In the last five years, the Striani case has been the main sword of Damocles hanging over UEFA’s Financial Fair Play Regulations. At the very least, the only real judicial threat they have faced (apart from the relatively harmless challenge mounted in the Galatasaray case at the CAS). Indeed, a Belgian player agent, Daniele Striani, represented by Bosman’s former lawyer Jean-Louis Dupont, attempted, in various fora, to challenge the compatibility of UEFA’s CL&FFP Regulations with EU law. Striani lodged a complaint with the European Commission (which was quickly rejected in October 2014) and initiated a private action for damages before the Brussels Court of First Instance. The latter deemed itself not competent to decide on the matter, but nevertheless accepted to order a provisory stay of the enforcement of the UEFA FFP Regulations pending a preliminary reference to the Court of Justice of the EU (see Ben van Rompuy’s blog on the case here). The CJEU unsurprisingly rejected to enter into the matter, but UEFA and Striani decided to appeal the first instance ruling to the Court of Appeal, which rendered its decision on 11 April. It is unclear at this stage whether Striani will attempt to challenge it at the Belgian Cour de Cassation (Highest Civil Court), however this would entail considerable risks and costs and his lawyers to date have not indicated that they would do so (see here). 

While the ruling of the Court of Appeal does not touch upon the much-discussed question of the compatibility of UEFA’s FFP Regulations with EU law (see our many blogs on the question here, here and here), it remains an interesting decision to discuss broader questions related to the procedural ease in challenging regulatory decisions passed by sports governing bodies (SGBs) based in Switzerland. Competition law constitutes the main legal tool available to sports stakeholders looking to challenge existing regulatory arrangements from the outside (e.g. not going through the internal political systems of the SGBs or the CAS route). Recent cases, such as the ISU decision of the European Commission, the Pechstein case in front of the German courts or the Rule 40 decision of the German competition authority, have demonstrated the potency of competition law to question the legality of the rules and decisions of the SGBs.[1] In this regard, the decision of the Brussels Court of Appeal narrows the range of parties allowed to challenge in European courts the SGBs’ rules and decisions on the basis of competition law.

I.               A Strict Interpretation of Article 5(3) of the Lugano Convention 

Striani, supported by a number of fans based in France and the UK (presumably PSG and Manchester City supporters), was challenging the UEFA FFP rules for their indirect effects. In short, the core claim was that the FFP Regulations, by curtailing the ability of clubs to invest on the transfer market, had the effect of depriving Striani from the chance to earn more money for his services as an intermediary and the fans from a chance to see better players join their favorite team and therefore improve the quality of the team’s performance. Undoubtedly, these effects were not primary objectives of the FFP rules, which were aimed at constraining the ability of clubs to invest at a loss. Moreover, the rules were only constraining clubs qualified to the European competitions. The question from the point of view of private international law, was whether Striani and the fans could rely on Article 5(3) Lugano Convention to sue UEFA in front of the the Belgian courts.[2]

The Court of Appeal acknowledged that in this case it was dealing with an action in liability for a breach of competition law but sided with UEFA in considering that the hypothetical damage suffered by the claimants in Belgium was too indirect for it to be competent. It came to this conclusion after a journey through well-known European private international law judgments, such as Mines de Potasse d’Alsace, Dumez France or Shevill, and other less known (mainly French and Belgian) judgments in cases involving Swiss-based SGBs.[3] In the present case, it noted that « the challenged UEFA Regulation does not prohibit M. Striani and MAD Management […] from exercising the activity of an intermediary in Belgium or abroad, nor does it regulate the conditions in which this activity is to be exercised ».[4] Moreover, the targeted provisions « do not prohibit the relevant clubs from having recourse to agents […] nor do they limit this activity ».[5] In fact, the prejudice alleged by Striani and MAD Management « is only an indirect consequence of the adoption of the challenged UEFA Regulation », as « it is not related directly to the activity of the claimants and does not have direct consequences on this activity in Belgium or abroad ».[6] Thus, the Court decided that jurisdictions of the seat of UEFA (the Swiss courts) are sole competent to hear the matter.

