According to a report by Reuters, FIFA is planning big changes to the transfer system, including a luxury tax and a limit on loaning players.
The report states that FIFA has dedicated a task force – commissioned by FIFA president Gianni Infantino – to evaluating the current transfer system and proposing changes that may be necessary. The task force released a report on the current status of the transfer system and what can be improved, and Reuters claims to have seen that report.
Reuters quotes the FIFA report, saying that FIFA believes recent inflated costs have led to “unsavory practices which may lead to the exploitation of players.” It says the current system has contributed to “various abuses at the expense of young players and the integrity of competitions.”
In addition to the supposed exploitation of players, the report states, “The transfer system appears to have turned into a speculative market. This is not fair to the football clubs or grassroots which are the foundation of the professional sport.”
The report most notably suggests halting the increase in transfer prices by developing an algorithm to predetermine the value of a player, implying that would be used to set a fixed price based upon the mathematical calculation. It states that the task force commissioned Swiss company CIES Football Observatory to develop the algorithm, which it reportedly has already done.
The algorithm method could be most notably problematic because it would appear to try quantifying player value with a rigid determination, while such a value can often be less of a fixed rate and more of a subjective value. Factors that determine a player’s value go far beyond just that player’s performance on the field, stretching to contributors such as the player’s contract situation, the bidding team’s roster makeup, the selling team’s roster makeup, the player’s public persona, the player’s fit with a managerial style of play, and the selling team’s perceived ability to replace the player, among much more. Essentially, one team’s need to buy coupled with another team’s willingness or need to sell can help determine a player’s value just as much as his play on the pitch.
The FIFA report also apparently suggested the use of a luxury tax to cap transfer values. Reuters states the tax would go towards a “solidarity fund” but did not expand upon that concept. Major League Baseball currently employs a luxury tax, essentially serving as a soft salary cap to keep teams accountable for the contracts they dish out. Any team with a total salary expenditure over a predetermined threshold would pay a percentage of that expenditure to MLB determined by their consecutive offending years. The money collected from the tax is spread throughout the other franchises in a revenue-sharing manner. It is unclear how FIFA would implement such a luxury tax, and if the tax would attempt to cap individual transfers or full team salary expenditure.
In addition, the FIFA report suggested capping a team’s ability to loan players in and out. The suggestion puts forth a cap of 6-8 slots useable to loan players in to a club, and a similar cap on the ability to loan players out. The English professional leagues already have a system of this type, limiting the amount of player loans available for registration; it does not, however, limit the amount of outgoing loans.
Finally, the FIFA report suggested limiting the fees paid to an agent, and strongly suggested prohibiting the ability for one agent to act as the negotiator for both a club and a player in a single transaction.
FIFA has taken a mostly laissez faire approach to the transfer market, allowing the market set itself as well as the trajectory of transfer values in recent history, although the governing body has worked to clean up the process slightly. Most notably, FIFA outlawed the practice of third-party player ownership, a common occurrence most visibly in Italy, Portugal, and South America that caused decisions on players’ futures to be made by parties other than the player himself.