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A FIFPro study has found that 27 clubs across Europe were relegated in 2014-15 from their respective leagues due to financial insolvency.

These findings clearly violate two of the objectives upon which the FIFA Regulations on the Status and Transfer of Players (RSTP) were built in 2001: integrity of competition and stability of contract.

These insolvencies are one of many facts which led to FIFPro’s decision to lodge a complaint against the RSTP with the European Commission.

Financial relegation is a reality stretching from Portugal to Poland with its victims ranging in scope from 31-time Bulgarian champion CSKA Sofia to less heralded Hungarian side Lombard Pápa FC.

Twelve European countries were affected in 2014-15 by financial insolvency within their clubs. This phenomenon affects a multitude of stakeholders within football. Fans are betrayed, owners left empty-pocketed and leagues forced to make drastic decisions. What is frequently overlooked is that players are heavily affected.

Over 600 players were affected by financial relegation during or following last season. Relegation spells a blow to a player’s career ambitions, earning power and throws their lives into uncertainty. Players are left to deal with these consequences along with unforeseeable realities that arise when wages are paid late or not at all. This exacts a profound mental and emotional toll which can cause permanent damage to a player’s relationships and wellbeing.

These players are victims of club governance models which allow unsustainable spending, often through the transfer system. This results in neglect to pay previously agreed wages and benefits to contracted employees.

How can the future occurrence of similar circumstances be reduced?

Strengthened licensing systems can be put in place mirroring those of nations such as the Netherlands and England. This includes enhanced reporting mechanisms and independent monitoring which ensures objective analysis’ of a club’s accurate financial context.

Crucially, if a club cannot meet licensing requirements then it should not become eligible to compete at the beginning of a league season. If a club does meet requirements but infringes upon licensing conditions during the season, mandatory sanctions must follow. These actions will contribute to the prevention of the ticking time bomb that exists when certain clubs enter a season with the foregone conclusion that they will have financial problems leading to insolvency.

Conversely, clubs must act fiscally responsible without living beyond their means. Such a management style can only benefit football, both by eliminating embarrassing situations such as that faced by Parma, as well as creating an impetus for the development of new strategies to build a competitive football
team without relying on the up-and-down nature of the transfer market.

It is integral that the recognition of players as workers is normalised within the club framework. One of the key objectives of FIFPro’s complaint to the European Commission was to demonstrate that footballers are entitled to the same protections as regular workers. Looking at the countries affected by financial insolvency, it is observed that in a number of them players are merely assets of their clubs and cannot invoke labour law protections. This protection is essential to protect players in cases of insolvency as well as gives them the right to the leave a club when they have not been paid.

Furthermore, players could engage in deeper collaboration with their national union and/or FIFPro, giving them a clearer picture of a club’s situation before they make a life changing employment decision.

The numbers show that club insolvencies are not uncommon in Europe and thus players must have greater awareness of the potential dangers they may be subject to.

As another European season is into full flow, the experiences of these clubs and employees must not be laid by the wayside. Opportunities exist for robust change but stakeholders, particularly clubs and leagues, must show commitment to improvement. Lessons must be learned, processes enhanced and football strengthened, for the good of all within the game. 

Teams relegated for finances following 2014-15 season:

Belgium: RAEC Mons Second Division
KV Woluwe Second Division
KRC Mechelen Second Division
VC Eendracht Aalst Second Division
Bulgaria: CSKA Sofia First Division
Lokomotiv Sofia First Division
Spartak Varna Second Division
Czech Republic:   Slavia Lounovice Third Division
TJ Stechovice Third Division
Finland: MyPa (Myllykosken Pallo) First Division
FC Honka First Division
France: Istres Third Division
Greece: Niki Volos First Division
OFI First Division
Paniliakos Second Division
Pierikos Second Division
Hungary: Kecskemeti TE First Division
Gyori ETO FC First Division
Lombard Papa First Division
Nyíregyháza Spartacus FC     First Division 
Pecsi MFC  First Division 
Poland: Widzew Lodz Second Division
MKS Flota Swinoujscie Second Division
Portugal:  Beira Mar  (photo) Second Division 
Russia: FC Rotor Second Division
Spain:  Elche  First Division 
Switzerland:  Servette FC  Second Division