This conclusion is not surprising. It was also the one reached by the first instance court, which however still decided quite surprisingly to send a preliminary reference to the CJEU and to order a stay in the enforcement of the UEFA FFP Regulations (the latter move was condemned by the Court of Appeal). Yet, it carries implications in the context of transnational sports regulation. Indeed, this is a domain in which the consumers (e.g. fans) are heavily impacted by decisions taken by international SGBs located mainly in Switzerland. The regulatory decisions of these bodies have undoubtedly structural effects on the way a particular sport is experienced by the fans. Moreover, due to the monopoly positions of the SGBs over their sports, these decisions are rarely challenged by competitors (such as the International Swimming League). They often bind the fans and determine the quality of the competitions they are watching and are doing so without providing them any type of say in the regulatory process. Sure, fans (or agents) will still be able to sue the SGBs in Swiss courts, but those have proven extremely ‘benevolent’ vis-à-vis the SGBs and are unlikely to apply EU competition law. In short, the Belgium court has consolidated the exclusion of actors indirectly affected by the decisions of the SGBs from European courts. What happens in Switzerland stays in Switzerland…

II.              The irresponsibility of the URBSFA for UEFA’s decisions

The second strategy used by Striani’s lawyers to anchor the dispute in Belgium was their attempt to involve the Belgium football federation, URBSFA, in the case. Indeed, as the URBSFA is seated in Belgium, there is no issue with regard to the competence of the Belgium courts in its regard. However, here the problem arises in connection to the URBSFA’s causal contribution to the adoption and enforcement of the challenged UEFA FFP Regulations. Indeed, the court held that « the fact that URBSFA is a member of UEFA does not turn it into a co-author of the regulations; the reasoning of the claimants ignores the separate legal personality of UEFA ».[7] The claimants were also alleging that the URBSFA was contributing to the enforcement of the FIFA rules, yet the court finds that they are « confusing the licensing role conferred to the national federations […] with the specific rules regarding the financial balance of clubs enshrined in Articles 57 to 63 of the attacked regulations ».[8] In fact, the « federal regulations of the URBSFA do not impose any constraints, or sanctions, with regard to the challenged break-even rules; these are of the sole competence of UEFA. »[9] Hence, the court concludes that no particular wrongful conduct can be attributed to the URBSFA linked to the harm alleged by the claimants.

By doing so, the Court of Appeal holds onto the formalist idea of the separate corporate personalities and brushes over the fact that national federations are at least politically co-responsible for the policies adopted, e.g. they hold the voting power inside the international federations. In this context, invoking the corporate veil might let national federations too easily off the hook, even though it is certainly true that a single national federation does not have a decisive voting power or influence inside an international SGB. Here, there is an interesting parallel with the functioning of the European Union itself, as it seems that decisions taken by UEFA (not unlike the EU’s) are not politically (or in this case legally) attributable to the individual member associations (the famous blame Brussels culture). The idea of a joint action between national and international federations leading to the exercise of collective power might be more suitable to capture the transnational regulatory dynamics at play in sports and could lead to some form of joint liability. In any event, this part of the decision highlights another difficulty in anchoring a case outside of Switzerland, as national federations will often be deemed an inadequate defendant due to their relatively passive role in the adoption and enforcement of the regulations of the international SGBs.

Conclusion

Striani’s crusade against UEFA’s FFP Regulations came to a strange end. While legal scholars and practitioners have been discussing at length whether FFP can be deemed compatible with EU law or not (I’ve spoken in favor of compatibility under certain circumstances, but many others have disputed it), the much-awaited ruling did not even touch upon this question. Indeed, the Brussels Court of Appeal simply denied its competence to hear the matter and sentenced the claimants to pay quite high legal fees to UEFA. By doing so, it did not simply put an end to a case that felt quite artificial and which might have been a pawn in a wider game between UEFA and some powerful clubs, it also closed the door on a variety of stakeholders willing to challenge the rules and decisions of SGBs outside of Switzerland. Indeed, if this interpretation of the Lugano Convention were to stand, it would for example exclude fans from being able to launch liability claims, on their home judicial turf, against international SGBs for the damage inflicted to their clubs.

