In the Negotiating Arena: A Guide to Contracts in Sports Law 

In the Negotiating Arena: A Guide to Contracts in Sports Law 


In the dynamic world of sports, where triumphs and defeats unfold on a grand stage, the backbone of every sporting endeavor lies in careful agreements that govern relationships among athletes, clubs, and stakeholders. In an area where the essence of fair play intertwines with the legal framework, we will elucidate the basic characteristics of contracts in sports in the Republic of Serbia. 

From pivotal signatures binding contractual parties to a series of interesting clauses, sports law is renowned for its specificities. Although it may seem that contractual relationships in the realm of sports law are straightforwardly regulated, they are characterized by a range of specificities. 

The contracts entered into depend on the category of athlete involved, whether it is a professional athlete or an amateur. For instance, for top-tier athletes, it is envisaged that they can be entrepreneurs. 

Looking at the employment contract of a professional athlete, which we will explain in more detail later in the text, it is clear that it is thoroughly regulated by the Sports Act, but it is also subject to the provisions of the Labour Law. It is essential to highlight that it possesses a range of attributes that distinguish it from the typical form of an employment contract. 

In this article, we will focus on contracts entered into by professional athletes as well as amateur athletes, all in accordance with the domestic Sports Act, and the method of resolving disputes. 


How does a professional athlete establish an employment relationship? 

Let’s start with the definition of a professional athlete – a professional athlete is someone who engages in sports activities as their sole or primary occupation, and another athlete who has the status of a professional athlete in accordance with the sports rules of the relevant international federation. 

It is important to note from the outset that written form is mandatory for contracts in sports; the contract, along with all amendments and supplements, including the mutually agreed termination of the contract between the athlete and the sports organization, is concluded in writing and authenticated in accordance with the law. 

Article 13 of the Sports Act addresses the question in the title – a professional athlete establishes an employment relationship with a sports organization by entering into an employment contract. 


Specifics of the employment contract for a professional athlete 

The employment contract for a professional athlete is concluded for a specified period, up to a maximum of 5 years. After this period expires, there are no restrictions for the athlete to enter into a new contract with the same or a different sports organization. Work interruptions shorter than 30 days do not affect the duration of this type of employment relationship. 

All rights and obligations from the employment relationship, in accordance with the Labour Law, belong to the athlete, unless otherwise determined by the Sports Act or the sports rules of the relevant international federation. 

The employment contract for a professional athlete determines the salary and other earnings in accordance with the Sports Act and the Labour Law, but these other earnings do not have the character of a salary. These include, for example, rewards for achieved results, compensation for accommodation, meals, and travel expenses during preparations and competitions, monetary and other compensation for the conclusion of contracts, and compensation for the use of the athlete’s likeness. 

Some variations of contractual relationships in the NBA are known as Player Contracts, Rookie Scale contracts, Veteran Minimum, 10 Percent Raise, and Max/Supermax contracts.

Unlike the legal form expressed in the Labour Law, the Sports Act stipulates that working hours, breaks, absences, and other rights and obligations of a professional athlete towards the sports organization are adjusted to the regime of sports preparations or competitions. 

The specificities of sports contracts are diverse. If we look at international practices, we can highlight a few interesting examples. 


The Bosman Ruling 

The landscape of football was altered by the decision of the European Court of Justice in the Bosman case (C-415/93). The Court determined that a club’s decision to retain Bosman after the expiration of the contract, or to charge a fee, contravened European Union regulations and impeded the guaranteed freedom of movement for the workforce. Additionally, the Court deemed the application of UEFA rules, allowing clubs in competitions to register a limited number of professional athletes who are citizens of other EU countries, as unlawful. 


Sign-and-trade contracts in the NBA 

This type of contract, used in the NBA league, represents a transaction in which a player signs a new contract with their current team or another team and is immediately traded for players from another team. This mechanism facilitates teams in transitioning players while simultaneously adhering to league salary rules. 

The sign-and-trade mechanism typically unfolds in multiple phases. Since the athlete’s consent is required, the first phase is a crucial agreement with the player. After obtaining consent, negotiations between teams for the exchange commence. Details are specified in the sign-and-trade agreement; the player’s approval is crucial for finalizing this agreement. 

The purpose of sign-and-trade contracts is manifold; it serves as a useful tool for teams looking to facilitate player movement within salary constraints, benefiting the player by potentially securing a more favorable contract. The losing team receives some form of compensation. It is a complex process requiring coordination and negotiation among different parties, including teams, players, and the league itself. 


Rooney v. Tyson 

Let’s briefly return to the year 1998 when the decision was made in the case of Rooney v. Tyson. The lawsuit revolved around an alleged breach of an oral agreement between the plaintiff, Kevin Rooney, and the defendant, Michael Gerard Tyson. When the renowned boxer Mike Tyson was 14 years old, he came under the guardianship of Cus D’Amato, a well-known figure in boxing. Rooney and D’Amato agreed that Rooney would train Tyson without compensation until the boxer fought professionally, and later, in return, he would be entitled to 10% of his earnings as long as he participated in professional fights. 

The central question in this legal dispute was whether the temporal description of the oral agreement posed a clear question and whether the description ‘while the boxer fights professionally’ constitutes indefinite employment under the legislation and prevailing doctrines in the state of New York. 

The Appellate Court of New York determined that the temporal clause in the oral agreement was clear and met the specificity standard. The Rooney v. Tyson case highlighted the importance of precision in oral agreements and the recognition of specific temporal clauses in contractual relationships involving the provision of personal services. 

