The "transfer" as an accidental asset: how the retain and transfer system unintentionally invented the current transfer market (Part I)

DOCTRINAL ANALYSIS · THE CASE · PART I OF III

Author: Juan Manuel Martinez Cartagena
Date: March 2026
Series: Economic rights in football: origin, practice, and arbitral doctrine
Technical level: High — sports lawyers, academics, football investors
Suggested citation: Martinez Cartagena, J.M. (2026). "The transfer as an accidental asset: how the retain and transfer system unintentionally invented the transfer market". juanmanuelmartinezc.com..

There is a paradox in the origin of the associated football transfer market that is rarely stated precisely: the system that today moves billions of dollars annually and upon which the entire legal architecture of economic rights was built was not designed as a market instrument. It was designed as an instrument of control. The economic value of the player as a transferable asset is not the product of a deliberate policy by any federation, nor of any rule. It is the unintended consequence of a system designed to immobilize footballers, and which ended up generating, precisely because of that immobilization, the first form of patrimonial ownership over registration rights or federative rights.

Understanding this origin is not an exercise in sports history. It is a dogmatic requirement. The conceptual confusion that persisted for decades over the legal nature of economic rights — whether they were rights in rem, labor rights, patrimonial expectations, or simple contractual practices — has its direct roots in the fact that the figure was born without a name and without a theory, as a byproduct of a registration system for purely administrative purposes. Only when this origin is understood can it be comprehended why the Court of Arbitration for Sport had to construct in 2005 the foundational distinction between federative registration and economic rights: because the market had existed for over a century without anyone having established that distinction with legal precision.

This article aims to reconstruct that genesis. The argument is as follows: the English retain and transfer system did not create the transfer market deliberately. In fact, it was an unintended side effect of the club's registration control over the players. When clubs started charging to release retained footballers, they unintentionally transformed an administrative tool into a patrimonial asset. What we came to know as the so-called "transfer". And four cases — Radford v. Campbell (1890), Kingaby v. Aston Villa (1910), Eastham v. Newcastle United (1963), and the Bosman ruling (1995) — are the four moments of that argument.

I. The retention system: an instrument of control that created value by accident

In 1885, the English Football Association formally accepted professionalism in football. It did so reluctantly, under pressure from northern clubs that were already paying their players covertly — fictitious jobs with employers linked to the club. The FA had tried for years to maintain the fiction of amateurism. When it no longer could, it chose to accept professionalism, but surround it with a control system that would limit its effects.

"In 1885, the northern clubs which attracted the biggest crowds and had the best playing records were making secret payments to the players who represented them. Professional football was a stark reality but the Football Association refused to acknowledge its existence, still less sanction the practice. Consequently, the clubs continued to make routine, covert payments to their players in the form of boot money, wherein wads of notes would be placed in their boots prior to a game." — McArdle (2000), section 1

The central mechanism of that control was registration. As of 1885, every professional player had to register with the FA at the beginning of each season. He could not change clubs during the season without the express authorization of his original club and the FA itself. At the end of the season, he was free not to renew — but only in theory. In practice, freedom of movement was so limited that the system functioned as a permanent subjection of the player to his club for as long as it wanted him.

The FA's final decision to allow professionalism, although reluctant, came accompanied by strict conditions. Professional players were forbidden from being team captains or assuming leadership positions within football. But the central mechanism of control was registration: every professional player had to register with a club at the beginning of each season and could not change teams without the consent of the FA and the original club. McArdle accurately describes the architecture of that system and its logic:

"The Association introduced a regulatory system which allowed it to oversee the transfer of professional players from one club to another. Players would have to re-register with their club every year and could not play for any club other than the one with which they were registered. They were free to join another club at the end of each season, even if their old club did not want to let them go, but players could not change clubs during a season unless they had the permission of the club which held their registration." — McArdle (2000)

This was the objective of the system: competitive stability. Smaller clubs feared that entities with greater resources would monopolize the best players. Retention was the instrument to prevent it. But on the way to that goal, the system produced an effect that no one had calculated: if the club could retain the player's registration and no other club could sign him without its consent, then the club automatically became the only possible seller of something others wanted to buy. The immobility of the player created scarcity. Scarcity created the price. And the price created the market.

