What Is the Status of the “Rangers” Players Today?

Last week Mr Green and his company Sevco 5088 Ltd bought the assets and business of Rangers Football Club. This included the “Player Contracts” – the contracts of employment of those employees of Rangers Football Club PLC (in Administration) (hereafter referred to as “Rangers PLC”) who are professional football players registered with the SFA.

There are two questions.

1                     What is the employment status of the players?

2                     What is the football status of the players?

As I have written before, I think Mr Green is wrong in what he says about the players. (On a side note, I feel that “Mr Green is wrong” is becoming the most-used phrase on this blog since “Carthago delenda est”!)

Employment Status

The TUPE regulations exist to protect employees, not employers. It is, in 99.99% of cases the employee who stands to lose out on a transfer of undertaking. The instances where the employer loses out are so rare that the law sees no need to protect them.

Once players agree to be employed by Sevco 5088 Ltd, trading as “The Rangers Football Club” and which I will refer to from hereon as “Sevco”, then their Rangers PLC contracts will continue on the same terms. Interestingly this of course means that the players who negotiated the right to leave on payment of a reduced transfer fee in return for a temporary wage cut, are effectively, as a result of the actions of the administrators, worth less than they would have been, with the result, one assumes, that the offer of £5.5 million by Sevco is also less than it would have been if the players retained full value. Perhaps not the best job by the administrators in the interests of the creditors there…

If a player objects to the transfer of his employment to Sevco, he cannot be forced, by law, to be employed by that company. Instead his contract would be at an end, and he would have no claim on Sevco, nor would it have any claim on him, on the basis that there never was a contract between them.

One of the complications could be the apparent lack of information and consultation between Duff & Phelps and Sevco on one hand, and the players, and other employees, on the other. Employees have a reasonable time, in all the circumstances, to decide of they wish to object to the transfer over. The less preparatory work done by the ”new” employer, the longer the employee has to reach that decision.

From a purely economic point of view, any player who has the choice of staying as a Rangers FC player under Sevco, or leaving as a free agent by objecting to being transferred, should undoubtedly choose the latter option, if there is a reasonable prospect of another club wanting to sign him. Put as simply as possible, the money which does not need to be paid as a transfer fee works its way into the player’s bank account by way of increased signing on fees and salary. Equally, any professional adviser to such a player would probably be in breach of duty to his client should he advise him to stay put.

That is not to say that it would be guaranteed that any player will make more money, but, especially with the news of the increased SKY TV deal with the English Premier League from season 2013-2014 onwards, the managers of EPL and prospective EPL teams will already feel the money which they won’t have for a year burning a hole in their pockets. The EPL gravy train is still running, and players, in what is a short professional career, are entitled to get on it if they can.

The employment position is very clear. The players have it in their control to be an employee of Sevco or not.

Football Status

This is a more difficult question, at least in the eyes of the SFA who asked FIFA for guidance. However, I think, in terms of the Rules applicable to Scottish football, and following the ruling in the Bosman case, this issue should also be clear cut, and in favour of the players too.

The relevant SPL Rules regarding registration are shown at the bottom of this piece.

The confusion comes about, I think, because of the phrasing of the Rules. They refer to a player having to be registered before being eligible to play for a “Club”. As I wrote early this morning, there are unfortunate complications which come from the reliance on the term “Club” in the Rules of the SPL and SFA. The players are not employed by the “Club” which is not a legal entity, but they play for the Club and not necessarily for the employer who pays them. An employment contract, standing what the rules say, might read that, as part of a player’s duties to Melchester Rovers PLC, he will play football for Melchester Rovers FC.

Termination of Registration is the issue here. The argument seems to be, and one assumes this is Mr Green’s position, that Sevco has acquired the players’ contracts and the rights of Rangers PLC under those contracts. In addition Sevco, he would argue, control the players’ registrations, even where the player objects to the transfer of his employment.

The problem with that stance by Sevco is that the issue of retention of control of registrations on the expiry of a contract was found some years ago to be unenforceable in EU Law. The famous Bosman case dealt wt that, and opened floodgates of wealth for players to move as free agents.

You can read an excellent Fact Sheet on the Bosman case, written by Dr Geoff Pearson, of the Football Industry Group at the University of Liverpool, here.

As Dr Pearson states:-

“The Bosman case arose because of a Belgium player called Jean-Marc Bosman. Bosman’s contract with … RFC Liege had run out and he wanted to be transferred to … Dunkerque. Liege, however, refused to let Bosman leave without the payment of a transfer fee which Dunkerque were unwilling to pay. Bosman claimed that as a European Union citizen, he possessed the right to “freedom of movement” within the European Union if he wished to find work (then Article 48 of the Treaty of Rome – now Art. 39 of the EU Treaty). The transfer system prevented him exercising his right to freedom of movement and Bosman argued that the system should be changed so that players who were out of contract with their club could move to another club without the paying of a transfer fee.”

The case was heard at the European Court of Justice, and the court found in favour of Bosman and against RFC Liege, the Belgium Football Association and UEFA. The court decided, inter alia, that:-

“Transfer fees for out-of-contract players were illegal where a player was moving between one E.U. nation and another. From now on only players still serving contracts with their teams could have transfer fees paid for them.”

The principles of Bosman have been extended since the case was decided back in 1995. Put simply, a football “club” cannot retain a player’s registration so as to prevent him signing for a new club if his contract has ended.

