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

Never let a good fiasco go to waste: why and how the governance of European football should be reformed after the demise of the ‘SuperLeague’ - By Stephen Weatherill

Editor’s note: Stephen Weatherill is the Jacques Delors Professor of European Law at Oxford University. He also serves as Deputy Director for European Law in the Institute of European and Comparative Law, and is a Fellow of Somerville College. This blog appeared first on eulawanalysis.blogspot.com and is reproduced here with the agreement of the author. 

 


The crumbling of the ‘SuperLeague’ is a source of joy to many football fans, but the very fact that such an idea could be advanced reveals something troublingly weak about the internal governance of football in Europe – UEFA’s most of all – and about the inadequacies of legal regulation practised by the EU and/ or by states. This note explains why a SuperLeague is difficult to stop under the current pattern of legal regulation and why accordingly reform is required in order to defend the European model of sport with more muscularity.

 

The creature that will not die

What, again?

It is over twenty years since since ‘Project Gandalf’, a plan for a European Football League prepared by Media Partners International, was notified to the Commission (OJ 1999 C70/5). Since then football in Europe has been played with a regular rhythm in the background: the threat of a breakaway ‘SuperLeague’ driven by the richest and most successful clubs. UEFA, the sport’s governing body in Europe, has responded. Alterations made periodically to the structure of its principal and most lucrative club competition, the Champions League, have favoured the interests of the richest and most successful clubs and, in a macabre dance, those changes have typically followed those clubs’ well-briefed grumbling and plotting. And Monday 19 April 2021 was glumly anticipated by football fans as the latest reel around the fountain: UEFA, media reports confidently predicted, would further compromise the structure of its competitions in order to give the richest and most successful clubs more of what they want – more games and firmer guarantees of participation.

But Monday 19 April instead brought the ‘SuperLeague’ clattering out of its murky background as threat and into the harsh light of day as execution. A group of twelve clubs from England, Spain and Italy announced the creation of an entirely new competition which would operate beyond the authority of UEFA. The self-chosen clubs are all rich, though several groan under mountainous debts. There is no plausible world in which this dozen would count as Europe’s undisputed finest in terms of sporting merit: their status is commercially driven. The plans guarantee the long-term participation of the founding clubs, and so would remove the threat of relegation from the new SuperLeague. This is entirely alien to the orthodox model of football Leagues across Europe. And the clubs plan to have their cake and eat it. They intend to play midweek games in the brand new SuperLeague while remaining members of their national associations, and so continuing to play in the Premier League, La Liga and Serie A as well as selected national Cup competitions. But they will no longer play in UEFA’s Champions League, which will therefore be robbed of most of its richest and most successful clubs, and also Arsenal and Spurs.

And then it crumbled.

Within 48 hours of the new competition’s announcement its proponents were racing each other from West London across East Manchester and beyond to see who could put most distance between themselves and a plan which had attracted almost universal derision and dismay. No longer a League from which its founder members could not be relegated, the SuperLeague had turned into a competition from which its clubs were desperate to knock themselves out. This Italian, Spanish and English Job had been intended to cause an explosion within European football, yet they couldn’t even blow the bloody doors off.

Gleeful mockery has its short-term place. This SuperLeague is dead. But the idea behind it and the people who drove it are not. A breakaway league in European football is the creature that will not die. Now is the time to think about the inadequacies of legal regulation of sport in Europe, in order to be prepared to defend the European model of sport the next time that a plan of this disruptive type is advanced, likely with greater strategic cunning. 

 

Why the law is not currently adequate

UEFA was doubly offended by the SuperLeague. The traditional regulatory model of European football was cast aside. No longer would qualification on merit be the sole criterion for participation. The infusion of fresh blood ensured by the system of promotion and relegation would be stopped. UEFA oversight would be precluded. The commercial model of recent years would be gravely imperilled too. UEFA’s Champions League is a spectacular success and provides UEFA with a valuable source of income. The ‘SuperLeague’ is a huge threat.

What could UEFA do?

The key insight is that UEFA is doubly offended because UEFA has a double function. It is a regulatory body but it is also a commercial actor. It protects the structure of the sport but it also makes money out of the sport. Most governing bodies in sport began in the days of well-meaning amateurs, carrying out the task of imposing routine and order on the rules of the game and the conduct of competitions, but in recent years, largely as a result of changes to the regulatory and technological shape of the audiovisual media sector, sport has increasingly become commercially lucrative to a dazzling degree. Governing bodies have typically added these new commercially sensitive functions to their longer-standing regulatory role by an incremental process of accumulation. UEFA, like many governing bodies in sport, sets the rules of the game but it has also become highly profitable. 

