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Exclusive: How Arsenal were at the heart of both the start and end of football’s “retain and transfer” system.

By Tony Attwood

If you think about the key changes to players’ contract law across the years you’ll think about George Eastham and how in 1963 he brought about the end of the long running “retain and transfer system through going on strike until he pushed through his transfer to Arsenal, with the court finally ruling that the traditional system was fundamentally illegal.

And you’ll also probably consider the Bosman ruling in the European Court of Justice in 1995 which gave the same freedom of movement to footballers as everyone else within the EU.

Indeed you might also recall the Court for Arbitration in Sport ruling in January 2008  which restricted the enforceability of footballers’ contracts to three years.

But if we ask, ‘how did “retain and transfer” come into being in the first place?’ then by and large the answer is likely to be vague.  Indeed if we ask ‘what did Arsenal have to do with it?’ the answer will be vaguer still.  At least until today.

However today we can reveal the ultimate irony of all.  While Eastham undid the tyranny of “retain and transfer” and in so doing went to Arsenal, it was Arsenal that was instrumental in laying the ground work to create “retain and transfer” in 1893.

Of course we may say that being involved in the creation of “Retain and Transfer” was hardly Arsenal’s greatest moment – although to be fair there is no indication that the club had any idea that the case George Davie brought against Arsenal would have such implications.  Indeed we must remember that in the case that is described below, Arsenal were the defendants.  True, Arsenal started the matter by refusing to pay George Davie’s salary when he was injured, but it was Davie’s decision to go to court which changed the football world.

First, a spot of background.

As I noted in the article on George Eastham on this site, “Starting in 1885 players had to register at the start of each season with one club.  The player could then change clubs only if his existing club agreed, although players could change clubs at the end of the season.

“As a result successful players demanded pay rises each September when the clubs asked them to re-sign.”

Now it has been assumed that the League moved away from this system (as Wiki expressed it), “to sustain the interest of spectators in the competition,” and to stop the richest clubs from dominating the competition, although neither Wiki nor any other site gives evidence to support this belief.

However research suggests that a major factor in this change was the 1893 Davie v Royal Arsenal Committee court case, a case which Arsenal won, and which subsequently allowed them, and all other clubs to change the contractual relationship between club and player – which is what happened in the summer of 1893.

Davie was born in Cardross on the north side of the Firth of Clyde on 19 April 1864 and joined Arsenal from Renton in October 1891 having previously played two games for Everton in the 1888/9 season. (He may well have played for other clubs, but the records are not complete).

Renton we should note was a particularly significant club at the time having three years earlier proclaimed themselves Champions of the World when as winners of the Scottish Cup they had beaten FA Cup holders West Bromwich Albion in a challenge play off.  So it is clear that by this stage of his career, Davie was already seen as a player of some ability.

For Arsenal Davie made his cup debut in the FA Cup tie against Small Heath on 16 January 1892.  It was not an auspicious start, the result being Small Heath 5 Royal Arsenal 1.  But Davie scored Arsenal’s only goal of that game and played well enough to be selected in each of three more FA Cup qualifiers the following season, scoring twice more.

But more to the point In total, between January and November 1892 he made 58 senior appearances for Royal Arsenal and scored 39 goals – an astonishing return for a man playing on the wing.

His final game was 19 November 1892 in the FA Cup 3rd qualifying round against Millwall Athletic.  At that point Davie was injured and a dispute between himself and the club escalated very quickly.  In essence it appears that Arsenal said that Davie, although injured, could still be engaged in what today we might call “light training” while the injury healed.  Or perhaps they even thought Davie was faking his injury (and to be fair, who wouldn’t after that level of football).

So great was the dispute that within two months of Davie’s last the case of Davie vs The Committee of Royal Arsenal FC was in the County Court.  The matter by this stage however was not so much if Arsenal should continue to pay Davie’s salary, even though he was not playing, but rather if Arsenal had the right to dismiss Davie over the issue of his refusal to engage in the club’s designated training regime, given that Davie had a contract until the end of the season.

That was in fact what the court stated was the case – the contract was not valid and the club could dismiss a player even though he had a year long contract.  This meant the clubs were free to invent a completely new form of relationship between themselves and their players – and this they proceeded to with a vengeance.