The position here is therefore clear, I suggest. If a player agrees to join Sevco, then his registration remains with the club, Rangers FC, on the basis that there is continuity on the club. The contract transfers over from Rangers PLC, the former employer, to Sevco, the new employer.

If the player chooses not to transfer across however, their contract with Rangers PLC is at an end. They have no contract with Sevco, nor ever had one. Therefore whilst they remain registered to “Rangers FC” until they take steps to have that registration cancelled, their can be no rights available to Sevco either to benefit from the player not transferring over, or to have any control over the registration.

As long as the player follows the procedures laid down in Rules D6.1, D6.4 or D6.9, depending on that attitude of Sevco, they will be able to have their registration terminated, and they will be a free agent, available to sign for any club elsewhere, with no compensation payable either to Rangers PLC or to Sevco.

Of course Sevco could decide to try to hold tan objecting player’s registration and to refuse to release it with a view to deriving a transfer fee. However, as this was outlawed by the ECJ 17 years ago, I think they would be on difficult ground, and indeed could open themselves, and the League and SFA if they refused to release the player’s registration, up to litigation for loss of the opportunity to sign elsewhere. Such a claim could be very substantial.

Therefore, unless Mr Green and Sevco have advisers who are smarter than I am (which I accept is entirely possible if not indeed certain) or he is a gambler, any player who does not want to join Sevco can leave for nothing.

Coming back to the role of the player’s agent, right now it is not clear (a) if Rangers will play football this coming season and (b) if so which division it will be in. In those circumstances, as Sevco is unlikely to be able to pay a full squad of players if not playing at all, or in the third division, the prospect of a new deal elsewhere becomes the “bird in the hand option”.

Sevco faces losing a number of its top players for nothing in the next very short while. I am not saying that that will happen, but any agent will be making sure his client understands the possible financial implications of deciding to stay on at Ibrox, should there be any credible interest at all elsewhere. If players do elect to stay, this will be trumpeted as a vote of confidence in Mr Green, and as exhibiting loyalty to Rangers, even if the reason is that no one else was interested. That however probably counts as “legitimate” PR!

The next few days will be very interesting. Who will sign on for the Sevco experience, and who will leave for their own financial well being and security?

 

Posted by Paul McConville

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Rules Regarding Player Registration

D1.1 Subject to these Rules, to be eligible to Play for a Club a Player must first be Registered either as a Professional Player or as an Amateur Player.

D1.2 An application for a Player to be Registered or to change Status must be made, in the case of Professional Registration, by submitting to the Secretary a fully completed and executed Contract of Service for the Player concerned and, in the case of Amateur Registration or change of Status, by submitting to the Secretary a fully completed written application in the form specified from time to time by the Board and must, in all cases, if issued to the Player concerned, be accompanied by a copy of the Player’s Player Passport. In the case of Amateur Registration or change of Status the form used must be fully completed with all required details and signed by the Player and Club concerned prior to submission to the Secretary. The Board may determine in the case of Amateur Registration to accept as an application for Amateur Registration a fully completed copy of the form or forms then in use by the SFA for the registration of amateur players submitted to the SFA.

D1.3 The Secretary shall, subject to these Rules, Register:-

D1.3.1 Players as either a Professional Player of a Club or as an Amateur Player of a Club; and

D1.3.2 any change in the Status of Registered Players.

D1.4 Every Relevant Player (as defined in the Rules of the SFL) shall be deemed to be automatically Registered, with appropriate Status, immediately upon his Club becoming a member of the League.

D1.5 Subject that a Player shall become registered as a Relevant Player, in accordance with the rules of the SFL, on the relegation of his club to the SFL, the Registration of every Player of a Club shall automatically cease upon his Club ceasing to be a member of the League

D6.1 The Registration of a Professional Player shall terminate on receipt by the Secretary of a written request to that effect, countersigned by the Player concerned, from the Club to which he is Registered.

D6.2 The Registration of an Amateur Player shall terminate on the receipt by the Secretary of a written request to that effect from the Club to which he is Registered.

D6.3 The Registration of a Professional Player shall terminate on the expiry of the term, without renewal, extension or replacement, duly notified to the Secretary, of his Contract of Service.

D6.4 Subject to the terms of this Rule D6.4, where the employment of a Professional Player by the Club to which he is Registered has been terminated in accordance with his Contract of Service the Player may, by giving fourteen clear days written notice to the Secretary, copied to the Club to which he is Registered, terminate his Registration. The Club to which he is Registered may, within fourteen days of receipt of the copy of such notice, notify the Secretary in writing and copied to the Player, that the Club concerned objects to the termination of the Registration of the Player. The only valid reasons for such objection are that the Player’s employment under his Contract of Service shall not have terminated or that termination of the employment by the Player shall not have been in accordance with the terms of the Player’s Contract of Service. In the event of the club validly objecting in accordance with this Rule D6.4 the Board shall determine whether, when and on what terms and conditions, if any, the Registration of the player shall terminate.

D6.9 The Board may terminate the Registration of a Player where, after consulting with the Club and Player concerned, the Board is satisfied that the Player’s association as a Player with the Club concerned has permanently terminated and there are no continuing claims between the Club and Player concerned.

D6.10 The Registration of a Player shall continue unless or until terminated in accordance with these Rules.