How to work round FIFA’s ‘anti-trafficking of minors’ rules

January 31, 2016

It’s not a popular view but; all credit to FIFA. It must have taken some guts to investigate and then impose transfer bans on Real Madrid and Atletico Madrid for contravening their rules on signing players aged under 18. The rules are in place to prevent clubs from hoovering up young, mainly impoverished teenagers, then transporting them round the world in the hope a few of them can make a profit for the clubs and agents.

Under FIFA’s Article 19, the only scenario that would permit a player under 18 from moving from Africa, South American, or Asia to Europe is if the player’s parents happen to move to the country for reasons not connected with football (a pretty unusual scenario). The rules are clear – so how are Premier League Academies able to have 17 year-old African players at the club?  The answer is via ‘pre-contract agreements’ – as an example, let’s look at Manchester City’s young Nigerian star Kelechi Iheanacho.

Iheanacho was the big star of FIFA’s 2013 U-17 World Cup and was courted by some of Europe’s top clubs (Porto, Arsenal and Man City were all immediately interested).  However, as an under 18 player the clubs were left the problem of how to legally sign the player. To resolve the problem, City signed the player on a ‘Pre-contract’ with full professional terms only being signed when the player became 18. However with Iheanacho, things weren’t quite as simple as that. The father and agent of Iheanacho were keen to get some cash up-front.  For their part, Manchester City were keen to bring the young player into the fold and ensure he developed before he reached the age of 18. 

Before we look at what happened, there are some key dates: Iheanacho’s father signed the pre-contract agreement with City in January 2014 when the player was aged 17 (9 months before his 18th birthday on 3 Oct 2014).

Interestingly, the City pre-contract nearly fell-through – this was because the player’s agent and his father were unhappy that City would only pay them when the full contract was signed. They wanted cash up-front but it seems City were unhappy with that arrangement (probably because they feared falling foul of FIFA’s Article 19. 

According to Goal the original proposal for the pre-contract agreement was that City would pay the following only the player turned 18 and signed the professional contract:

  • £650,000 to the player when the player
  • £350,000 to Iheanacho's father 
  • £250,000 transfer fee
  • £300,000 for the Taye Academy in Owerri (Nigeria)

Goal reports that the player’s father and agent were unhappy that they would have to wait for their cash and the deal nearly fell through and the deal nearly collapsed. So how was this impasse resolved?

According to Nigeria’s Sun News, City broke the deadlock by paying Iheanacho’s father £300,000 up-front (with £150,000 going immediately to the Academy). To quote Sun News:

“Iheanacho senior is now smiling to the bank as he has been paid half of what was promised him after his son signed for City,” a source familiar with this transaction said

“This shows how badly the EPL want the youngster.”

If true, this all rather bizarre – the player was still 17 yet the Premier League club had apparently paid-out £450,000 to sign him as part of the pre-contract agreement. On the face of it City seem to have played pretty fast and loose with Rule 19.

Once the pre-contract agreement was signed, given Artricle 19, one might have expected that to be the end of the matter for City (until he reached the age of 18).  However, whilst still aged 17 Iheanacho joined City’s Right to Dream Academy in Ghana (about 1,000 kilometres from Iheanacho’s home). When you think about it, this in itself is pushing the envelope of the spirit of FIFA’s article 19 which were introduced to stop youngsters being uprooted in this way and moved across national boundries.

During the summer of 2014 (when still aged 17), Iheanacho joined the main Man City squad on a pre-season trip to Scotlandand the tour of USA, which included playing and scoring against AC Milan.

In July 2014, Iheanacho would have expected to play in Nigeria’s African Youth Qualifier, but despite being only 17 and not under a professional contract at City, the club apparently refused to ‘release’ the player. The Nigerian U20 team official said “We have tried to get the release of Kelechi Iheanacho and Chidiebere Nwakali from Manchester City. We first wanted the players to join us in training camp at least two weeks to our match. City insisted on releasing them a week to the match and now they have said they won’t be releasing them at all.”

In Sept 2014 (still aged 17) he trained with US team Columbus Crew (taking part in a friendly against Dayton). This was arranged by Claudio Reyna, director of football operations Man City’s franchise New York City FC. Again, Iheanacho was technically a minor but was training and playing for a team thousands of miles from his homeland – this probably isn’t what FIFA intended under Article 19.

In October 2015 Iheanacho became 18 and has now signed a professional contract with Man City. He looks to be a terrific talent – City could no doubt sell him for a huge sum if they wished to sell the player.

