FIFA to overhaul contract termination rules after Julian Alvarez dispute

From the beginning of January, FIFA will amend Article 17, which governs contract termination clauses and the ending of contractual relationships between players and clubs.

The revised regulations will require competitions to bring their contracts into line with a model in which the value of a unilateral termination is reasonably proportionate to the circumstances of the deal. The aim is to prevent either party from setting an excessive figure that effectively blocks a player from leaving.

According to Sport, the change follows several transfers that collapsed because of high release clauses or because clubs refused to negotiate the departure of players who had made clear they did not want to continue with their current side. One such situation arose this summer between Julian Alvarez and Atletico de Madrid.

The main purpose of the new regulations is to reduce disputes between clubs and players when contracts are ended. The changes are also intended to address issues highlighted by the case known as the Lass Diarra case.

Players’ representatives have backed the amendments introduced by FIFA.

Until now, the compensation due after a contract was terminated has been assessed on an individual basis. There has been no defined methodology or clear set of standards for determining the precise amount, leading to widely differing outcomes.

FIFA has therefore decided to revise Article 17 to make the process more transparent, objective and predictable. The two parties will be able to agree the level of compensation contractually, ensuring that the damage caused by a breach is fully covered.

The new rules distinguish between contracts that contain a release clause and those that do not.

Where a contract includes a release clause, the agreed amount will normally determine the compensation payable. However, that figure may be disregarded if it is clearly excessive and unfair.

Cases involving contracts without a release clause will be more complicated. Compensation will be calculated using several factors, including the remaining value of the contract, outstanding wages, the value of the player’s services, the loss resulting from the possibility of the player moving elsewhere, the cost of replacing them and any other proven damage.

Despite the different approaches, both the player and the club will be entitled to compensation equivalent to the remaining value of the contract that was breached.