Euros for player development

Do Slovak clubs understand the issue of training compensation?

Training compensatios? For some, maybe a novelty, although in reality it is not. And some have no idea they can benefit from this concept. “It is a system long respected by FIFA, UEFA, national associations, and clubs, which ensures that the development of players under 21 – in Slovakia under 23 – in international transfers is not left without financial recognition. Clubs that genuinely cared for and developed players are entitled to financial rewards under certain conditions. In other words, when a player later earns a living as a professional, the clubs that developed him cannot be left without money,” says sports analyst and football agent Jozef Tokos. He adds: “It is very good that the new registration and transfer regulations of the SFZ reacted appropriately to this and included the training compensation system.”

According to FIFA regulations, a player’s training and education take place between the ages of 12 and 23. Training compensation is paid to the player’s club when the player signs his first professional contract, or when he transfers as a professional between clubs of two different associations before the end of the season in which he turns 23. This applies regardless of whether the transfer occurs during or at the end of his contract. “If I put it in more legal terms, in the European Union this is an intervention into one of the fundamental freedoms, which is the freedom of movement for work. When an employee’s contract ends, they can work in another EU country. Here, for players under 21 – under 23 in our conditions – there is a certain restriction. On one hand, there is the freedom of movement; on the other, clubs have an interest in being compensated for player development, so they get back part of their investment,” adds Jozef Tokos. While the more commonly used and better-known payment – and often cheaper for payers – is the solidarity payment (calculated from the actual transfer fee and distributed among clubs involved in the player’s development), training compensation is limited by the mentioned age restrictions. “For our clubs, this can often be an amount from which they can profit quite nicely. My experience shows that compared to solidarity payments, training compensation – which can reach higher, even five-digit sums – is often bypassed, unpaid, or paid very reluctantly,” adds Jozef Tokos.

He has dealt with several interesting cases of initiating and representing clubs seeking unpaid training compensation. Over two years, Jozef Tokos handled thirteen successful cases. Liptovský Mikuláš, Rimavská Sobota, and Dukla Banská Bystrica successfully claimed training compensation from Czech side Slovan Liberec, Trenčín from French club Arles-Avignon. He legally represented MFK Zemplín Michalovce in the case of unpaid training compensation for player Issacs Wassem from South African club CR Vasco de Gama Cape Town. Michalovce later succeeded before FIFA’s Dispute Resolution Chamber, which ordered the South African club to pay the training compensation. “We caught this one at the last moment,” adds Jozef Tokos. Interestingly, Jozef Tokos has also mediated training compensation internationally. In September 2014, he mediated for Italian club Parma from English side Blackburn Rovers for Fábio Nunes. This was a five-digit sum, which, however, in bankrupt Parma had the effect of a stone thrown into a well. He also represented FC Porto in a claim against Blackburn, and Danish club Nordsjaelland in a claim against Everton. And interestingly, after three successful representations of Slovak clubs against Liberec, he was later approached by Liberec to successfully “defend” against claims from Nitra and Topoľčany.

For the purpose of calculating compensation for training costs, FIFA instructs associations to divide their clubs into a maximum of four categories according to the financial investment in player training. Training costs are set for each category and correspond to the amount needed to train one player for one year. “Every national association must categorize its clubs into four categories each year according to their development expenses. England, Spain, Germany, France, Italy are category 1, the second divisions in these countries are category 2, as well as Belgium, Denmark, the Netherlands, Austria, and Scandinavian countries. Slovakia’s top division is category 3.” Slovak clubs fall into categories 3 and 4. Based on FIFA’s guidelines, categories have specific values visible in the attached table. Each confederation has different “value,” with wealthy Europe the most lucrative, followed by South America. “If a player from Slovakia (category 3) goes to England (category 1), the amount payable is the difference in the table – category 3 is valued at €30,000, category 1 at €90,000, so the difference is €60,000. If the player moves to category 4 or becomes an amateur, no compensation is paid.”

This system is not new globally. “Nevertheless, not only Slovak clubs but also many foreign ones don’t know they are entitled to training compensation. They should monitor their young players after they leave and, if eligible, claim it. They should audit their former players. Let me give a specific example: A club develops a player from ages 12 to 14, the player goes abroad as an amateur and joins an academy, then signs his first professional contract at age 19 – five years after leaving Slovakia. From the trigger event – in this case signing the first pro contract – there is a two-year time limit to claim compensation,” adds Jozef Tokos. If two years pass and the claim is made later, FIFA’s Dispute Resolution Chamber will deem it inadmissible. In other words, you must protect your rights within the proper time frame. “It’s definitely an area to watch and be interested in. It may be complex for many, which I understand, because it is demanding even for those specializing in sports law. Some national football associations, like the Dutch one, offer advisory services to clubs. It’s always better to seek advice – in either direction. Because the reverse situation can also happen: a Slovak top-division club signs a 21-year-old African player believing he is free, without checking if they must pay training compensation. If this obligation arises, the costs are higher than the club expected. There were also cases where clubs signed a player thinking he was free, only to be contacted about payment a year or two later,” adds Jozef Tokos.