Hundreds of players released, lawsuits over transfers and £200MILLION in damages to promotion-chasers... one sports lawyer explains why voiding the 2019-20 season would cause Chaos
Everything around football is up in the air. The season has been suspended for weeks and it is unclear when – and if – it might return. As time goes on, there are more voices calling for the campaign to be called off amid the
coronavirus crisis.
They do not seem to factor in the sheer number of issues that would be caused by ending it prematurely. There has been speculation over potential legal action – but what would actually happen if they decided to announce it was over today?
Sportsmail has spoken to sports lawyer David Seligman of Brandsmiths to find out what would happen if the season was rendered null and void...
The Premier League and EFL seasons are up in the air amid the ongoing coronavirus crisis
What happens on that first day?
A lot of EFL clubs will basically get rid of every player they do not want to keep. Every season, EFL clubs release loads of players. They'd save salaries for April, May and June and a month's severance, so four months of wages.
They wouldn't be able to argue force majeure - unforeseeable circumstances that prevent someone from fulfilling a contract – because EFL and
Premier League contracts don't include those express clauses.
What they might be able to do is argue that the contract is frustrated. It means that for reasons beyond control of the parties you can't do what the contract promises. Contracts could be set aside because of unforeseen events that render the obligation impossible. That applies to employment contracts and loan contracts.
Sportsmail spoke to sports lawyer David Seligman (right) to discuss the possible outcome
A huge number of players could be released in the EFL if clubs can argue for 'frustration'
If you set aside a contract for a player who is engaged to play for you next season they are unlikely to re-sign for you, but if you have a player that you are counting down the days until they leave, the doctrine of frustration would be used to the club's advantages.
Players are unable to play. No players or clubs thought they'd be in this situation. It's physically impossible for the players to fulfill the obligation in the contract.
Frustration is an argument I'd raise on behalf of the clubs to set aside employment contracts and loan players.
It's potentially hundreds of players being released from their deals and clubs having a valid legal basis to do so.
It could lead to potentially hundreds of players being released from their contracts early
Say you want to keep players and they are meant to be getting a bonus for staying up or qualifying for Europe – would they have a right to claiming it?
It depends. Say the season is voided – it depends how the contract is drafted, if it says if we 'retain our status at the end of the 2019-20 season' then it would be pretty hard to argue around it on the basis that they have, albeit in unusual circumstances.
But there will be issues if the season doesn't finish and they decide to relegate the bottom three teams anyway. There are players due for a wage cut if they go down. It's unlikely, but there would be an argument that they haven't been relegated due to performance, so they shouldn't have their wage cut.
The obvious one if they voided the season would be obligations to other clubs for transfers. For example, if a club sold a player to Luton and a clause of the transfer agreement states that if they stay up, they will pay £100,000. The selling club would argue they stayed up so Luton owe them the money. Luton would argue that it is as though the season never happened, so that obligation passes onto next season essentially.
The EFL and Premier League would have to implement some very detailed guidance in an attempt to give clubs clarity in such circumstances.
Wouldn't teams just come to a unanimous agreement?
Clubs throughout the pyramid have vastly different issues to contend with. For example with loan players, if you're in League Two, you might have five players in on loan and decide you don't want to pay for them so you argue the contract has been frustrated.
But a Premier League or Championship side may have 10 out on loan and they will want the money under those loan agreement. They're going to disagree.
If it ended today, the EFL and Premier League will have to set out guidelines or regulations that wouldn't necessarily determine an outcome but can lead to clubs reaching a sensible compromise.
Clubs would then have to come to agreements or simply sue each other.
Premier League clubs and EFL sides might have different attitudes over loan agreements
If English leagues are voided and players are released, could they sign for clubs abroad?
This depends on FIFA and the Member Associations. FIFA will likely let the Member Associations effectively pick their own transfer windows.
Therefore if the Premier League and EFL lobby the FA to keep the window shut and if the registration window is opened by the Spanish Football Federation, say, and Pedro is released by Chelsea due to frustration, Barcelona could bring him in for free to get them over the line.
He might even go to Chelsea and say, 'Release me, I want to go and play abroad'.
Pedro is coming towards the end of his deal with Chelsea and wants to leave in the summer
What about options in contracts?
Options generally have to be activated by the third Saturday in May. But if the season ends today, players might be able to terminate their agreements and sign for another club immediately. That's an issue – clubs would say they didn't have a chance to decide on whether to activate the option, especially when there is no visibility as to when the next season may commence.
How could you extend a contract when you don't know when next season is or ends either? When would it start and finish? How can you negotiate performance-related bonuses? There's so much uncertainty and that always brings disputes.
How long could legal cases go on for?
An option I would advocate would be to set up a Covid arbitration committee to deal with disputes. As it stands, there's FA Rule K arbitration.
They are heard and decided upon quicker than High Court proceedings. But they can drag out. And the arbitrators can be QCs or seasoned lawyers, which can cost £15,000 to £20,000. If it's a dispute of, say, £50,000, it's a large chunk of the potential payout.
EFL clubs have the Player Related Dispute Commission. Whenever I've dealt with it, you rarely get to a final hearing because it takes such a long time that matters usually get settled and both parties take the compromise.
There needs to be an alternative to this. A Covid arbitration committee would be useful as it would likely see many of the same arguments raised with many factual similarities between cases. Precedent could be easily set and the arbitrators would be well versed in the law pertaining to frustration, force majeure and failure of consideration and how that could be applied to these types of cases.
Manchester United are yet to decide if they want to activate a clause in Nemanja Matic's deal
What about sponsors? Would that be an issue?
Sponsorship deals are relatively straightforward contracts – you pay X amount and you gain the value from your brand appearing on shirts etc. There'll be some shirt sponsors who will say they will not pay because the games are not happening. They may argue there is a failure of consideration – an essential element to a contract.
Clubs will counter that by saying that as they've played three quarters of the season, people have bought shirts and there are re-runs of matches on TV so you're still getting the exposure under the contract and so there is no 'total failure' of consideration – the legal test.
Sponsors may also argue frustration, or some contracts may have force majeure clauses in them.
That'll be a huge issue and dispute as sponsorship income is a vital source of revenue for clubs at all levels and sponsorship fees are often paid quarterly. There may be a few defaulting payment this June.
