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

International and European Sports Law – Monthly Report – April 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.More...

The Reform of FIFA: Plus ça change, moins ça change?

Since yesterday FIFA is back in turmoil (see here and here) after the FIFA Council decided to dismiss the heads of the investigatory (Cornel Borbély) and adjudicatory (Hans-Joachim Eckert) chambers of the Independent Ethics Committee, as well as the Head (Miguel Maduro) of the Governance and Review Committee. It is a disturbing twist to a long reform process (on the early years see our blogs here and here) that was only starting to produce some tangible results. More...

RFC Seraing at the Court of Arbitration for Sport: How FIFA’s TPO ban Survived (Again) EU Law Scrutiny

Doyen (aka Doyen Sports Investment Limited) is nothing short of heroic in its fight against FIFA’s TPO ban. It has (sometimes indirectly through RFC Seraing) attacked the ban in front of the French courts, the Belgium courts, the European Commission and the Court of Arbitration for Sport. This costly, and until now fruitless, legal battle has been chronicled in numerous of our blogs (here and here). It is coordinated by Jean-Louis Dupont, a lawyer who is, to say the least, not afraid of fighting the windmills of sport’s private regulators. Yet, this time around he might have hit the limits of his stubbornness and legal ‘maestria’. As illustrated by the most recent decision of the saga, rendered in March by the Court of Arbitration for Sport (CAS) in a case opposing the Belgium club RFC Seraing (or Seraing) to FIFA. The arguments in favour of the ban might override those against it. At least this is the view espoused by the CAS, and until tested in front of another court (preferably the CJEU) it will remain an influential one. The French text of the CAS award has just been published and I will take the opportunity of having for once an award in my native language to offer a first assessment of the CAS’s reasoning in the case, especially with regard to its application of EU law. More...

The Validity of Unilateral Extension Options in Football – Part 1: A European Legal Mess. By Saverio Spera

Editor’s Note: Saverio Spera is an Italian lawyer and LL.M. graduate in International Business Law at King’s College London. He is currently an intern at the ASSER International Sports Law Centre.

                 

In the football world the use of unilateral extension options (hereafter UEOs) in favour of the clubs is common practice. Clubs in Europe and, especially, South America make extensive use of this type of contractual clauses, since it gives them the exclusive possibility to prolong the employment relationship with players whose contracts are about to come to an end. This option gives to a club the right to extend the duration of a player’s contract for a certain agreed period after its initial expiry, provided that some previously negotiated conditions are met. In particular, these clauses allow clubs to sign young promising players for short-term contracts, in order to ascertain their potential, and then extend the length of their contracts.[1] Here lies the great value of UEOs for clubs: they can let the player go if he is not performing as expected, or unilaterally retain him if he is deemed valuable. Although an indisputably beneficial contractual tool for any football club, these clauses are especially useful to clubs specialized in the development of young players.[2] After the Bosman case, clubs have increasingly used these clauses in order to prevent players from leaving their clubs for free at the end of their contracts.[3] The FIFA Regulations do not contain any provisions regulating this practice, consequently the duty of clarifying the scope and validity of the options lied with the national courts, the FIFA Dispute Resolution Chamber (DRC) and the CAS. This two-part blog will attempt to provide the first general overview on the issue.[4] My first blog will be dedicated to the validity of UEOs clauses in light of national laws and of the jurisprudence of numerous European jurisdictions. In a second blog, I will review the jurisprudence of the DRC and the CAS on this matter. More...

Call for papers: ISLJ Annual Conference on International Sports Law - 26-27 October 2017

The editorial board of the International Sports Law Journal (ISLJ) is very pleased to invite you to submit abstracts for its first Annual Conference on International Sports Law. The ISLJ, published by Springer in collaboration with ASSER Press, is the leading publication in the field of international sports law. Its readership includes both academics and many practitioners active in the field. On 26-27 October 2017, the International Sports Law Centre of the T.M.C. Asser Instituut and the editorial board of the International Sports Law Journal will host in The Hague the first ever ISLJ Annual Conference on International Sports Law. The conference will feature panels on the Court of Arbitration for Sport, the world anti-doping system, the global governance of sports, the FIFA transfer regulations, comparative sports law, and much more.

More...


International and European Sports Law – Monthly Report – March 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

 More...

