FIFA limits excessive release clauses in player contracts

FIFA has officially approved Circular No. 1970, introducing significant amendments to Article 17 of the Regulations on the Status and Transfer of Players. This reform is a direct consequence of the long-standing Lassana Diarra vs. Lokomotiv Moscow case (Case C-650/22), where the Court of Justice of the European Union ruled that previous FIFA transfer rules violated antitrust law and the principle of free movement of workers.

Going forward, release clauses will be subject to proportionality controls. Compensation will only be enforceable if it is not deemed clearly excessive or unfair, considering the specific circumstances of the operation, such as the transfer fee, the player's salary, and the remaining value of the contract. In the absence of a written clause, compensation will be calculated based on objective criteria, including unpaid remuneration, replacement costs, and proven damages.

The goal of these reforms is to end the practice of setting astronomical release fees that serve no purpose other than to block a player's move to another club. For instance, the 500 million euro clause in Julian Alvarez's contract with Atletico Madrid, which is 40 times his annual gross income, would be considered unlawful under the new rules.

These new regulations will only apply to agreements signed after January 1, 2027. However, players retain the option to appeal to general labor courts, citing EU primary law, if they believe their freedom of movement as workers is being disproportionately restricted by their contract terms.