This is where and why the application of legal rules to governing bodies in sport becomes awkward. No one doubts that UEFA has a legitimate role. Sport needs a regulator, to set the rules, to impose order on the calendar, to protect the welfare of players and fans, and so on. But equally no one doubts that regulatory choices have direct commercial consequences. If UEFA decides to impose sanctions on those involved in a ‘SuperLeague’ it will be able to present such steps as a means to defend the integrity of the model of sport that has long dominated European practice. But it will stand accused of seeking to promote its own commercial interest in maintaining monopoly control over the Champions League by suppressing the emergence of a new form of competition, a SuperLeague, which might generate high levels of consumer demand and which, if the restless dozen are to be believed, had already generated lucrative financial backing. Both these perspectives contain their truths – regulatory and commercial motivations inevitably overlap in the governance of sport. 

Imagine UEFA had carried through its threats to impose sanctions, which, in their most vigorous form, would have involved banning participating clubs and players from any involvement in football other than the ‘SuperLeague’ itself. To achieve that would involve action not only by UEFA but also the relevant national football associations and, to exclude players form the World Cup too, FIFA. Would EU law oppose a response of this type, designed to protect European football’s traditional structures?

The problem in short is – it is not clear.

There is nothing explicit in EU law that addresses the matter. Sport was not even mentioned in the founding Treaties until as late as 2009, and the provision then inserted, Article 165 TFEU, is programmatic rather than precise. EU secondary legislation on sport is thin and of no relevance to the matter at hand. EU sports law largely comprises the patchwork of decisions of the Court and the Commission which have, since the very first in 1974 (Case 36/74 Walrave and Koch ECLI:EU:C:1974:140), addressed the compatibility of practices in sport with the demands of EU internal market law. This concerned initially the law of free movement, applied in the famous Bosman case (Case C-415/93 ECLI:EU:C:1995:463), and latterly competition law. And it is EU competition law which provides the most obvious objection to UEFA’s desire to take action against the promoters of and participants in a ‘SuperLeague’.

It is necessary to try to sift the existing practice of the Commission and Court to try to piece together an understanding of how EU competition law would apply in these circumstances. Nothing is predetermined. This, then, is already a problem – it is impossible to predict with confidence exactly how far UEFA’s autonomy of action is constrained by EU competition law.

Let us try. The most recent decision in which EU competition law has been applied to sport is also the one that is factually closest to the case of a governing body taking action to protecting its model against third party organisers wanting to offer competing events. It is the International Skating Union decision. 

 

The International Skating Union decision (ISU).

In December 2017 the Commission decided that the eligibility rules of the International Skating Union (ISU) were incompatible with EU competition law, specifically Article 101 TFEU on anti-competitive bilateral and multilateral practices (AT.40208). The Commission’s Decision was upheld on appeal to the General Court, which in December 2020 approved all the key findings made by the Commission (Case T-93/18 International Skating Union v Commission EU:T:2020:610).

The core of the objections in ISU were targeted at the governing body’s treatment of skaters who chose to take part in events that were not approved by the ISU. The ISU had power conferred on it as the sole governing body in the sport recognized by the International Olympic Committee (IOC) to ban such skaters from the Olympic Games and the World Championship. The ISU was able to act, and did act, in a way that protected and promoted the events which it organized at the expense of competing suppliers. The Commission’s Decision reached the conclusion that it reserved to itself powers in a way that exceeded what was necessary for the organization of the sport and for the maintenance of its integrity. It had pursued activities in the global market for the organisation and exploitation of international speed skating events in circumstances where its regulatory function overlapped with commercial motivations. The ISU had – according to both the Commission and the General Court - a conflict of interest. By stretching its activities beyond the regulatory domain into areas which prioritised its own commercial interests at the expense of third parties in the market, the governing body had acted in an anti-competitive manner contrary to Article 101 TFEU. 

The responsible EU Commissioner Margrethe Vestager, commenting at the time on the Commission ISU decision, was eager to treat the ruling as an expression of general principle, not simply one confined to its own particular facts. She explained that where a single federation organises competitions from local to international level according to the global pyramid structure which characterises the governance of most sports, ‘the penalties these federations impose should be necessary and proportionate to achieve’ goals associated with the proper conduct of the sport, but they ‘certainly shouldn't be used to unfairly favour the federation's own commercial interests, at the expense of athletes and other organisers’. 

The ISU Decision shows that EU competition law restrains the autonomy of governing bodies in sport, but the assymetry of power between the ISU and skaters has little in common with the more balanced relationship between UEFA and the biggest football clubs. So, in the search to understand how EU competition law restrains UEFA, ISU is a clue, but not definitive.