Returning to our Sports Act – such uncertainties are resolved by the provision on mandatory written form. 


Which contract does an amateur athlete enter into? 

Let’s begin with the legal definition of an amateur athlete – it refers to an athlete for whom earning is not the purpose of engaging in sports activities and who does not pursue these activities as a profession. 

The contract entered into by an amateur competitive athlete and a sports organization is called a contract of practicing sports This contract stipulates financial compensation for engaging in sports activities, monetary and other rewards for achieved results, reimbursement of accommodation and meal expenses during sports preparations and competitions. 


What are transfer and loan agreements? 

The law mandates a written form and authentication for transfer agreements. The contracting parties are the sports organization with which the athlete has a contract and the sports organization to which the athlete is transferring. Based on this agreement, the first contracting party agrees to allow the athlete, for a specified fee, to prematurely terminate the contract to move to another sports organization. 

Transfer agreements for underage athletes are subject to additional rules prescribed by law. 

It is important to note that the law has specified an additional ground for the invalidity of transfer agreements – contracts through which third parties acquire exclusive rights over the future economic rights of the sports organization in future transfers are void. 

For a lending agreement, a mandatory written form and authentication in accordance with the law are also prescribed. The contracting parties are the sports organization with which the athlete has a contract and the sports organization to which the athlete is temporarily transferring. The first contracting party agrees to allow the athlete to temporarily move to another sports organization. 


What is a contract of intermediation in sports? 

A sports intermediation contract is defined as a contract in which an agent undertakes to connect an athlete with a sports organization for negotiations on concluding an employment contract or to connect one sports organization with another for concluding a transfer agreement, and the sports organization undertakes to pay the agent a specified fee if the contract is concluded. 

The law prescribes mandatory written form and authentication in accordance with the law; it also applies to all amendments and supplements to that contract. Furthermore, the law specifies certain mandatory elements – the sports intermediation contract must obligatorily include the amount of the fee for sports intermediation, the duration for which it is concluded, and the scope of authority for intermediation. Otherwise, the contract is void. 

Additionally, a contract concluded between an athlete and a sports organization with the intermediation or representation of an agent or a sports intermediation organization must include the designation of the intermediation organization. If it does not, it is void. 

The law specifies that this contract is concluded for a period of up to two years at most but can be renewed after that period between the same contracting parties. 


Christian Casini vs. Vestel Manisapor (CAS 2007/A/1274) 

This case established that an agent can represent the interests of an athlete or club only if they have entered into a written contract with the client explicitly specifying who is responsible for paying the intermediary fee, the type of fee, and the conditions for payment. Furthermore, in every transaction where a sports agent represents the client’s interests, the name/title of the agent must be stated in the relevant employment or transfer agreement. 


Vladimir Stojković vs. Anthony McGill (CAS 2013/A/3104) 

As a general rule, the activities of a sports agent must be causally connected to the conclusion of an employment contract. If an employment contract is signed without the agent’s involvement, the athlete does not owe a commission. However, this rule is not without exceptions. An agent has the right to claim a commission, even if not actively involved in the transfer, if explicitly stipulated by a clause in the mediation contract. 


Dispute ResolutionSports Arbitration 

The Sports Act stipulates that parties can agree to submit disputes over freely disposable rights to an ad hoc sports arbitration tribunal, a permanent sports arbitration tribunal at the Olympic Committee of Serbia, a permanent sports arbitration tribunal at the Sports Association of Serbia (for non-Olympic sports), or a permanent sports arbitration tribunal at the Paralympic Committee of Serbia. 

In matters related to the termination, annulment, or determination of the nullity or fulfillment of contracts between athletes or sports professionals and sports organizations, dispute resolution can also be entrusted to a permanent sports arbitration tribunal at the relevant national branch sports association. 

An arbitration agreement is considered concluded even if the plaintiff files a lawsuit or appeal with sports arbitration, and the defendant does not object to the arbitration’s jurisdiction before engaging in the dispute’s merits. 


International Sports Arbitration 

While our Arbitration Act provides that domestic entities can agree to the jurisdiction of only domestic arbitration institutions (except in cases provided for by law), the Sports Act introduces an exception by allowing sports disputes to be subject to international sports arbitration in accordance with the rules of the relevant sports association. 

This is also confirmed by the decision of the Supreme Cassation Court, Rev. 1303/18 of May 23, 2019, which determined that for resolving disputes related to the fulfillment of contracts between athletes or sports professionals and sports organizations, exclusive jurisdiction of the domestic court does not exist because it can also be resolved before sports arbitration. 


Karen Pavicic v. Fédération Équestre Internationale (FEI) (CAS ad hoc Division/OG Rio/16/014) 

Article 1 of the CAS Ad Hoc Section Rules contains a provision: ‘unless the time required to exhaust internal legal remedies makes an appeal to the CAS Ad Hoc Section ineffective.’ This provision applies in urgent cases where urgency is beyond the partiescontrol. However, this provision does not apply when urgency is caused by the applicant’s inactivity, who decided to wait for two weeks before turning to CAS, although they could have appealed to the FEI. 


Sheikh Khalid Al Qassimi & Abu Dhabi Racing Team v. Fédération Internationale de l’Automobile (FIA), Qatar Motor and Motorcyle Federation (QMMF) & Nassr Al-Attiyah (CAS 2015/A/3872) 

CAS decisions confirm that for CAS to have jurisdiction to consider an appeal, there must be a specific arbitration agreement between the parties, or jurisdiction must be explicitly recognized in the statutes or regulations of the relevant sports association.