The legality of surety undertakings in relation to minor football players: the Lokilo ca Asser International Sports Law Blog |

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

International and European Sports Law – Monthly Report – June 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

 

The Headlines

 
ISLJ Annual Conference on International Sports Law

On 26 and 27 October, the T.M.C. Asser Institute in The Hague will host the first ever ISLJ Annual International Sports Law Conference. This year’s edition will feature panels on the Court of Arbitration for Sport, the world anti-doping system, the FIFA transfer regulations, human rights and sports, the labour rights of athletes, and EU law and sport. More...



Mitigating Circumstances and Strict Liability of Clubs in Match-fixing: Are We Going in the Wrong Direction? An Analysis of the Novara and Pro Patria Cases - By Mario Vigna


Editor’s note: Mario Vigna is a Senior Associate at Coccia De Angelis Vecchio & Associati in Rome, Italy. His main practice areas are sports law, commercial law, and IP law. He also has extensive experience in the Anti-doping field, serving as Deputy-Chief Prosecutor of the Italian NADO and as counsel in domestic and international sports proceedings. He is a frequent speaker at various conferences and workshops. He was not involved in either of the cases discussed below.


I.               Introduction 

Gambling in football is a popular and potentially lucrative activity. It also raises numerous issues. When faced with the issue of gambling, the European Court of Justice (now Court of Justice of the EU) determined that gambling was economic activity per se, notwithstanding gambling’s vulnerability to ethical issues, and thus could not be prohibited outright.[1] With the legality of gambling established, it was left to the proper legislative bodies (national legislatures, national and international federations, etc.) to regulate gambling in order to guard against fraud and corruption. Gambling was not going to disappear; the dangers inherent to gambling would require attention.  More...




Overdue payables in action: Reviewing two years of FIFA jurisprudence on the 12bis procedure – Part 2. By Frans M. de Weger and Frank John Vrolijk.

Editor's Note: Frans M. de Weger is legal counsel for the Federation of Dutch Professional Football Clubs (FBO) and CAS arbitrator. De Weger is author of the book “The Jurisprudence of the FIFA Dispute Resolution Chamber”, 2nd edition, published by T.M.C. Asser Press in 2016. Frank John Vrolijk specialises in Sports, Labour and Company Law and is a former legal trainee of FBO and DRC Database.

This second blog will focus specifically on the sanctions available for FIFA under Article 12bis. It will provide explanatory guidelines covering the sanctions imposed during the period surveyed.


Introduction

The possibility to impose sanctions under article 12bis constitutes one of the pillars of the 12bis procedure. Pursuant to Article 12bis of the RSTP, edition 2016, the DRC and the PSC may impose a sanction on a club if the club is found to have delayed a due payment for more than 30 days without a prima facie contractual basis[1] and the creditor have put the debtor club in default in writing, granting a deadline of at least 10 days.[2] The jurisprudence in relation to Article 12bis also shows that sanctions are imposed ex officio by the DRC or the PSC and not per request of the claimant.More...





Overdue payables in action: Reviewing two years of FIFA jurisprudence on the 12bis procedure – Part 1. By Frans M. de Weger and Frank John Vrolijk.

Editor's Note: Frans M. de Weger is legal counsel for the Federation of Dutch Professional Football Clubs (FBO) and CAS arbitrator. De Weger is author of the book “The Jurisprudence of the FIFA Dispute Resolution Chamber”, 2nd edition, published by T.M.C. Asser Press in 2016. Frank John Vrolijk specialises in Sports, Labour and Company Law and is a former legal trainee of FBO and DRC Database.

In this first blog, we will try to answer some questions raised in relation to the Article 12bis procedure on overdue payables based on the jurisprudence of the DRC and the PSC during the last two years: from 1 April 2015 until 1 April 2017. [1] The awards of the Court of Arbitration for Sport (hereinafter: “the CAS”) in relation to Article 12bis that are published on CAS’s website will also be brought to the reader’s attention. In the second blog, we will focus specifically on the sanctions applied by FIFA under Article 12bis. In addition, explanatory guidelines will be offered covering the sanctions imposed during the period surveyed. A more extensive version of both blogs is pending for publication with the International Sports Law Journal (ISLJ). If necessary, and for a more detailed and extensive analysis at certain points, we will make reference to this more extensive article in the ISLJ. More...