 

ISU and past practice

ISU is not a one-off: this is not the only material on which we can draw to understand how EU law affects and restricts UEFA’s options in responding to the SuperLeague. A wonderful book published in 2015 bursts with relevant ideas (K. Pijetlovic, EU Sports Law and Breakaway Leagues in Football). And the structure of the ISU ruling fits comfortably into the EU’s track record in applying EU law to sport. The need for a regulator in sport is acknowledged. A game needs common rules, predictably applied and apt to secure the integrity of competition. But such activities shall not spill over beyond what is necessary for the proper organisation of the sport, and there is special suspicion of systems of governance which are structured or applied in a way that prioritises the commercial interests of the governing body in question. 

In Meca Medina and Majcen v Commission (Case C-519/04P EU:C:2006:492) the Court explained that the compatibility of rules with EU competition law cannot be assessed in the abstract. The legal assessment of practices that have the effect of restricting competition also includes examination of their objectives. The Court decided that the imposition of sanctions for violation of anti-doping rules did not necessarily constitute a forbidden restriction of competition within the meaning of (what is now) Article 101 TFEU, since they were justified by the legitimate objective of preserving healthy sport, though it added that attention would need to be paid in detail to fair procedure and proportionate sanctions. Bosman (Case C-415/93 ECLI:EU:C:1995:463 ), a free movement rather than a competition law case, similarly permits the interpretation of EU law to be informed by the sporting context in which it is applied. So, famously, the Court declared that ‘In view of the considerable social importance of sporting activities and in particular football in the Community, the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and of encouraging the recruitment and training of young players must be accepted as legitimate’. The Court ruled against the particular transfer system of which Bosman had fallen foul because it went too far to apply collectively enforced restraints to the contractual freedom even of players whose contracts had expired. But the Court was plainly receptive to an adjusted regime which addressed the legitimate concerns it had mapped in the ruling. The transfer system was duly amended to apply only to players whose contract has not expired, and it lives on today in that slimmed down form.

There followed Motosykletistiki Omospondia Ellados NPID v Elliniko Dimosio – commonly abbreviated to MOTOE and known as the ‘Greek motorcycling’ case (Case C-49/07 EU:C:2008:376). It was held that ELPA, a body granted legal authority under Greek law to decide whether or not to permit the staging of motorcycling competitions, had violated Article 102 TFEU by running a system in which ELPA itself was engaged in the organisation and commercial exploitation of motorcycling events. The problem was that in the circumstances ELPA had ‘an obvious advantage over its competitors’; its gatekeeping right allowed it to ‘distort competition by favouring events which it organises or those in whose organisation it participates’. 

Article 165(1) TFEU, introduced into the Treaty with effect from 2009, directs that the EU ‘shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function’. But both the Court and the Commission have long been assiduous in interpreting and applying EU internal market law in a way that recognises the legitimate concerns that arise in sport. Article 165 merely codifies that contextual sensitivity. EU law has been shaped according to a model whereby sport enjoys ‘conditional autonomy’ under EU law (see S. Weatherill, Principles and Practice in EU Sports Law, 2017). Governing bodies are able to operate consistently with EU law on condition that they demonstrate why their practices are necessary for the organisation of their sport – to defend its ‘integrity’, as is asserted in ISU. It is when governing bodies reach beyond the sphere of legitimate and necessary regulation that they tend to come into conflict with EU law – for example by applying the transfer rules even to out-of-contract players or by leveraging regulatory power to enhance a position in the market at the expense of commercial rivals. 

 

The legitimate reach of a governing body’s regulatory power

In ISU the objection was not to the role of a governing body acting as gatekeeper, in order to impose order on a sport’s calendar: the objection was to leveraging that regulatory power to achieve commercial advantage. The problem was a conflict of interest between regulatory concerns and profit-making, and it is an endemic problem in sports governance given the rising commercial value of sport alongside a reluctance among governing bodies to establish systems which sharply separate the regulatory from the commercial sphere. 

ISU insists on review of a governing body’s regulatory choices for fear that they may generate anti-competitive consequences. But it does not assume that the supply of competitive sporting events shall become a wholly unregulated market. Neither the Commission nor the General Court in ISU objects to the notion that sports governing bodies shall be able in principle to arrange the calendar, to decide how many events should be permitted, to ensure safety standards are met, and to perform a broader gate-keeping function. The Commission went out of its way in ISU to state that protecting the integrity and good functioning of the sport is a legitimate objective pursued by a governing body and this is confirmed in the ruling of the General Court. So too Commissioner Vestager, reflecting on the Decision, insisted that ‘we're certainly not questioning the right of …federations to do their job of organising the sport’. 

The question: where to draw the line between legitimate supervision and anti-competitive conduct?

 

SuperLeague

Would EU law have precluded UEFA from taking steps to oppose the SuperLeague? 

