Will global soccer be reshaped after EU's top court issued a major ruling in Lassana Diarra case?

The global soccer transfer market, worth more than $10 billion each season, is facing a revolutionary overhaul or a nuanced evolution following last week's ruling by the European Court of Justice in the Lassana Diarra case.

By ruling that some FIFA regulations on player transfers are contrary to EU legislation relating to competition and freedom of movement, the bloc's top court has paved the way for deep changes in the sport's economy.

Here is a look at the key elements of the case and the possible impact of the landmark ruling.

Lassana Diarra is a former much-traveled footballer whose career saw him play for prestigious clubs such as Chelsea, Paris Saint-Germain and Real Madrid. He represented France 34 times. At one point in his career, Diarra moved to the Russian league. It’s a dispute with Lokomotiv Moscow that triggered the legal case examined by the European Court of Justice (ECJ).

Diarra signed a four-year contract with Lokomotiv in 2013. The deal was terminated a year later after he was unhappy with alleged pay cuts. Lokomotiv applied to the FIFA dispute resolution chamber for compensation and the player submitted a counterclaim seeking compensation for unpaid wages. The Court of Arbitration for Sport found the Russian club terminated the contract “with just cause” and the player had to pay 10.5 million euros ($11.2 million). Diarra said his search for a new team was hampered by FIFA rules stipulating that any new club would be jointly responsible with him for paying compensation to Lokomotiv.

Free movement is a fundamental right of workers in the European Union within the single market. On that basis, the EU’s top court said that the FIFA rules, including the one that resulted in the refusal to provide Diarra with an international transfer certificate (ITC) for a move to Charleroi, restricted his freedom of movement.

The court also found that FIFA regulations breached the bloc’s competition law because they aim at restricting and preventing “cross-border competition which could be pursued by all clubs established in the European Union.”

The ECJ ruling will now be referred back to the appeal court in Mons, Belgium, which will rule on the Diarra case. This could take years rather than months. Although FIFA said it was satisfied “that the legality of key principles of the transfer system have been reconfirmed,” Diarra’s lawyers claimed “total victory.”

The judges in Luxembourg acknowledged having stability in player rosters and regularity in competitions are legitimate objectives for FIFA, but that rules must be applied proportionally.

Some analysts have compared it to the ECJ’s 1995 decision on Belgian Jean-Marc Bosman. That ruling removed restrictions placed on foreign EU footballers within national leagues and allowed players in the bloc to move to another club for free when their contracts ended. Those principles had an obviously wider focus than the narrower scope of Diarra, about terminating a contract for cause.

For now, the decision on Diarra does not change how the transfer market functions. But many legal experts believe that the ruling will ultimately have major effects on the sport’s economy.

“The decision essentially says the current system is too restrictive and so will have to change,” said Ian Giles, a partner at Norton Rose Fulbright law firm. “It’s entirely possible this means players will feel they can now break contracts and sign on with new clubs, without the selling club being able to hold them or demand significant transfer fees. This will likely result in reduced transfer fees and more economic power for players — but over time things will have to stabilize to allow clubs to remain economically viable."

It took more than five years after the Bosman ruling for updated FIFA transfer rules to be published in 2001. Some of those debates then will now be revisited.

A major reset of transfer fee values can seriously affect many smaller market clubs. Bosman already accelerated gaps in wealth and competitive balance across European soccer, which is increasingly dominated by a small group of clubs. They can lure free-agent players with higher signing bonuses and salaries – money that previously would be more widely distributed via transfer fees.

Spending by super-wealthy clubs can still reward smaller ones who excel at investing time and expertise in scouting and developing local and global talent: Ajax, Brighton, Genk in Belgium, which nurtured Kevin De Bruyne, Thibaut Courtois and Leandro Trossard.

The influential European Club Association, which represents more than 700 teams, sees potential threats to the industry’s health in the fallout from Diarra. Transfer fees and payments to clubs from former players being sold later in their career “are an efficient and effective means of wealth distribution from bigger clubs to smaller ones,” the ECA noted.

The soccer industry is increasingly a game being played by lawyers in courts and government offices.

FIFA is being challenged in several legal arenas, in part because it works (Diarra, Super League, agents regulations ). There is also a growing perception FIFA does not listen before launching projects and that pro-transparency reforms demanded and passed a decade ago are in decline.

Within hours of the Diarra ruling Friday, the group of domestic leagues and player unions announced a news conference in Brussels for Oct. 14 to explain their filing to the European Commission. The complaint on competition law grounds argues FIFA adds new and bigger tournaments to the congested calendar without proper consultation.

European Leagues and FIFPRO once had a seat at FIFA’s Football Stakeholders Committee that was a key forum for debate, including on the transfer market. FIFA paused the panel in 2021 and soon its president Gianni Infantino pushed for playing World Cups every two years. The idea was resisted by a widespread backlash. The leagues group says the Diarra ruling shows how representation at FIFA is “becoming legally essential.”

FIFA had indicated before Friday it would consult widely on transfer market reforms it believes can focus on specific issues raised by Diarra, rather than a total overhaul.