International and European Sports Law – Monthly Report – May 2017. By Tomáš Grell

Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

The end of governance reforms at FIFA?

The main sports governance story that surfaced in the press (see here and here) during the last month is related to significant personal changes made by the FIFA Council within the organization’s institutional structure. In particular, the FIFA Council dismissed the heads of the investigatory (Mr Cornel Borbély) and adjudicatory (Mr Hans-Joachim Eckert) chambers of the Independent Ethics Committee, as well as the Head (Mr Miguel Maduro) of the Governance and Review Committee. The decision to remove Mr Maduro was taken arguably in response to his active role in barring Mr Vitaly Mutko, a Deputy Prime Minister of Russia, from sitting on the FIFA Council due to an imminent conflict of interests. These events constitute a major setback to governance reforms initiated by the football’s world governing body in 2015. For a more detailed insight into the governance reforms at FIFA, we invite you to read the recent blog written by our senior researcher Mr Antoine Duval. More...

The Olympic Games and Human Rights – Part II: Human Rights Obligations Added to the Host City Contract: Turning Point or Empty Promise? – By Tomáš Grell


This is a follow-up contribution to my previous blog on human rights implications of the Olympic Games published last week. Together with highlighting some of the most serious Olympic Games-related human rights abuses, the first part has outlined the key elements of the Host City Contract ('HCC') as one of the main legal instruments regulating the execution of the Olympic Games. It has also indicated that, in February 2017, the International Olympic Committee ('IOC') revised the 2024 HCC to include, inter alia, explicit human rights obligations. Without questioning the potential significance of inserting human rights obligations to the 2024 HCC, this second part will refer to a number of outstanding issues requiring clarification in order to ensure that these newly-added human rights obligations are translated from paper to actual practice. More...


The Olympic Games and Human Rights – Part I: Introduction to the Host City Contract – By Tomáš Grell

Editor’s note: Tomáš Grell is currently an LL.M. student in Public International Law at Leiden University. He contributes to the work of the ASSER International Sports Law Centre as a part-time intern.


In its press release of 28 February 2017, the International Olympic Committee ('IOC') communicated that, as part of the implementation of Olympic Agenda 2020 ('Agenda 2020'), it is making specific changes to the 2024 Host City Contract with regard to human rights, anti-corruption and sustainable development. On this occasion, IOC President Thomas Bach stated that ''this latest step is another reflection of the IOC's commitment to embedding the fundamental values of Olympism in all aspects of the Olympic Games''. Although the Host City of the 2024 Summer Olympic Games is scheduled to be announced only in September this year, it is now clear that, be it either Los Angeles or Paris (as Budapest has recently withdrawn its bid), it will have to abide by an additional set of human rights obligations.

This two-part blog will take a closer look at the execution of the Olympic Games from a human rights perspective. The first part will address the most serious human rights abuses that reportedly took place in connection with some of the previous editions of the Olympic Games. It will also outline the key characteristics of the Host City Contract ('HCC') as one of the main legal instruments relating to the execution of the Olympic Games. The second part will shed light on the human rights provisions that have been recently added to the 2024 HCC and it will seek to examine how, if at all, these newly-added human rights obligations could be reflected in practice. For the sake of clarity, it should be noted that the present blog will not focus on the provisions concerning anti-corruption that have been introduced to the 2024 HCC together with the abovementioned human rights provisions. More...



Exploring the Validity of Unilateral Extension Options in Football – Part 2: The view of the DRC and the CAS. By Saverio Spera

Editor’s Note: Saverio Spera is an Italian lawyer and LL.M. graduate in International Business Law at King’s College London. He is currently an intern at the ASSER International Sports Law Centre. 

This blog is a follow up to my previous contribution on the validity of Unilateral Extension Options (hereafter UEOs) under national and European law. It focuses on the different approaches taken to UEOs by the FIFA Dispute Resolution Chamber (DRC) and the Court of arbitration for sport (CAS). While in general the DRC has adopted a strict approach towards their validity, the CAS has followed a more liberal trend. Nonetheless, the two judicial bodies share a common conclusion: UEOs are not necessarily invalid. In this second blog I will provide an overview of the similarities and differences of the two judicial bodies in tackling UEOs. More...