It is plain that UEFA would gain commercial advantage by killing off the SuperLeague. But the exercise of regulatory power commonly has some commercial consequence – that unavoidable overlap does not take the governing body’s activities over the line. The real issue is whether the exercise of regulatory power is necessary to secure the organisation of the sport.

ISU was an extreme case. The power imbalance between ISU and the skaters was very great; and the penalties envisaged by ISU went beyond any conceivable band of proportionate response. Given the aggressive suppression of third party organisers that was involved, disclosing a clear strategy of furthering the ISU’s own commercial aspirations in staging skating competitions, there was no need for the notion of protecting the ‘integrity’ of sport to be explored in any depth. The Commission and the General Court did not trouble to do so. Meca-Medina too, though the leading case, does not help to tease out the precise boundaries of the zone of legitimate action to police the integrity of sport, because anti-doping procedures plainly fall within it.

UEFA’s position in the face of rebellion by the major football clubs would have obvious distinctions from the situations found in MOTOE and ISU, most of all that its concern to defend the integrity of its existing structures would seem to carry much more weight given that the leading football clubs possess a destructive power which the third parties in MOTOEand ISU did not. The SuperLeague was clearly designed to reduce the Champions League to a sideshow, if not to destroy it altogether. 

Two questions structure the legal inquiry. What legitimate objectives may UEFA defend? And, assuming legitimate objectives have been identified, what are the permissible limits of action designed to defend them?

Once again the problem is that these are not matters set out cleanly in any existing legal texts. But let us try.

Can UEFA adopt measures to secure the integrity of its competitions' ability to produce the one true champion: that is, can UEFA take steps to stop European football looking like boxing? I think this is plausible, and it would justify action designed to ensure that UEFA’s Champions League has a higher profile and greater appeal than any breakaway competition.

Can UEFA adopt measures to suppress a competition where access is not based on merit and/or where promotion and relegation are curtailed: that is, can UEFA take steps to stop European football looking like sports leagues in North America? I think this is also plausible, and it would justify action designed to curtail the viability of any breakaway competition.

UEFA has other plausible legitimate objectives on which it may rely in responding to the threat of a SuperLeague. Protecting the calendar to prevent player overload would belong on this list; so too would protecting the pyramid structure of governance in order to ensure that all competitions are subject to the same rules globally rather than fragmented according to which organiser is in charge; and the re-distribution of income raised at élite level throughout the structure of the sport, in order to achieve some degree of vertical solidarity, is a further relevant concern. 

If (some or all of) those are legitimate aims, then one would need also to check whether UEFA's measures are proportionate and apt to achieve the end in view. The length of any ban would  be legally relevant, so too the breadth of its scope. The harsher the penalty, the less likely it is to survive proportionality-based review - yet of course the harsher the penalty, the more effective it is likely to be. Here too a detailed context-specific analysis would be required, but one may think that sanctions imposed on clubs would be more readily shown to be necessary and therefore justified than sanctions imposed on individual players. 

The implications under competition law would not be limited to measures taken directly by UEFA. The collective sale of broadcasting and other media rights to the UEFA Champions League falls within the scope of Article 101 because it restricts supply (by individual clubs as sellers), but it is permitted on the basis that it generates sufficient economic benefits.  It remains to be seen whether the sale of rights to a SuperLeague would be treated with similar indulgence: its closed nature and the extent to which it shares the proceeds of collective selling with the game more widely might induce sceptical assessment.

A prediction? It seems to me highly plausible in principle that EU law would permit some forms of action taken by UEFA against participants in a SuperLeague which are designed to protect the legitimate interests of a governing body with overall responsibility for its sport, subject to meeting the demands of the principle of proportionality. But one needs to be fully aware that competition law, like high level sport, rarely yields a wholly confident prediction. A SuperLeague will be using it too, to argue that it is injecting fresh competition into the market for sports events and that accordingly it should be protected from sanctions. These are difficult legal arguments, for which both legislative texts and precise case law precedents are wanting.

 

What next?

The contempt directed at the owners of the twelve clubs involved in the breakaway has been torrential. Disdain for VAR unites football fans, but that unwelcome intrusion of technology into the frantic pace of a proper football match is a pimple alongside the wrecking ball arrogance of the SuperLeague. The protests appear to have brought the plan unveiled on Monday 19 April 2021 to its knees. The twelve clubs, it seems, will remain within the existing arrangements and play in the existing competitions. But the biggest clubs have not lost their appetite for inducing UEFA to alter the design of the Champions League to suit their interests better. And although this SuperLeague appears to be dead, the threat of the breakaway league in European football remains the creature that will not die.

