Migrating Football Players, Transfer Fees and Migration Controls



of the relative size of the home country of the talents, and should moreover be relatively
high when talents are in high demand.

But, direct or indirect migration controls can also be used to restore efficiency. Previously
such controls were realized in European football by the so-called nationality rule. This
rule allowed national football associations to limit the number of foreign players a team
in a given association was allowed to field. By regulating the maximum number of
foreign players, migration of players was effectively restricted and the quality of the
smaller leagues protected. It goes without saying that within the common market of the
EU, this practice had to be abolished. Indeed, as a part of the Bosman ruling, the
European Court of Justice also held that the nationality rule constituted an obstacle to the
freedom of movement and was therefore prohibited.

Another example of a migration control is the so-called ‘home-grown’ player rule,
recently introduced by the European Football Association (UEFA). According to this
rule, clubs can only enter a European competition, like the Champions League, if their
roster of players contains at least a certain number of players who were educated by the
club itself. This rule obviously restricts the demand for foreign players and thus restricts
migration in an indirect way. However, as in the current formulation of the home-grown
rule the nationality of the trained players is left unidentified, the rule is not necessarily an
infringement upon EU principles. Recently, the European Parliament even explicitly has
declared itself in favor of the home-grown rule as a means to restore competitive balance
in European football.

If talents are to be trained in order to become top players, free and uncompensated
migration of players will diminish the incentives for national leagues to provide
schooling to talented players. As a result the supply of talents will be too low. Transfer
fees can lead to a correction to a too low supply of talents because of the lack of training
facilities. However, although introducing transfer fees for migrating players will be
Pareto improving compared to a free market migration equilibrium of football players,
oversupply of talents in the small league can emerge.

In an equilibrium with endogenous talents small leagues will not have any training
facilities if the migration of their talents to the big leagues go uncompensated. The



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