Editor’s note: Thomas Terraz is a fourth 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

 On March 05, the T.M.C. Asser Institute hosted ‘Mega-sporting events and human rights: What role can EU sports diplomacy play?’ a Multiplier Sporting Event organized in the framework of a European research project on ‘Promoting a Strategic Approach to EU Sports Diplomacy’. This project funded by the European Commission through its Erasmus+ program aims to help the EU adopt a strategic approach to sports diplomacy and to provide evidence of instances where sport can help amplify EU diplomatic messages and forge better relations with third countries. In particular, Antoine Duval from the Asser Institute is focusing on the role of EU sports diplomacy to strengthen human rights in the context of mega sporting events (MSE) both in Europe and abroad. To this end, he organized the two panels of the day focusing, on the one hand, on the ability of sport governing bodies (SGB) to leverage their diplomatic power to promote human rights, particularly in the context of MSEs and, on the other, on the EU’s role and capacity to strengthened human rights around MSEs. The following report summarizes the main points raised during the discussions.

2.     Context to the Event

Before diving into the panels, the scene was set by a few speakers who described the background and some of the main issues encircling the event. First, Antoine Duval (Asser Institute) kicked the day off by describing the general goal of the project and his role within it. Specifically, Duval strives to explore key questions such as: to what extent are SGB’s diplomatic actors and do they have human rights responsibilities? Also, what is the role of the EU’s sports diplomacy with regard to human rights at MSEs? Can it and should it get involved and if so, what could it do to be most effective?

Having laid the foundation of the event, Richard Parrish (Edge Hill University) described the background to the project ‘Promoting a Strategic Approach to EU Sports Diplomacy’. Parrish explained that while many countries have a clear sports diplomacy strategy, the EU has been rather ‘late’ to the party. He explained that there may be room for a soft power approach to EU sports diplomacy. The project aims to continue the political momentum gained from a 2016 report on EU sports diplomacy and has now held several events across Europe that analyze this subject from different lenses. Parrish concluded by explaining that the EU has started to be more conscious of this issue and has, for example, now included sport in its dialogue with China for the first time.

Simon Rofe (SOAS) then brought some introductory remarks to help frame the discussions that would follow. Rofe started by pointing out how human rights and diplomacy have not exactly gone hand in hand and that many diplomatic instruments are rather silent on human rights, which often has been intentional. Furthermore, there are also issues when trying to identify which and what form of human rights should be promoted, although the UN has played a leading role in this regard. There are also questions regarding what capacity for change there is within SGBs. Rofe also gave the example of how human rights have already been disseminated through sport, such as during apartheid in South Africa. Nevertheless, as SGBs gain greater roles in non-sport matters, their responsibility to respect and further human rights is significantly increased.

3.     The Panels

a.     Panel 1: Leveraging the Diplomatic Power of the Sports Governing Bodies for Human Rights

Now that the stage was set, the first panel took the floor with Antoine Duval acting as chair. Claire Jenkin (University of Hertfordshire) was the first to speak and examined the concept of legacies, especially in terms of children and young people. In other words, how can SGBs help leave positive human rights legacies in the MSEs host nations? Jenkin took the example of the International Inspiration Programme from the London 2012 Olympics, which was the first ever international legacy initiative linked to the Olympics and ran from 2007-2014. Its goal was to reach out to young people and bring sport to the youth beyond the context of the Games. In the end, it helped influence 55 national policies, strategies and legislative amendments. Jenkin highlighted, once more, how defining which human rights values to promote can be challenging. There are also many in a position that can promote human rights through sport but are simply not aware of their position as a ‘sport diplomat’. Hence, creating awareness, defining the appropriate human rights perspective and ensuring that young voices are heard in this process are essential to developing the SGBs’ human rights diplomacies.