The legal and regulatory framework is not adequate to meet such challenges. Consider the frantic response to the SuperLeague. UEFA needed to decide what type of sanctions it would impose, doubtless after – urgent – consultations with national associations and FIFA, and perhaps with national governments minded to legislate too. UEFA needed to seek – urgent – advice from the Commission on its view of the impact of EU competition law on proposed sanctions, even if ultimately the authoritative voice on the meaning of EU law belongs to the Court of Justice. And UEFA was already faced by – urgent – applications to national courts on behalf of the SuperLeague 12 seeking to secure orders restraining the imposition of any penalties.

On all these points the law is not clear. EU competition law does not provide a checklist of sanctions which UEFA may lawfully impose and those which go too far. EU law more generally does not regulate directly the structure of governance in European sport. Nor do national laws provide clear controls. Governing bodies in sport have been largely successful in sheltering their autonomy from legal regulation. The SuperLeague fiasco should prompt a re-think. What is UEFA’s autonomy’s worth, when it is revealed to be so vulnerable to the concerted strategies of the biggest clubs? This breakaway failed, but the creature is not dead, and the next version, more skilfully prepared, might succeed.

 

Re-thinking sporting autonomy

In the past UEFA, jealous of its sporting autonomy, frequently called into question the legitimacy of EU intervention. The judgment in Bosman records that UEFA had requested the Court to order a measure of inquiry under its Rules of Procedure in order to obtain fuller information on the role played by transfer fees in the financing of the game, but the Court, noting that UEFA had haplessly failed to submit this request before the close of the oral procedure, refused. Things have changed. UEFA has come to understand the strategic advantage of keeping the EU, most immediately the Commission, onside.

In 2012 a ‘Joint Statement’ by the EU Commissioner then responsible for competition law, Joaquín Almunia, and Michel Platini, then President of UEFA, declared that the ‘break even’ rule at the heart of UEFA’s system of ‘Financial Fair Play’ is based on sound economic principle and that its objectives are consistent with EU state aid policy (IP/12/264). This ‘Joint Statement’ is not legally binding and its analysis lacks depth, but its very existence demonstrates that UEFA, here also reflecting the interests of Europe’s leading football clubs, has succeeded in getting close to the Commission and securing its informal approval. This strategy of co-operation rather than confrontation also marked the reform of the transfer system after Bosman. In March 2001 the Commission declared it had formalized the matter in an exchange of letters between Mario Monti, at the time the Commissioner for Competition, and Sepp Blatter, President of FIFA (IP/01/314). Pending litigation was settled and brought to an end, and the Commission announced closure of its own investigation in June 2002 (IP/02/824). This has no formal status, and, as with FFP, one cannot exclude that a court would take a different view, but for the time being a co-operative solution prevails. Moreover the involvement of FIFA reminds that the effect of EU law is frequently not confined to EU territory alone. The economic centrality of Europe to many, if not all, sports means that in practice the need to adjust practices to comply with EU law sometimes entails that adjustment operates more widely. EU’s norms become global norms. Note too that since 2014 the Commission and UEFA have had a formal arrangement for co-operation.

For present purposes the principal point of interest is that here the governing body, UEFA, has a real and direct interest not in securing autonomy from EU law but rather in using it to defend its existing model of governance and, most of all, its premier club competition, the Champions League. Pursuit of a more intimate relationship with the EU may involve a diminution of autonomy from regulation but it may the best way for UEFA to protect its autonomy from the avaricious might of the biggest clubs. The EU is an imperfect regulator of sport – it lacks expertise, its competence is not comprehensive, and the geographical boundaries of the EU mean nothing to football. But it will be intriguing to observe whether April 2021’s eruption prompts demands for a more assertive EU, able and willing to move beyond the ad hoc application of competition law and to adopt instead a more proactive role, seeking to establish minimum standards of good governance while ruling out sporting competitions which depart from merit-based criteria for admission. It would – and should – be a chance too for the EU to insist on a more serious commitment to re-distribution of wealth within European football. The biggest clubs have induced the transformation of the Champions League into a competition in which only a small pool of clubs may aspire to reach the later stages, let alone win it, and the disproportionate benefits which attach to mere participation in it have wreaked havoc with competitive balance in smaller national leagues across Europe. UEFA needs EU backing to stop these trends, and to reverse them. This would transform the ‘European Model of Sport’ from windy rhetoric and window-dressing to something more concrete and normative.

Consider too national political processes. In the short term had there been a need to stop the SuperLeague by immediate intervention, then it is national political processes which have the power to act with the necessary speed. Legislation could forbid closed Leagues. A higher level of state intervention in sport would be another threat to UEFA’s autonomy, and would likely be accompanied by pressure to reform its governance, yet it would also provide UEFA with a further means to defend its model from the destructive power unleashed by a SuperLeague. So ‘will politics show its teeth and confer a real-sanctioned monopoly to the football pyramid … [as] a transnational public service?’ (Antoine Duval, April 19 2021). After all, tongue in cheek, ‘political interference with sports is only bad if it goes against governing bodies’ objectives’ (Borja García, April 19 2021).

