The European Community was established in 1957 with the primary objective of economic integration. Four fundamental rights- free movement of workers, goods, services and capital- were created to remove border impediments to trade, such as tariffs and quotas. Economic integration allows for increased competition through the elimination of restrictions to trade and the efficient allocation of resources. For an extended period of time, European football enjoyed a de facto exemption from Community law because its operations were not legally challenged. This changed with the European Court of Justice’s (“ECJ”) Bosman decision in 1995. Bosman essentially created free agency in European football by holding that existing transfer rules and nationality restrictions violated the free movement of workers between Member States of the European Union. Extrapolating upon Bosman, the European Commission subsequently issued a finding that the rules violated European Community competition law as well. Abandonment of the pre-Bosman transfer system is heralded as the death knell of European football. This reaction is highly exaggerated. To survive and thrive, European football need only commit to a new economic model. In the United States, baseball has undergone similar battles since the early part of the twentieth century. However, despite all the negative predictions by critics when the baseball reserve clause was abolished, baseball has expanded from 24 teams to 30-team league, per-game attendance has nearly doubled and baseball’s competitive balance remaining generally unaffected. European football need only learn from American baseball as how to adapt to drastic changes in a sport. Challenges to the Transfer System
The origins of the international transfer system lie in the very beginnings of English professional football. In 1863, a band of English amateur football clubs known as the Football Association ("F.A.") began to set up a uniform set of rules and regulations to govern what would become England's first professional football league. One of these rules was the "Retain and Transfer Rule.' The Rule's essence was that "after a player's contract had expired, an option period, controlled exclusively by the club, began."' During the option period, the club could resign the player at a compensation level at least commensurate to his previous contract or could place the player on the transfer list. Other teams could sign players off the transfer list but had to reimburse the former club. The transfer system was a response to fears that smaller market clubs would be unable to compete with larger market clubs for top players. In theory, at the end of a star player's contact, large market clubs, for example Manchester United, would be able to outbid any small market club for that player. As the large market clubs began to acquire all of the most talented players, parity within the league would evaporate, leaving only a few competitive clubs. Just as the "eat-what-you-kill" mentality within England's business environment of the mid-nineteenth century was being replaced by calls for the government to reduce economic inequality, restrictions on player movement were thought to promote a competitive balance, which was in the interests of the F.A., football, and sport itself. By requiring the option period at the end of all contracts, the F.A. created a system where small market teams that were able to develop top players could retain those players or at least be compensated for them, and therefore compete with large market teams despite their smaller budgets.
As the game began to internationalize, the F.A. further restricted player movement by maintaining limits on the number of foreign players that any single club could have on its roster. Other national football associations also adopted foreign player limit rules so that by 1995, all F.I.F.A. members employed some sort of foreign player restriction in an...
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