Nudging, not crushing, private orders - Private Ordering in Sports and the Role of States - By Branislav Hock

Editor's note: Branislav Hock (@bran_hock)  is PhD Researcher at the Tilburg Law and Economics Center at Tilburg University. His areas of interests are transnational regulation of corruption, public procurement, extraterritoriality, compliance, law and economics, and private ordering. Author can be contacted via email: b.hock@uvt.nl.


This blog post is based on a paper co-authored with Suren Gomtsian, Annemarie Balvert, and Oguz Kirman.


Game-changers that lead to financial success, political revolutions, or innovation, do not come “out of the blue”; they come from a logical sequence of events supported by well-functioning institutions. Many of these game changers originate from transnational private actors—such as business and sport associations—that produce positive spillover effects on the economy. In a recent paper forthcoming in the Yale Journal of International Law, using the example of FIFA, football’s world-governing body, with co-authors Suren Gomtsian, Annemarie Balvert, and Oguz Kirman, we show that the success of private associations in creating and maintaining private legal order depends on the ability to offer better institutions than their public alternatives do. While financial scandals and other global problems that relate to the functioning of these private member associations may call for public interventions, such interventions, in most cases, should aim to improve private orders rather than replace them. More...



What Pogba's transfer tells us about the (de)regulation of intermediaries in football. By Serhat Yilmaz & Antoine Duval

Editor’s note: Serhat Yilmaz (@serhat_yilmaz) is a lecturer in sports law in Loughborough University. His research focuses on the regulatory framework applicable to intermediaries. Antoine Duval (@Ant1Duval) is the head of the Asser International Sports Law Centre.


Last week, while FIFA was firing the heads of its Ethics and Governance committees, the press was overwhelmed with ‘breaking news’ on the most expensive transfer in history, the come back of Paul Pogba from Juventus F.C. to Manchester United. Indeed, Politiken (a Danish newspaper) and Mediapart (a French website specialized in investigative journalism) had jointly discovered in the seemingly endless footballleaks files that Pogba’s agent, Mino Raiola, was involved (and financially interested) with all three sides (Juventus, Manchester United and Pogba) of the transfer. In fine, Raiola earned a grand total of € 49,000,000 out of the deal, a shocking headline number almost as high as Pogba’s total salary at Manchester, without ever putting a foot on a pitch. This raised eyebrows, especially that an on-going investigation by FIFA into the transfer was mentioned, but in the media the sketching of the legal situation was very often extremely confusing and weak. Is this type of three-way representation legal under current rules? Could Mino Raiola, Manchester United, Juventus or Paul Pogba face any sanctions because of it? What does this say about the effectiveness of FIFA’s Regulations on Working with Intermediaries? All these questions deserve thorough answers in light of the publicity of this case, which we ambition to provide in this blog.More...


Asser International Sports Law Blog |

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

International and European Sports Law – Monthly Report – April 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.More...

The Reform of FIFA: Plus ça change, moins ça change?

Since yesterday FIFA is back in turmoil (see here and here) after the FIFA Council decided to dismiss the heads of the investigatory (Cornel Borbély) and adjudicatory (Hans-Joachim Eckert) chambers of the Independent Ethics Committee, as well as the Head (Miguel Maduro) of the Governance and Review Committee. It is a disturbing twist to a long reform process (on the early years see our blogs here and here) that was only starting to produce some tangible results. More...

RFC Seraing at the Court of Arbitration for Sport: How FIFA’s TPO ban Survived (Again) EU Law Scrutiny

Doyen (aka Doyen Sports Investment Limited) is nothing short of heroic in its fight against FIFA’s TPO ban. It has (sometimes indirectly through RFC Seraing) attacked the ban in front of the French courts, the Belgium courts, the European Commission and the Court of Arbitration for Sport. This costly, and until now fruitless, legal battle has been chronicled in numerous of our blogs (here and here). It is coordinated by Jean-Louis Dupont, a lawyer who is, to say the least, not afraid of fighting the windmills of sport’s private regulators. Yet, this time around he might have hit the limits of his stubbornness and legal ‘maestria’. As illustrated by the most recent decision of the saga, rendered in March by the Court of Arbitration for Sport (CAS) in a case opposing the Belgium club RFC Seraing (or Seraing) to FIFA. The arguments in favour of the ban might override those against it. At least this is the view espoused by the CAS, and until tested in front of another court (preferably the CJEU) it will remain an influential one. The French text of the CAS award has just been published and I will take the opportunity of having for once an award in my native language to offer a first assessment of the CAS’s reasoning in the case, especially with regard to its application of EU law. More...

