Are players under “Scholarship Agreements” amateur or professional?

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A recent CAS case has cast doubt on whether players on a Scholarship Agreement could be classified as amateurs instead.

Historically, players on a Scholarship Agreement have been considered as professionals under Article 2 of the Regulations on the Status and Transfer of Players (RSTP), which meant that training compensation would be payable to the player’s training clubs when the player entered the Scholarship Agreement. However, a recent CAS case has cast doubt on whether players on a Scholarship Agreement could in fact be classified as amateurs instead, which could have wide reaching consequences for numerous clubs in England.

Scholars as Professionals

In England, as is the case in many other countries, young football players often sign two year “Scholarship Agreements” with football clubs when they turn 16 (Scholars). Scholars train and play with the club and also attend vocational or educational training from time to time. In return, they are remunerated with a small allowance and their travel (and when required, accommodation expenses) is paid for by the club. As an illustration, in the Premier League, Scholars are paid approximately £480 a month in the first year and £520 a month in the second year. In the Football League, the equivalent amounts are approximately £360 a month in the first year and £400 a month in the second.

The relevance of how much Scholars are paid comes into focus when determining whether the Scholar is an amateur or a professional as FIFA’s position on this is clear. Irrespective of any national regulations or legal norms on the matter, pursuant to Article 2 of the RSTP, a player’s status as an amateur or professional is determined solely by the remuneration they receive.

One of the leading CAS cases on this issue is CAS 2006/A/1177. In that case, a Danish player Magnus Troest entered into a Scholarship Agreement with Aston Villa for a period of three years. The player’s former club – B.93 Copenhagen – subsequently claimed that Aston Villa owed them training compensation. Aston Villa denied this and argued that training compensation would only be payable when the player signed a professional contract with the club.

The Panel applied Article 2 of the RSTP 2001 to differentiate between an amateur and a professional player, and the Article read as follows:

  1. Players who have never received any remuneration other than for the actual expenses incurred during the course of their participation in or for any activity connected with association football should be regarded as amateur. 
  2. Travel and hotel expenses incurred through involvement in a match and the costs of a player’s equipment, insurance and training may be reimbursed without jeopardising a player’s amateur status. 
  3. Any player who has ever received remuneration in excess of the amount stated under par. 2 of this Article in respect of participation in or an activity connected with association football should be regarded as non-amateur unless he has reacquired amateur status under the terms of Art. 26 par. 1 below.

In that case, the player was paid a wage of £320 a month in the first year and £360 a month in the second year of his Scholarship Agreement, in addition to travel expenses. However, the Panel applied a strict reading of Article 2 and despite acknowledging that the payments would “fall short of a living wage”, on a strict reading of Article 2 above, it was still in excess of the travel, hotel, equipment, insurance and training costs of the player. Accordingly, the player was considered as a professional and Aston Villa was liable to pay training compensation to B.93 Copenhagen.

New developments

This has been the status quo for training compensation claims for Scholars until the recent case of CAS 2014/A/3659. In that case, a young player entered into a Scholarship Agreement with a Belgian club under which he was to be paid the fixed sum of €400 per month.

At this point, it is important to make a distinction between Article 2 of the 2010 RSTP - which was the applicable version of the RSTP in that dispute – and Article 2 of the 2001 RSTP which was applied in CAS 2006/A/1177. Under the 2010 RSTP, Article 2 read as follows: 

A professional is a player who has a written contract with a club and is paid more for his footballing activity than the expenses he effectively incurs. All other players are considered to be amateurs. [Emphasis added.]

The wording in the 2010 version of Article 2 is broader than that contained in RSTP 2001, and the applicable test was now simply whether the scholarship allowance paid to the player in respect of his footballing activity exceeded the expenses he incurred. The Sole Arbitrator compared the income the player would receive against the expenses he was likely to incur (under the categories of “nutrition and diet”, travel and equipment) and determined that €400 a month for a football player in Belgium was not in excess of the expenses he would have incurred and was therefore not sufficient to consider the player as a professional. Specifically, the Sole Arbitrator stated that €300 a month for “nutrition and diet expenses” was justified for a football player. The player was thus considered as an amateur for the duration of this Scholarship Agreement.

It is important to note however, that in CAS 2014/A/3659, the player received a payment of €400 as a fixed fee to cover all of his expenses including travel and equipment. As the Sole Arbitrator noted, the player “did not receive any other payment or legal right on such payment than EUR 400 each month”.

In contrast, in England, it may be the case that players are not only paid their monthly allowance but the club also pays for their accommodation and travel expenses to games. As such, when taking into account the expenses the player pays for himself, it may result in a player being “paid more for his football activity than the expenses he effectively incurs”, meaning he should be classified as a professional. Conversely, a club may pay the player a monthly lump sum, but deduct payments for accommodation and may not pay for the player’s travel expenses. In that case, it may be possible for the club to argue that the player is an amateur as his expenses are greater than his income. Clearly, it depends entirely on the specific facts of each individual case.

Conclusion

This decision could have a significant impact on many clubs in England who employ Scholars. Previously, pursuant to CAS 2006/A/1177, it was widely accepted that Scholars would be considered as professionals and training compensation would therefore be payable to his training clubs. CAS 2014/A/3659 has now potentially opened the window for clubs to challenge this classification under Article 2 of the RSTP. Clearly however, the success of such an argument would depend entirely on the facts of each individual case and the quality of evidence put forth to support such an argument.

Nevertheless, this new development could potentially have a significant impact on the classification of Scholars in the context of training compensation going forward. How significant this impact will be remains to be seen. Evidently, this is a very grey area but could give rise to opportunities for clubs and if this could be applicable to you, please get in touch as we would be delighted to provide you with assistance in this regard.

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