Given the Real Madrid director general has said I know for a fact that in many of these cases the disciplinary investigations have already started a while ago’ it will be interesting to see what, if anything, develops. I am not suggesting Man City have breached Article 19 but they do seem to have pushed the envelope of the spirit of the rule (at the very least).  Of course, City are not the only club that enters into ‘pre-contracts’ as a way of working round FIFA’s rules for potential young stars. Perhaps this is an area that FIFA will want to strengthen in the future.  However, it does appear that City’s reported £300,000 payment to Iheanacho’s father in January 2014 does look somewhat irregular and it would be interesting to know City’s justification the payment given the player’s age.


 

Leicester accused of 'creative accounting' in bid to avoid £8m charity bill

January 13, 2016

OK, admittedly, the above headline has been deliberately created for maximum impact (and to make a point). However it is not with some validity - I will explain.

During their promotion season, Leicester spent heavily (by Championship standards) on wages. When you exclude around £9.4m of bonuses paid for gaining promotion, their wage bill was just short of £27m (for comparison Derby’s last reported wages were £13.5m).

The Championship FFP rules in place when Leicester were promoted (2013/14...


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Premier League Profit & Sustainability rules for 2015/16

January 4, 2016

Premier League Profit & Sustainability rules for 2015/2016 4 Jan 2016

For the current season (2015/16) there are two elements to the Premier League’s financial constraint regulations. The rules can be found within the 2015/2016 Premier League Handbook.

The Premier League shy away from calling these rules ‘Financial Fair Play’ but they have pretty-much the same aim: a set of rules and regulations to ensure financial sustainability. The two elements are:

1. Profit & Sustainability

2. Short Te...


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Platini announces FFP rules to be 'eased

May 18, 2015

The announcement that FFP rules are to be 'eased' has left both critics and supporters of the rules wondering what this means for the European football.

The FFP rules and their concept of 'break-even' look set to stay, but crucially, the rule that prevents a wealthy owner from injecting cash into the club to fund losses appears about to be scrapped. In many ways this isn't hugely surprising; UEFA's 'sustainability' argument always looked the most vulnerable in respect of a wealthy benefactor ...


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QPR's accounts released and heading for £50m fine

March 14, 2015

QPR’s controversial accounts were released this week.  As anyone following this story will be aware, the club recently announced profits via a vague Press Release which claimed that surprisingly low losses of just £9.7m had been made in 2013/14.  A number of people raised questions about how this could have been achieved without some accounting ‘slight-of-hand’ (see my previous article).

Now we have the accounts, it transpires that the club owners wrote off £60m in loans and classed th...


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QPR figures not all they seem

March 2, 2015

QPR issued a press release on 2 March to announce that the club had improved on losses of over £65m in 2012/13 and had made losses of just £9.8m in 2013/14.  Not only that, but the owners had paid off loans of £60m. On the face of it, a terrific improvement and stories about the club being hit by a £30-£40m FFP fine were clearly wider of the mark.  However, things are not quite as they may initially seem

The improvement was both stunning an unexpected. And as we know, when something seems...


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The Championship Embargo and Premier League's role in the rule change

December 13, 2014

New spending constraint rules have been voted-in by Championship clubs. The new rules replace the term "Financial Fair Play" with the term 'Profit and Sustainability' and crucially do not come into effect until next season (2015/16). The actual vote was a close run thing with 6 clubs voting against the change (Ipswich and Charlton were amongst the clubs that voted against the new rules).

The deferral of the implementation of the rules means that clubs must keep to the 'old' limits, and keep lo...

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QPR still on a collision course with Football League

November 13, 2014

Although Championship clubs voted for new FFP rules on 6th November, QPR are still on a collision course with the Football League. The rule changes do not expressly alter any sanction applied as a result of the club's overspend during 2013/14.

Although QPR’s accounts have not yet been released, it is inconceivable that they would have been able to keep losses below the threshold for the 2013/14 season (£3m maximum loss, or £8m if the owners injected £5m equity). Looking the most recent ac...


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Which Championship clubs can expect to receive a Transfer Embargo?

October 30, 2014

With Championship clubs due to submit their Fair Play information to the Football League by 1 December, it is worth considering which clubs are likely to have breached the rules and the likely impact.

Looking at the Championship clubs, 9 are viewed as being ‘Likely’ or ‘Very Likely’ to receive a Transfer Embargo from January.


The Football League will look back at the season 2013/14 and determine which clubs exceeded the permitted loss limits for that season. During 2013/14 clubs were ab...


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Was FFP the reason for high-profile 'Loan&Buy' deals this transfer window?

September 3, 2014

During the Summer 2014 Transfer Window we saw a number of deals where a player was loaned for 12 months, with the option to buy at the end of the loan. There were a number of reports that FFP was the reason for this type of transaction and it is worth exploring the issue.

There are a number of reasons why clubs might want to enter into a 'Loan&Buy' deal:


To get round a spending cap

Under the UEFA FFP sanctions, Man City and PSG were give a net player spending restriction (in addition to other sa...


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