FIFA Limits on Player Transfers Are Illegal, Europe’s Top Court Rules

A decision could force soccer’s governing body to rewrite the regulations that govern the sport’s multibillion-dollar transfer market.

Europe’s top court ruled on Friday that some elements of soccer’s multibillion-dollar global player trading market are illegal, a decision that is likely to force changes to the way thousands of athletes move between teams around the world every year.

The ruling, concerning the right of players under contract to terminate those agreements under rules drawn up by FIFA, soccer’s global governing body, came in a case brought by a French player who was subject to millions of dollars in fines after walking out of his agreement with a Russian team in a pay dispute and trying to sign with a club in Belgium.

The penalties levied against the player, Lassana Diarra, and any team that wanted to sign him, “are contrary to E.U. law,” the European Court of Justice said in a statement on Friday.

The full ruling has yet to be published, and the details in that decision will provide greater understanding of how significant any changes to player trading rules will be. The so-called transfer market, an industry that is closely followed by tens of millions of soccer fans, serves as a major engine of cash generation to hundreds of teams that develop players around the globe.

The statement said judges at the court had considered the impact of roster stability in its decision but determined that the rules managed by FIFA “go beyond what is necessary to pursue that objective.”

Diarra’s case was brought by a Belgian lawyer, Jean Louis-Dupont, who was also a key figure in a major case heard by the court a generation earlier that revolutionized the trading market. That case, named for Jean Marc-Bosman, the former player who brought it, mandated that free agents could join the club of their choosing without a fee after their contracts expired — instantly flipping the power over the market from clubs to players, and ushering an era of supersize contracts for the game’s top stars.

Confusion about the significance of Friday’s ruling could be read by the reactions to it, with FIFA acknowledging the decision but saying that it would lead to only minor adjustments to its rules, while Mr. Dupont and a global players union described it as seismic.

“FIFA is satisfied that the legality of key principles of the transfer system have been reconfirmed in today’s ruling,” the governing body said in a statement. “The ruling only puts in question two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to consider. FIFA will analyze the decision in coordination with other stakeholders before commenting further.”

The players union FIFPro described it as a “major ruling” and said it would “change the landscape of football.”

Mr. Dupont said the ruling meant that players could now seek compensation for losses as a result of the regulations that have been in place since 2001. “We are convinced that this ‘price to pay’ for violating E.U. law will — at last — force FIFA to submit to the E.U. rule of law and speed up the modernization of governance,” said a statement released by his law firm, Dupont-Hissel.

In recent years, soccer’s transfer industry has grown to become a form of entertainment in itself, creating entire media businesses solely focused on news and rumors about player movements.

The market’s growing profile and value have also turned a group of agents into significant actors with the ability to shape entire rosters while taking in huge commissions themselves, payments that often dwarf salaries for all but the biggest stars.

The ruling is the latest setback for FIFA, which failed to tame agents after losing a legal challenge over rules to cap commissions. In similar wording, courts around Europe agreed that those rules ran the risk of contravening existing employment and commercial laws.

FIFA officials had privately been warning that any changes to the transfer rules based on the claim brought by Diarra would lead some agents to encourage players to break contracts in an effort to move to bigger clubs, reducing the motivation for smaller teams to nurture talent in their own academies.

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