Besides those directly impacted, in the case of FFP primarily the clubs (would the players be sufficiently directly affected? Maybe, maybe not), those that wish to challenge the rules and decisions of the SGBs are condemned to turn to the Swiss courts, which are rather well-known for their deference to the wide regulatory autonomy of international SGBs. In short, what happens in Switzerland (e.g. the adoption and enforcement of the SGBs’ regulations) is to stay judicially in Switzerland. This will be a reassuring news for the network of Swiss private associations that rule over international sports as it will reduce the risk of facing civil litigation outside of their well-chartered home turf. In fact, it is extremely rare for those directly affected (e.g. the clubs and athletes) to be ready to go to court to challenge them. As evidenced by the case of Bosman or Pechstein, the short-term costs in doing so are disproportionately high (boycott and career-end for the former, bankruptcy for the latter) while the chances of success remain quite limited. Similarly, a football club is unlikely to take the risk of going against UEFA or FIFA, unless it has nothing left to lose (e.g. like SV Wilhelmshaven). In sum, even if I believe UEFA’s FFP rules could be allowed to stand under EU law, this ruling sheltered UEFA from having to deal with this question, at least for the time being.

[1] In general, see B. Van Rompuy, The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations, Maastricht Journal of European and Comparative Law (2015), vol. 22, nr. 2

[2] Article 5(3) Lugano Convention provides that: A person domiciled in a State bound by this Convention may, in another State bound by this Convention, be sued in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur.

[3] See the judgments cited in Cour d’appel Bruxelles, UEFA c. Striani & co, 11 avril 2019, 2015/AR/1282, paras 40 & 41.

[4] « En effet, le Règlement UEFA critiqué n'interdit pas à M. Striani et à MAD Management, qui se présentent comme agent de joueurs de football en Belgique (le premier comme personne physique et la seconde étant la société à travers laquelle le premier exerce son activité), d'exercer cette activité d'agent, en Belgique ou à l'étranger ni ne règle les conditions d'exercice de cette activité. » Ibid, para. 42.

[5] « Par ailleurs, ces dispositions ne font nullement interdiction aux clubs concernés de recourir aux services d'agents, tels les demandeurs originaires, ni ne limitent cette activité. Ibid.

[6] « ll découle de ce qui précède que, sans préjuger de la matérialité du dommage invoqué par M.Striani et MAD Management, ce dommage, à le supposer établi, n'est qu'une suite indirecte du l'adoption du Règlement UEFA querellé. Le Règlement querellé ne concerne pas directement l'activité des demandeurs originaires et n'a pas de conséquence directe sur cette activité, en Belgique ou ailleurs. » Ibid.

[7] « L’URBSFA n'est pas l'auteur des règles d'équilibre financier prévues au Règlement UEFA. Le seul fait que I'URBSFA soit membre de l'UEFA ne la rend pas co-auteur du Règlement; le raisonnement des intimés fait fi de la personnalité juridique distincte de l'UEFA. » Ibid, para. 48.

[8] « Ce faisant, les intimés entretiennent la confusion entre le rôle dévolu aux fédérations nationales pour l'octroi des licences, non critiqué en tant que tel, et les règles particulières concernant l'équilibre financier, prévues aux articles 57 à 63 du Règlement querellé. » Ibid.

[9] « Le Règlement fédéral de l'URBSFA ne comporte dès lors pas d'exigence, ni de sanction, concernant les règles d'équilibre financier querellée; celles-ci sont uniquement du ressort de l'UEFA. » Ibid.

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre.

The result of the Brexit referendum on 23 June 2016 took the European Union (almost) by surprise. A lot has been said and written about the impact of the United Kingdom leaving the EU. As in all other areas, the British sport sector will also face the effects of the modification of the relationship between the EU and its (probable) former Member State, the UK. It is nearly impossible to foresee all consequences as the UK has not even triggered article 50 TFEU yet to officially start the exit negotiations. However, as the UK position toward the EU will change in any case, this two-part blog aims to examine the main practical implications of such an exit for the UK, but also for the EU, in relation to the actual application of EU law in sport and the EU sport policy.