Next up was Florian Kirschner (World Players Association/UNI Global Union) who looked at how SGBs have exercised their human rights diplomatic role. Kirschner illustrated how sport has a fundamental role in our society and is naturally connected to several human rights. The sports movement also clings to principles such as fairness, solidarity, equality and inclusion. However, Kirschner argued, SGBs have not always upheld these principles and pointed to several examples, such as widespread corruption, the award of MSEs to countries with questionable human rights records, suppression of free speech and violations of worker’s rights. There have also been instances of ‘sportwashing’, where states use sport events to try to give the impression that they are compliant with human rights, while coming short of their obligations in practice. The World Players Association, NGOs and other trade unions have come together to push SGBs, under the UN framework, to take greater account of human rights. Kirschner closed with the case of Hakeem al-Araibi and highlighted how many actors, including FIFA, were able to use their influence to push for his release.

Lucy Amis (Unicef UK/Institute for Human Rights and Business) then explained to the participants the importance of transferring the policies SGBs have adopted in relation to human rights into actual practice. This means developing strategies that enforce the values SGBs claim to uphold. There are numerous cases where sport has not lived up to these values: including cases where migrant workers are exploited to build MSE sport facilities, cases of child labor, and various instances where fans chant homophobic and racist slurs. Amis highlighted that SGBs must be especially diligent in cases affecting children because they face the highest risk of exploitation. On the other hand, sports diplomacy has helped initiate positive changes in some countries. In Rwanda, sport was used to help rebuild its society amidst significant adversities. There have also been encouraging developments in Qatar. Despite many calls to cancel the World Cup, FIFA’s persistence to hold the World Cup there has helped bring an end to the kafala system. All in all, challenges do remain. For instance, many national SGBs are limited to a very small and amateur staff, which creates greater challenges in creating, implementing and enforcing human rights strategies.

Finally, Guido Battaglia (Centre for Sport and Human Rights) closed the panel and began by giving an overview of the Centre for Sport and Human Rights’ goals and work. Battaglia described how the Centre’s main priority is helping those who are most affected by sports - the athletes, workers, and fans, among others - based on international human rights standards. The Centre promotes and fosters human rights in sport by bringing a wide variety of actors together, including SGBs, local organizing committees, governments, sponsors, broadcasters, international organizations, civil society and trade unions. The aim is to help these groups share best practices, increase their capacities and improve accountability on human rights issues. Battaglia then shared examples of how the Centre has been active in the field. One of these cases concerned Semyon Simonov, a human rights activist in Russia, who had been arrested while interviewing workers building World Cup stadiums in Volgograd. During this time, the Centre held a conference during which Human Rights Watch directly requested FIFA to monitor the situation. This eventually prompted FIFA to attend one of Simonov’s court hearings, acting as a sort of diplomatic pressure and signaling the sports world was watching. Battaglia concluded that pushing human rights through sports diplomacy, while still in its infancy, is gaining momentum and that there is enormous potential to help unite society through sport.

b.     Panel 2: A Human Rights Dimension for the EU’s Sports Diplomacy?

The second panel, chaired by Carmen Perez (Universidad Carlos III de Madrid), then directly confronted the central question of how the EU could develop a human rights-based sports diplomacy. Arnout Geeraert (Utrecht University) launched the panel with a purposively provocative statement that EU sports diplomacy is ridiculous and that fundamentally there should be a deepening rather than a widening of its action in this matter. Since the EU has limited resources to focus on its sports diplomacy, it should work to strengthen its current efforts. Generally, the EU promotes liberal norms such as liberty, anti-discrimination, democracy, human rights and good governance in its actions. In the sports sector, the EU has had the greatest success in steering SGBs through negative integration and soft power measures, and SGB usually comply because they seek to be on good terms with the EU. In the end, Geeraert contends that the EU’s sport diplomacy should be to place more pressure on SGBs through a variety of existing channels, including coordinating EU member state positions in international organizations like the Council of Europe, and forming alliances with non-member states. The EU could then push human rights through these various relationships, which would indirectly compel SGBs to respect human rights.

