Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Why the CAS #LetDuteeRun: the Proportionality of the Regulation of Hyperandrogenism in Athletics by Piotr Drabik

Editor's note
Piotr is an intern at the ASSER International Sports Law Centre.

Introduction

On 24 July the Court of Arbitration for Sport (CAS) issued its decision in the proceedings brought by the Indian athlete Ms. Dutee Chand against the Athletics Federation of India (AFI) and the International Association of Athletics Federations (IAAF) in which she challenged the validity of the IAAF Regulations Governing Eligibility of Female with Hyperandrogenism to Compete in Women’s Competition (Regulations). The Regulations were established in 2011 as a response to the controversies surrounding South African athlete Caster Semenya (see e.g. here, here, and here), and for the purpose of safeguarding fairness in sport by prohibiting women with hyperandrogenism, i.e. those with excessive levels of endogenous (naturally occurring) testosterone, from competing in women athletics competitions. Owing to the subject-matter that the Regulations cover, the case before the CAS generated complex legal, scientific and ethical questions. The following case note thus aims at explaining how the Panel addressed the issues raised by the Indian athlete. It follows a previous blog we published in December 2014 that analysed the arguments raised in favour of Ms. Chand. More...




Not comfortably satisfied? The upcoming Court of Arbitration for Sport case of the thirty-four current and former players of the Essendon football club. By James Kitching

Editor's note: James Kitching is Legal Counsel and Secretary to the AFC judicial bodies at the Asian Football Confederation. James is an Australian and Italian citizen and one of the few Australians working in international sports law. He is admitted as barrister and solicitor in the Supreme Court of South Australia. James graduated from the International Master in the Management, Law, and Humanities of Sport offered by the Centre International d'Etude du Sport in July 2012.


Introduction

On 12 May 2015, the Court of Arbitration for Sport (CAS) announced that the World Anti-Doping Agency (WADA) had filed an appeal against the decision issued by the Australian Football League (AFL) Anti-Doping Tribunal (AADT) that thirty-four current and former players of Essendon Football Club (Essendon) had not committed any anti-doping rule violation (ADRV) identified within the AFL Anti-Doping Code (AADC). The players had each been charged with using Thymosin-Beta 4 (TB4) during the 2012 AFL season.

On 1 June 2015, WADA announced that it had filed an appeal against the decision by the AADT to clear Mr. Stephen Dank (Dank), a sports scientist employed at Essendon during the relevant period, of twenty-one charges of violating the AADC. Dank was, however, found guilty of ten charges and banned for life.

This blog will solely discuss the likelihood of the first AADT decision (the Decision) being overturned by the CAS. It will briefly summarise the facts, discuss the applicable rules and decision of the AADT, review similar cases involving ‘non-analytical positive’ ADRVs relating to the use of a prohibited substance or a prohibited method, and examine whether the Code of Sports-related Arbitration (CAS Code) is able to assist WADA in its appeal.

This blog will not examine the soap opera that was the two years leading-up to the Decision. Readers seeking a comprehensive factual background should view the excellent up-to-date timeline published by the Australian Broadcasting Corporation. More...


EU Law is not enough: Why FIFA's TPO ban survived its first challenge before the Brussels Court