Unless stated otherwise, the use of the terms Brexit in this blog should be understood as a complete exit of the UK from the European Union. This blog focus in particular on this worst case scenario and its consequences for UK sport. However, it is highly improbable that the future Brexit negotiations with the EU will end up without some kind of special agreement between the two parties the first of which being an EEA type of agreement with full access to the internal market and applicability of EU law. 

The first part of this blog will examined the consequences for UK sport in terms of access to the EU internal market and the applicability of free movement principles. The second part is focused on specific impacts with regard of others domain of EU law for professional and grassroots UK sport. 

Part 1. EU free movement and the internal market

The EU internal market and its free movement of people declination was at the centre of the Brexit referendum. The potential consequences for the Premier League and professional footballers have been commented upon thoroughly elsewhere. Yet, Brexit’s impact is not restricted to British sport’s leading product, such as the Premier League, nor solely the freedom of movement provisions.

The controversy: free movement of sportspeople

The right to free movement is one of the fundamental freedoms guaranteed by the EU to its citizens and it is at the core of EU treaties. It means that any direct or indirect discrimination based on nationality is prohibited (article 18 TFEU), leaving EU citizens free to exercise their right to move freely and reside within the territories of the 28 EU Members States (article 21 TFEU). These rights apply to both professional and amateur sportspeople, and Brexit will have consequences for them whether they are British citizens or from other Members States.

First, in relation to professional and semi-professional sportspeople, when looking for example at consequences of Brexit on the Premier League, it is the principle of free movement of workers (article 45 TFEU) that is at stake. It should be noted that Brexit will impact not only footballers but also all professional athletes that are considered as “workers” within the meaning of the Treaty. In this context, “workers” means those who are gainfully employed (as stated in 1976 by the European Court of Justice - ECJ - in the Donà and Mantero case, 13/76). These athletes might be rugby or basketball players in a professional clubs or cyclists in a team to give a few examples. Also, other individuals associated with sportspeople may rely on the provisions of free movement of workers, such as doctors, physiotherapists, stable staff, coaches or administrative staff. 

Free movement also currently applies to professional and semi-professional sportspeople that are not “workers”. Freedoms of establishment (article 49 TFEU) and provision of services (article 56 TFEU) apply to athletes that are self-employed (for example tennis players, sailors or horse riders) or to instructors, coaches, or physical trainers. Sports agents may also rely on both freedoms if they are established in another of the EU’s Members States and/or if they are providing their services during a player transfer for example. To illustrate these provisions with genuine practical cases, you may want to think of a UK tennis player that has established himself in France for training purposes for a long period, or of Italian professional horse rider coming to the UK to provide a couple of hours of training for a master class. These situations are much more common than one believes and Brexit might have an important impact on significant number of people working in the sport sector.

At the time of writing it is impossible to know (or even guess) how events will unfold or what the future position of the UK toward the EU will be after Brexit negotiations. The impact will have to be assessed depending on whether and, if so, how the UK will have access to the internal market. A few UK sports officials have raised their voices to recall, for example, the strong position of British football in Europe and asked for exception regimes for their players. Without intending to sound pessimistic, EU officials have already made it very clear that the UK may not pick and choose how they access the internal market and it is difficult to see how a “sport exemption” regarding free movement of athletes may be granted against any other sectors. A solution might be to implement national UK legislation giving free access to professional players to the UK labour market. A problem will however remain regarding free access to the EU market for UK players as, in that case, there is no obligation for the EU to grant reciprocity. If the professional and semi-professional sport sector in the UK (and in the EU as well for UK players) wishes to still be able to recruit athletes that are EU citizens after the exit as easily as it was before Brexit, it should advocate for an EEA agreement (“EEA type” - which seems inconsistent with the intended aims of the referendum as, in this situation, the UK would retain its access to the internal market but would give up its voting rights). 