Agata Dziarnowska (European Commission) took a different view from Geeraert and argued that a widening of the EU’s sport diplomacy should also be a part of the EU’s strategy in this field. Fundamentally, Dziarnowska argued, soft power is the EU’s most effective tool, and when you add the fact that Article 165 TFEU gives the EU the ability to cooperate with third countries on issues related to sport, there is a clear path for the EU to act. When it does so, it should be promoting EU values, including those related to human rights. In this context, the EU has already begun to take action within this strategic framework. For example, promoting the aforementioned values will be part of the new Erasmus programme. Additionally, the Council relatively recently adopted Conclusions related to sports events to ‘enhance integrity, transparency and good governance in major sport events’. These Conclusions specifically addressed business and human rights principles and highlight the importance of the selection process. Dziarnowska closed by underlining that EU action will greatly rely on strong political support, particularly from the Member States.

Alexandre Mestre (Sport and Citizenship) built on Dziarnowska’s contention that there is indeed an avenue for the EU to intervene on human rights. Given the wording of Article 165 TFEU, there are a multitude of areas for EU action. Mestre explained that crucial issues such as fighting against human trafficking, doping, child labor, sexual abuse of athletes, excessive commercial/economic exploitation of athletes are matter that deserve the EU’s attention. Furthermore, recent cases, such as Caster Semenya’s dispute with World Athletics, has shown how the SGBs’ eligibility rules could be another area where the EU could add value, given its previous experience with eligibility. Moreover, the EU has tremendous experience dealing with cases of discrimination and could use this expertise as a basis to promote human rights issues. Like Geeraert, Mestre also sees the EU increasing its cooperation with other entities, such as with the Council of Europe, civil society and third countries hosting MSEs. Mestre, nevertheless, also envisages direct cooperation with SGBs as part of the EU’s sports diplomacy strategy.

Lastly, Christian Salm (European Parliamentary Research Service) gave a historical perspective on the EU’s sports diplomacy, emphasizing the European Parliament’s role. Salm described how the 1970s were truly pivotal in this story, especially since it was the ‘decade of breakthrough’ for human rights. There were two events that placed human rights as a top priority: the World Cup in Argentina in 1978 and the 1980 Moscow Olympics. Concerning the first, the European Parliament’s Political Affairs Committee decided to have a hearing concerning human rights to counter political propaganda from Argentina’s right-wing military regime. While the hearing was blocked by a vote, the socialist group decided to hold its own debate, which created a significant media interest. The hearing generated calls for the release of the opposition leader in Argentina and led to a wider debate concerning sport events, specifically with regards to boycotts. Salm then described how leading up to the 1980 Moscow Olympics the international situation following the Soviet invasion of Afghanistan and the wave of oppression on human rights activists stimulated majority support amongst the European Parliament to boycott the Olympics. While the European Parliament was in many ways limited, it understood its role as a guardian of human rights and was able to generate significant attention to these issues. More recently, in February 2014 the European Parliament also held a public hearing on migrant workers building stadiums. With this perspective, Salm explained, the European Parliament can definitely play a part in developing a human rights dimension to EU sports diplomacy.

4.     Conclusion

After each of the panels, participants were able to ask questions which stimulated many fruitful discussions, such as the importance of including human rights considerations in MSE bidding processes and defining an overall EU diplomatic strategy that would effectively use the EU’s leverage on these questions. On the latter issue, to prevent a fragmented diplomatic approach, the second panel concluded that coordination between all EU actors and informal policy making – such as raising awareness through public hearings and conferences – can help create a cohesive and effective EU sports diplomacy scheme. In any event, from all the discussions, it is evident that human rights will need to play a greater role in any EU sports diplomacy strategy given the inherent human rights concerns that MSEs carry.

On behalf of the organizers, we would like to thank all the speakers and participants for ensuring a remarkably productive and rich event in difficult times. We look forward to seeing you at the Institute again soon!

Editor's note: Rhys was an intern at the T.M.C. Asser Institute. He now advises on investments and Notre acquisitions in sport (mainly football) via Lovelle Street Advisory. Following a career as a professional athlete, Rhys has spent much of his professional life as an international sports agent, predominantly operating in football. Rhys has a Bachelor of Laws (LL.B) and a Bachelor of Philosophy (B.Phil.) from the University of Dame, Sydney, Australia. He is currently completing an LL.M at the University of Zurich in International Business Law / International Sports Law.

