by Shruti Maheshwari and Trisha Mishra, fourth year students at National Law University, Jodhpur

1.     Introduction

People often argue that why do these superstar players need the shelter of employment laws/rules protecting their economic interest when they are highly influential to suffer any exploitation. For instance, a simple gesture of promoting a healthy lifestyle such as drinking water from a renowned player of football can slash the shares of a multinational beverage company. Thereby, the article analyses whether these superstar players are really immune to exploitation at their workplace in the light of Lionel Messi’s exit from Barcelona.

2.     Lionel Messi and his departure from FC Barcelona: An Overview

The news of Messi leaving Barcelona came as a shock to each and every fan. It was not just the fans who wanted Messi to stay in Barcelona but Messi himself wanted to continue his stay in his beloved club. This was evident when Messi was struggling to hold down his tears on the dais while bidding a goodbye to the club. However, what left Barca fans in a dilemma was the question that why did Messi not continue his stay by offering a wage cut or perhaps offering to play for free despite knowing the financial struggles of the club. The simple answer to this dilemma is that he couldn’t do so due to Spanish employment laws and the La Liga salary cap.

2.1.Spanish Employment Law

According to this law, an employee’s salary cannot be less than 50% of the previous wage drawn by him. In the case of Messi, he was a free agent at that time. This means that his contract with Barcelona expired and he was no longer associated with it or any other club. Thereby, had he joined Barcelona back, it will be considered as a new employment contract and not a renewal of the previous contract. Thus, even if he agreed to play for free, he could not. This law wouldn’t have allowed him to do so as the salary cannot be less than 50% of his previous wage. Due to this, Messi, offered a 50% wage cut in order to ensure compliance. However, despite this offer, he could not continue his stay because of another stringent rule, which is, the La Liga’s salary cap.

2.2.La Liga’s Salary cap

As per La Liga’s salary cap rule, a club cannot spend more than 70% of its revenue on its players’ wages and transfer fees. However, due to gross financial mismanagement, Barcelona already exceeded this salary cap to 110%. And even after Messi’s leaving the club, they can only manage to bring it down to 95% which is still in excess of the wage cap limit. Thus, it was the financial mess created by the club itself which made them lose their greatest player.

3.     Do players really deserve / need the benefits of employment laws/wage rules?

3.1.Beneficial Employment Legislation

The purpose of the Spanish employment law for the salary to be 50% of the previous wage is to protect workers/employees from being financially exploited. There are arguments that why do players need such beneficial legislations like the Spanish Employment law or any other similar minimum wage law to safeguard their economic interests when they are already paid humongous amounts as compared to other employees/workers of traditional industries. However, it is pertinent to note that players are as vulnerable as workers/employees of a conventional industry. 

3.1.1.     Glamourous Industry

The sports industry is as glamourous as the entertainment industry, therefore, the rush of young players into the industry is increasing. The chances of these youngsters being exploited in the hands of the club are high. They are forced to accept the one-sided contract because they are in desperate need of the opportunity to move forward with their careers. Thus, laws mandating a certain amount of pay helps in avoiding the exploitation of these vulnerable players.

3.1.2.     High Health Risks

 The chances of permanent disability or severe injury are always there in a profession like sports. These players sacrifice their health to play for the clubs and take them to the top. Therefore, it is important that these players are guaranteed a minimum payment so that, they are not left high and dry when they face some medical emergency.

3.1.3.     Early Retirement

Most of the players retire at an age of 35-40 years. This is because of the strenuous training and annual leagues. So, the assured minimum wage is a must for them as it is their only source of income that will support them all their life.

Therefore, for the abovementioned reasons, the sportspersons equally require the shelter of beneficial legislations like the Spanish employment law or other minimum wage laws so that they can protect their rights. Since in sports, not just the young and upcoming players are vulnerable but superstars like Messi, Ronaldo are also vulnerable as they equally jeopardise their health for the sake of their respective elite club/team who earn their fame in the name of the players.

Thus, to prevent exploitation of players by these elite clubs, beneficial employment legislations are to be made prima facie applicable to players, as it was rightly done in the case of Lionel Messi, without any opposition.

3.2.Salary Cap

In general, the salary cap is the threshold set by the governing body in terms of the total percentage of the gross capital of a club or a fixed amount, that a club can spend on players while forming a team in a season. Salary cap is like a win-win situation for both players and the club, particularly when the player is a free agent, i.e., he/she isn’t part of any club and the contract with the previous club has expired. That is, the players can freely choose to play for the club providing them with the highest salary as per their needs and convenience. While on the other hand, clubs have to restrict their bid in accordance with the salary cap which is financially beneficial for them as it prevents them from spending extravagantly, thus, shielding them from future bankruptcy.

