The training compensation system.

• Author: Bakker, Mark

1. Introduction

   Football clubs became obliged to pay training compensation with the introduction of the FIFA Regulations for the Status and Transfer of Players in 2001. The basic rule is that a club owes compensation to all clubs which contributed to a player's training if that player signs his first contract as a professional before his 23rd birthday, or if the player transfers before his 23rd birthday. The Regulations were amended in 2005. Several modifications were made but the training compensation itself remained in existence.

   The Dispute Resolution Chamber (DRC) is the organ charged with issuing decisions in the case of disputes involving training compensation. The DRC has issued a number of such decisions in this area in the interim. A discussion follows below on how the training compensation system works, based on the FIFA Regulations for the Status and Transfer of Players and the DRC's decisions. It will focus to a large extent on cases where compensation is due and calculation of the extent of this amount. These themes will be addressed after discussing the DRC's working methods.

2. The Dispute Resolution Chamber

   In each case, the Dispute Resolution Chamber first determines whether it is competent to issue a decision. This occurs on the basis of the Rules Governing the Procedures of the Players' Status Committee and the Dispute Resolution Chamber (DRC) and the Regulations for the Status and Transfer of Players. (1) It is also determined which version of the Rules Governing the Procedures of the Players' Status Committee and the Dispute Resolution Chamber (DRC) applies. (2) The DRC is empowered to issue a decision in the case of a dispute about training compensation between clubs which belong to different football associations. (3)

   Should it be confirmed that the DRC is indeed the correct body, it is then determined which version of the Regulations for the Status and Transfer of Players applies. A new version of these regulations came into effect on 1 July 2005. The regulations of 2001 apply to issues submitted to FIFA before this date. The regulations of 2005 apply in all other cases. (4) Several amended articles apply from 1 January 2008, but the articles involving training compensation have not been amended. (5)

   The DRC issues decisions based on the facts and evidence provided. (6) Any party deriving a right from an alleged fact shall carry the burden of proof. (7) Appeals against DRC decisions can be submitted to the Court of Arbitration for Sport (CAS). (8)

3. When is there an entitlement to training compensation?

   3.1 National

   FIFA regulations cover training compensation in international cases. These generally concern a club which must pay compensation to a club which is a member of a different football association. The rules governing national transfers are drawn up by the national football associations. These rules must however be approved by FIFA.9 In the Netherlands, the KNVB regulates the training compensation due in national transfers in the Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution [Reglement overschrijvingsbepalingen algemeen, opleidingsvergoedingen en solidariteitsbijdrage].

   3.1.1 The KNVB and the Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution

   The Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution were established during the KNVB association's meeting on 15 June 1987. Amongst other things, these regulations cover training compensation which must be paid by a club which is a member of the KNVB to other clubs which are also members of the KNVB. According to this regulation, training compensation is due to the clubs for which the player is authorised to play during his training period if a player is younger than 22 and has played in five binding matches of the first eleven of a professional football club, or if a player younger than 22 has signed a player's contract with a professional football club. (10) A professional football club is obliged to notify the KNVB in writing that an amateur player has played for the fifth time in a binding match of its first eleven, or that he has signed a player's contract with it for the first time. This notification must occur within 14 days after the fifth match or the signing of the player's contract. (11) The professional football club which is due to pay training compensation must pay such compensation within 30 days after a player has signed a contract. This term must also be taken into account if a player has appeared in the fifth binding match. (12) If a professional football club does not pay the training compensation within 30 days, then the KNVB pays the rightful club(s) on first request, and the KNVB then has a claim on the professional football club. The request must be submitted in writing to the association, specifying the grounds on which the claim is based. (13)

   3.1.2 The KNVB and training pool regulations

   Alongside the Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution, there are also training pool regulations [pool reglement opleidingen]. The 'pool' is a fund created by the KNVB intended to compensate the training costs of a professional football club if a young player in training is transferred from a professional football club to another professional football club. Article 1 paragraph 1 of the regulation stipulates that only professional football clubs may claim pool compensation.

   A professional football club can claim pool compensation for a player it has trained if this player is transferred to another professional foot ball club, the player is an active amateur and plays in the A-, B-, C-or D-youth of the relevant professional football club.

   In addition the professional football club claiming pool compensation for a player must have notified the relevant player in writing by no later than 1 May of the calendar year that he may again participate in the club's youth training. (14) A copy of this written notification also needs to be submitted to the KNVB no later than 7 May of the same calendar year.

   Pool compensations are separate from training compensations that are due on the basis of the Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution. The pool regulations in fact state that, if a club has obtained pool compensation for a player, this club no longer has any right to training compensation for that player. (15) Any possible entitlement to training compensation by amateur clubs on the basis of the Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution is not affected by this. (16) It will be discussed later that compensation based on the pool regulations is higher than compensation based on the Regulations on General Transfer Provisions, Training Compensation and Solidarity Contribution.

   3.2 International

   The FIFA Regulations and decisions by the DRC cover training compensation in international cases. Training compensation in international situations will also be considered below. First, the focus will be on instances where training compensation is due to clubs which have contributed to a player's training. Here the FIFA Regulations of 2001 and 2005 are unequivocal. Training compensation is payable when a player signs his first contract as a professional before the end of the season of his 23rd birthday. Compensation must also be paid for each international transfer the player makes before the end of the season of his 23rd birthday. This applies both to a transfer while there is an ongoing contract, and to a transfer on conclusion of the player's employment contract. (17)

   A player's former club has no right to any training compensation if that club has terminated the contract with the player without just cause. (18) Nor is there any entitlement to compensation if the player moves to a club from category 4 (amateur level). (19) The rules of 2001 provide an exception to this if the player acquires non-amateur status again within three years. (20) The rules of 2005 stipulate the term as 30 months. (21)

   The 2005 rules also provide that the player's new club must have paid the training compensation to all clubs which have a right to it, within 30 days following registration with the new football association. (22) This rule also stipulates that if a link between the player and any of the clubs that trained him cannot be established, or if those clubs do not make themselves known within 18 months of the player's first registration as a professional, the training compensation shall be paid to the association(s) of the country (or countries) where the professional was trained. (23) The 2001 rules set the term at two years. (24) The compensation must be used by the football association for developing youth football.

   3.3 The first contract as a professional

   Training compensation must therefore be paid if a player signs a contract as a professional before the end of the season of his 23rd birthday. But when is there in fact such an employment contract? Where is the line between an amateur and a professional?

   Article 2 of the FIFA rules of 2001 and 2005 stipulates that a professional has a written contract with a club. He will in fact be paid more than the amount of the actual expenditure for his football activities. The rules of 2001 provide that 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.

   The DRC had to reach a decision in a case where a 'scholarship agreement' was involved. According to this agreement, the player received around EUR 500 a month in the first season, EUR 560 in the second and EUR 710 in the third. Travel expenses were also reimbursed. The DRC considered that the player received remuneration which...