Having looked at the different types of investors in football in part one of this two-part blog series, “A non-exhaustive Typology”, it is fitting to now consider the regulations that apply to investors who seek to build a portfolio of football clubs.

One way to measure the momentum of a particular practice and how serious it ought to be taken, might be when that practice earns its own initialism. Multi-club ownership or MCO as it is increasingly known today, is the name given to those entities that have an ownership stake in multiple clubs. Within the little research and writing that has been undertaken on the topic, some authors submit that investors with minority stakes in multiple clubs ought not to be captured by the MCO definition.  This position appears problematic given some of the regulations draw the line at influence rather than stake.

There are now approximately 50 MCO’s across the football world that own approximately 150 clubs.^[1] Given the way MCO is trending, one might consider it important that the regulations keep up with the developing MCO practice, so as to ensure the integrity of football competitions, and to regulate any other potentially questionable benefit an MCO might derive that would be contrary to football’s best interests.

In this blog, I focus on the variety of ways (and levels at which) this practice is being regulated.  I will move through the football pyramid from member associations (MA’s) to FIFA, laying the foundations to support a proposition that FIFA and only FIFA is positioned to regulate MCO.

i)               The Cases that Shaped the MCO Regulatory Landscape

The ENIC and Red Bull cases essentially shaped MCO regulations, at least for UEFA.  For a comprehensive analysis of the cases, I would encourage one look at both “Multi-Club Ownership in European Football – Part I: General Introduction and the ENIC Saga” and “Multi-Club Ownership in European Football – Part II: The Concept of Decisive Influence in the Red Bull Case” by Tomáš Grell.

ENIC CASE[2]

The ENIC case featuring proceedings before the Court of Arbitration for Sport and before the European Commission, made its way to such bodies because London Stock Exchange listed entity, ENIC (English National Investment Company), owned stakes in both AEK Athens and SK Slavia Prague, that were set to play in the same UEFA club competition. At that point in time, UEFA had adopted regulations that made entry to UEFA club competitions conditional upon a club having not (i) held or been dealing in the securities or shares; and refrained from (ii) being a member; (iii) being involved in any capacity whatsoever in the management, administration, and/or sporting performance; and (iv) having any power whatsoever in the management, administration and/or sporting performance - of any other club participating in the same UEFA club competition. Furthermore, an individual or entity was prohibited from exercising control over more than one club participating in the same UEFA club competition.

The Committee for the UEFA Club Competitions had initially ruled that only SK Slavia would take part in the 1998/99 UEFA Cup. Not satisfied with that ruling, on 15 June 1998, AEK Athens and SK Slavia Prague filed a request for arbitration with CAS and simultaneously sought interim relief which was given, allowing both clubs to compete in the 1998/99 UEFA Cup. On 20 August 1999 however, the CAS held that the Original Rule was valid and that UEFA could apply the rule moving forward. Given the blow this dealt to ENIC’s football business strategies, on 18 February 2000, ENIC lodged a complaint with the European Commission and argued anew that the UEFA rules were contrary to EU competition law. The Commission was satisfied that the Original Rule was valid in that it sought to protect the integrity of UEFA competitions, rather than to restrict competition, hence seeing no violation of the relevant EU competition laws.

RED BULL CASE[3]

The current rules encapsulated in Article 5 of the UCL Regulations are distinct from the Original Rule in that one of the standards that would render a club unable to participate in a UEFA competition is if an individual or entity is able to exercise by any means a “decisive influence” in the decision-making of more than one club in that competition.

In 2017, RB Salzburg and RB Leipzig had both secured places in the 2017/18 UCL. Not long after, the UEFA General Secretary expressed concern with the Club Financial Control Body (CFCB), and the Adjudicatory Chamber of that body agreed that the clubs had failed to satisfy the criteria set out in the rules. The substantial levels of sponsorship received by Red Bull and certain individuals linked to the decision making of both clubs inter alia, were flagged as reasons for breaching the threshold.