The Validity of Unilateral Extension Options in Football – Part 1: A European Legal Mess. By Saverio Spera

Editor’s Note: Saverio Spera is an Italian lawyer and LL.M. graduate in International Business Law at King’s College London. He is currently an intern at the ASSER International Sports Law Centre.

                 

In the football world the use of unilateral extension options (hereafter UEOs) in favour of the clubs is common practice. Clubs in Europe and, especially, South America make extensive use of this type of contractual clauses, since it gives them the exclusive possibility to prolong the employment relationship with players whose contracts are about to come to an end. This option gives to a club the right to extend the duration of a player’s contract for a certain agreed period after its initial expiry, provided that some previously negotiated conditions are met. In particular, these clauses allow clubs to sign young promising players for short-term contracts, in order to ascertain their potential, and then extend the length of their contracts.[1] Here lies the great value of UEOs for clubs: they can let the player go if he is not performing as expected, or unilaterally retain him if he is deemed valuable. Although an indisputably beneficial contractual tool for any football club, these clauses are especially useful to clubs specialized in the development of young players.[2] After the Bosman case, clubs have increasingly used these clauses in order to prevent players from leaving their clubs for free at the end of their contracts.[3] The FIFA Regulations do not contain any provisions regulating this practice, consequently the duty of clarifying the scope and validity of the options lied with the national courts, the FIFA Dispute Resolution Chamber (DRC) and the CAS. This two-part blog will attempt to provide the first general overview on the issue.[4] My first blog will be dedicated to the validity of UEOs clauses in light of national laws and of the jurisprudence of numerous European jurisdictions. In a second blog, I will review the jurisprudence of the DRC and the CAS on this matter. More...

Call for papers: ISLJ Annual Conference on International Sports Law - 26-27 October 2017

The editorial board of the International Sports Law Journal (ISLJ) is very pleased to invite you to submit abstracts for its first Annual Conference on International Sports Law. The ISLJ, published by Springer in collaboration with ASSER Press, is the leading publication in the field of international sports law. Its readership includes both academics and many practitioners active in the field. On 26-27 October 2017, the International Sports Law Centre of the T.M.C. Asser Instituut and the editorial board of the International Sports Law Journal will host in The Hague the first ever ISLJ Annual Conference on International Sports Law. The conference will feature panels on the Court of Arbitration for Sport, the world anti-doping system, the global governance of sports, the FIFA transfer regulations, comparative sports law, and much more.

More...


International and European Sports Law – Monthly Report – March 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

 More...

The legality of surety undertakings in relation to minor football players: the Lokilo case. By Adriaan Wijckmans

Editor's note: Adriaan Wijckmans is an associate specialized in sports law at the Belgium law firm Altius.

In a recent judgment, the Brussels Court of First Instance confirmed the legality of a so-called surety undertaking, i.e. an agreement in which the parents of a minor playing football guarantee that their child will sign a professional contract with a football club as soon as the child reaches the legal age of majority.

This long-awaited ruling was hailed, on the one hand, by clubs as a much needed and eagerly anticipated confirmation of a long-standing practice in Belgian football[1] and, on the other hand, criticised by FIFPro, the international player’s trade union, in a scathing press release. More...



Kosovo at the Court of Arbitration for Sport – Constructing Statehood Through Sport? By Ryan Gauthier (Thompson Rivers University)

Editor's Note: Ryan is Assistant Professor at Thompson Rivers University, he defended his PhD at Erasmus University Rotterdam in December 2015. His dissertation examined human rights violations caused by international sporting events, and how international sporting organisations may be held accountable for these violations. 


“Serious sport…is war minus the shooting.” – George Orwell

 

In May 2016, the Union of European Football Associations (UEFA) admitted the Football Federation of Kosovo (Kosovo) as a member. The voting was close, with 28 member federations in favour, 24 opposed, and 2 whose votes were declared invalid. The practical outcome of this decision is that Kosovo would be able participate in the UEFA Euro championship, and that Kosovo teams could qualify for the UEFA Champions’ League or Europa League. More...


