Staying Onside: Why Don’t Clubs Sack Players Who Go On Strike?

Welcome to our new video blog Staying Onside - where our specialist sports team takes a look at the biggest legal and business issues in the world of sport. This week we’re looking at player power in football!

Mark Clattenburg swaps the Premier League for Saudi Arabia

Mark Clattenburg announced yesterday that he has resigned from his position as a Premier League referee to take up a new role in the Middle East for the Saudi Arabian Football Federation (SAFF). Mr Clattenburg had been part of the “Select Group” of elite referees in England for a number of years and his departure marks the first high profile referee to leave the Premier League to officiate abroad. A couple of legal points in the wake of this announcement worth bearing in mind:

How is Mr Clattenburg’s resignation possible midway through the season?

The Premier League’s transfer window (or “registration period” as it is described in the FIFA Regulations) closed at the end of January and won’t open again now until 1 July. However, the restrictions only apply to the transfer of players. As has been the case since the transfer window was compulsorily introduced by FIFA for the 2002-2003 season, coaches and managers have been free to move outside of the transfer windows and referees unsurprisingly also fall outside these transfer restrictions. As a result, subject to Mr Clattenburg giving his employer the required notice under his employment contract, his move is able to take place immediately.

What sort of compensation can the Professional Game Match Officials Board expect?

Premier League referees are some of the highest paid referees in world football so what type of transaction fee might have been payable to secure Mr Clattenburg’s services? Actually, probably not that much. His employment contract was with the Professional Game Match Officials Board (PGMOB), a body which represents top-flight referees in England and provides match officials for all games in the Premier League, the Football League and FA Cup competitions. The referees on PGMOB’s “premier league panel” command a salary comprised of an annual retainer fee plus an additional match fee for each match officiated. As referees are not tied down to long term, multi-year contracts like football players, the likelihood is that Mr Clattenburg would have only been required to buy out the remainder of his annual retainer for the 2016-2017 season (and SAAF may have even agreed to pay this for him by way of a “golden hello” in his new employment contract). All things considered, not bad business for the services of a referee who officiated the Champions League Final and the European Championship Final last year, and with speculation in the media that the deal offered by SAFF to Mr Clattenburg may be worth as much as £500k a year tax free, not a bad deal for “Clatts” either!

As to what this means for how PGMOB contract with their high profile referees moving forwards and whether this move marks the beginning of a migration of European football’s top officials to richer climbs remains to be seen, but it is without doubt an interesting and landmark development in world football.

Corporate Lawyer needed – 4/5 PQE

Onside Law is a market-leading specialist sports law firm with a head office in London.

Our clients are some of the biggest names in sport, including many of the leading national and international governing bodies, broadcasters, clubs, sponsors, investors and high profile individuals.

Our practice is thriving and we are seeking to bolster our team by recruiting a lawyer to assist with a broad range of corporate (entrepreneurial) work as well as some commercial matters. Prior sports/media or private equity experience is helpful, but not essential. Ideally you will have between circa 4/5 years of PQE although all candidates with demonstrable experience to fulfill the role will be considered.

Applicants are asked to submit a cover letter and CV by email to zoe.fitt@onsidelaw.co.uk by no later than Friday, 13 January 2016.

Bite sized reminder: PSC Register

Since 6 April 2016 most UK private companies have been required to produce, keep and maintain a register of people with significant control over that company (a PSC register).

Common examples of an individual exercising significant control over a company are when that individual who holds, directly or indirectly, more than 25% of the shares or voting rights in the company. This is not exhaustive and the rules also contain other conditions that constitute significant control.

Also remember that in certain circumstances the ownership and control of an intermediate controller must be “looked through” in order to disclose the individual(s) holding the ultimate significant control.

A company must supply Companies House with the information on its PSC register at the same time as filing its Confirmation Statement (which has replaced the annual return).

Failure to produce a PSC register has been a criminal offence since 6 April 2016 which should be incentive enough to comply. More practically, if your annual filing date for the next Confirmation Statement is approaching, you need to ensure you have produced and maintained a PSC register so that the details can be supplied to Companies House.

A company’s PSC register cannot be empty. If the company knows or reasonably believes that there are none, this fact must be stated on the register. Where a company is taking reasonable steps to identify its PSCs but has not yet identified them, that fact should be entered on the PSC register.

New Dawn for Sports Governance

With £1 Billion invested in sport over the last four years and nearly 16 million adults playing sport, sport is ever more important to the fabric of British society. Against this background, the Government has launched its new Code for Sports Governance which sets mandatory requirements for receiving funding and government support. The code comes into effect in April 2017 and will require:

  • A dramatic increase in diversity on Boards both in terms of skills and experience and in particular in targeting 30% female representation;
  • Greater transparency with much more information to be made publicly available
  • Reform of traditional models and councils to ensure the Board of Directors is the ultimate decision maker for the governing body

Many smaller governing bodies have reformed in anticipation of the new Code and are well placed to be compliant.

However, some of the larger federations with traditional governance models, often hundreds of years old, are struggling. The FA for example has only one woman on its Board and an, arguably, out dated and undemocratic Council that still retains its role as the ultimate decision making body for the FA. Unless they reform, their multi million annual investment from Sport England is in jeopardy. Perhaps more importantly, given their wealth, would be the withdrawal of government support which could mean no more fast track visas for players and visiting teams, no more collaboration on bids for international tournaments and a host of other unintended consequences.

It is perhaps the less tangible non-financial government support that might persuade the “old guard” that modernising governance in accordance with the Government’s requirements is not meddling but simply good practice in the 21st Century.

Onside Law ranked as a top UK sports firm

Onside Law is delighted to be ranked as one of the top sports firms in the country by Chambers & Partners 2017. The latest publication describes us as a ‘highly regarded ensemble of specialist sports law advisers’, along with being ‘valued for their commercial nous on a host of non-contentious sports matters along with a steadily expanding disputes and regulatory practice.  Click here to view the ranking.