Star Lawyer Jean-Louis Dupont is almost a monopolist as far as high profile EU law and football cases are concerned. This year, besides a mediatised challenge against UEFA’s FFP regulations, he is going after FIFA’s TPO ban on behalf of the Spanish and Portuguese leagues in front of the EU Commission, but also before the Brussels First Instance Court defending the infamous Malta-based football investment firm Doyen Sport. FIFA and UEFA’s archenemy, probably electrified by the 20 years of the Bosman ruling, is emphatically trying to reproduce his world-famous legal prowess. Despite a first spark at a success in the FFP case against UEFA with the Court of first instance of Brussels sending a preliminary reference to the Court of Justice of the EU (CJEU), this has proven to be a mirage as the CJEU refused, as foretold, to answer the questions of the Brussels Court, while the provisory measures ordered by the judge have been suspended due to UEFA’s appeal. But, there was still hope, the case against FIFA’s TPO ban, also involving UEFA and the Belgium federation, was pending in front of the same Brussels Court of First Instance, which had proven to be very willing to block UEFA’s FFP regulations. Yet, the final ruling is another disappointment for Dupont (and good news for FIFA). The Court refused to give way to Doyen’s demands for provisional measures and a preliminary reference. The likelihood of a timely Bosman bis repetita is fading away. Fortunately, we got hold of the judgment of the Brussels court and it is certainly of interest to all those eagerly awaiting to know whether FIFA’s TPO ban will be deemed compatible or not with EU law. More...


The New FIFA Intermediaries Regulations under EU Law Fire in Germany. By Tine Misic

I'm sure that in 1985, plutonium is available in every corner drugstore, but in 1955, it's a little hard to come by.” (Dr. Emmett L. Brown)[1]


Back to the future?

Availing oneself of EU law in the ambit of sports in 1995 must have felt a bit like digging for plutonium, but following the landmark ruling of the European Court of Justice (ECJ) in the Bosman case[2], 20 years later, with all the buzz surrounding several cases where EU law is being used as an efficient ammunition for shelling various sports governing or organising bodies, one may wonder if in 2015 EU law is to be “found in every drug store” and the recent cases (see inter alia Heinz Müller v 1. FSV Mainz 05, Daniel Striani ao v UEFA, Doyen Sports ao v URBSFA, FIFA, UEFA) [3] cannot but invitingly evoke the spirit of 1995.

One of the aforementioned cases that also stands out pertains to the injunction decision[4] issued on 29 April 2015 by the Regional Court (Landesgericht) in Frankfurt am Main (hereinafter: the Court) in the dispute between the intermediary company Firma Rogon Sportmanagement (hereinafter: the claimant) and the German Football Federation (Deutschen Fußball-Bund, DFB), where the claimant challenged the provisions of the newly adopted DFB Regulations on Intermediaries (hereinafter: DFB Regulations)[5] for being incompatible with Articles 101 and 102 TFEU.[6] The Court, by acknowledging the urgency of the matter stemming from the upcoming transfer window and the potential loss of clients, deemed a couple of shells directed at the DFB Regulations to be well-aimed, and granted an injunction due to breach of Article 101 TFEU. More...




Compatibility of fixed-term contracts in football with Directive 1999/70/EC. Part 2: The Heinz Müller case. By Piotr Drabik

Introduction
The first part of the present blog article provided a general introduction to the compatibility of fixed-term contracts in football with Directive 1999/70/EC[1] (Directive). However, as the Member States of the European Union enjoy a considerable discretion in the implementation of a directive, grasping the impact of the Directive on the world of football would not be possible without considering the national context. The recent ruling of the Arbeitsgericht Mainz (the lowest German labour court; hereinafter the Court) in proceedings brought by a German footballer Heinz Müller provides an important example in this regard. This second part of the blog on the legality of fixed-term contract in football is devoted to presenting and assessing the Court’s decision.


I. Facts and Procedure
Heinz Müller, the main protagonist of this case, was a goalkeeper playing for 1.FSV Mainz 05 a club partaking to the German Bundesliga. More...


Compatibility of Fixed-Term Contracts in Football with Directive 1999/70/EC. Part.1: The General Framework. By Piotr Drabik

Introduction
On 25 March 2015, the Labour Court of Mainz issued its decision in proceedings brought by a German footballer, Heinz Müller, against his (now former) club 1. FSV Mainz 05 (Mainz 05). The Court sided with the player and ruled that Müller should have been employed by Mainz 05 for an indefinite period following his 2009 three year contract with the club which was subsequently extended in 2011 to run until mid-2014. The judgment was based on national law implementing Directive 1999/70 on fixed-term work[1] (Directive) with the latter being introduced pursuant to art. 155(2) TFEU (ex art. 139(2) TEC). On the basis of this article, European social partners’ may request a framework agreement which they conclude to be implemented on the European Union (EU, Union) level by a Council decision on a proposal from the Commission. One of the objectives of the framework agreement,[2] and therefore of the Directive, was to establish a system to prevent abuse arising from the use of successive fixed-term employment contracts or relationships[3] which lies at the heart of the discussed problem.[4] More...