International and European Sports Law – Monthly Report – February 2017. By Tomáš Grell

 Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked. More...

FIFA's Responsibility for Human Rights Abuses in Qatar – Part II: The Zurich Court's Ruling - By Tomáš Grell

Editor’s note: Tomáš Grell comes from Slovakia and is currently an LL.M. student in Public International Law at Leiden University. He contributes also to the work of the ASSER International Sports Law Centre as a part-time intern.

This is a follow-up contribution to my previous blog on FIFA's responsibility for human rights abuses in Qatar published last week. Whereas the previous part has examined the lawsuit filed with the Commercial Court of the Canton of Zurich ('Court') jointly by the Dutch trade union FNV, the Bangladeshi Free Trade Union Congress, the Bangladesh Building and Wood Workers Federation and the Bangladeshi citizen Nadim Shariful Alam ('Plaintiffs') against FIFA, this second part will focus on the Court's ruling dated 3 January 2017 ('Ruling').[1]  More...



Asser International Sports Law Blog | A Good Governance Approach to Stadium Subsidies in North America - By Ryan Gauthier

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

A Good Governance Approach to Stadium Subsidies in North America - By Ryan Gauthier

Editor's Note: Ryan Gauthier is Assistant Professor at Thompson Rivers University in Canada. Ryan’s research addresses the governance of sports organisations, with a particular focus on international sports organisations. His PhD research examined the accountability of the International Olympic Committee for human rights violations caused by the organisation of the Olympic Games.


Publicly Financing a Stadium – Back in the Saddle(dome)

Calgary, Canada, held their municipal elections on October 16, 2017, re-electing Naheed Nenshi for a third term as mayor. What makes this local election an interesting issue for sports, and sports law, is the domination of the early days of the campaign by one issue – public funding for a new arena for the Calgary Flames. The Flames are Calgary’s National Hockey League (NHL) team, and they play in the Scotiabank Saddledome.


Scotiabank Saddledome, credit to Lorraine Hjalte, Calgary Herald

The team began play in 1972 as the Atlanta Flames, moving to Calgary in 1980. The Saddledome was built in 1983 to support both the newly-arrived Flames, and Calgary’s 1988 Winter Olympic Games. Today, the Saddledome is the oldest arena in operation in the NHL. Due to its age, and the damage caused by floods in 2013, the Flames are looking for a new home. As is the norm in North America, the Flames have no intention of going it alone, but are seeking a deal with the City of Calgary where the city would subsidize part of the arena. Negotiations have been ongoing for several years, with a few possible sites discussed.

Shortly into the 2017 municipal election campaign, negotiations between Calgary and the Flames broke down. The City of Calgary publicly released their proposal for a $555 million stadium, where the city would effectively subsidize 33% of the stadium through a mix of funding, land, and demolition of the old Saddledome. The team would pay 33% of the costs, and the fans would kick in the final 33% through a ticket tax. The Flames responded by releasing their proposal for a $500 million stadium, where the city would provide 45% of the funding through a ‘Community Revitalization Levy’ (a loan from the province of Alberta, paid off by property taxes on new developments around the arena), with the team providing 55% of the remainder. The difference in costs may be that the Flames’ proposal does not appear to consider the demolition of the old Saddledome. While the team’s proposal has the team paying more costs up-front, it would also see the Flames pay no property tax or rent during their tenure in the new stadium, while keeping all revenue generated by the arena.

Canadian national media praised Mayor Nenshi for not simply capitulating to the demands of the Flames. Print media exhorted taxpayers to “Just say ‘No’” to subsidizing the Flames, and called Nenshi’s re-election “a win for every city blackmailed by a sports team”. The Calgary Flames, and the NHL were less sanguine, as NHL Commissioner Gary Bettman blamed Nenshi for not getting a new arena for the Flames, and Flames’ management suggesting that the team would have to move. The night of Nenshi’s re-election saw the communications director of the Flames, Sean Kelso, take a more direct stance:


The ongoing dispute in Calgary is emblematic of a larger problem in North America – the public financing of stadiums for professional sports teams.

Public Financing of Stadiums in North America – A General Overview

North American cities have subsidized stadiums for professional sports teams for decades. However, cities rarely simply transfer cash to a team. Instead, more complex mechanisms are used: issuing bonds, tax increases, lotteries, and the use of “eminent domain”.

