Why Rangers only have to pay £300k for Joe Aribo - the cross-border transfer rule which benefits Scottish clubs

The days of Scottish clubs competing with their English counterparts for players when transfer fees are involved largely belong in the past.

Joe Aribo is set to sign for Rangers with Charlton owed just 300,000.
Joe Aribo is set to sign for Rangers with Charlton owed just 300,000.

Even wages can be an issue, such is the influence of TV money south of the border.

In turn Scottish clubs have had to get crafty and resourceful. As well as focusing on bringing through players from the academy, they have had to scout around the lower reaches or in Europe.

They have also benefited from one useful factor: the cross-border development fee.

Celtic took advantage of the cross-border rule to sign Moussa Dembele from Fulham. Picture: SNS

Recruiting out-of-contract young talent from England is an avenue in which Scottish clubs can profit from, as Celtic did with Moussa Dembele and Rangers are set to do with Joe Aribo.

The French striker cost just £500,000 before being sold on for nearly £20million two seasons later.

Rangers are set to part with a paltry £300,000 for Charlton midfielder Aribo, who has had interest from England, the Bundesliga and Celtic. He who would have fetched much more if he was under contract.

The 22-year-old was criticised by Addicks boss Lee Bowyer for moving to Scotland.

It is understood he was offered a new contract by the club last summer but penny-pinching owner Roland Duchatelet reneged before putting another deal on the table for a lot less money, opening up the prospect for Steven Gerrard to make his move and sign the player.

If Aribo had joined another club in England, the Championship side would have been in line for a higher fee.

The Premier League and Football League have rules and regulations in place for a player under the age of 24 moving between to English clubs.

One of the most high profile cases was Danny Ings' move from Burnley to Liverpool in 2015 with the Anfield side instructed to pay £6.5million for the striker, plus potential add-ons.

The player was out of contract at Burnley but since he was under the age of 24 the Clarets were due a compensation fee for the "training and development of the centre-forward", as per sports lawyer Dan Lowen.

When English clubs are unable to come to an agreement over a fee in such a situation the Professional Football Compensation Committee (PFCC) makes the decision.

The tribunal takes into a range of factors, including the player's playing record, interest from other clubs, the contracts on offer, previous fee, age and time with the academy.

The move became headlines news due to the fee.

If Ings had moved abroad or to Celtic or Rangers, however, Burnley would have been entitled to just €270,000 through Fifa's "training compensation regime".

Since the PFCC have no "jurisdiction" for cross-border moves it is the much lower Fifa fee which comes into play, opening up an advantageous route for Scottish clubs.

Prior to 2001, clubs would not have to pay any compensation for what was a free or 'Bosman' transfer. However, football's governing body made tweaks to the transfer system.

The difference between the way Fifa and the PFCC estimate compensation is summed up by Lowen.

He wrote: "The (Fifa) training compensation in any applicable case can be determined with little more than knowledge of the player’s date of birth, the dates he joined and left the training club and the categorisation of the clubs. In contrast with the PFCC’s assessment in the case of players moving between English clubs, the formulaic calculation under FIFA’s rules does not focus upon the circumstances of the particular player in question and/or the training of young players actually provided by either club."

In addition, the Fifa training compensation is required to be shared among all the teams who had a hand in the player's development before the age of 24.

There may be a semblance of sour grapes from Charlton in the Aribo move to Glasgow, and if Scottish clubs are smart there could be plenty more opportunities to upset English clubs when a young talent moves north.