However, and following some quite deliberate and specific changes, the CFCB Adjudicatory Chamber accepted compliance reports that RB Salzburg had cut ties with certain individuals, reduced the amount of sponsorship money paid by Red Bull and were satisfied that a cooperation agreement between the two clubs had been terminated.  The CFCB Chief withdrew his objection and RB Salzburg and RB Leipzig were admitted to the 2017/18 UCL.

ii)              Member Associations and Motives

Whilst one could simply list the national association’s MCO regulations, the reality is that for the MA’s that have express regulations, they are largely of a similar flavour to that of their Confederation. One might find the varying motivations of MA’s in enacting MCO regulations of more interest. One key feature is that some of the MA’s regulate based on MCO within their own nations, and some concern themselves with MCO even outside of the nation in which the MA governs football. This is where an MA’s motivations are evident.

Scotland

Scotland for instance, regulates MCO via Article 13 of the Articles of Association of the Scottish Football Association and refers to the section as “Dual Interests in Clubs”.[4]  It is understood that Scotland have a high standard when it comes to MCO, so as to ensure that its competition does not become the reserve competition to the English Premier League or another larger league.  With that in mind, one can then understand why Mike Ashley’s attempt to increase an already 8.92% to 29.9% shareholding of Rangers FC was rejected. The Newcastle United owner was not given written permission as is required per Article 13, as he had signed an agreement that he would not own more than 10% of the club and would not exercise influence on the board.

"The Board, under Article 13 of the Scottish FA Articles of Association, is required to have due regard to the need to promote and safeguard the interests and public profile of association football, its players, spectators and others involved with the game. This test is set out in full in Article 13.6."

Italy

Not too long ago, one was free to own more than one club in Italy (i.e. Aurelio De Laurentiis’ ownership of S.S.C. Napoli and S.S.C. Bari), but in recent months MCO in the Italian context has been headline material, with U.S. Salernitana 1919 promoting to the Serie A, a club owned by Claudio Lotito who also owns S.S. Lazio. The newly enacted Article 16 bis of the NOIF FIGC provides that an individual or entity cannot own two or more clubs in Italy, in the same competition.  On Thursday 30 September 2021, the FIGC announced that ownership of more than one professional club would be prohibited, “for those companies that should rise to Lega Pro from the Serie D” (translated), and multi-club owners would need to sell their (other) clubs “by the beginning of the 2024/2025 season”.

The result of this is retroactive in effect and one can reasonably suspect that the legal teams for these wealthy multi-club owners will be instructed to explore all options for a favourable outcome in courtrooms and other relevant decision-making bodies. One can simultaneously hold a view that MCO ought to be regulated, and concede that, when these owners bought these clubs, they did so on the representation that it was legal and they were free to do so. A forced sale as opposed to a willing sale distorts the market and what a willing buyer and willing seller would have otherwise settled on for a purchase price.  Flowing from the above, club owners can expect well below market rate offers, as has been the case reportedly with Salernitana, given they must sell. 

iii)             The Confederations

Most of the MCO regulations of Confederations refer to the concern of jeopardisation of the integrity of a match or competition. The regulations largely capture the substance of Article 20(2) of the FIFA Statutes which will be expanded upon below. For instance, the OFC regulation found at Article 15 (3) of the OFC Statutes, states that  ‘Member Associations shall ensure that no natural or legal person (including holding companies and subsidiaries) exercise third-party control in any manner whatsoever (in particular through a majority shareholding, a majority of voting rights, a majority of seats on the board of directors or any other form of economic dependence or control etc.) over more than one club or group whenever the integrity of any match or competition could be jeopardised.’  One will find almost verbatim, the same provision at Article 12(3) of the CAF Statutes and at Article 17(3) of the CONCACAF Statutes.

