A compensation claim that could be worth billions of euros and involve 100,000 footballers who have played professionally in the European Union over the last 23 years may alter the financial landscape of the sport.

The Dutch foundation Justice for Players (JFP) has launched a lawsuit against global governing body FIFA. Also named as co-defendants in the case are the German Football Association (DFB) and those of France, Belgium, the Netherlands and Denmark.

"It will amount to billions," Dolf Segaar, a lawyer and board member for JFP, told DW.

"It's not only about money. It is about fair rules, which we believe are important as well. We intend to discuss the settlement for compensation, but we want as well for this to be a trigger to find new rules on behalf of clubs and players, so that there is a better functioning labor market in the football industry."

The lawsuit follows a landmark ruling from the European Court of Justice (ECJ) last October in a case brought by former Real Madrid and France player Lassana Diarra. The midfielder had wanted to terminate his contract with Lokomotiv Moscow in 2014 but was unable to join a Belgian club after leaving Russia because Lokomotiv owned his registration and he did not have what was described as "just cause" for termination.

The ECJ ruled that the FIFA transfer laws which applied at the time "impede the free movement of professional footballers wishing to develop their activity by going to work for a new club." The organization tweaked those laws in December, but much less stringently than advocates had hoped for.

Footballers not treated like other EU workers

Unlike in regular EU labor law, footballers are bound by contracts they sign when they join a club or renegotiate a deal. Therefore, unlike other workers, they cannot seek work elsewhere without their employer agreeing to a fee with another interested party for a transfer — or until their contract expires.

Even exiting on contract expiration is a relatively new concept in football, having been introduced only in 1995 after another landmark case known as the Bosman ruling — named after the player who brought the case. Jean-Louis Dupont, the lawyer for Diarra and Belgian player Jean-Marc Bosmanat the time, is advising JFP.

The Bosman ruling changed football significantly, giving players greater power over their careers and contributing to the enormous wage growth at the top end of the sport in the last 30 years.

Christina Philippou, associate professor in accounting and sport finance at the University of Portsmouth in England, thinks that a settlement or win in court for JFP could have a similarly significant impact.

"Inevitably, if you are saying that somebody can walk away from a contract, then that restructures the system," she told DW. "The power shifts, and that makes it more like normal employment cases."

Philippou explained that footballers are currently considered "intangible assets" by clubs, assigning them a value in a club's accounting and allowing for some leeway in terms of spreading value over a long-term contract and other such practices. This is particularly important given that European clubs often have to adhere to financial rules of profit and sustainability from domestic leagues and European football's governing body, UEFA.

Reduced transfer fees, higher wages?

Given the financial interests at stake, she expects JFP to come to an agreement with the associations and FIFA that maintains some sort of tweaked transfer system, though adds that it could see transfer fees reduce greatly or disappear.

"The transfer fee is effectively buying you out of your contract. Now if we revert to normal employment rights, which is effectively what this case is looking like, then that does away with this entirely."

She also predicts we could see a further rise in wages for those at the top of the game, with Europe becoming even more attractive to non-EU players as a result, and perhaps a shortening of contract lengths. Long-term contracts could become redundant if a player can walk away from a deal any time without much of a transfer fee. This may, in turn, be problematic for smaller clubs who rely on player sales while players lower down the leagues would face greater risk from injury or illness should shorter term contracts become even more usual.

Seegar, too, expects some change to the transfer model but thinks negotiations will mean it is not so drastic.

"I still believe that if you are transferred from one club to the other, there still will be a kind of compensation from payment by one club to the other for the transfer of the player under an existing contract.

"I'm not sure whether masses of players will terminate their agreements without just cause, because you want to go to another club, and if you are seen as an unreliable player that easily terminates his contracts, why would another club take the risk?"

FIFA, FAs and clubs may count the cost of lawsuit

The Dutch lawyer told DW that, given JFP only sent the letters out on Monday, few players are signed up yet. With the case being brought in the Netherlands, those residing there will automatically be represented. But any player who has played professionally in the European Union or the UK, whether male or female, since 2002 will be eligible. He does not "believe that it is a big challenge" to attract players to join the lawsuit.

"It's not important whether or not you transferred during this period. It is just because of your diminished negotiation position and the disincentives caused by the rules that you have suffered damages," he said.

JFP claims players earned 8% less over the course of their career as a result of FIFA's transfer rules.

Should Seegar and JFP be successful, the cost to FIFA and national football associations in the EU could be massive. For the EU countries with high-paying leagues, like Spain, Germany and France, penalties could be ruinous for clubs, who may be passed on the costs by their FAs, given they pay players' wages.

"A lot of clubs are loss-making as it is," Philippou said.

"That could be quite problematic. It's a lot of money and as it's a damages claim, [it] would have to be paid short term. It's not something where you can talk about how you restructure and fix the system, it's something that you have to find money for now."

Reports suggest that FIFA have been given until early September to answer the threat of legal action. JFP expects the case to get to court in 2029 if a settlement cannot be reached in advance.

While FIFA have not yet responded to a DW query, the DFB confirmed to DW that they had received correspondence from JFP which was "now being reviewed internally," adding that they are "currently unable to comment on the content or further details."

Edited by: Chuck Penfold