The legal situation pertaining to Martinez' transfer.

We had a bit of a discussion about this subject over at Bayernforum, which sparked me to actually read the FIFA laws about transfers, especially about contract termination (which is what a release clause effectively is). I made my conclusions there, but figured I might as well post about it here as well because I'm pretty sure over half of the press doesn't quite realize what's going on either.

Basically, the stories we've heard so far are: Bayern is ready to meet his release clause of 40 million; Bilbao is entitled to demanding that the release clause is paid by Martinez himself; Martinez paying the release clause would incur having to pay an extra 8 million of tax; Bilbao is ready to take Bayern to court for contacting the player.

Now, first we need to know what we're dealing with here. What we know as release clauses are covered under paragraph 17.2 in FIFA's Regulations on the Status and Transfer of Players:

Entitlement to compensation cannot be assigned to a third party. If a professional is required to pay compensation, the professional and his new club shall be jointly and severally liable for its payment. The amount may be stipulated in the contract or agreed between the parties.

However, this exact wording is not enforced in all local associations, unlike paragraphs 17.3-5 relating to the same subject. So the Spanish FA can change this, and they have - it seems that their definition (the wording of which I am speculating considering I don't speak Spanish) has it so that only the professional is required to pay the compensation fee, the "release clause".

Now, apparently this is the cause of the tax problem. If Martinez takes up any financial interactions with his team, he is also obligated to pay taxes for it. This was reported as the main stumbling block, and I have no way to verify it either, because like I said, I am unable to read up on Spanish football law. BUT - it is a moot point anyway, for reasons I'm going to explain soon. It seems that the press picked up on the wrong issue in the delays.

The REAL problem is paragraphs 17.1, 17.3 and 17.4 of the same document referenced earlier. A release clause falls under "terminating a contract without just cause", as opposed to "just cause" or "sporting just cause", the latter basically makes sure that if you have no play time at all, you can leave the club, subject to consideration of the specific circumstances involved, but I digress. Now, the paragraphs I mentioned deal with the compensation and transfer and player bans that are involved when a contract is terminated without "just cause". Because it:

shall be presumed, unless established to the contrary, that any club signing a professional who has terminated his contract without just cause has induced that professional to commit a breach

, signing Martinez after he has paid his release fee will incur any team that signs him up a transfer ban lasting two registration windows, "unless established to the contrary". In our case, signing him in the way that is being thrown around in the media would incur us a transfer ban lasting until July 2013. But wait, there's more! We only dealt with paragraph 17.4!

The paragraph 17.3 means that, due to the release clause being counted non-"just cause";

sporting sanctions shall also be imposed on any player found to be in breach of contract during the protected period. This sanction shall be a four-month restriction on playing in official matches. In the case of aggravating circumstances, the restriction shall last six months.

, meaning that signing Martinez after he has paid his release clause would make him unable to play for us for 4 to 6 months, depending on the circumstances. And even that's not the end of it!

The wording in paragraph 17.1 is a bit badly-phrased, and it is very difficult to understand whether or not the "compensation fee" mentioned in 17.1 is identical to the compensation fee in paragraph 17.2, aka the "release clause". However, earlier (but not pre-Bosman) precedent (involving the purchase of Lizarazu from Bilbao funnily enough) would suggest that they are, in fact, separate, and as such, we would have to pay extra compensation to Bilbao in addition to the release clause and the extra tax it brings. Apparently, this extra compensation is figured into the 56-58 million figure that's been thrown around.

So in conclusion to the whole release clause story, actually forcing Bilbao to let Martinez go and have him sign for us would cost us upward of 56 million euros, with a year-long transfer ban and a 4-6 month playing ban for Martinez. Effectively, this means that forcing Bilbao to sell him is impossible, unless of course someone much smarter than me (and there are a buttload of them people) manages to come up with some loophole in the system. I wouldn't hold my breath for it, however.

At least a bit of good news comes in relation to the "tapping up" accusations made at Bayern. Paragraph 18.4 of the same document that deals with the subject, reads:

A club intending to conclude a contract with a professional must inform the player’s current club in writing before entering into negotiations with him. A professional shall only be free to conclude a contract with another club if his contract with his present club has expired or is due to expire within six months. Any breach of this provision shall be subject to appropriate sanctions.

, so effectively since there is no way to sufficiently prove that Bayern "intended to conclude a contract" with Martinez and "entered negotiations with him", there's also no threat of Bayern being punished for tapping up unless we have the most inept lawyers in the word (that is, unless we have Lionel Hutz sitting at Säbener Strasse right now).

Now, let's wrap this shit up. KHR just today said that:

We're working on it and I hope we can announce a deal by the end of August. But it's not entirely easy.

so, there is some hope of a deal still going through on our part at least. But he concedes that:

It's a very complicated clause, so the whole subject would cause certain legal and tax problems

which if I'm right (which is obviously not a given), refers to the problems I brought up in this article. It seems that we're simply trying to persuade Bilbao into accepting a "normal" transfer, in which case all these compensation fees and transfer bans don't apply. This is entirely dependent on the co-operation of the Basque club, which is indeed the main stumbling block so far. So to sum up, we're working on it, but it all depends on Bilbao as there is no way to force the deal through.

Addendum: the whole confusion arose from the Bilbao president specifically saying that a club would need to meet his release clause of 40 million, which we eventually did. However, it seems like they thought that no one would actually call their bluff and are now holding on to Martinez at all costs, despite a generally unwritten law that any transfer bid matching a players release clause would be accepted. They are risking a lot of credibility from the footballing world to get credibility from their fans.

The FanPosts are solely the subjective opinions of Bavarian Football Works readers and do not necessarily reflect the views of Bavarian Football Works editors or staff.

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