There is a distinction to be made however at confederation level, between MCO regulations applying specifically to the MA’s that fall under the Confederations, or to competitions hosted by the Confederation. Given the noise both the ENIC and Red Bull cases made, the most renown MCO regulations are those that apply to UEFA competitions, but consider also how CONMEBOL prohibits multi-club ownership in its competitions. Article 7(f) of the CONMEBOL Statutes provides that natural or legal persons cannot control more than one club. Perhaps an extension, “CONMEBOL’s Club Licensing Regulations establish as a requirement that, to participate in CONMEBOL Libertadores and CONMEBOL Sudamericana tournaments, license applicant clubs must submit a legally valid declaration if one: Owns or trades titles or securities of any other club participating in the same competition; or, b) Owns the majority of the shareholder voting rights of any other club participating in the same competition; or, c) Has the right to appoint or dismiss most of board or management or department members of another participating club in the same competition; or, d) Is a shareholder and controls most of the shareholder voting rights of shareholders in any other club participating in the same competition in accordance with an agreement signed with other shareholders of the relevant club; or, e) Belongs to the leadership structure of any other club participating in the same competition; or, f) Is involved in any quality in the management, administration and/or sporting performance of any other club participating in its competition; or, g) Has any power in the management, administration and/or sporting performance of any other club participating in the same competition.” 

The AFC regulates at both confederation club competition level, and via its club licensing regulations. The Entry Manual of the AFC Club Competitions provides as a condition of entry, at section 9.12: To ensure the integrity of an AFC Club Competition: no participating club may, either directly or indirectly, hold or deal in the securities or shares of any other participating club; be a member of any other participating club; be involved in any capacity whatsoever in the management, administration and/or sporting performance.

Article 19 of the AFC’s Club Licensing Regulations provides that a Licence Applicant must submit a legally valid declaration outlining the ownership structure and control mechanism of the club. These regulations prohibit a natural or legal person involved in the management, administration and/or sporting performance of the club, either directly or indirectly: a) holds or deals in the securities or shares that allows such person to exercise Significant Influence in the activities of any other club participating in the same competition; b) holds a majority of the shareholders’ voting rights of any other club participating in the same competition; c) has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of any other club participating in the same competition; d) is a shareholder and alone Controls a majority of the shareholders’ voting rights of any other club participating in the same competition pursuant to an agreement entered into with other shareholders of the club in question; e) is a member of any other club participating in the same competition; f) is involved in any capacity whatsoever in the management, administration and/or sporting performance of any other club participating in the same competition; and g) has any power whatsoever over the management, administration and/or sporting performance of any other club participating in the same club competition.

When it comes to UEFA, MCO regulation is found throughout the so-called “UEFA Regulatory Framework”.  This includes the UEFA Statutes (Edition 2020), the UEFA competitions regulations, in particular the Regulations of the UEFA Champions League 2018-21 Cycle (2020/21 season) and the Regulations of the UEFA Europa League 2018-21 Cycle (2020/21 season), and the UEFA Club Licensing and Financial Fair play Regulations (Edition 2018).

The UEFA Statutes capture both the objectives of UEFA and the obligations of its MA’s, with a strong emphasis on the frequently referred to concern with MCO - issues of integrity. Then, within The Regulations of the UEFA Champions League, sits at Article 5 - Integrity of the competition / multi-club ownership.  This covers integrity of competition again and sets a criterion in order for a team to be eligible for UEFA competition, much the same flavour of regulation seen throughout the rest of the Confederations regarding ownership and control, but with the all-important test at Art.5 – 5.01(c) (iv)  No individual or legal entity may have control or influence over more than one club participating in a UEFA club competition, such control or influence being defined in this context as: being able to exercise by any means a decisive influence in the decision-making of the club.. 

FIFA reported that as of 2018, just 33 % of MA’s had regulatory provisions for MCO’s. The percentage of MA’s within the Confederations that regulate MCO is as follows:

• Confederation of North, Central America and Caribbean Association Football (CONCACAF) – 19%
• Oceania Football Confederation (OFC) – 22%
  
• Confederation of African Football (CAF) – 22%
• Asian Football Confederation (AFC) – 33%
• South American Football Confederation (CONMEBOL) – 50%
• Union of European Football Associations (UEFA) – 50%

What these figures might uncover is a gap in how serious MCO ought to be taken, between the Confederations and the MA’s, and that the perceived threat MCO posed to the integrity of competitions at the time these MA regulations were enacted was minor. Confederations might want to take a firmer proactive rather than reactive approach with MA’s, given the speed at which the MCO phenomenon has gained momentum. That is if one concludes that MCO regulation ought to lie with the Confederations.

