

 

Spurs are a selling club anyway aren't they?

 

I know what you mean though, there are examples of clubs around us doing well. but we finished 5th not so long ago. It's not like Everton are now an immovable part of the elite. They don't own their best player either.

[NG32]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

The summer after we finished 5th we should have took a gamble, spent 30 million at least. We bought Anita then forced next summer signings in early as things got so bad. That cost us but we've got back in the position to challenge again and the summer coming up is where we should spend at least 30 million again. Will we learn from our last mistake? I hope so.

 

No, its not going to happen, dont get your hopes up.

[AyeDubbleYoo]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Interesting to see Spurs sign all of their replacements BEFORE the Bale sale was completed.

 

The Luke Shaw thing becomes irrelevant if the club are on an upward projectory.

 

Ask Saints fans what they think of their club right now and I'm sure the general mood would be positive in terms of application from the manager and playing staff and general progress. They are playing good football whilst investing money and generally improving in league position. Same with Everton.

 

Why can't we?

 

Obviously Southampton fans will be very pleased, maybe less so now Cortese has walked. And they're on an upward trajectory for sure, but my question is how far they will push it. Remains to be seen I guess.

[LRD]

Aye, the likes of established sides like Everton and Spurs are bankrupting themselves trying to break into the top 4.

 

Spurs are a selling club anyway aren't they?

 

I know what you mean though, there are examples of clubs around us doing well. but we finished 5th not so long ago. It's not like Everton are now an immovable part of the elite. They don't own their best player either.

 

They are digging themselves into massives debts trying to get into the top 4 though, as per your point. Silly of them, should be contented with 6-10.

[BrettNUFC]

The summer after we finished 5th we should have took a gamble, spent 30 million at least. We bought Anita then forced next summer signings in early as things got so bad. That cost us but we've got back in the position to challenge again and the summer coming up is where we should spend at least 30 million again. Will we learn from our last mistake? I hope so.

 

Wtf

 

What you moaning at now? 

[Minhosa]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Aye, the likes of established sides like Everton and Spurs are bankrupting themselves trying to break into the top 4.

 

Spurs took massive gambles. They were throwing huge sums of money around without really being in a position to afford that. Paid off in the end though.

 

Everton have got there on good management rather than spending power. Something Ashley just overlooks.

 

You say that, but they very obviously could afford it. What happens if the Bale sale falls through? So what, they're still sitting on £000'm's of assets to sell off if they really have to OR worst case is that they keep him, they add a load of players and they achieve a top 4 space to fund the whole splurge.

 

Call me naive but I don't think Daniel Levy would risk the future of the club for the sake of a few extra players in the summer.

 

Truth is, they and everyone else knew the Bale deal was happening and they proactively addressed it and planned for it. We all knew the Cabaye deal was happening and we'll have a last minute panic and then sit on the money.

 

Tell's you everything you need to know about the commitment of the respective owners and why they are the game. One wants to compete and achieve and one wants to run an indirect Sports Direct marketing department, at a profit.

[AyeDubbleYoo]

The summer after we finished 5th we should have took a gamble, spent 30 million at least. We bought Anita then forced next summer signings in early as things got so bad. That cost us but we've got back in the position to challenge again and the summer coming up is where we should spend at least 30 million again. Will we learn from our last mistake? I hope so.

 

Wtf

 

What you moaning at now? 

 

 

You're not sympathising enough Brett, people are freaked out.

[AyeDubbleYoo]

Aye, the likes of established sides like Everton and Spurs are bankrupting themselves trying to break into the top 4.

 

Spurs are a selling club anyway aren't they?

 

I know what you mean though, there are examples of clubs around us doing well. but we finished 5th not so long ago. It's not like Everton are now an immovable part of the elite. They don't own their best player either.

 

They are digging themselves into massives debts trying to get into the top 4 though, as per your point. Silly of them, should be contented with 6-10.

 

I never mentioned anyone else's finances, I don't know enough about them to comment. If they can afford the debt then good luck to them. I'm just saying every other club isn't as perfectly run as people make out. In fact many outsiders seem to think we're run well financially.

[merlin]

Can't believe people can be happy with this. Selling the best player we have without any realistic replacement. At a time where the league is probably going to be as open as we'll ever see it.

 

But rather than wanting investment into the side to push on and really challenge we have fans saying we're safe and should just sell on. f*** that s***, how can you complain about the owner and manager lacking ambition when you display it openly yourselves.

 

With some of the fans' views on here, it is clear that Ashley will be here for years and NUFC will be non-entities for that time. Perhaps another Derby hammering might cause the thick scales to drop from some people's eyes.....

[Minhosa]

Evidence does seem to suggest they that do try and better themselves so if it were within their grasp I am sure they would try for a CL push.

 

What do you mean "within their grasp" though? They've done well so far, nobody could deny that. But would they put themselves into massive debt to go from 10th to 4th? I just think sometimes how brilliant other clubs are is massively exaggerated on here. But meh.

 

Interesting to see if Man Utd or Chelsea manage to get Luke Shaw as well.

 

Interesting to see Spurs sign all of their replacements BEFORE the Bale sale was completed.

 

The Luke Shaw thing becomes irrelevant if the club are on an upward projectory.

 

Ask Saints fans what they think of their club right now and I'm sure the general mood would be positive in terms of application from the manager and playing staff and general progress. They are playing good football whilst investing money and generally improving in league position. Same with Everton.

 

Why can't we?

 

Obviously Southampton fans will be very pleased, maybe less so now Cortese has walked. And they're on an upward trajectory for sure, but my question is how far they will push it. Remains to be seen I guess.

 

I don't think that's the question though. For me, the question is 'are they pushing to improve every season with a view to breaking into the top 4?'.

 

I could get on board with that. At least they're trying.

 

We finished 5th yet they play better football, seem to have a very good young manager and appear to have a committed Board. If we can do it, why can't they?