Diarra’s lawyer Jean-Louis Dupont — who also represented Bosman 30 years ago — sees a bigger picture. He appeared to be recruiting for a wider suit against FIFA by claiming “all professional players have been affected by these illegal rules” and could now seek compensation.

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Will global soccer be reshaped after EU's top court issued a major ruling in Lassana Diarra case?

Will global soccer be reshaped after EU's top court issued a major ruling in Lassana Diarra case?

FILE - In this file photo dated Friday, Sept. 14, 2018, Paris-Saint-Germain player Lassana Diarra during a French League One soccer match against Saint-Etienne at the Parc des Princes stadium in Paris. (AP Photo/Michel Euler, File)

NEW YORK (AP) — Embattled New York City Mayor Eric Adams said Monday that he’s accepted the resignation of his deputy mayor for public safety, Philip Banks, the latest senior official to leave as the mayor fends off an indictment and calls to step down.

Adams said on TV station NY1 that Banks had told him Sunday that “he wants to transition to some other things" and "doesn't want this to be a constant burden on the work that we're doing in the city.” The mayor added, “I wish my good friend well.”

The resignation, first reported in the New York Post, comes one month after federal agents seized devices from top city officials including Banks and his brother, schools chancellor David Banks, who also announced his resignation. In total, five top administration officials have left the administration in the last month.

Federal prosecutors have said they are pursuing “several related investigations” in addition to the case against the mayor, who was indicted late last month on charges of accepting illegal campaign contributions and bribes from foreign nationals. He has pleaded not guilty.

In a separate probe, federal prosecutors are scrutinizing whether a consulting firm run by a third Banks brother, Terence, broke the law by leveraging his family connections to help private companies secure city contracts, according to a person familiar with the matter. The person spoke to The Associated Press on condition of anonymity because they were not authorized to disclose information about the investigations.

All three Banks brothers have denied wrongdoing. An attorney for Philip Banks, Benjamin Brafman, said Monday that federal prosecutors had assured him his client was not a target of the investigation. He said prosecutors were initially scrutinizing “insignificant” Zelle payments between the brothers that were actually related to poker games.

The Justice Department's definition of a target is notoriously fluid. Prior to Adams' indictment, the city's top legal counsel, who has also since resigned, told reporters that the mayor did not appear to be a target of the investigation.

Adams has rebuffed calls to resign, brushing off concern about his ability to govern as he mounts his legal defense and contends with an exodus of top aides. “I am confident when the true story gets out and not a one-sided version, New Yorkers are going to see that we can stay focused and get the job done,” he said Monday.

But he is facing mounting pressure to clean house in his administration, including from Gov. Kathy Hochul, a Democrat who has the power to remove him from office.

Adams appointed Philip Banks in 2022 as deputy for public safety, a role not seen in New York since the 1990s that gave him wide influence over the nation’s largest police and fire departments.

Banks had previously served as the NYPD’s highest-ranking uniformed member, but resigned abruptly in 2014 after becoming ensnared in another corruption scandal that shook City Hall.

In that case, federal investigators obtained approval to wiretap his phone amid questions about $300,000 that wound up in bank accounts belonging to him and his wife. Two businessmen were later convicted of bribing police officers and other officials. Banks was not charged but was named as an unindicted co-conspirator.

He later acknowledged accepting gifts from the businessmen — including overseas travel, meals and cigars — that were mistakenly omitted from disclosure forms.

“I never broke the law, nor did I ever betray the public trust by abusing my authority as an NYPD official,” he wrote in a guest essay announcing his return to public service under Adams.

Adams has been a friend of the Banks brothers since the 1980s, when the future mayor was a young police officer and their father, Philip Banks Jr., was a law enforcement mentor.

On Thursday, Adams announced that David Banks would cease running the schools system on Oct. 16, and not at the end of the calendar year as previously announced. In a statement, David Banks said he had planned to continue serving through the end of the year “to conduct a responsible transition for our staff,” but that Adams had “decided to accelerate that timeline.”

In addition to seizing the phones of the three Banks brothers, federal investigators also took devices from the city's police commissioner, Edward Caban, and one of Adams’ closest aides, Timothy Pearson. Both men have since stepped down. Caban and Pearson have both denied wrongdoing.

At a press briefing last month, Adams spoke of his close ties to the Banks brothers.

“I’ve known the Banks families for years,” he said. “And my knowing someone, I hold them to the same standard that I hold myself to.”

In this courtroom sketch, New York Mayor Eric Adams' defense attorney Alex Spiro, left, speaks at the podium as Adams is seated at right at the defense table during a hearing in Manhattan federal court, Wednesday, Oct. 2, 2024, in New York. (Elizabeth Williams via AP)

New York City Mayor Eric Adams arrives to court in New York, Wednesday, Oct. 2, 2024. (AP Photo/Seth Wenig)

FILE - New York City Police Dept. Chief of Department Philip Banks attends a news conference, in New York, Jan. 30, 2014. (AP Photo/File)