Move to save transfer system

Record transfer: Real Madrid paid £37m for Luis Figo

The government is taking action to stop football's transfer system being ruled illegal by the European Commission.

The EC is expected to rule next month that transfer fees are an unfair restriction on players' economic freedom and call for them to be scrapped.

But the Culture Secretary, Chris Smith, believes the fees are a way of transferring wealth from the big clubs to smaller ones, and that this balance needs to be maintained.

The EC says its aim is to give footballers the freedom of movement enjoyed by other workers in Europe.

Mr Smith wants to discuss this with other EU sports ministers, as the UK Government fears its efforts to build football from grassroots level could be threatened by the move.

Chris Smith wants to protect smaller clubs

"The government has worked hard with the football authorities to build a better future for football in this country," a source close to the cabinet minister is reported as saying by the Press Association.

"We are channelling new investment for football facilities at grassroots and have helped set up youth academies at clubs.

"But these efforts could be undermined if transfer fees are outlawed.

Lifeline

"They are a vital lifeline for smaller clubs and give them an incentive in nurturing home-grown talent."

Smaller clubs agree with Mr Smith's argument.

They say there is little point devoting time and money to youth development if young players can walk out at any time.

If the current system is scrapped, it is not known what it will be replaced with.

Some feel that a compensation system, based on a player's salary multiplied by the length of time remaining on his contract, may be acceptable to the EC.

Also under consideration is the Spanish pay-back system, in which a player agrees to buy his way out of his contract if he wants to move.