The SFA and SPFL have been reported to the Competition and Markets Authority over claims they're restricting the rights of youth footballers.
Children’s Commissioner and campaigning organisation RealGrassroots have announced they've submitted formal complaints over issues with Club Academy Scotland and what they say amounts to exploitation of children.
Here's what it means.
What is Club Academy Scotland?
Set up as part of 'Project Brave', which aims to improve youth football in Scotland, CAS governs the development of players from the age of 11 to 18.
Clubs are judged on things like appearances for home-grown players, coaching qualifications, facilities, talent identification and sports science and medicine set-ups and awarded a grade.
The grades range from Advanced Youth Level through Performance Level, Performance (Progressive) Level to Elite Level.
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Clubs are then allocated funding from the SFA based on their grade and how they've performed against certain criteria, with £800,000 distributed to 25 clubs in 2020.
The legal challenge concerns how players are signed to the 11 elite academies: those of Aberdeen, Celtic, Dundee United, Hamilton Academical, Hearts, Hibs, Kilmarnock, Motherwell, Rangers, Queen's Park and St Mirren.
What's the issue?
Under the SFA and SPFL rules, players aged 15 to 17 in those academies are registered to that club for two years unless both sides agree to terminate the registration.
If the player has played fewer than 25% of the games they were eligible for they can apply to the club to have the registration terminated, and appeal to a panel if that is refused.
The SFA says this does not represent a contract.
Once a player leaves the 15 to 17 age group, they are free to sign for another club but if their current club offers them professional terms, any new club would have to pay training compensation.
They and their parents are also not allowed to negotiate with other clubs during the registration period, and elite clubs can only recruit one player from each age range at another elite club.
The Children’s Commissioner and campaigning organisation RealGrassroots argue this is a restriction of competition and amounts to exploitation of children.
How does it restrict competition?
The complainants argue that the clubs have agreed between them not to recruit from each other, thereby creating an anti-competitive environment where youth footballers' freedom of movement is infringed.
William Smith, co-founder of RealGrassroots, said: "The clubs treat children as commodities that their current clubs own. Young players have no freedom to move to the best club for them, and if their current club treats them badly, they have no ability to do anything about it."
Why would the SFA and SPFL have those kind of rules?
There is a logic behind the registration process.
For one, it prevents bigger club academies from simply raiding smaller ones for their best players.
There's no such rule for cross-border transfers and in recent years we've seen moves such as Liam Smith leaving Kilmarnock for Manchester City, Liam Morrison going from Celtic to Bayern Munich and Billy Gilmour joining Chelsea after leaving the Rangers academy.
In addition, a two-year registration period should provide stability and consistency for a young player to develop in the same environment.
What's the counter-argument?
Critics say that the current system gives clubs no reason to commit to or invest in youth, they can simply keep young players on their books and potentially get compensation when they sign a professional deal elsewhere.
A 2020 Scottish Government panel concluded the system is weighted "too far in favour of the professional clubs" and puts "children and young people in the position where they can be disadvantaged in terms of the choices they may wish to make about their footballing ambitions".
The Children's Commissioner and RealGrassroots say the SFA and SPFL have been too slow in addressing these concerns and they've been left with no choice but to report them to the CMC.
What have the SFA said?
They say they have made changes, and that their policies and procedures are in line with the statutes of FIFA, world football's governing body.
They note the 2020 report said "significant progress" had been made.
What happens next?
The CMA will now weigh up whether to open a formal investigation. It has the power to levy fines and order rule changes in cases where it's determined that competition rules have been broken.
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