Further, the benefits of Salary Cap can also be viewed from a general public interest perspective:

3.2.1.     Player’s perspective

Players want to grow not only financially but professionally as well. Thus, it is very important from a player’s point of view to have a Salary Cap because without Salary Cap the competitiveness of the league will decrease as the strong players will be poached by some big clubs. This will also affect the growth of the players in terms of their skill as they will not get to play against some of the most talented players.

3.2.2.     Viewer’s Perspective

It is very important to maintain the attractiveness of the games but without Salary Cap this is not possible. This is because removal of the cap will lead to the accumulation of best players in a few of the rich clubs, making the games predictable for the viewers in the stadium as well as the television. The leagues are required to ensure equal distribution of talents across the clubs to retain the excitement of the game and Salary Cap is a one-stop solution for this.

Apart from enhancing general public interest, the salary cap also has the effect of increasing employment opportunities. Without a salary cap, owners of the clubs can go to any extent to attract the best of the lot towards themselves even though it may cost them their financial stability. But in presence of a salary cap, each club will prepare a course of action to spend its finance accordingly. And with the income saved, the club can invest in other related growth projects for players. In this manner, the clubs will be financially healthy which will attract investors and thereby increase employment opportunities and at the same time ensure players are compensated proportionately.

4.     Other Reasons for the need of benEficial employment laws and wage rules in THE sports industry

4.1.Collective Bargaining: Challenges in Sports Industry

In a system of collective bargaining, the employees/workers form a union or an association to negotiate with their employer on matters pertaining to wages, working conditions, etc. Thus, rather than negotiating individually, workers/employees negotiate as a whole to be able to secure a better deal. Thus, through collective bargaining, a degree of balance is created by giving employees equivalent bargaining power as that of an employer which results in an agreement that represents the best of both sides.

The need of collective bargain is equally necessary in a sports industry. Like workers of other traditional industries, sportpersons also need a platform to voice their demands against exploitative employment terms. Although, players such as Roger Federer, Neymar Jr., et al who have carved a name for themselves have high bargaining power and can hire lawyers to secure their interests. However, this is not true for upcoming sportspersons and hence, they face the wrath of one-sided employment contracts. Thus, with the help of collective bargaining, the players can secure their interests in a wide range of areas including base salaries, medical rights, retirement, injury grievance and other related aspects.

However, despite the need for collective bargaining in sports industry, there are many challenges unique to the sports industry which results in not so favourable outcome for players through a collective bargain.

Some of these challenges are:

4.1.1.     Threat to the true essence of sports

Unlike other traditional industries which significantly operate for ‘economic pursuit’, the sports industry is more of following the pursuit of social, educational, and cultural activities. However, by extending rights to players such as the right to form associations, right to strike, etc, will hamper the true essence of sports as players will be focused more on the commercial aspect rather than the non-commercial aspects. Thus, a collective bargain will erode the true nature of sports.

4.1.2.     Difficulty in adopting an economic method of strike

To gain an advantage on the bargaining desk, the players have the economic weapon of a strike, in case, negotiations fail. However, due to the short span of their career as the nature of the industry requires early retirement, the strike can cause a disproportionate threat to players’ earning prospects because of work stoppage, cancellation of entire seasons/matches etc. Further, major top-notch sports leagues have significant market share and enjoy a considerable monopoly and thus, in the absence of rival leagues, it is difficult for a sportsperson to employ this economic method of a strike to gain an advantage on the table due to limited employment market.

4.1.3.     Top-notch players are likely to suffer

This system helps represent the voice of all players, i.e., from the weakest to the strongest. In this manner, the collective bargain helps secure the rights of even the weakest player who individually possess very little bargaining power. However, this system results in an injustice to top-notch players who deserve high compensation as they are the trump cards in any professional sport. Individually they have high bargaining power. However, it is diminished in collective contracts as these contracts are fairly rigid than individual contracts. Thereby, the top-notch, talented players are likely to suffer.

Hence, due to these challenges mentioned above, the collective bargain system may not work effectively in the sports industry. Thus, player-friendly employment laws/rules such as Spanish law of minimum wage to be at least 50% of the previous wage, or the La Liga rule of 70% salary cap, etc ensure that players’ rights are secured in the long run without the need of going into the complexities of negotiations which are difficult to achieve in a complicated sports industry.

5.     Conclusion

In this article, we have thoroughly argued in favour of beneficial employment laws and salary cap rules which were, however, the reason for Messi’s exit from Barcelona against his wishes. But looking from the perspective of labour law, Messi, in fact, dodged the exploitation that he would have faced had he played as a charity for Barcelona because such a star player with highly specialized skills doesn’t deserve to pay for the financial mismanagement of a top-flight club, simply because he possesses fame and fortune. Thus, it is not just the young and upcoming players with low bargaining power who require the support of such beneficial laws/rules at the workplace but these laws/rules are equally desirable for the prevention of exploitation of megastars like Lionel Messi.