UEFA’s FFP out in the open: The Dynamo Moscow Case

Ever since UEFA started imposing disciplinary measures to football clubs for not complying with Financial Fair Play’s break-even requirement in 2014, it remained a mystery how UEFA’s disciplinary bodies were enforcing the Club Licensing and Financial Fair Play (“FFP”) regulations, what measures it was imposing, and what the justifications were for the imposition of these measures. For over a year, the general public could only take note of the 23 settlement agreements between Europe’s footballing body and the clubs. The evidential obstacle for a proper analysis was that the actual settlements remained confidential, as was stressed in several of our previous Blogs.[1] The information provided by the press releases lacked the necessary information to answer the abovementioned questions.

On 24 April 2015, the UEFA Club Financial Control Body lifted part of the veil by referring FC Dynamo Moscow to the Adjudicatory Body. Finally, the Adjudicatory Body had the opportunity to decide on a “FFP case. The anxiously-awaited Decision was reached by the Adjudicatory Chamber on 19 June and published not long after. Now that the Decision has been made public, a new stage of the debate regarding UEFA’s FFP policy can start.More...

Policing the (in)dependence of National Federations through the prism of the FIFA Statutes. By Tine Misic

…and everything under the sun is in tune,

but the sun is eclipsed by the moon…[1] 


The issue

Ruffling a few feathers, on 30 May 2015 the FIFA Executive Committee rather unsurprisingly, considering the previous warnings,[2] adopted a decision to suspend with immediate effect the Indonesian Football Federation (PSSI) until such time as PSSI is able to comply with its obligations under Articles 13 and 17 of the FIFA Statutes.[3] Stripping PSSI of its membership rights, the decision results in a prohibition of all Indonesian teams (national or club) from having any international sporting contact. In other words, the decision precludes all Indonesian teams from participating in any competition organised by either FIFA or the Asian Football Confederation (AFC). In addition, the suspension of rights also precludes all PSSI members and officials from benefits of any FIFA or AFC development programme, course or training during the term of suspension. This decision coincides with a very recent award by the Court of Arbitration for Sport (CAS) in this ambit, which shall be discussed further below.[4]More...


The Brussels Court judgment on Financial Fair Play: a futile attempt to pull off a Bosman. By Ben Van Rompuy

On 29 May 2015, the Brussels Court of First Instance delivered its highly anticipated judgment on the challenge brought by football players’ agent Daniel Striani (and others) against UEFA’s Club Licensing and Financial Fair Play Regulations (FFP). In media reports,[1] the judgment was generally portrayed as a significant initial victory for the opponents of FFP. The Brussels Court not only made a reference for a preliminary ruling to the European Court of Justice (CJEU) but also imposed an interim order blocking UEFA from implementing the second phase of the FFP that involves reducing the permitted deficit for clubs.

A careful reading of the judgment, however, challenges the widespread expectation that the CJEU will now pronounce itself on the compatibility of the FFP with EU law. More...

A Bridge Too Far? Bridge Transfers at the Court of Arbitration for Sport. By Antoine Duval and Luis Torres.