First, cities may provide money for stadiums through providing bonds to team owners. These bonds are tax-exempt, and are normally used by cities for public improvements. Cities have been able to justify their use for stadiums, and the tax-exempt nature of the bonds lowers the lifetime borrowing costs for a team. Second, cities may simply increase taxes. Cities used to increase property taxes to raise money for stadiums, but local residents began to resent such increases. Today, cities often increase “sin taxes” (e.g., on alcohol, or gambling), or taxes on hotels, in an attempt to move the burden of increased taxation to out-of-town people who won’t be voting in the next municipal election. Third, cities may set up lotteries, in conjunction with the state or province, to raise money for the stadium. Finally, cities may exercise their use of “eminent domain”. This tactic enables cities to condemn the land, with payment of just compensation (which is often not market value) to the original owner, for the furtherance of a “public purpose” (what constitutes a public purpose is broad, following the US Supreme Court decision in Kelo v. City of New London, 545 U.S. 469 (2005)).

After understanding the what, the question remains: why do cities subsidize sports stadiums? Ultimately, there is a limited supply of major-league teams, and cities view being a “major league” city as a benefit. Unlike European professional leagues, where any local team could make it to the top league through promotion, the top leagues in North America are closed leagues, currently limited to 30-32 teams in the “big four” leagues. Cities that want to be home to a professional team must convince a league to expand, placing a new team in their city (as Las Vegas recently did with the NHL), or convince an owner of an already-existing team to relocate (as Las Vegas has done with the National Football League’s Oakland Raiders). One way to encourage expansion or relation is to offer a subsidized stadium. It can be argued that these tactics are no different than a city offering a subsidy to convince a company to establish or relocate an office – like what is happening with Amazon right now – except for the scale of the subsidy.

Boosters of stadium subsidies have argued that cities should be happy to have sports teams, as the teams will generate an economic boost. They claim that the team, and their new stadium, will increase local income, employment rates, property values, and the well-being of citizens. However, economists have generally debunked these claims. While there are examples of successful stadiums, they are generally not as successful as predicted, often not worth the costs, and the few successes are drowned out by every other instance where the economic impact was not realized (sort of like hosting the Olympic Games or FIFA World Cup).

Proposed Legal Solutions to Halt Public Financing of Stadiums

Given the lack of economic benefits generated by stadiums, particularly given the hundreds of millions of dollars of subsidies granted to each stadium, legal scholars have proposed legislative, regulatory, and judicial solutions to halting this gravy train.

In regards to legislative solutions, Canada and the United States could follow the model of the European Union (EU). The EU has restrictions on government assistance to private industries, to prevent the distortion of competition across the EU – these are known as the “State Aid” rules, found in Art. 107 of the Treaty on the Functioning of the European Union. In practice, the EU has an uneven history of applying the State Aid rules to sport. However, it has shown more enthusiasm over the past year to find evidence of state aid that is incompatible with the Treaty, including in a case that involved a questionable deal involving land next to Real Madrid’s Bernabéu Stadium. However, legislative solutions are unlikely to be enacted by either the American Congress or the Canadian Parliament (or local legislative bodies). There appears to be no interest to do so, and why would there be? Politicians can benefit from new stadiums by working with business elites who support the stadiums, and the evidence of repercussions at the ballot box appear to be mixed.

Some legal scholars have suggested regulatory or judicial solutions, such as: halting the tax-free status of municipal bonds, ending the use of eminent domain to obtain land for stadiums, and advocated a stronger role for antitrust oversight over the conduct of teams and leagues in this regard. However, courts have construed these particular laws broadly enough to allow the public financing of stadiums to continue.

A Good Governance Approach to the Public Financing of Stadiums – Atlanta Braves Case Study

When even Calgary’s stance, which had the city subsidizing at least 1/3 of the stadium, is considered brave, it seems reasonable to presume that publicly-subsidized stadiums will continue apace in North America. As such, it may be more helpful to consider what happens after a stadium project is proposed. Applying a good governance approach to stadium financing could be a helpful way forward. If stadiums are going to be built, regardless, then it is best to make those who build stadiums – governments and teams – accountable to the taxpayers and fans.

