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 | The EU State aid and Sport Saga – A blockade to Florentino Perez’ latest “galactic” ambitions (part 1)

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

The EU State aid and Sport Saga – A blockade to Florentino Perez’ latest “galactic” ambitions (part 1)

This is the first part of a blog series involving the Real Madrid State aid case.

Apart from being favoured by many of Spain’s most important politicians, there have always been suspicions surrounding the world’s richest football club regarding possible financial aid by the Madrid City Council. Indeed, in the late 90’s a terrain qualification change by the Madrid City Council proved to be tremendously favourable to the king’s club. The change allowed Real Madrid to sell its old training grounds for a huge sum. Though the exact price for the grounds remains unknown, Real Madrid was suddenly capable of buying players like Figo and Zidane for record fees. However, the European Commission, even though agreeing that an advantage was conferred to the club, simply stated that the new qualification of the terrain in question does not appear to involve any transfer of resources by the State and could therefore not be regarded as State aid within the meaning of article 107 TFEU.

Agreements between the club and the Council have been a regularity for the last 25 years.  A more recent example concerns an agreement signed on 29 July 2011 (Convenio29-07-2011.pdf (8MB). The agreement regularizes two earlier agreements between the Council and Real Madrid dating from 1991 and 1998 respectively. The commitments deriving from those earlier agreements were not followed by the relevant parties and therefore had to give way to a new agreement. A closer look at the 29 July 2011 Agreement exposes a bizarre chain of events. It turned out that in 1998 Real Madrid transmitted an undivided half of their old training grounds to the municipality. Apart from a large sum of money, the club was to receive a number of terrains spread out over the municipality, including a terrain located in the area called Las Tablas valued at €595.194 in 1998. However, due to its qualification for sporting usage, the Council concluded in 2011 that the parcel could not be transferred to the club due to the fact that Madrid’s urbanity laws only permit a transfer of urban or urbanizable terrains. For that reason, the Council agreed to compensate the football club not for the original value of €595.194 but for a staggering €22.693.054,44! Real Madrid was not compensated in the form of a sum, but rather it was presented with a packet of terrains including four terrains of a total area of 12.435 m/2 in the street Mercedes Arteaga in the Carabanchel district of Madrid.

The year 2011 also saw a second agreement between the Council of Madrid and the football club, this time concerning construction works on the Real Madrid stadium Santiago Bernabéu. This agreement, dating from November 2011, is known as operation Bernabeú-Opañel and includes the following plans. The Council is to transfer to the club a terrain constituting a 12.250 m/2 buildable surface which borders the west-side of the Bernabéu stadium. This acquirement permits Real Madrid to cover the stadium with a roof, to build a shopping centre and a hotel on the façade situated on the Paseo de la Castellana (one of Madrid’s most important streets). In return, the club firstly agreed to transfer to the Council the shopping centre Esquina del Bernabéu, which is situated at the South-East-side of the stadium with a buildable surface of 6.858 m/2. The Council would then demolish the shopping centre and convert it into a public park. Secondly, the club is to transfer back to the Council part of the four terrains located in the street Mercedes Arteaga that it received as part of the 29 July 2011 Agreement.  In addition to the transfers of the old shopping centre and the terrains located in the street Mercedes Arteaga, Real Madrid is also to pay €6.6 million to the Council. The Council, however, encountered an obstacle in its own urban laws. The Plan General de Ordenación Urbana de Madrid de 1997 (PGOU) did not permit private parties, like Real Madrid, to construct on public terrains owned by the Council. Therefore, on 16 November 2012, the Government of the autonomous region of Madrid announced that the PGOU is to be modified ad hoc for the operation Bernabeú-Opañel.

By means of the operation Bernabeú-Opañel, Real Madrid expressed that it hopes to “convert the Club in a sporting institution of reference in the world. The aim is for the stadium to have a maximum level of comfort and services superior to the most modern and advanced sporting stadiums in the world” (PropuestaRealMadrid.pdf (914.2KB)). According to the Council, the operation will not only improve sporting and leisure facilities in the city, it will also create up to 9.546 m/2 of “green zones”. Moreover, the investment for the construction works will be borne only by Real Madrid and it is expected that the construction works will give employment to more than 2 000 people and the exploitation to 600 people.

 

In 2012, the ecological movement Ecologistas en Acción found several legal irregularities with regard to the 29 July Agreement operation Bernabeú-Opañel and (unsurprisingly) concluded that the agreements appeared to be very beneficial for Real Madrid. It therefore started legal proceedings in front of the Spanish administrative Court claiming that the ad hoc modification of the PGOU was illegal. It would later on launch on appeal in front of the Tribunal Superior de Justicia de Madrid, or Madrid High Court (TSJM-Order-31-07-2014.pdf (112.3KB)). Simultaneously, it informed the European Commission of potential unlawful State aid granted by the Council of Madrid to Real Madrid. To Spain’s outrage, on 18 December 2013, the Commission declared that it had enough reasons to believe that the incriminated transactions might involve State aid and launched a formal investigation in accordance with Article 108(2) TFEU. Concretely, the Commission expressed the following concerns:

1) The Commission doubts whether it was impossible for the Council of Madrid to transfer the Las Tablas property to Real Madrid;

2) The Commission doubts that a market value of the Las Tablas plot of land has been sought;

3) The Commission doubts the market conformity of the value of the properties which were transferred to Real Madrid by the 2011 Agreement and at the occasion of the subsequent further exchange of land around the Bernabéu Stadium, and;

4) The Commission doubts that there is an objective of common interest, which could justify selective support to a very strong actor in a highly competitive economic sector. 