FIFA’s freshly adopted TPO ban entered into force on 1 May (see our Blog symposium). Though it is difficult to anticipate to what extent FIFA will be able to enforce the ban, it is likely that many of the third-party investors will try to have recourse to alternative solutions to pursue their commercial involvement in the football transfer market. One potential way to circumvent the FIFA ban is to use the proxy of what has been coined “bridge transfers”. A bridge transfer occurs when a club is used as an intermediary bridge in the transfer of a player from one club to another. The fictitious passage through this club is used to circumscribe, for example, the payment of training compensation or to whitewash a third-party ownership by transforming it into a classical employment relationship. This is a legal construction that has gained currency especially in South American football, but not only. On 5 May 2015, in the Racing Club v. FIFA case, the Court of Arbitration for Sport (CAS) rendered its first award involving directly a bridge transfer. As this practice could become prevalent in the coming years we think that this case deserves a close look. More...

Asser International Sports Law Blog | Blog Symposium: FIFA’s TPO ban and its compatibility with EU competition law - Introduction - Antoine Duval & Oskar van Maren

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Blog Symposium: FIFA’s TPO ban and its compatibility with EU competition law - Introduction - Antoine Duval & Oskar van Maren

Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

On 22 December 2014, FIFA officially introduced an amendment to its Regulations on the Status and Transfers of Players banning third-party ownership of players’ economic rights (TPO) in football. This decision to put a definitive end to the use of TPO in football is controversial, especially in countries where TPO is a mainstream financing mechanism for clubs, and has led the Portuguese and Spanish football leagues to launch a complaint in front of the European Commission, asking it to find the FIFA ban contrary to EU competition law.

Next week, we will feature a Blog Symposium discussing the FIFA TPO ban and its compatibility with EU competition law. We are proud and honoured to welcome contributions from both the complainant (the Spanish football league, La Liga) and the defendant (FIFA) and three renowned experts on TPO matters: Daniel Geey ( Competition lawyer at Fieldfisher, aka @FootballLaw), Ariel Reck (lawyer at Reck Sports law in Argentina, aka @arielreck) and Raffaele Poli (Social scientist and head of the CIES Football Observatory). The contributions will focus on different aspects of the functioning of TPO and on the impact and consequences of the ban.

Before the five blogs (starting with the complainant, La Liga, on Tuesday) will be published next week on a daily basis, we have the pleasure to kick off today with a light introduction to TPO. At the end of next week we will synthesise the debate and provide our preliminary take on the ban’s compatibility with EU law.

With this exciting Blog Symposium on one of the hottest sports law topics, we celebrate the first anniversary of the ASSER International Sports Law Blog (last year’s opening blog is here). We hope you will enjoy the read and feel free to comment! 

What is TPO? 

The use of the notion of TPO is often criticized because it misrepresents the situation it purposes to qualify. Indeed, no third-party owns a player, but only a share of the “economic right” linked to the transfer of the player’s “federative right”[1]. This is why, as you will see later next week, some of our authors refuse to use the term and have opted for alternative concepts, such as TPE (third-party entitlements) or TPI (third-party investment). Due to our legal obsession with the written word, we will personally hold onto TPO as it is the notion enshrined in FIFA’s regulations.

Beyond this semantic debate, a plurality of contractual constellations is captured under the umbrella term TPO. What is common to all cases is that a company or an individual provides a football club or a player with money in return for being entitled to a share of a player’s future transfer value. Thus, TPO is enshrined in a separate private law contract between a third-party and a club or a player. The plurality of TPO situations derives from this contractual basis. The parties are free under national private law to creatively draft those contracts as they see fit, each one of them being a specific type of TPO in itself. 

The main aim of the practice is to finance clubs. Often TPO is used to externalise the costs of recruiting a player, sometimes it is used to finance the general functioning of a club. However, the use of TPO is always intimately connected to the drive of professional clubs to diversify their funding sources in order to leverage their competitiveness in national and international competitions. Nowadays, a club like Atletico Madrid would probably not have been able to reach the final of the Champions League or win La Liga without having widespread recourse to it.

What are the problems with TPO?