Whilst MCO might not give rise to an issue for many nations (yet), the MCO environment of countries like Mexico, (1/3 of the clubs in the Liga MX are part of a domestic MCO arrangement, to say nothing of those same owners stake and influence in Mexican media and broadcast) where there are regulations in place at both MA and Confederation level, flies in the face of both the Mexican FEMEXFUT regulations and CONCACAF regulations. Might this highlight that FIFA and only FIFA can regulate this practice?

iv)             FIFA & MCO Regulation

FIFA does not expressly regulate MCO, assumingly as clubs are not its direct remit. Though through some interpretative effort, FIFA imposes an obligation on its MA’s to regulate MCO. In the FIFA Statutes at Article 20 (2), “Status of clubs, leagues and other groups of clubs”, it reads:

Every member association shall ensure that its affiliated clubs can take all decisions on any matters regarding membership independently of any external body. This obligation applies regardless of an affiliated club’s corporate structure. In any case, the member association shall ensure that neither a natural nor a legal person (including holding companies and subsidiaries) exercises control in any manner whatsoever (in particular through a majority shareholding, a majority of voting rights, a majority of seats on the board of directors or any other form of economic dependence or control, etc.) over more than one club whenever the integrity of any match or competition could be jeopardised.

Another way of looking at how FIFA may regulate MCO, is an obligation it places on the confederations at Article 23 (g), “Confederations’ Statutes”, it reads: 

The confederations’ statutes must comply with the principles of good governance, and shall in particular contain, at a minimum, provisions relating to the following matters:

(g) regulation of matters relating to refereeing, the fight against doping, club licensing, the imposition of disciplinary measures, including for ethical misconduct, and measures required to protect the integrity of competitions.

As one will notice, the protection of the integrity of competitions does not quite warrant its own sub-section of Article 23, and instead is heaped in with matters such as refereeing and doping. Article 20 might have more clout, but given the influx of MCO and investment in football in modernity, one can reasonably wonder if the regulations suffice.  

Article 20(2) of the FIFA Statutes (formerly Article 18(2)) has been considered to a degree at the Court of Arbitration for Sport. Though where it has, for instance in CAS 2014/A/3523 Club de Fútbol Atlante S.A. de C.V. v. Federación Mexicana de Fútbol (FMF) & Club Atlas F.C., the findings uncover that Article 20(2) cannot be relied upon for clarity, in terms of the jeopardisation MCO poses to the integrity of football matches or competitions.

“The FIFA rule on multiple ownership is not absolute but is based on a case-by-case assessment of the jeopardy caused to the integrity of football matches or competitions. Whether or not the integrity of a match or competition is jeopardised is a very intricate assessment which necessarily must be based on profound knowledge of the match or competition in question.”[5]

Whilst the case is not exclusively about the relevant integrity of competitions article within the FIFA Statutes, the appellant was unable to successfully argue the point that two clubs in the same league belonging to the same owner poses a serious threat to the competition (via the then Article 18(2) of the FIFA Statutes and the identical Article 7(m) of the CONCACAF Statutes) as it was unable to convince the Panel that the integrity of the Liga MX was indeed actually jeopardised.

The CAS in this instance was merely making a decision per its reach, but one struggles to imagine that any football governing body would want to take the position and to regulate so as to suggest that MCO within competitions does not “necessarily” raise integrity issues. Perhaps an extreme analogy, but that would be like concluding that doping is not “necessarily” performance enhancing and a case-by-case intricate assessment is needed to determine whether an advantage was actually attained.  Some threats to integrity require the preventative approach be captured in the regulations and the above case highlights that the articles regarding MCO found in the FIFA Statutes are insufficient and have probably not kept pace with the MCO phenomenon. A further reasonable question one might ponder, is what the reaction to the above case might have been if the clubs were UEFA based?

v)               Concluding remarks and why FIFA must assume MCO Regulations

MCO is a transnational phenomenon with no clear integrated or uniform regulatory framework and rather, a fragmented landscape, as one might reasonably expect when MCO regulation is left to the many Confederations and MA’s.  MCO regulations as they stand may have sufficed in yesteryear when football was not the target of such investment for direct financial return, branding in the case of company investment, or the branding and soft power strategies of nations – evidently the prime motivations for establishing an MCO. 

