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£40 Million? Liverpool Aim To Hold Firm As Suarez Bites Back

£40 Million? Liverpool Aim To Hold Firm As Suarez Bites Back

It won’t surprise many people that Luis Suarez is in the headlines again.  This time however,  it’s not for something he’s done on the pitch but rather a clause in his contract which has Arsenal and Liverpool engaging in a “tug of war” for a player very much in demand. 

The story is clearly fascinating from a footballing perspective.  Will Arsene Wenger finally break the purse strings and spend big, proving to everyone that Arsenal can be considered a true challenger for major trophies this season?  Will Liverpool be able to hold onto their prized asset without the offer of Champions League football, in the hope of securing a return to the much coveted “top table” of European football, next season?   Football fans throughout the country will continue to follow the potential Suarez transfer, awaiting the answers to these questions and many more.  However, more interestingly from a sports law perspective is a clause in Suarez’s contract surrounding any bids of over £40 million which Liverpool receive for the player.

For those who have been too occupied elsewhere (has there been another story this week, capturing the nation’s attention?) it may assist to provide a brief background.  During the summer, Luis Suarez has given a number of interviews in his native Uruguay suggesting that he is being “victimised” by the British press and wants to move abroad.  Various rumours circulated over the summer that Real Madrid, Paris Saint Germain and Bayern Munich were all lining up bids for the striker.  To date, none of these clubs have made an official bid.  In fact, the only club who has made a bid is Arsenal.  A couple of weeks ago Arsenal made a bid of £35 million which was instantly rejected.  Liverpool insisted that that offer was nowhere near the true value of the player, which they say is closer to £55 million.  This week, Arsenal have returned with an offer of £40 million. Or, to be exact, they have returned with an offer of £40,000,001.

So, why the unconventional figure?  The reason is because Suarez has a clause in his contract which suggests that any offer over £40 million is significant.  The exact significance of such an offer, what it requires Liverpool to do and what it permits Suarez to do, is at the centre of debate which could ultimately end up in the courts.

It is rumoured that Suarez and his agent believe that any offer for him which exceeds £40 million allows him to speak to the club making such a bid.  That would allow Arsenal the chance to discuss the transfer with Suarez and in all likelihood reach an agreement on the personal terms of the transfer.  Arsenal’s hope would then be, once personal terms are agreed, that Suarez tells Liverpool that he wants to move to Arsenal.  Liverpool would then be forced with a decision between keeping an unhappy player who wished to play elsewhere or accepting the £40,000,001 offer on the table, and securing the services of other players before the English transfer window closes on 2 September. Essentially, Arsenal are hoping that Suarez can “engineer” his departure from Liverpool in such a way that Liverpool’s hand is forced.

Liverpool believe that the only consequence of an offer of over £40 million for Suarez, is that they need to tell the player of the bid.  Liverpool believe they are under no obligation to accept the offer or give Suarez permission to talk to the club making such a bid.    

As with all contracts, the devil is in the detail and without seeing the actual clause in question, I cannot offer firm advice one way or another on how the clause would and should be interpreted.  But, Liverpool’s interpretation of the clause is an odd one.

In this day and age of 24 hour media, news of Arsenal’s bid of £40,000,001 became public almost as soon as it was made.  Indeed, given the ongoing issues Suarez has faced in the last few years, such a large bid for the player was always going to be headline news.  Do Liverpool really believe that Suarez wouldn’t know about an offer of over £40 million should such a bid be made?  Such a view is naïve, at best.  As such, a clause which only requires Liverpool to inform Suarez of a bid being made over this value, is meaningless.  Suarez already knew about the bid Arsenal were making, perhaps even before it become public.

So, that leaves Suarez’s interpretation of the clause. It is clear that the £40 million figure is not a “minimum fee release” clause which means that Liverpool do not require to accept any bid which meets that value.  Such clauses are not uncommon in football and in countries such as Spain, they are mandatory.  The way Spanish clubs get round that is to make the “minimum fee release” clauses for the top players exorbitant.  Lionel Messi’s clause is said to be €250 million.  Cristiano Ronaldo’s is said to be €1 billion.  Set against such figures, a minimum fee release clause for Suarez at £40 million would be small change and there is no suggestion from either side that that is how the clause in Suarez’s contract is being interpreted.

What then of the suggestion that Arsenal’s bid of over £40 million allows Suarez to discuss personal terms with Arsenal.  Such a clause goes against the basic rule that a purchasing club cannot discuss personal terms with a prospective player until the selling club has given them permission to do so. Permission is normally granted, once a transfer fee has been agreed.  A contravention of these rules would normally lead to a finding that both the transferring player and the purchasing club were in breach of league rules. Perhaps the most well-known example of such “tapping up” conduct in recent times was when Chelsea were found to be in breach of Premier League rules by “tapping up” Ashley Cole, when he still under contract at Arsenal.  At the conclusion of a Premier League hearing, Chelsea, Jose Mourinho and Ashley Cole were all found to be in breach of the relevant rules and fined a total of £450,000 between them.

Should the dispute regarding the clause continue, judicial interpretation of the clause may be required.  It is likely however, that the first stage of that process would be the FA Premier League’s own rules.  Arsenal, Liverpool and Suarez (probably through his contract of employment with Liverpool) are subject to Article 64 of the FIFA Regulations which  provides that football disputes of this nature should not be heard in the ordinary courts.  Instead, FIFA insist that  such disputes are kept within the “footballing family” and ultimately determined by the Court of Arbitration for Sport in Switzerland, if unable to be resolved through the FA Premier League’s own rules and procedures.  Should any of these formal procedures be instigated by Liverpool, Arsenal or Suarez it is likely that a formal determination of the issues will not be quick and certainly unlikely to be resolved before 2 September (and perhaps not even before the January transfer window closes on 31 January 2014).  Such an impasse would be extremely undesirable for all concerned.  The one thing this story requires is a quick resolution.

If Liverpool stick to their interpretation of Suarez’s contract, and Arsenal continue to covet the player, Arsenal may be persuaded to increase their bid to an acceptable level.  Such an outcome is certainly the most likely.  However, should both teams stick to their current position, the eventual outcome will be fascinating for sports fans and lawyers alike.

Neeraj Thomas is a Senior Solicitor within the Sports Law team at Burness Paull & Williamsons LLP.

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