We do not want to spoil too much of next week’s discussion, but we need to at least mention the possible problems that have been linked with the use of TPO and that might serve as a potential justification for banning it. TPO is first and foremost seen as an intrusion of a third-party in the life of a football club and a player with the potential for an illegitimate influence on the management of the team and the player’s career. The many conflicts of interest that might arise in the shadow of multiple, sometimes contradictory, investments are particularly feared. TPO is also seen as a dubious financing technique used to circumvent the new UEFA Financial Fair Play regulations and to prop up clubs that are chronically in financial troubles. Finally, there is a moral dimension. For example, UEFA president Michel Platini likened TPO to a type of modern “slavery”. In short, should it be acceptable for someone to own a share of an economic right personally attached to a player? Can a player be forced-sold on the basis of a TPO agreement? All these issues will be discussed extensively next week; they are central to the evaluation of the ban’s compatibility with EU competition law. 

Regulating TPO or banning it? That is the question!

TPO has been banned for some time in England, France and Poland, while it was authorized in the rest of the World. The English FA, profoundly traumatized by the Carlos Tévez case, decided to ban the practice as early as 2008. In other countries, particularly Spain, Portugal and South America, TPO has been, and still is, part of the “football culture”. For example, it is estimated that in Brazil’s top division 90% of the players are subjected to a TPO agreement. In these countries TPO is seen as a necessity for national football clubs - not only to compete with clubs in richer countries, but also for professional football to be financially viable. It was no surprise that the leagues and clubs of the abovementioned countries were against a blanket ban of TPO and would rather see it being regulated. They consistently expressed this opposition during the FIFA Congress in June 2014 and the working groups created by FIFA in September 2014 with the aim of tackling the issue. Nonetheless, on 26 September the FIFA executive committee took the decision to ban third-party ownership of players’ economic rights (TPO) with a short transitional period. Following this announcement, the FIFA circular fleshing out the legal details of the ban was published on 22 December. Article 18bis of the Regulations on the Status and Transfers of Players was amended and the Regulations now include a new Article 18ter.[2] These new articles came into force on 1 January 2015 and, after a transition period, TPO will officially be banned as of 1 May 2015.

This total ban raises many practical and legal questions. What is to become of the already signed TPO agreements? Will the ban be fully enforced? Or, will creative schemes arise to circumvent it? Was there a less restricting alternative to attain its objective? And…is it compatible with EU competition law? 

The debate is open!


[1] The legal construction underlying TPO is clearly explained (unfortunately only in Italian) by Leandro Cantamessa in his article, ‘Un Tema Semi-Nuovo di Diritto Sportivo Internazionale: la Third Party Ownership (TPO)’, in L’Europa e lo sport (a cura di) S. Bastianon, G. Giappichelli Editore, 2014, pp.123-134.

[2] Article 18bis(1) will now read : “No club shall enter into a contract which enables the counter club/counter clubs, and vice versa, or any third party to acquire the ability to influence in employment and transfer-related matter its independence, its policies or the performance of its teams.”

Article 18ter:

1.      No club or player shall enter into an agreement with a third party whereby a third party is being entitled to participate, either in full or in part, in compensation payable in relation to the future transfer of a player from one club to another, or is being assigned any rights in relation to a future transfer or transfer compensation.

2.      The interdiction as per paragraph 1 comes into force on 1 May 2015.

3.      Agreements covered by paragraph 1 which predate 1 May 2015 may continue to be in place until their contractual expiration. However, their duration may not be extended.

4.      The validity of any agreement covered by paragraph 1 signed between 1 January 2015 and 30 April 2015 may not have a contractual duration of more than 1 year beyond the effective date.

5.      By the end of April 2015, all existing agreements covered by paragraph 1 need to be recorded within the Transfer Matching System (TMS). All clubs that have signed such agreements are required to upload them in their entirety, including possible annexes or amendments, in TMS, specifying the details of the third party concerned, the full name of the player as well as the duration of the agreement.

6.      The FIFA Disciplinary Committee may impose disciplinary measures on clubs or players that do not observe the obligations set out in this article.

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