Friday, 18 January 2013

The Curious Transfer Of Zeki Fryers

Earlier this month Tottenham Hotspur announced the signing of the former Manchester United defender Zeki Fryers on a permanent deal from Standard Liege. The signing has angered Fryers’ former club who feel that the deal was structured to ensure that Tottenham acquired the youngster for a lower fee than if he had signed directly from United last summer.  
Zeki Fryers’ contract with United expired at the end of June 2012. Whilst United offered Fryers a new contract, the player rejected United’s offer of a new deal and after the expiry of his contract with United, trained with Tottenham during pre-season with a view to a permanent move.
Under Rule V17 of the Premier League rules, a Premier League club who registers an out of contract player under the age of 24, who has rejected a contract offer from his former club, must pay the player’s former club a compensation fee. The compensation fee payable shall be a sum agreed between the two clubs (Premier League Rule V26 and V27.1) however, in the event that an agreement between the two clubs cannot be reached, the compensation fee shall be determined by the Professional Football Compensation Committee (Premier League Rule V27.2), which is incorporated under the rules of both The Premier League The Football League. The Professional Football Compensation Committee does not follow a set formula when determining the amount of compensation payable however Article 3 of Annexe 5 of The Football League Regulations confirm that the following factors are taken into account:
  • the status of each of the clubs;
  • the age of the player;
  • the amount of any fee paid by the former club upon acquiring the registration of the player;
  • the length of time during which the former club held the registration of the player;
  • the terms of the new contract offered to him by both the former club and the new club;
  • his playing record including any international appearances; and
  • substantiated interest shown by other clubs in acquiring the registration of the player. 
In addition, the committee also take into account the following costs incurred by the player’s former club in accordance with Article 4 of Annexe 5 of The Football League Regulations:
  • any cost incurred by either club in operating an academy such as:
    • living accommodation;
    • training and playing facilities;
    • scouting, coaching, administrative and other staff;
    • education and welfare requirements;
    • playing and training strip and other clothing;
    • medical and first aid facilities; and
    • friendly and competitive matches and overseas tours;
  • any other cost incurred by either club directly or indirectly attributable to the training and development of players 
The Football League’s website also provides a helpful insight as to the committee’s decision making when determining the compensation payable: 
“In deciding on a compensation figure, it is not uncommon for the Professional Football Compensation Committee to set fees that build as the player becomes more established at first team level. Recent cases have seen clubs receive a basic compensation fee with further payments becoming due on the player's debut, following a certain numbers of first-team appearances and after international appearances.” 
United had clearly incurred significant costs in training and developing Fryers given that the player had first signed for United when he was just nine. Also, Fryers made six appearances for United’s first team and represented England at Under 16, 17 and 19 levels hence why United were reportedly not prepared to accept any less than £6 million compensation for Fryers. However, according to United, Tottenham “could not afford” such a fee and so the transfer failed to go through last summer. 
Following the failed transfer to Tottenham, Fryers signed for the Belgian club Standard Liege in August 2012. As the transfer was between clubs of different associations, the transfer was subject to the FIFA Regulations on the Status and Transfer of Players (“the FIFA Regulations”) which also provide for compensation to be payable to the player’s former club for the costs they have incurred in training the player between the ages of 12 and 21 (Article 1 Paragraph 1 of Annexe 4). 
Unlike the fee determined by the Professional Football Compensation Committee pursuant to the Premier League Rules, the amount of compensation payable under the FIFA Regulations is calculated using a set formula. In order to calculate the compensation payable, it is necessary to first ascertain the training costs for that player i.e. the costs that the new club would have incurred if it had to train the player itself (Article 5 Paragraph 1 of Annexe 4). All football associations are required to divide their clubs into four categories in accordance with the clubs’ financial investment in training players and particular training costs are set for each category of club (Article 4 Paragraph 1 of Annexe 4). The relevant training costs are generally set in accordance with the category of player’s new club unless the player moves from a lower category club to a higher category club in which case the calculation is based on the average training costs of the two clubs (Article 6 Paragraph 1 of Annexe 4). Once the training costs are known, the training compensation is calculated by multiplying this figure by the number of years the player trained with his former club (Article 5 Paragraph 2 of Annexe 4). However, training costs for seasons between the player’s 12th and 15th birthdays (i.e. four seasons) shall be based on a category 4 club’s training costs to ensure that compensation figures for very young players are not unreasonably high (Article 5 Paragraph 3 of Annexe 4).
The compensation paid to United by Liege was undisclosed however I have attempted to calculate the likely fee paid by Liege to United in accordance with the above formula. Fryers’ move from United to Liege was from a higher category to a lower category so training costs would have been calculated in accordance with Liege’s category of training costs determined by the Belgian FA. It is not clear what Liege’s category of training costs was but it was likely to be category 2 meaning the relevant training costs would have been 60,000 euros in accordance with FIFA Circular No 1299. Fryers joined United from the age of 9 and left when he was 19 so it appears that United would have received around 280,000 euros or just over £228,000 based on the following calculation:

12 to 14 years - 4 x 10,000 euros (category 4 club training costs) – 40,000 euros15 to 19 years - 4 x 60,000 euros (category 2 club training costs) – 240,000 euros
Total – 280,000 euros

Just six months after signing for Liege, Fryers has now signed for Tottenham, which came to no surprise for Sir Alex Ferguson who confirmed that he “expected him to go to Tottenham in the January transfer window”. The transfer between Liege and Tottenham is also subject to the FIFA Regulations and, in particular, Article 21 which confirms that “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”, otherwise known as a solidarity contribution. As United contributed to Fryers’ education and training, they will receive 5% of the transfer fee that Tottenham paid to Liege in accordance with Article 1 Paragraph 1 of Annexe 5 which is designed to reflect the number of years that Fryers was registered with United between the ages of 12 and 23.Tottenham have reportedly signed Fryers for a fee of £900,000 so it seems that United have received a further £45,000. 
Overall, United appear to have only received around £273,000 for Fryers which is clearly far inferior to the fee that United were initially demanding from Tottenham in the summer and the fee that they were reportedly expecting to be determined by the Professional Football Compensation Committee, hence United’s anger over the transfer.  
Sir Alex Ferguson has called for the Premier League to "look into” the transfer and he feels that Fryers’ “registration should be stopped until they investigate it thoroughly”. Whilst any application to register a player and all transfer arrangements are subject to the approval of the Premier League board (Premier League Rule U6 and V12), it is difficult to see how Tottenham have breached any Premier League rules so there appears to be no grounds for the Premier League to block Fryers’ registration with Tottenham. Tottenham clearly deny breaching any rules and say that Fryers’ transfer to Liege and subsequent transfer to Tottenham were genuine transfers and not designed to reduce the fee that Tottenham ultimately paid for Fryers. After the transfer was announced Tottenham issued a statement confirming that Fryers “wanted to return to England. His representatives made contact with clubs in England. This afforded us a second opportunity to sign the player." Liege have also verified Tottenham’s version of events. The training compensation and solidarity contribution due to United pursuant to Articles 20 and 21 of the FIFA Regulations have been paid so there is no reason for FIFA to intervene in respect of the transfer. 
It is understood that United have considered making a formal complaint to the Premier League although the fact that Sir Alex Ferguson referred to "a blatant manipulation of the situation" rather than an actual breach of the Premier League rules suggests that United acknowledge that Tottenham have not breached any by Premier League rules. However, United, as well as other clubs, will no doubt want to avoid the same happening to other young players so United’s vociferous comments may prompt the Premier League and/or FIFA to consider taking steps to avoid the possibility in the future of clubs deliberately structuring such deals in order to reduce the amount of compensation payable.