In the worst case scenario of a complete exit from the EU, is there any good news for UK sport? British sports federations will be able to implement rules entailing direct discrimination, including introducing quotas of players based on nationality or favouring their own athletes which is, for now, completely forbidden under EU law. On the other hand, the return of visas and work permits between the UK and the EU might lessen the level of competition in national championships as it will hinder exchanges of athletes on both sides. It is quite unsure that this is the best option for British sport. Moreover, one should remember that non-discrimination is also granted to sportspeople coming from non-EU countries under the terms of agreements between the EU and third countries (Igor Simutenkov C-265/03). For example, under the terms of the Cotonou Agreements, it is impossible to impose nationality based quotas for sportsmen from Africa, the Caribbean and the Pacific Group of States provided the player entered the territory of one of the Member States legally, which is a strict condition. This principle implies that a player coming from one of the countries covered by that agreement is not considered as a “foreign” player if quotas for such players are in force in that sport (this is the case for Rugby Union for example). It also means that the UK not only has to renegotiate its relationship with the EU but with all other non-EU countries that are, for now, covered by these association or partnership agreements. British sport will need to be cautious about it.

It should also be noted that Brexit will lead to the end of the mutual recognition of professional qualifications (see directive 2005/36). This principle applies in the sport sector as well whenever the possession of a diploma is legally required; Member States cannot refuse to permit EU citizens from other Member States to participate in a profession if they hold a recognised qualification from their country for working in that profession unless there are substantial differences in the level of qualification or duration of training. This applies to coaches (i.e. ski instructors) or doctors in the sport sector for example. Another very specific example is the European professional card (directive 2013/55/EU, applicable from 18 January 2016) that has been implemented for mountain guides (and physiotherapists) and allows for a simple and rapid recognition of professional qualifications. Consequences might be less important where an international sports governing body sets up its own set of qualifications (think about the UEFA Pro Licence for football coaches).

Free movement provisions likewise apply to amateur athletes. Based on a combined reading of articles 18, 21 and 165 TFEU, EU citizens who participate in an amateur sporting activity by using their right to free movement should not be discriminated on grounds of nationality. It is, once more, nearly impossible to currently illustrate the impact of Brexit with tangible facts but it means that free movement of EU citizens who are amateur athletes will be affected while coming to or from the UK for competition or training purposes. Furthermore, in terms of injuries or accidents while training or competing, it should be recalled that Brexit may affect the European health insurance system. This system gives every EU citizens access to state-provided healthcare during a stay in any of the EU countries under the same conditions as people insured in that country.

Finally, it should be mentioned that Brexit may impact upon the sport sector as it has links to EU citizenship. A complete Brexit will entail that sports supporters cannot travel as freely between the UK and the EU as they used to. Again, a return to a strict visa policy seems unlikely but giving up EU citizenship will have consequences on border and passport controls and on the organisation of sport events in the UK. The UK and the EU will also no longer be entitled to the cooperation organised against violence and hooliganism within the EU (Council Decision 2002/348/JHA, security at international football matches), or, at least, not in the same terms.

The underlying problem: free movement of goods

Free movement of goods is an essential element of the single market (articles 30, 34 and 35 TFEU) and it provides for the prohibition of measures that restrict trade between Member States, including not only customs duties and quantitative restrictions on imports and exports but all equivalent measures. Sports clothing and materials are covered by these provisions. We shall probably enter a period of uncertainty but the future of trade relations between the UK and the EU will be at the top of the agenda as soon as the negotiations start. Also, in order to facilitate free movement, European standards for sporting purposes goods have been set up by the European Committee for Standardization – n°136 - (full list of standards here). This probably exposes the EU to the bureaucratic suspicion but these harmonisations are necessary to facilitate trade between the EU and to ensure a common level of consumer safety. UK/EU negotiations on Brexit will surely and primarily focus on trade agreements which hopefully will lower the risk of a return to full quotas and tariffs obligations. Nonetheless, trade between the UK and the EU will suffer as much in the sport sector as for other sectors and, again, an EEA type agreement would be welcome for both parties. 

One specific category of goods is important for the sport sector, namely the circulation of civil firearms. EU sport shooters have access to a European firearms pass under directive 91/477/EEC on the control of the acquisition and possession of weapons. This means that they can cross EU internal market borders without prior authorisation in order to attend competitions and trainings. Brexit will withdraw the possibility of obtaining that pass which may result in more red tape for sportspeople at the borders.