There was no decision that said: from now on, clubs can market the registrations of their players. That commercialization arose spontaneously as a logical consequence of having a monopoly over something in demand. Clubs discovered that they could demand financial compensation from any club that wanted to sign a player under their registration, even if that player did not have a valid contract with them. The transfer fee was born. Not as the product of a policy, but as the consequence of a restriction.

II. Radford v. Campbell (1890): the first proof that the system had no basis

Even before the Football League tightened the system in 1893, English football had its first encounter with ordinary law. And the result was revealing: when a court evaluated whether football's contractual agreements deserved judicial protection, the answer was negative.

In March 1890, the player Campbell signed a contract with Nottingham Forest for the following season. Shortly after, before that season began, he signed another contract with Blackburn Rovers — the most successful and prestigious club in England at the time, FA Cup champions five times, and one of the founding clubs of the Football League in 1888. Nottingham Forest requested an injunction to prevent Campbell from playing for Blackburn. McArdle reproduces the central reasoning of the Court of Appeal, heard by Lord Esher, Master of the Rolls:

"The Master of the Rolls said that this jurisdiction of the Court must depend upon the circumstances of each case. It was not in every case where a man was about to break his contract that an injunction ought to be granted to restrain him from doing so. What was at stake in the present case? There was no question of character or of property, except that it was said that there would be a diminution in the gate money. But the real point was the pride of the club; they wished to win their matches, and for that purpose they had engaged these professionals. Was the solemn machinery of the Court to be invoked by granting an injunction to satisfy their pride in winning their matches? If the defendant broke his agreement, an action might be brought against him, and it might even be that an action could be brought against the other club for enticing him to do so. But it was not necessary to decide that now; all that needed to be said was that Mr. Justice North was right, and that this was not a proper case in which to grant an injunction." — Radford v. Campbell, Nottingham Forest (1890) 6 TLR 488, cited in McArdle (2000)

The case reached the Court of Appeal, where it was heard by Lord Esher, Master of the Rolls. His reasoning was brief and forceful. Forest had hired Campbell to win matches. They wanted to keep him out of competitive pride. But that was not enough to move the judicial apparatus. If Campbell had breached his agreement, Forest could sue for the damages caused. What it could not do was force him to play for a specific club through a precautionary measure. The request was denied.

Lord Esher's decision contained a lesson that English football refused to hear: the football contract system, insofar as it sought to force a player to provide his services to a specific club against his will, had no backing in ordinary law. English courts were unwilling to become the enforcement arm of the Football Association's private agreements.

The FA's reaction was exactly the opposite of what the ruling suggested. Instead of reconsidering the system, they tightened it. From 1893 onwards, the restriction was no longer just not being able to change clubs during the season — it was never being able to change clubs without authorization, with or without a valid contract. The practical consequence of Radford v. Campbell was that English football built an even more restrictive system precisely because the courts had refused to protect the previous one.

But there was something else in that decision that football executives did not understand: Lord Esher had hinted that, if the player breached a contract, the club could claim economic damages. That possibility — that of monetizing the breach — was the seed of what was to come. If the movement of a player could be translated into an economic claim, then the movement of a player had a price. And if it had a price, it was an asset.

III. Kingaby v. Aston Villa (1910): the error that consolidated the system for fifty years

The Kingaby case is, from a legal perspective, one of the most instructive episodes in the history of sports law. Not because of what it decided, but because of the opposite.

The federative registration of the player Herbert Kingaby had been sold by Clapton Orient to Aston Villa in 1906 for 300 pounds. A few weeks later, Aston Villa did not see the potential of that player as he did not meet expectations and tried to resell him to Clapton Orient for 150 pounds. Clapton Orient had no money. No other club showed interest. Aston Villa, one of the richest clubs in England at that time, decided not to renew Kingaby's contract but to retain his registration, which prevented him from playing for any other Football League team.

