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A Breakdown of the Legal Implications for Player and Club.
On 26 October 2023, it was announced that Newcastle United midfielder Sandro Tonali has been banned from football for 10 months. He was found guilty of breaching gambling regulations by the Italian Football Federation (FIGC).
This happened just a few months after the Italian player joined Newcastle for a record transfer fee of over £60 million. After a string of high-profile betting scandals involving the likes of Ivan Toney, Harry Toffolo and Nicolo Fagiolo – Tonali is the latest to fall victim to public scrutiny for breaching betting regulations.
It is a heavy blow for both player and club, and one which certainly highlights the precarious relationship between athletes and gambling. Whilst we are certain there is public consensus about ensuring Tonali receives the support he needs to overcome his gambling related addictions, the circumstances behind the Tonali ban raise a number of significant legal questions.
What happens to Tonali’s Contract? Can Newcastle United Terminate Tonali’s Contract?
Almost all player employment contracts will contain “gross misconduct” and “disrepute” clauses which outline behaviours that could lead to the termination of the player’s employment relationship. The exact scope of these behaviours will be contract specific.
The Premier League has a standard form contract whereby “gross misconduct” broadly covers actions such as (i) theft or fraud, (ii) anti-doping related offences, (iii) incapacity related to drugs or alcohol and a more catch all provision covering equally “serious offences” and persistent breaches of the terms of the employment contract.
Betting related offences are therefore not strictly defined as a gross misconduct offence and there is some scope for interpretation. Meanwhile, the basis for terminating a player for bringing the club into disrepute is equally subjective.
One of the overarching principles governing football player contracts is the principle of contractual stability. Encapsulated by Article 13 of the FIFA Regulations on the Status and Transfer of Players, contractual stability refers to the idea that an employment contract should only be terminated upon expiry of the term or by mutual agreement. Any unilateral termination by a club is therefore vehemently discouraged and should remain a last resort option. Accordingly, a decision to terminate would therefore likely result in a protracted legal battle before the FIFA Dispute Resolution Bodies and subsequently the Court of Arbitration for Sport.
While Newcastle could theoretically terminate Tonali’s contract – there are financial, commercial, and social implications that should be considered as well. From a financial perspective, regardless of the termination, Newcastle will remain liable to pay AC Milan the outstanding portion of the circa £60 million transfer fee. They will simultaneously lose any value the Tonali was anticipated to bring to the Club over the course of his 5-year contract.
From a social perspective, news of Tonali’s struggles with gambling addiction has garnered mass public support and a decision to terminate him on that basis could alienate a fanbase that is sympathetic to his plight.
Will Newcastle be obligated to pay Tonali while serves his ban?
As Tonali is unable to provide the Club with his services throughout the duration of his ban – it is certainly logical to query whether Newcastle will be obligated to pay Tonali his full salary. Generally speaking, football clubs have a range of disciplinary options available to them with penalties ranging from formal warnings to fines.
That said, while clubs are able to fine players – there are strict restrictions on the maximum severity of those fines. Any fine which is equivalent to more than 2 weeks of the player’s basic salary will need to be approved and ratified by the Professional Footballer’s Association. While there is a strict maximum limiting any fines to the equivalent of withholding 6 weeks of the player’s basic salary. Notwithstanding any disciplinary action, Newcastle may seek to take – it is likely that Tonali will receive his full salary throughout the duration of the ban.
What about AC Milan? And does Newcastle have any legal causes of action against AC Milan?
Given the proximity between Tonali’s record breaking transfer and the publication of the allegations – the online rumour mill certainly has been quick to allege that AC Milan must have been aware of Tonali’s impending plight. At this stage, there is no evidence to suggest that AC Milan were aware of Tonali’s activities – however, any such knowledge does provide an interesting legal dilemma. Namely, can Newcastle claim compensation from AC Milan in the event evidence emerges that the AC Milan was aware of either Tonali’s betting related activities or the investigation by the Italian authorities.
From a legal perspective, most transfer agreements will contain a range of representations and warranties which almost certainly would cover any known issues relating to a player’s physical or mental health as well as any known investigations into a player’s conduct. Strictly speaking if it emerges that AC Milan were aware of Tonali’s gambling addiction or the investigation by the Italian authorities – such knowledge could be considered a breach of those warranties potentially rendering them liable for compensation.
From a more practical perspective however, such knowledge will be incredible difficult to substantiate. Any claim will require a rigorous fact mission to gather sufficient evidence capable of discharging the burden of proof before either a Court or an Arbitral panel. Any claim Newcastle may have will therefore primarily rest on whether they have substantial evidence to show that AC Milan had sufficient knowledge of Tonali’s gambling addiction or of any investigations into his gambling related activities.
The Sandro Tonali ban certainly brings with it a number of interesting legal debates while simultaneously highlighting the delicate relationship between athletes and gambling. At the time of publication, head coach Eddie Howe has reiterated Newcastle’s support to Tonali and any further disciplinary action seems unlikely.
It however remains to be seen whether Newcastle will probe AC Milan about any existing knowledge of Tonali’s gambling addiction and the related investigations at the time of Tonali’s transfer.