The Commission’s doubts seem, in light of the facts at hand, reasonable. To decide whether or not the land transactions qualifies as unlawful State aid, however, the four cumulative criteria of Article 107(1) TFEU need to be fulfilled. (1) The aid must confer an economic advantage on Real Madrid; (2) it must be granted by a Member State or through State resources; (3) the advantage must be selective and distorts or threatens to distort competition; and (4) it must affect trade between Member States.


Advantage to Real Madrid over its competitors

As the Commission pointed out in paragraph 21 of its notice initiating the infringement procedure against Spain, “Real Madrid appears to enjoy an economic advantage from the fact that a plot of land, which at the time of its acquisition was valued at €595,194, appears 13 years later, in an operation to offset mutual debts, with a value of more than €22 million”. Furthermore, there are also doubts regarding the market conformity of the lands transferred in the operation Bernabéu-Opañel. In situations where the public authorities wish to sell public property to private investors, it should make sure that the revenue obtained from the sale is comparable to market level. This criterion is also known as the “market economy vendor principle”. In accordance with the Land sale Communication, should the public authorities wish to avoid any advantage to the recipient over its competitors during a land sale transaction, it should apply one of the two following procedures: (1) an unconditional bidding procedure or (2) a procedure where the land is valued by one or more independent asset valuers prior to the sale negotiations. The Court of Justice has ruled that other methods may also achieve the same result, but in order to comply with EU State aid rules, the national provisions establishing rules for calculating the market value of land must in all cases lead to a price as close as possible to the market value.[2] Special obligations for the buyer, such as urban planning requirements, do play a role when determining whether or not the land was sold at market value. Furthermore, land transfer deals, which often consist of more than just one land transaction, have to be scrutinized in their entirety.[3] Therefore, to determine whether an advantage was conferred to Real Madrid, both agreements between the club and the Council have to be take into account with a special focus on the valuation methods used.

In 1998, the valuation for the terrain in Las Tablas (€595,194) was done by the administration of Madrid, on the basis of legislation which offers a technique to determine the value of urban real property. The calculated value for the same terrain in Las Tablas in 2011 amounted to €22.693.054,44. According to a valuation report released by the Municipal Valuation Department, the value was calculated in accordance the same application rules. Yet it has to be borne in mind that the Municipal Valuation Department forms part of the Área de Gobierno de Urbanismo y Vivienda del Ayuntamiento de Madrid. Not only is the Área de Gobierno de Urbanismo y Vivienda the main public authority regarding urban planning in Madrid, it is together with Real Madrid the main party in the 2011 Agreement itself.

Real Madrid was not compensated in the form of a payment, but rather it was presented with another packet of terrains valued at €19,972,348.96. In the valuation report released by the Municipal Valuation Department, a list is included with average terrain values per district calculated by the independent appraiser Tasamadrid. In continuation, the Municipal Valuation Department applied a formula based on its own legislation to determine the final value of the terrains. This packet of terrains included land in the street Mercedes Arteaga, valued at €4,360,862 which were transferred back to the municipality in the operation Bernabéu-Opañel.

The operation Bernabéu-Opañel also included the club transferring the old shopping centre Esquina del Bernabéu and added a payment of €6,6 million. A second valuation report indicates that the value of the Esquina del Bernabéu is €3,861 per square meters passed on the average values of terrains found in adjacent streets. Furthermore, the Council “requalified” the terrain between the Bernabéu stadium and the street Paseo de la Castellana by ad hoc modifying the local urban laws (PGOU) before transferring it to Real Madrid. The value of this terrain is also calculated in the second report and ads up to €1,208 per square meter. Even though two of the terrains in question can be found in the same area, the value per square meter of the Esquina Bernabéu is much higher (€3,861) as compared to the value of the land between the Bernabéu stadium and the street Paseo de la Castellana (€1,208). True, the terrain with the Esquina del Bernabéu has already been built on, thereby increasing the value, but one should keep in mind that the operation Bernabéu-Opañel consists of demolishing the Esquina del Bernabéu and turning it into a green zone. On the other, the other terrain will be used for the construction of a hotel and a new shopping centre. Secondly, a quick glance at other real estate transfers in the same area of Madrid shows that the value of the terrains is in fact much higher. In 2012, the Picasso tower was purchased by a private firm for €400 million, or €5000 m/2. Today, the building Torre Titania can be bought for €11,000 m/2 and the building Castellana 200 is for sale for €150 million.

With all the above in mind, one could legitimately get the feeling that the actual aim of the Agreement of 29 July 2011 was to pave the way for the operation “Bernabéu-Opañel”, as some media suggested. Unlike in the Konsum Nord case, where the General Court held that the presence of a link between different transactions could mean that the measure in question does not constitute State aid, the link between the agreements in the Real Madrid case only increases suspicions regarding unlawful State aid. Furthermore, the Council of Madrid has also been inconstant regarding its valuation methods. The value of the terrain in Las Tablas was calculated without an independent appraiser and the value of the Esquina del Bernabéu was calculated using the average value of terrains found in adjacent streets. In short, there are good reasons to believe that the transactions were made in order to provide a financial advantage to Real Madrid.

The remaining three criteria of Article 107(1) TFEU and possible justifications will be discussed in an upcoming blog post.



[1] Notes are omitted. A comprehensive article can be accessed at Oskar van Maren, "The Real Madrid case: A State aid case (un)like any other?".

[2] Case C-239/09 Seydaland Vereinigte Agrarbetriebe [2010] ECR I-13083, §33-35

[3] Case T-244/08 Konsum Nord ekonomisk förening v Commission [2011] ECR II-0000, §58

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