  

Conclusion

Radical change is often generated by moments of crisis, and it could be that the prime movers behind the ‘SuperLeague’ will come to be seen as having provoked a strengthening, not a weakening, of UEFA’s regulatory and commercial profile. This, however, does depend on UEFA, the EU and national politicians seizing the moment, and acting now to reform governance. They should not assume that because the current crisis is over, business as usual will resume. The unsystematic character of EU competition law should serve to focus attention on the need for broader intervention by the EU in order to protect and improve established systems of governance. Faced by the biggest clubs’ plain disdain for matters of fundamental sporting significance in Europe such as merit-based qualification for competitions and open Leagues with promotion and relegation, UEFA may find the EU a helpful ally: so too it may find a higher level of readiness to intervene in sport at state level serves its purposes. A durable accommodation between sporting tradition and commercially-driven innovation is desperately needed, or else fans can gloomily anticipate the emergence of many more malformed creatures. The creature is not dead.

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Asser International Sports Law Blog | A New Chapter for EU Sports Law and European Citizenship Rights? The TopFit Decision - By Thomas Terraz

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 New Chapter for EU Sports Law and European Citizenship Rights? The TopFit Decision - By Thomas Terraz

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

Christmas has come very early this year for the EU sports law world in the form of the Court of Justice of the European Union’s (CJEU) judgment in TopFit eV, Daniele Biffi v Deutscher Leichtathletikverband eV by exclusively analyzing the case on the basis of European citizenship rights and its application to rules of sports governing bodies that limit their exercise. The case concerned an Italian national, Daniele Biffi, who has been residing in Germany for over 15 years and participates in athletic competitions in the senior category, including the German national championships. In 2016, the Deutscher Leichtathletikverband (DLV), the German Athletics Federation, decided to omit a paragraph in its rules that allowed the participation of EU nationals in national championships on the same footing as German citizens. As a result, participation in the national championship was subject to prior authorization of the organizers of the event, and even if participation was granted, the athlete may only compete outside of classification and may not participate in the final heat of the competition. After having been required to compete out of classification for one national championship and even dismissed from participating in another, Mr. Biffi and TopFit, his athletics club based in Berlin, brought proceedings to a German national court. The national court submitted a request for a preliminary ruling to the CJEU in which it asked essentially whether the rules of the DLV, which may preclude or at least require a non-national to compete outside classification and the final heat, are contrary to Articles 18, 21 and 165 TFEU. Articles 18 and 21 TFEU, read together, preclude discrimination on the basis of nationality against European citizens exercising their free movement. The underlying (massive) question here is whether these provisions can be relied on by an amateur athlete against a private body, the DLV.

Covered in a previous blog, the Advocate General’s (AG) opinion addressed the case from an entirely different angle. Instead of tackling the potentially sensitive questions attached with interpreting the scope of European citizenship rights, the opinion focused on the application of the freedom of establishment because the AG found that participation in the national championships was sufficiently connected to the fact Mr. Biffi was a professional trainer who advertised his achievements in those competitions on his website. Thus, according to the AG, there was a sufficient economic factor to review the case under a market freedom. The CJEU, in its decision, sidelined this approach and took the application of European citizenship rights head on.

The following will dissect the Court’s decision by examining the three central legal moves of the ruling: the general applicability of EU law to amateur sport, the horizontal applicability of European citizenship rights, and justifications and proportionality requirements of access restrictions to national competitions.

 

2.     Applicability of EU Law to Amateur Sport

The CJEU has long made the distinction that sporting activity falls under the scope of EU law “in so far as it constitutes an economic activity.”[1]  Since this ruling in the 1974, treaty revisions, the natural development of the CJEU’s case law, and the increasing economic interests involved in sport has meant that defining the boundaries of EU law’s application to sport has become increasingly difficult. These borderline cases can especially arise when an amateur athlete is barred from a competition, since amateur athletes prima facie do not have an economic interest. For example, the CJEU in the Deliège case explored the extent to which amateur athletes may enjoy market freedoms. The Court ruled that amateur athletes may come within the scope of EU law when the exercise of their sporting activity is sufficiently connected to an economic sphere. In this case, an amateur athlete’s sponsorship contracts and grants were considered to be sufficient economic activity to fall within the scope of the freedom to provide services.[2] Amateur athletes in this case still needed to demonstrate that they had a minimum economic interest that was being affected by a sport rule. Sporting rules lacking economic effect would thus fall outside the scope of the market freedoms.