McArdle describes the situation precisely:

"The main obstacle to Kingaby's freedom of movement was the fact that the vagaries of the retain and transfer system allowed Villa to keep him on their retained list even though they had no intention of giving him a new contract after his one-year deal had expired. Kingaby could not join another League club once he had been placed on Villa's retained list, but since he was no longer under contract to them, he was not receiving a wage." — McArdle (2000)

Kingaby found refuge in Fulham, of the Southern League, which at that time was not subject to the Football League's restrictions. But in the summer of 1910, the Southern League and the Football League reached an agreement for mutual recognition of their registration systems. Kingaby was automatically reinstated on Aston Villa's retained list. The club then set a transfer fee of 350 pounds — higher than the player's market value and well beyond the means of Leyton Orient, the team he had negotiated his signing with.

Kingaby, with the financial backing of the players' union, took the case to court arguing that Aston Villa's actions constituted an illegal restraint of trade. The case had a solid legal basis — precedents such as Mitchel v. Reynolds (1711) 1 PWms. 181 and Leather Cloth Co v. Lorsont (1869) LR 9 Eq. 345 established limits on anti-competitive business practices. But Kingaby's lawyer made, in McArdle's words, a serious and inexplicable error:

"At the trial, the player's counsel made a grave and inexplicable error of judgment by focusing on Aston Villa's allegedly malicious use of the transfer system, without making reference to the law on restrictive practices developed in those earlier cases. Counsel, almost certainly bearing in mind what had happened with Radford, merely argued that the club had acted maliciously and had used the retain and transfer system to stymie Kingaby's career in an act of revenge." — McArdle (2000)

Judge Lawrence J. withdrew the case from the jury before deliberation began. Since the legality of the retain and transfer system had not been questioned, the court assumed as a fact that said system was legal and only ruled on Aston Villa's intentions. As is even documented in the Eastham ruling itself years later: "No tort had been committed against the plaintiff, and there was no evidence of malice" — Eastham v. Newcastle United [1964] 3 All ER 139, 156, per Wilberforce J., citing Lawrence J. in Kingaby v. Aston Villa.

The consequences were devastating for the players. By not having questioned the legal basis of the system, the ruling operated as an implicit validation of its legality. The costs of the process were awarded against the union, almost leading it to bankruptcy. And the retain and transfer system continued without substantial modifications for almost fifty more years.

But there is something worth highlighting from a dogmatic perspective: Kingaby's error was not merely procedural. It was conceptual. His lawyer did not understand — or could not articulate — that the problem was not the behavior of a particular club, but the very structure of the system. The retention system was restrictive by design, not by abuse.

That confusion between the abuse of the system and the illegality of the system itself would persist for decades. And it is, fundamentally, the same confusion that would later appear in the debates on economic rights: the difficulty of distinguishing between what the system allows and what the system is.

IV. Eastham v. Newcastle United (1963): when what had to be attacked was attacked

George Eastham was a midfielder for Newcastle United. In April 1960, he requested release from his contract. Newcastle refused. Eastham left professional football and accepted employment outside the sport. In October 1961, the players' union contacted him with a proposal: that his case serve as a test of the legality of the retain and transfer system. This time, the argumentation would be correct.

What Eastham faced was, in essence, the same system that had trapped Kingaby five decades earlier — but with even more severe restrictions. A player whose contract expired could be placed on his club's retained list, preventing him from signing with any other Football League team. During that retention period, the club had no obligation to pay him a wage. The player could request that his transfer fee be reduced, but if no club could or wanted to pay it, he remained suspended in a legal vacuum: without a contract, without a wage, and without the possibility of working in his profession. Greenfield and Osborn (1998) identify four possible scenarios for a player at the end of his contract, all of them limiting his freedom:

"The player could re-sign for the same club at any time between 1 April and the first Saturday in May. The club could retain the player on less favourable terms by giving notice between 1 May and 1 June. The player could be placed on the transfer list at a fee set by the club. If the club did not wish to retain the player and did not demand a fee for him, he could be given a free transfer." — Greenfield, S. and Osborn, G. (1998: 35), cited in McArdle (2000)

The case was presented in the Chancery Division of the High Court of England in the summer of 1963. Judge Wilberforce, unlike the Kingaby judge, attacked the problem from its foundations. The question was not whether Newcastle had acted maliciously. The question was whether the combined retain and transfer system constituted an unreasonable restraint of trade. And the answer was affirmative. Wilberforce J. argued:

"Any system which interferes with the player's freedom to seek other employment at a time when he is not being employed by another club seems to me to operate substantially in restraint of trade." — Eastham v. Newcastle United [1964] 3 All ER 139, 147

Regarding the combination of the retained list with the transfer fee, the judge was equally explicit:

"What makes the transfer fee so objectionable... is its combination with the retain system. When it is combined in that way — that is to say, when a player is retained and it is made known that his club is open to offers, or when a player is placed on both the transfer list and the retained list — he cannot escape outside the League." — Eastham v. Newcastle United [1964] 3 All ER 139, 150

And on the employers' claim that the system was valid because it was universal in football:

"The system is an employers' system, set up in an industry where the employers have succeeded in establishing a united monolithic front all over the world, and where it is clear that for the purposes of negotiation the employers are very much more highly organised than the employees. No doubt the employers all over the world consider the system a good one, but this does not prevent the court from considering whether it goes further than is reasonably necessary to protect their legitimate interests." — Eastham v. Newcastle United [1964] 3 All ER 139, 150

Judge Wilberforce did not just point out the restrictive effect of the system. He demonstrated that the retention system was not, as the Football League claimed, a necessary measure to protect the legitimate interests of the clubs. If the League really wanted to give clubs the power to extend their players' contracts, it would not have used a mechanism that came into play after the player's employment had ended. Retention was not a contract extension. It was something different and more serious: a club's ability to prevent a former employee from working in his profession, without paying him, and without the player having committed any offense.

Wilberforce's ruling forced the Football Association to amend its rules. From that moment on, no club could retain a player's registration without offering him at least a contract on reasonable terms. Pure retention — without a contract, without a wage — ceased to be possible in English football.

But the transfer system continued. And this is the point that matters for the thesis of this article: Eastham did not eliminate the transfer market. It only eliminated the most abusive component of the system that had created it. The player could no longer be retained indefinitely without a contract, but the club still had the power to demand financial compensation when another club wanted to sign him during the term of a contract. The "transfer fee" as an asset survived the elimination of abusive retention because it had acquired its own market logic that no longer depended on the control instrument that had originated it.

That confirms the thesis: the transfer market was not just a byproduct of the retention system. It had become an independent economic reality, with its own demand, its own valuation system, and its own contractual practices. The restriction had created the asset. But the asset had taken on a life of its own.

V. Bosman (1995): the closing of the cycle and the paradox that persists

On December 15, 1995, the Court of Justice of the European Union issued the most transformative ruling in the history of sports law. Jean-Marc Bosman, a Belgian footballer for RFC Liège, had seen his club prevent his transfer to French side Dunkerque upon the expiration of his contract by not requesting the corresponding international transfer certificate — a measure the club adopted over doubts about the French club's solvency. Bosman was left without a club, without a wage, and without the possibility of exercising his profession in dignified conditions.

The preliminary question that reached the CJEU was technical, but its implications were structural: did the rules requiring the payment of a transfer compensation even after the player's contract had expired, and which conditioned the issuance of the transfer certificate to the payment of that compensation, violate Article 48 of the EEC Treaty on the free movement of community workers? The Court declared:

"Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations, under which a professional footballer who is a national of one Member State may not, on the expiry of his contract with a club, be employed by a club of another Member State unless the latter club has paid to the former club a transfer, training or development fee." — CJEU Judgment of 15 December 1995, Case C-415/93, Bosman, paragraph 114

The answer was affirmative. The Court declared that a professional community player had the right to change clubs without any economic condition once his contract expired. Post-contractual transfer compensation was incompatible with community law. The transfer certificate could not be conditioned on payment.

Bosman was the inevitable closure of a logic that had begun with Radford v. Campbell a hundred and five years earlier in England. If the starting point was that courts refused to protect control over the player against the player's autonomy, the endpoint was that Community law declared incompatible with fundamental freedoms any system that restricted that autonomy.

