In 2012 the Premier League, Football league and Football Association introduced the 'Elite Player Performance Plan' (EPPP), with the objective of producing a higher number of homegrown English players.
That was (and remains) a noble objective, but it's one that can have a sting in the tail for youth players at academies (and their parents) if they are uneducated about the 'compensation' mechanism in the EPPP.
The compensation mechanism kicks in when the youth player wants to move from one academy to another. And in practice, that mechanism is capable of dooming the career of a youth player, before it has even begun.
Under the EPPP the rates of compensation are fixed as follows:
Under 9: £5,000 per year
Under 10: £7,500 to £10,000 depending on Category of academy
Under 11: £10,000 to £15,000 depending on Category of academy
Under 12: £15,000 to £45,000 depending on Category of academy
Under 13: £20,000 to £60,000 depending on Category of academy
Under 14 to 16: £25,000 to £80,000 per year depending on Category of academy
It is obvious that the above rates of compensation can add up very quickly, and unfortunately, the compensation mechanism applies regardless of the circumstances of the youth player who wishes to move from one academy to another.
For example, where a 12 year old boy wishes to move from one academy (because of welfare reasons or because the other academy has approached that player), the compensation entitlement for the 'losing' academy will be the same: and can be in excess of £75,000 for a youth player that age.
In practice, many academies will not be prepared to pay such a substantial sum to sign a youth player (other than where that player is perceived to be of genuine exceptional quality for the long term). In the absence of a negotiated resolution between the two academies and/or the parents, the player in question is likely to effectively be thrown on the scrap heap. We know of that happening to many youth players.
There are very limited circumstances where the compensation will not apply, including where a YD7 release form (and not a YD10 release form) has been signed in respect of the youth player. The intricacies of those forms and the circumstances in which they are relevant, will be the subject of our next Blog.