The TopFit ruling changes this understanding because Mr. Biffi is an amateur athlete and instead of invoking the market freedoms, he decided to rely on his European citizenship rights. These rights derive from being a citizen of the Union and do not require the exercise of an economic activity to be applicable. Indeed, Article 21 TFEU gives the free movement of persons a whole new dimension where an economic interest is no longer a prerequisite to fall under the aegis of the fundamental freedoms.[3] The CJEU confirmed this reality in Baumbast when it declared that the introduction of Union citizenship “has conferred a right, for every citizen, to move and reside freely within the territory of the Member States” regardless of their status as economically active or nonactive.[4] Thus, the Court in TopFit states, in reference to other cases, that one’s exercise of their free movement under their European citizenship, includes the “access to leisure activities” and that Article 21 (1) TFEU also intends “to promote the gradual integration of the EU citizen concerned in the society of the host Member State.”[5] It then extends this reasoning to sport by relying on Article 165 TFEU, the Article which explicitly introduced sport into the Treaties, which “reflects the considerable social importance of sport” and that the practice of an amateur sport helps “to create bonds with the society of the State” or “to consolidate them.”[6] The Court goes even further to unequivocally state that this is the “case with regard to participation in sporting competitions at all levels.”[7] On this basis, it is possible for amateur sportspersons to rely on Article 18 and 21 TFEU.[8] Therefore, the Court has confirmed that EU law, through rights derived from European citizenship, may apply to restrictions of free movement that arise from ‘all levels’ of amateur sport, basically extending the reach of EU law applicability to all types of sports activity on the territory of the EU, provided by public authorities or (as we will see in the next section) by private ones.  

 

3.     Horizontal Applicability of European Citizenship Rights

The next issue that materializes from the ability of amateur sports persons to rely on European citizenship rights is whether these rights may be invoked against private entities, the sport governing bodies. Indeed, sports throughout the European Union is primarily governed by a network of private associations integrated in the famous pyramid of sports. Treaty articles may be relied upon horizontally, meaning against other private parties, by individuals so long as the relevant article is “sufficiently clear, precise and unconditional to be invoked by individuals.”[9] AG Tanchev rightly argued in his opinion that giving Article 21 TFEU horizontal direct effect would be a “significant constitutional step” by being the “first time this century that a provision of the Treaty has been selected to join the small number of provisions having the quality of horizontal direct effect.”[10] In particular, the AG explains that Article 21 TFEU has always been used in relation to disputes arising between an individual and the State and giving horizontal direct effect to Article 21 TFEU could damage legal certainty.[11] 

Regardless, the Court in TopFit was not dissuaded and decided to allow Mr. Biffi to rely on Articles 18 and 21 TFEU against the DLV, a private entity. It explains that the fundamental objectives of the European Union “would be compromised if the abolition of barriers of national origin could be neutralised by obstacles” emanating from private entities.[12] The Court then goes on to elaborate that this principle applies “where a group or organisation exercises a certain power over individuals and is in a position to impose on them conditions which adversely affect the exercise of the fundamental freedoms.”[13] Such an interpretation of the horizontal direct effect of Article 21 TFEU is in line with the ‘relatively’ limited horizontal direct effect already described by De Mol for Article 18 TFEU that “concerns private relations in which one party is weaker than the other party.”[14] Thus, in order for one to invoke Article 21 TFEU horizontally, it is necessary to scrutinize the nature of the relationship and power (im)balance between the parties. The more asymmetrical the relationship, the more likely Article 21 TFEU may be relied on horizontally. On the whole, TopFit confirms that not only may Article 21 TFEU have horizontal direct effect but that perhaps this horizontal effect is not completely unlimited, although it is questionable what the practical consequences of this distinction actually entails.

In the sporting context, however, the message is clear: non-economic sporting activity, such as amateur level sports with zero economic benefits derived from it, falls under the scope of EU law and Article 21 TFEU may be invoked by EU citizens against the private associations which are more often than not ruling sports at a local, regional and national level in the Member States. In short, all (economic and non-economic) sports activity is now subjected to the control of EU law (in particular with regard to anti-discrimination).


4.     Justifications and Proportionality of Access Restrictions to National Competitions

After having found that Mr. Biffi may rely on his European citizenship rights against the DLV, the Court quite readily finds that there has been a restriction to this right. It asserts that the DLV’s rules could result in non-German athletes receiving less investment from their clubs since they may not participate in the national championships in the same manner as German athletes. Consequently, “athletes of other Member States would be less able to integrate themselves” in their club and the wider society of the Member State, and the effects of this “are likely to make amateur sport less attractive for EU citizens.”[15] However, a restriction on a fundamental freedom may be justified if it pursues a legitimate objective and meets the proportionality requirements. The Court goes on to entertain several justifications put forward by the DLV and firmly rejects each as an illegitimate objective. These rejected justifications include: “the argument that the public expects that the national champion of a country will have the nationality of that country”; that the national champion is used to represent his country in the international championship (it was clear that this was not the case for those competing in the senior category); and a “need to adopt the same rules for all age categories” (since it was obvious the DLV had adopted different rules in regards to national selection depending on the age category).[16] In the end, the Court only accepts one justification concerning preventing the participation of non-nationals in the final heat specifically due to the nature of eliminatory heats in some sports. It recognizes that the participation of a non-national may prevent a national from “winning the championship and of hindering the designation of the best nationals.”[17]