FIFA regularly offsets the negative news stories it attracts, with reference to growing the game globally. If FIFA is to cash in on the growing the game globally narrative, it surely has an obligation to regulate when that global growth produces integrity issues to football, as is the case with MCO. If one accepts that MCO is a transnational phenomenon and in turn a global issue, and that it does raise concerns in regard to the integrity of football inter alia, then it is difficult to see what body other than FIFA is best positioned to deal with the MCO phenomenon.

There are other reasons of significance as to why this should lie with FIFA as well. For instance, the MCO phenomenon also affects FIFA’s training rewards systems that it has gone to considerable lengths to attempt to fine tune (i.e. the establishment of the Clearing House). With players moving between clubs within the same MCO for free, many transfers will not trigger the trickledown effect they may have otherwise had players transferred for market rates. Another concern for FIFA might be player trading within an MCO being used as accounting tactics to avoid triggering Financial Fair Play issues, rather than a transfer representing the market value of the player.

Player welfare issues also arise, as do employment law questions.  It is already the case that there are clauses in player contracts where a player cannot refuse to be transferred to another club within an MCO if so requested (or demanded), which is in effect an MCO contract, rather than a club contract. Even when clauses of this nature are not inserted within an MCO club player’s contract, there are concerns when players are groomed within an MCO ,given the clubs have considerable time with players and a unique dynamic exists within MCO given common ownership, where a club is incentivised to persuade the player to remain within the group, when the best move, career, financial or otherwise, may be elsewhere. This is an entirely different dynamic to a player weighing up his or her transfer options and seeking professional advice from an agent and/or lawyer.  There are also instances where an MCO has only allowed a move internally and refused a transfer to another club and potentially better option for the player, raising  the ever-recurring freedom of movement questions. These instances are of course rare (for now), but real implications that need attention from football’s global governing body.

The increased globalisation of the game through creations like the UEFA Conference League and FIFA also expanding the Club World Cup, significantly broadens the number of clubs that may face each other, which increasing the risks that MCO presents. The obligations FIFA imposes on its MA’s and Confederations are not observed across the board, and are consequently not sufficient to keep pace with the burgeoning MCO phenomenon. FIFA can no longer simultaneously celebrate the globalisation of football, and defer on definition and regulation downwards in the football pyramid, when it comes to a product of that globalisation; Multi Club Ownership.

[1] I have added to the approximate figure mentioned in the hyperlinked article, to account for some recent acquisitions.

[2] CAS 98/200 AEK Athens and SK Slavia Prague / UEFA & Case COMP/37 806: ENIC / UEFA [2002] Commission

[3] CFCB Adjudicatory Chamber AC-01/2017 RasenBallsport Leipzig GmbH and FC Red Bull Salzburg GmbH

[4] DUAL INTERESTS IN CLUBS 13.1 Except with the prior written consent of the Board:- (a) no club or nominee of a club; and (b) no person, whether absolutely or as a trustee, either alone or in conjunction with one or more associates or solely through an associate or associates (even where such person has no formal interest), who:- (i) is a member of a club; or (ii) is involved in any capacity whatsoever in the management or administration of a club; or (iii) has any power whatsoever to influence the management or administration of a club, may at the same time either directly or indirectly:- (a) be a member of another club; or (b) be involved in any capacity whatsoever in the management or administration of another club; or ARTICLES OF ASSOCIATION 69 (c) have any power whatsoever to influence the management or administration of another club

[5] CAS 2014/A/3523 Club de Fútbol Atlante S.A. de C.V. v. Federación Mexicana de Fútbol (FMF) & Club Atlas F.C., at 88