What made the contract unenforceable in the eyes of the judge seemed to be the fact that the contract allowed the player to be paid whether he worked or not.  Thus if not selected for the team through poor form, injury, or a breakdown in the employer-employee relationship he would, under the standard one-year contract still be paid.  But by extension this would imply that the club had to pay the player no matter what, and that, the judgement suggests could not be valid, since such an arrangement could mean that the player could declare he was not fit to play, and yet would still be paid.  There had to be some checks and balances – even though it was Arsenal who had created the contract.

Since this arrangement of payment when not working didn’t happen in any other area of employment (there being no statutory sick pay or any other such rights at this time), it seems the judge thought it was not a valid contract of employment.  Employee rights were not the order of the day in 1883 – indeed we should note that the notion of old age pensions did not exist until they were proposed at the general election 17 years later.

Now this finding in a county court would not have the force of law – county court judgements have never been binding in the way that case law is developed through the findings in higher criminal courts.  But with the Labour and Trades Union movements in their infancy the clubs and the infant Football League recognised that they could seize the initiative and change the entire contract system to their benefit, leaving it up to the players to fight back.

(We may also note in passing that the first footballers’ trade union – the AFU – was not formed until 1898 – and in fact was formed specifically to reform the retain and transfer regulations that came into force as a result of Davie’s defeat in the Royal Arsenal dispute.)

The great irony of the situation was that the club that Davie took to court was Royal Arsenal, the club set up to be run by the workers for the workers – a club who would later  the same year be involved in a fundamental dispute with the “gentlemen” of the club who were in the process of calling the Committee a bunch of “nobodies” who were not fit to run the club.

(It has been suggested that this legal case was cited as evidence of the Committee’s inability to run the affairs of Royal Arsenal FC effectively, but I can’t see that as the case.  Although “Retain and Transfer” did not emerge at once, Royal Arsenal FC won the case that Davie brought – that is hardly a sign of incompetence.  My view, at least until we find any further evidence, is that the Davie case might have been cited at the very start, before the hearing as an example of incompetence, but it couldn’t have been seen as that once Arsenal won.)

As a result of the Arsenal Committee’s victory in the Davie  case the League clubs devised their new system for the 1893-94 season onwards, a system that very much put the players in their place at the bottom of the heap, and which lasted until the challenge of George Eastham in 1960.

Under the system introduced in 1893, Davie’s complaint was no longer viable, for once a player was registered with a Football League club, he could not be registered with any other club, even in subsequent seasons, without the permission of the club with whom he was registered.   This regulation applied even if the player’s annual contract with the club holding his registration was not renewed after it expired.  Meanwhile the club were not obliged to play the player and, even without a contract, the player was not entitled to receive a salary. Nevertheless, if the club refused to release his registration, the player could not play for any other Football League club.  As we have seen It was called “retain and transfer” but was in fact a feudal system of employer ownership of employees.  Davie not only lost his own case, he lost virtually every right that the players had previously enjoyed.

However although power moved dramatically from the players to the clubs, the players did still have some very modest vestiges of control left.   For a start they could move out of the Football League and play abroad (which a surprising number did), or play in the Scottish League or Southern League (neither of which recognised retain and transfer,).

Additionally the players could use the power of publicity to blacken the name of the club that would not let them go.  Thus if a club did exert the full force of retain and transfer and refuse to allow the player to move while not paying or playing him, that would mean very few new players would ever want to move to that club.  The risk of playing for a club that would even contemplate taking advantage of this clause in the new contract was so great that no player in his right mind would ever sign for such a club.   As a result the clubs needed to keep their name clean and the clause was virtually never used.

All this would be enough to make the George Davie vs Royal Arsenal case of supreme interest in the history of football.  But there was a second issue that made the case singularly famous, and that was an interview that Davie gave upon the conclusion of the case to the St James Gazette – an interview which became a national phenomena, with the interview being reprinted in newspapers across the country, and indeed turning up even in the press in Australia some six weeks later.

It was in fact that article which revealed the finances of football to the general public for the first time, and the public were suitably outraged and shocked at the vast amount of money that was being spent on players and generated by football as a whole.

I’ll turn to that article in part two of this piece.

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