Good governance principles have been increasingly applied to the organization of sport – particularly the governance of international sporting organisations. While good governance can be defined in a myriad of ways, it is often broken down to particular principles. In examining stadium projects, I suggest that four principles should be considered: transparency, public participation, solidarity, and review. These principles closely track those used by the Sports Governance Observer.

One recent stadium project seems to have studiously avoided all of these principles entirely – in a way that demonstrates the need for these principles to be applied in the first place. This project took place in the Calgary Flames’ old home of Atlanta, USA.


                                                                                          Turner Field, credit to Zpb52

In 2013, the Atlanta Braves announced that they were leaving their current stadium in downtown Atlanta. They weren’t moving to a new city, but were moving 32 kilometres north to the suburb of Cobb County. The reason for the move? A brand new, publicly-financed stadium. The Atlanta Braves had played at Turner Field since 1997. Not even twenty years later, the stadium, originally built as the centrepiece of the 1996 Summer Olympic Games, was deemed to be obsolete by the Braves. Enter Cobb County. To pay for a new stadium for the Braves, Cobb County issued $368 million in municipal bonds (originally estimated at $276 million). The Braves, in chasing public money, bucked the trend of teams moving closer to the city centre, as suburbs are not conducive to stadiums.

While the rationale and the dollar figure should raise some eyebrows, the process used to secure funding for the stadium should be deeply disturbing to fans of democratic processes. The deal itself was negotiated in secret between a single Cobb County commissioner, and the Atlanta Braves. The president of the Atlanta Braves, John Schuerholz, stated that if news of the deal “had leaked out, this deal would not have gotten done…If it had gotten out, more people would have started taking the position of, ‘We don’t want that to happen. We want to see how viable this was going to be.’” Eventually, the deal needed to be voted on by Cobb County commissioners. At the public vote held in May 2014, only twelve speaking slots were available to the public. Stadium supporters had lined up by 2pm for the 7pm meeting, and the Commissioners denied any additional speaking slots. The same Commissioners voted 5-0 to fund the stadium. Opponents of the stadium filed a suit in the Georgia courts, alleging that the bonds used to finance the new stadium violated the Georgia state constitution, and various state laws. However, the opponents were defeated in the courthouse, too, as the Georgia Supreme Court upheld the validity of the bonds as they provided at least some plausible public benefit. The stadium opened in 2017 to positive reviews from fans and ballpark enthusiasts.

In examining the Atlanta Braves new ballpark by applying principles of good governance, the results are discouraging. Transparency was almost non-existent throughout most of the process, as the deal was completed in secret, as admitted by the president of the team. Public participation was curtailed throughout the process, and most galling, at the eve of the final vote on the funding. There have been no solidarity benefits that have come to the forefront, although it should be noted that it is possible that money that was raised to pay for public parks was diverted to funding the stadium, which cuts against the idea of solidary benefits. Finally, there will likely be no post facto review of the stadium and any attendant benefits it may claim. While there was review of the deal itself through the courts, the Georgia Supreme Court noted that “we do not discount the concerns Appellants have raised about the wisdom of the stadium project and the commitments Cobb County has made to entice the Braves to move there. But those concerns lie predominantly in the realm of public policy….”.


SunTrust Field, Credit to David Goldman/AP

The Value of Good Governance Principles in the Stadium Debate

The case of Atlanta demonstrates the importance of good governance in the public financing of stadiums. Proponents, critics, and scholars can apply these principles to evaluate and engage in more thoughtful debates over the processes of public financing of stadiums. Since stadiums are likely to receive public funding, regardless of the merits, a better process should improve the benefits to the public, while constraining the costs.

Applying principles, as opposed to enacting legislation, may lead the reader to ask “can these principles be enforced?” In terms of traditional legal enforcement, namely recourse to a regulatory body or a court, a city would probably need to implement these terms into a Memorandum of Understanding with the team. For principles such as solidarity, particulars could be written into the final funding agreement. This has been done, for example, with the Community Benefits Agreement implemented between the City of Edmonton, and the Edmonton Oilers hockey team, for a publicly-subsidized stadium that opened in 2016.

However, even if the city itself refuses to implement these principles, they do provide a framework to hold decision-makers to account. In instances where the government has done wrong by the citizens, but there are no judicial remedies, the remedy is then to vote the government out. In establishing these principles, they then provide standards by which the government can be held to account, if not formally, then at least through the ballot box.


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