How is COVID-19 affecting footballers’ contracts?

16th April 2020

With football on hold and no date set for resumption of the season, the game is in turmoil.

The financial pressure on clubs is like nothing seen before, with smaller clubs which are reliant on gate receipts being hardest hit.

Footballers are no different to other employees except that their contracts are always fixed term and set by the football transfer windows.

Postponement or suspension of league competitions affects both contracts expiring at the end of the season and contracts commencing at the start of the new season.

Under English law, clubs cannot require players to extend their contracts nor vary them by deferring or reducing wages without agreement from the player.

Unless an extension or new contract is agreed, the player will be a free agent on 1 July 2020.

Around 13% of Premier League players fall into this category, which can be very lucrative for the player as there will be no transfer fee to pay by his new club, meaning higher wages for the player.

There is little or no financial incentive for many top players out of contract on 30 June to agree on short term contract extensions, possibly jeopardising a lucrative free move.

In response to Covid-19 disruption, FIFA recently issued guidance to all National Associations proposing that agreements expiring at the end of the season should be extended to the new season end date and agreements beginning on the original new season start date be delayed until the new season start date.

But FIFA cannot bind players to extend contracts nor require them to work beyond 30 June if their contracts would have ended on that date, as our domestic law will always take precedence.

The key, as always, will be an agreement between individual clubs and players, which is likely to prove difficult in the current climate.