Finally, free movement also concerns horses which under EU law are qualified of “goods intended for sporting purposes”. This term is used to refer to the set of directives regulating the movement of and trade in equidae at the EU level. Three different directives are in force and may be impacted by Brexit. In turn, this will have severe consequences for the UK as the horse sector, whether for competition or horseracing, is really strong. Identification requirements – name, genealogy and victories – are established by EU law (directive 90/427/EEC and regulation 504/2008/EC) under strict animal health conditions and “regional” quarantine principles in case of disease (directive 2009/156/EEC). Trade of horses and participation in competitions within the EU is subject to non-discrimination and equal treatment principles between horses without distinction based on the Member States of origin (directive 90/428/EEC). This principle applies to the rules of competition, the judging and the prizes awarded for that competition. Some exceptions regarding specific stud-book, regional or traditional competition are possible. Finally, it should also be noted that a European Community code relating to veterinary medicinal products exists to implement the free movement of veterinary products and to prevent animal doping. Re-entry of registered horses for racing, competition and cultural events after temporary export to non-EU countries is also regulated (directive 93/195/EEC). The UK horse sector will have to change its habits (see, for example the reaction of British horseracing authority to the Brexit vote) after Brexit and the movement of horses with the EU will be more difficult as a consequence. However, as a former EU Member State, the UK will certainly negotiate a favourable agreement with the EU even though obligations concerning the arrival from and return to their home countries outside the EU of sport horses is already regulated. Additionally, it will be possible to negotiate bilateral agreements.[1]

The impact of Brexit regarding the rules of the internal market is important and goes further than just football and the Premier League. The push for a trade agreement with access to the EU internal market here has a special importance for UK sport as for the EU. Otherwise, a complete Brexit will surely end up in a difficult step backward alongside a complete reorganisation of national rules.  

[1] Such an agreement – Tripartite Agreement (TPA) – already exists between France, the United Kingdom and Ireland.

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre. 

Part 2. EU competition law and sports funding

The first analysed impact of Brexit on sport was the one regarding EU internal market rules and free movement. However, all sport areas that are of interest to the European Union will be impacted by the result of the future Brexit negotiations. This second part of the blog will focus on EU competition law and the media sector as well as direct funding opportunities keeping in mind that if the UK reaches for an EEA type agreement competition law and state aid rules will remain applicable as much as the funding programs.  

A) EU competition law and the media sector

As for the internal market rules, EU competition law applies to sport as long as an economic activity appears to have an impact on the European market. In the field of sport this is particularly true for the media sector, a key source of economic revenue for professional sport. 

EU competition law

It should be stated from the beginning that the UK, even completely outside of the EU, will not escape EU competition law (articles 101 and 102 TFEU). Indeed, if there is an economic activity within the European market EU law will continue to apply. The application of EU competition law leads to a convergence with national competition rules and most of the decisions relating to sport will probably remain enforceable through UK national law provisions unless there is an important change in their interpretation or a complete shift in competition law policy leading to a change of these rules. 

The main impact for the UK regarding the applicability of EU competition law appears to be in the media sector. With regard to the collective selling of media rights, for the time being national provisions should maintain the system in force which is derived from the Commission’s decisional practice (Football Association Premier League for a British example). Collective selling of media rights is compatible with EU competition law if the selling procedure is organised in a transparent and non-discriminatory manner, the contractual exclusivity runs for no more than three years and the rights are sold in several packages. The “no-single buyer” clause that was first imposed upon the Premier League to avoid the risk of monopolisation given the specific structure of the British sport media market (and now also applied by the German competition authority for the Bundesliga rights) might be questioned. This clause, providing that all the rights should not be sold to a single broadcaster, combined with the possibilities offered by EU free movement and impressive marketing skills from the Football Association, has made the Premier League the most valuable football competition in the world (6.9 billion euros for 2016-2019). It is highly probable that the UK national competition authority will keep that clause and the obligations for all sport media rights unless there is a major shift in national competition law policy. Remaining or leaving, in any case EU competition law will have left an important imprint on the British sport media rights landscape.