Having found a legitimate justification, the Court moves on to considerations of proportionality and reasons that “non-admission of non-nationals to the final must no go beyond what is necessary”, and it recalls the fact that the exclusion of non-nationals is only recent.[18] In other words, the Court essentially finds it rather strange that a sudden rule change became necessary to prevent the participation of non-nationals in the finals and, in light of this, finds the means to be unnecessary and generally disproportionate to the aim sought.

Next, it also recalls that participation of non-nationals was also subject to the authorization of the organizers and had resulted in Mr. Biffi’s complete exclusion in one competition. The Court explains that such an authorization scheme must “be based on objective and non-discriminatory criteria which are known in advance” to be justified. In regard to proportionality, it finds that “total non-admission” of a non-national athlete to the national championship in this circumstance to be disproportionate because due to the DLV’s own admission, there were ways for athletes to compete in the competition, either in the preliminary heats and/or outside classification. None of the DLV’s justifications were able to survive the proportionality requirements.

However, this does not mean that there could never be a legitimate justification that can meet the proportionality requirements. Interestingly, before it examined any of the DLV’s submitted justifications, the Court essentially gave a hint to sport governing bodies wishing to introduce nationality restrictions to the organization of their national competitions. It states that it is legitimate to limit the award of the national title to a national of the relevant Member State because the nationality requirement is an essential feature of holding the title.[19] Thus, it seems the Court would readily accept a restriction to the ability of non-national athletes to actually win the title.


5.     Conclusion

The CJEU took full advantage of the case before it by demonstrating how a lack of an economic interest does not give sport governing bodies full reign to prevent amateur athletes seeking to further integrate themselves in their host Member State’s society through amateur sport. It also signals the Court’s willingness to observe and take into consideration the specific characteristics of the sport and competition structure in question. Additionally, TopFit has opened exciting new judicial avenues for the exercise and enforcement of European citizenship rights against powerful private entities. In particular, sport governing bodies should pay close attention to the TopFit ruling because it further illustrates how they may exercise their regulatory autonomy provided they follow the analytical framework imposed by the CJEU in its control of discriminatory restrictions to market freedoms and European citizenship rights.


[1] Case 36-74 B.N.O. Walrave and L.J.N. Koch v Association Union cycliste internationale, Koninklijke Nederlandsche Wielren Unie and Federación Española Ciclismo [1974] ECR 1974 –01405 para 4.

[2] Joined Cases C-51/96 and C-191/97 Christelle Deliège v Ligue francophone de judo et disciplines associées ASBL, Ligue belge de judo ASBL, Union européenne de judo [2000] ECR I-02549 para 51.

[3] See Section III, Ferdinand Wollenschlager, ‘A New Fundamental Freedom beyond Market Integration: Union Citizenship and its Dynamics for Shifting the Economic Paradigm of European Integration’ [2011] European Law Journal 1.

[4] Case C-413/99 Baumbast and R v Secretary of State for the Home Department [2002] ECR I-08091 para 81 and 83.

[5] Case C-22/18 TopFit e.V. Daniele Biffi v Deutscher Leichtathletikverband e.V. [2019] ECLI:EU:C:2019:497 para 31-32.

[6] ibid para 33-34.

[7] ibid para 34.

[8] ibid para 35.

[9] Case C-438-05 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP and OÜ Viking Line Eesti [2007] ECR I-10779 para 66; see also Paul Craig and Gráinne de Búrca, EU Law: Text, Cases, and Materials (6th edn, OUP 2015) 192.

[10] Case C-22/18 TopFit e.V. Daniele Biffi v Deutscher Leichtathletikverband e.V. [2019] ECLI:EU:C:2019:181, Opinion of AG Tanchev, para 56 and 100.

[11] ibid para 101 and 103.

[12] TopFit (n 5) para 38.

[13] ibid para 39.

[14] Mirjam de Mol, ‘The Novel Approach of the CJEU on the Horizontal Direct Effect of the EU Principle of Non-Discrimination: (Unbridled) Expansionism of EU law?’ [2011] Maastricht Journal of European and Comparative Law 109.

[15] TopFit (n 5) para 46-47.

[16] ibid para 54 and 56-57.

[17] ibid para 61.

[18] ibid para 62

[19] ibid para 50.

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