Posted by Dan Meadon-Bower, Partner
Clubs vote to take the power back from the players
After a player’s shock move to a new club a year too early, English Premiership clubs have unanimously voted to close a contract loophole.
It was a little known clause that allowed the Gloucester winger, Jonny May to move from Kingsholm to Leicester, despite having another year left on his deal with the West Country club.
What does the clause say?
Under this clause, a club can buy a player out of their current deal, provided it offers one-off fixed compensation at the amount of the player’s yearly salary under his contract with this new club.
This contract loophole has been in place for a number of years, but this summer marked the first time that it was used. The clubs had previously assumed that the clause was designed for the free movement of non-playing staff rather than for players. However, Jonny May’s move took clubs by surprise as they were unaware the loophole applied to players.
Contracts used to be a secure way to make sure players can only move clubs once their contract has expired. However recent high profile deals, including ex-Bath fly-half George Ford and new Montpellier No 8 Louis Picamoles, have commanded significant transfer fees to buy players out of their current contracts.
So what did the clubs do?
Predictably, news of the loophole sent shockwaves around English clubs, with many concerned that it would lead to transfer chaos. Clubs that had secured players on long-term contracts could no longer guarantee player loyalty. The clause seemed to pose a particular threat to smaller clubs with less financial power that rely on nurturing their own talent and retaining them for as long as possible.
But following talks earlier this month ahead of the new season, which begins on 1 September, all twelve Premier League Clubs have agreed to alter the clause to allow negotiation of a fee between the two clubs. This development allows clubs to retain a degree of power, ensuring that players are not freely bought out of long-term contracts.
The move, which is seen as a shift in power back to the clubs from the players, should protect smaller clubs from having their young stars poached and preserve the equality and competitiveness of the Premiership. However, like the negotiations surrounding the global season, The Rugby Players’ Association (RPA) were not consulted on the change.
We’ll be watching closely to see what impact this may have on players’ careers and whether inflated sums of money are demanded for players looking to leave a contract early.
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