Other media related questions

In relation to media rights, two more points are interesting. Firstly, the question concerning multi-territory licensing of media rights in sport may arise. Sport rights are sold on a territorial basis. One of the many reasons for it are linguistic borders. However, the ECJ concluded that territorial exclusivity agreements relating to the transmission (using satellite decoders from broadcast providers based on another Member State) of football matches were a breach of competition law and the free movement of provision of services (Football Association Premier League v QC Leisure and Karen Murphy v. Media Protection Services Limited, joined cases C-403/08 and C-429/08). This important judgement caused great despair among sport organisers but it gave the opportunity to consumers to access a broader list of sport media providers around the EU. Depending on the position of the UK towards the EU, this possibility may vanish in the future. This judgment is also important for EU protection of property rights. The Court held that sport events cannot be considered intellectual creations, and, as such, cannot be protected by copyright. However, a clear distinction was made between private residence watching and public screening. The latter could amount to copyright infringement if some part of the event can be considered as unique and original and are duly protected (i.e. songs, slow motion extracts, etc.). In that case, it is for the Members States to regulate such a protection, but the EU is also developing a specific protection at the European level. Sport rights holders are exposed to financial damages due to breach of intellectual property rights with high economic value. This is the case for media rights but also for sport merchandising. The enforcement of those rights is conjointly overlooked by the Commission for harmonization of national legislations as well as the European Union Intellectual property Office (EUIPO) and Europol. In a situation where cross-border piracy and counterfeiting is difficult to tackle alone, the UK might consider to secure some kind of cooperation with the EU on that matter.

Secondly, also concerning the sports media industry, albeit with less ties to competition law provisions, the Audiovisual Media Services Directive (better known as the “Television Without Frontiers directive”) might not be applied to the UK in the future or at least as it stands at the moment. This directive regulates cross-border television broadcasting and allows EU Member States to establish a list of sport events of major importance for society that are offered on subscription-free TV channels (article 14 of the directive). The protected events list is then transmitted to the Commission in order to check its compliance with EU law and published in the EU Official Journal. Members States are entitled to create such a list but may choose not to. The UK is amongst the Members States that choose to set up such a list. Consequently, the 1996 Broadcasting Act lists those events for the UK (for example the Olympic Games, the Wimbledon Tennis Finals, the FA Cup Final, or the FIFA World Cup Finals Tournament). The national law relies on the directive which means that after Brexit, if the UK wants to keep with that requirement it should integrate the list into its national law. In a country where the subscriptions for premium sports pay television are the most expensive in Europe, it is quite doubtful whether this is good news for the British consumer and that might be an incentive to maintain a similar system. The directive also provides for a system of mutual recognition meaning that a provider of an audiovisual media services is subject to the law of its country of origin. Another Member State cannot impose other requirements than the one provided for by the directive. This principle, in case of Brexit, will surely disappear which is a potential problem for sports broadcasters seated in the UK and engaged in cross-border activities.  

EU State aid policy

Public funding and financial support is often used in sport and is a highly sensitive issue. Infrastructure and individual sport clubs are the main beneficiaries of public funds, which can make them subject to EU State aid provisions (article 107 TFEU). The Commission has closely monitored the application of State aid law in the field of sport, drawing a big line between professional and grassroots sports subsidies. Financial support to professional clubs is sometimes found incompatible with EU law as it distorts competition. An exception to this is where the objectives pursued are non-economic (subsidies for young training centres have been considered compatible as the main goal is to meet education obligations). Subsidies to amateur clubs are less likely to constitute State aid as they are not pursuing an economic activity. For sport infrastructures, only the ones pursuing economic activities and in competition at the European level are likely to be subject to State aid rules. A consequence of a complete Brexit might end the application of EU State aid rules in the UK. Anyway, given the expected negative economic consequences related to Brexit, it is rather unlikely that British public authorities will have the financial capacity to intensively fund professional clubs and sports infrastructures even if it they would have the freedom to do so. 

B) The money: securing sports funding

Finally, since the entry into force of the Lisbon Treaty, the EU developed a more proactive policy in sport via funding opportunities. These are also going to be impacted by Brexit and adverse consequences will specifically target amateur sport.  