But here appears the paradox that matters most for this analysis: Bosman eliminated post-contractual transfer compensation. It did not eliminate the transfer market; furthermore, in my opinion, it managed to give it the connotation of a true market of federative and economic rights. Clubs continued to pay massive sums to sign players who were still under contract with their original club. The transfer fee did not disappear — it was restricted to transfers during the life of the contract.

And it is here that the thesis of this article reaches its most important conclusion: the transfer fee, which had been born as an accidental byproduct of the retention system, had acquired such economic consistency and such centrality in the business model of professional football that it survived the elimination of the instrument that had created it. As many mention, the Bosman case did not erode the transfer market in any way. It molded it. And what remained — the economic value of the player during the term of his contract — was exactly the object upon which the CAS would have to rule years later in the Espanyol-Velez Sarsfield case.

The retain and transfer system was dead. Economic rights remained latent. And no one had yet defined them, or at least limited them conceptually, despite their use and contractual reference.

VI. History as a legal argument

The historical reconstruction above is not just context. It is the foundation of the doctrinal argument that sustains this entire series.

If economic rights were born as an accidental byproduct of a control system, and if that control system was gradually dismantled by English and European case law over more than a century, then the question the CAS had to answer in 2005 was not a new question. It was the most sophisticated version of a very old question: how much of the player's economic value can be appropriated by third parties, and under what conditions can that value circulate in the market?

Radford v. Campbell answered that courts will not protect control over the player if that control lacks sufficient legal basis. Kingaby answered — albeit inadvertently — that how a system is attacked matters as much as the substance of the attack. Eastham answered that the control system is unreasonable insofar as it goes beyond what is necessary to protect legitimate interests. Bosman answered that Community law takes precedence over any private system of sports labor market regulation.

And the CAS, in 2005, answered that the economic value of the player during the life of his contract can be divided, assigned, and distributed among different holders, because economic rights are ordinary contractual rights that are not confused with federative registration nor with the person of the player.

Each of these answers presupposes the previous ones. The CAS doctrine would not have been possible without Bosman. Bosman would not have been possible without Eastham. Eastham would not have been possible without Kingaby's instructive error. And none of these cases would have been necessary if the English retention system had not unintentionally created the asset that all of them tried, in different ways, to define or destroy.

The history of the transfer fee is the history of an effect that outgrew its cause. And that is the mandatory starting point to understand why economic rights are what they are — and why they remain so difficult to define.

Jurisprudential References:

• Radford v. Campbell, Nottingham Forest (1890) 6 TLR 488.
• Kingaby v. Aston Villa Football Club (1912), cited in Eastham v. Newcastle United [1964] 3 All ER 139, 156.
• Eastham v. Newcastle United Football Club Ltd. [1964] 3 All ER 139 (Ch D), per Wilberforce J.
• Court of Justice of the European Union, Judgment of 15 December 1995, Case C-415/93, Union Royale Belge des Sociétés de Football Association ASBL and others v. Jean-Marc Bosman and others, paragraphs 114 et seq.

Doctrinal References:

• McArdle, D. (2000). "One Hundred Years of Servitude: Contractual Conflict in English Professional Football before Bosman". Web Journal of Current Legal Issues, Issue 2. Available at: https://www.bailii.org/uk/other/journals/WebJCLI/2000/issue2/mcardle2.html [Accessed February 28, 2025].
• Greenfield, S. and Osborn, G. (1998). Contract and Control in the Entertainment Industries. Aldershot: Dartmouth, p. 35.

Regulatory References:

• Football Association. (1885). English football professionalisation rules. London: FA.
• Football League. (1893). Player registration system, 1893/94 season. Football League.
• FIFA. (2023). Explanatory Notes on the New Provisions in the Regulations on the Status and Transfer of Players Regarding Registration Periods (Transfer Windows). Zurich: FIFA.

Juan Manuel Martinez Cartagena is a lawyer holding a Master's degree in International Sports Law from the University of Lleida, with institutional experience within Colombian professional football.

Part II of this series analyzes the birth of economic rights in South America: how Argentina, Brazil, and Uruguay built a financial market upon the future value of the player before any regulation named it.

This article is part of an ongoing doctrinal research on economic rights in football, which will be published soon in book format as part of a broader work on the legal and economic structure of the global transfer market.