EU funding for sport

The introduction of article 165 TFEU allowed the EU to create a specific funding programme for sport. Before that, sport related projects were indirectly funded through other EU programmes. The 2014-2020 Erasmus + Sport programme provides grants for a broad range of actions and activities in the field of sport. The aim of the programme is to promote the positive values of sport and physical activity and good governance in the sector as well as support dual careers of athletes and projects against match-fixing, doping, violence, racism and intolerance. These funds are directly targeted to grassroots sports through collaborative partnerships, not-for-profit European sport events, dialogue with European sport stakeholders as well as studies and conferences. British sport and sport-related organisations as well as public authorities can benefit from funding. However, these possibilities may disappear following Brexit. Erasmus + Sport is a European programme and, as such, helps to finance projects contributing to the development of a European dimension of sport. Consequently, it is difficult to give an exact number of projects financed through the programme in the UK. However, to give an illustration, in 2015, just for Erasmus + Sport projects for which a UK sport organisations was the lead coordinator, the EU funding amounted up to 1.1 million euros. It should be kept in mind that other British organizations are simple partners to many other projects and are entitled to be funded as well (the 2015 budget for the Erasmus + Sports programme was 18,8 million euros). Will the UK be entitled to keep some funding? If it secures an EEA type agreement, Erasmus + Sport will still apply but the UK will have to financially contribute to it. 

The financial participation from the EU in UK sports is also possible through other EU programmes. It is worth mentioning the European Structural and Investment funds which promotes the socio-economic development of European regions (10.7 billion euros were awarded to the UK for 2014-2020). The EU also provides funding for sport related studies to which several UK-based academics and think tanks have already participated. One should not forget that the EU is also actively supporting academic and PhD research through several programmes (the main one being Horizon 2020) and that in case of Brexit it will have a negative impact on the UK’s capacity to produce academic output on sport (think about anti-doping, sports law and governance, economics studies, etc…). 

Gambling and sport betting

The British market for gambling and sports betting generated 12.6 billion pounds last year. It is one of the biggest markets in Europe and British betting operators seized the opportunities offered by the EU’s freedom to provide services to develop their activities in other EU Members States as the EU pushed for the opening of gambling and online betting to competition. As a consequence of Brexit, Gibraltar-based online betting firms (let’s face it, due to a favourable taxation system) might lose their access to the European market. The Gibraltar betting and gambling authority tried to put on a brave face in the aftermath of the Brexit vote but, in the case of Brexit, the best solution for the operators will be to leave Gibraltar for an EU Member State and secure its access to the European market (for example Malta, a very popular host for betting operators).

The economic impact for the gambling sector is sure to be important, but it is just as important for the sport sector as part of the betting industry’s revenue constitutes an important source of income for sport, and in particular grassroots sport via taxes. Furthermore, betting operators are active in sponsorship for professional club and athletes. If the financial stability of these companies is undermined, it will probably have an impact on both their participation in the financing of sport and their marketing strategy. 

Another problem that might arise for the UK in that area concerns the fight against corruption and match fixing that threatens the integrity of sport and its economic value. The UK cannot handle this problem alone and the EU, given the sector’s inherent cross-border nature, is encouraging cooperation between Members States and sport organisations to tackle the issue. Europol, the EU’s law enforcement agency, provides assistance to EU Member States and sport organisers (collaborating for example with UEFA). Brexit might imply that the UK will leave that organisation, yet it could also maintain a cooperation via operational or/and strategic agreements. In any event, the UK remains a member of Interpol also very active in the fight against match-fixing and illegal gambling. 

Conclusion

Just about everything is going to change between the EU and the UK and it is the same for sport. At this stage, a lot of guesswork is involved in trying to elucidate a picture of the impact of Brexit on sport. Whether with a direct positive action through its funding policy or because of the rules on the internal market and competition having an indirect impact, the EU had an influence on the whole of British sport. This blog tackled the main issues at stake in sport for the EU and the UK before the latter starts its negotiations to formally rescind its membership. But it also should be noted that the EU is an important arena for formal and informal discussion on subject that interest sport in general. For example the EU Work Plan for sport for 2014-2017 sets up EU expert groups to work on topical issues in the field of sport. The European Parliament also hosts a sport-intergroup. By leaving the EU, the UK is also leaving behind an opportunity to deepen its cooperation at the EU level.