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

[New Publication] - The European Roots of the Lex Sportiva: How Europe Rules Global Sport - Antoine Duval , Alexander Krüger and Johan Lindholm (eds) - Open Access

Dear readers, 


I have the pleasure to inform you that our (with Prof. Johan Lindholm and Alexander Kruger from Umeå University) edited volume entitled 'The European Roots of the Lex Sportiva: How Europe Rules Global Sport' has been published Open Access by Hart Publishing. 



You can freely access the volume at: https://www.bloomsburycollections.com/monograph?docid=b-9781509971473


Abstract

This open access book explores the complexity of the lex sportiva, the transnational legal regime governing international sports. Pioneering in its approach, it maps out the many entanglements of the transnational governance of sports with European legal processes and norms. The contributors trace the embeddedness of the lex sportiva within national law, European Union law and the European Convention on Human Rights. While the volume emphasizes the capacity of sports governing bodies to leverage the resources of national law to spread the lex sportiva globally, it also points at the fact that European legal processes are central when challenging the status quo as illustrated recently in the Semenya and Superleague cases. Ultimately, the book is also a vantage point to start critically investigating the Eurocentricity and the complex materiality underpinning the lex sportiva.


Table of contents

1. Made in Europe: Lex Sportiva as Embedded Transnational Law - 1–14 - Antoine Duval , Alexander Krüger and Johan Lindholm

I. The European Roots of Lex Sportiva

2. Embedded Lex Sportiva: The Swiss Roots of Transnational Sports Law and Governance - 17–40 - Antoine Duval

3. Putting the Lex into Lex Sportiva: The Principle of Legality in Sports - 41–68 - Johan Lindholm

4. Europeanisation of the Olympic Host (City) Contracts - 69–92 - Yuliya Chernykh

5. The Influence of European Legal Culture on the Evolution of Lex Olympica and Olympic Law - 93–118 - Mark James and Guy Osborn

6. Who Regulates the Regulators? How European Union Regulation and Regulatory Institutions May Shape the Regulation of the Football Industry Globally - 119–152 - Christopher A Flanagan

7. The Europeanisation of Clean Sport: How the Council of Europe and the European Union Shape the Proportionality of Ineligibility in the World Anti-Doping Code - 153–188 - Jan Exner

II. The Integration of European Checks into the Lex Sportiva

8. False Friends: Proportionality and Good Governance in Sports Regulation - 191–210 - Mislav Mataija

9. Sport Beyond the Market? Sport, Law and Society in the European Union - 211–228 - Aurélie Villanueva

10. EU Competition Law and Sport: Checks and Balances ‘à l’européenne’ - 229–256 - Rusa Agafonova

11. Is the Lex Sportiva on Track for Intersex Person’s Rights? The World Athletics’ Regulations Concerning Female Athletes with Differences of Sex Development in the Light of the ECHR - 257–282 - Audrey Boisgontier

III. Engaging Critically with a Eurocentric Lex Sportiva 

12. Lex Sportiva and New Materialism: Towards Investigations into Sports Law’s Dark Materials? 285–308 - Alexander Krüger


[Online Event] The ECtHR's  Semenya  ruling: A human rights game-changer for the transnational governance of sport? - 13 October 2023

During the 2023/2024 academic year, the Asser International Sports Law Centre will dedicate special attention to the intersection between transnational sports law and governance and gender. This online discussion is the first of a series of (online and offline) events which will explore the way in which international SGBs and the CAS define the gender divide in international sports, police gender-based abuses, and secure gender-specific rights to athletes.


Caster Semenya, a South-African runner and Olympic champion, was dominating her favorite distance, the 800m, for a number of years, when in 2018 the World Athletics (then known as IAAF) adopted a new set of regulations (colloquially known as the DSD Regulations), which imposed new conditions to the eligibility of athletes for certain female competitions, such as the 800m. Semenya, who has a condition known as differences in sex development (DSD), was forced to decide between subjecting to a specific medical treatment aimed at diminishing the level of testosterone in her body or stopping competing on her preferred distance. As she refused to undergo any medical treatment to regain eligibility, she decided to challenge the legality of World Athletics DSD Regulations before the CAS in Lausanne. While the CAS acknowledged that the Regulations were discriminatory and were disregarding the legal sex of Semenya in the name of a so-called sporting sex, the arbitrators also considered that this discrimination was justified and proportionate. Semenya’s challenge against the award was rejected by the Swiss Federal Tribunal (SFT) in August 2020. As a last resort, she decided to lodge an application with ECtHR against Switzerland.


On 11 July 2023, the ECtHR released its judgment in the much-awaited Caster Semenya v. Switzerland case. In short, the Strasbourg Court sided with Semenya and concluded that Switzerland failed to comply with its positive obligations stemming from the European Convention on Human Rights. The ruling is an important milestone in the interaction between the CAS and (European) human rights law. It will likely affect the place of human rights (and in particular the ECHR) at the CAS, the intensity of the supervision exercised by the SFT, as well as the justification of the regulatory decisions of the SGBs. We look forward to discussing these with our two speakers, who have followed closely the case and already blogged (here and here) about the judgment:


The online discussion will be introduced and moderated by Dr. Antoine Duval and Dr. Daniela Heerdt, and will include short presentations by the speakers and a Q&A with the audience.


Registration is available for free at: https://www.asser.nl/education-events/events/?id=4325

12th round of Caster Semenya’s legal fight: too close to call? - By Jeremy Abel

Editor's note: Jeremy Abel is a recent graduate of the LL.M in International Business Law and Sports of the University of Lausanne.

 

1.     Introduction

The famous South African athlete Caster Semenya is in the last lap of her long legal battle for her right to run without changing the natural testosterone in her body. After losing her cases before the Court of Arbitration for Sport (CAS) and the Swiss Federal Tribunal, she filed an application before the European Court of Human Rights (Court). In the meantime, the Court has released a summary of her complaint and a series of questions addressed to the parties of the case.

As is well known, she is challenging the World Athletics’ Eligibility Regulations for the Female Classification (Regulations) defining the conditions under which female and intersex athletes with certain types of differences of sex development (DSDs) can compete in international athletics events. Despite the Regulations emanating from World Athletics, the last round of her legal battle is against a new opponent: Switzerland.

The purpose of this article is to revisit the Semenya case from a European Convention on Human Rights (ECHR) perspective while considering certain excellent points made by previous contributors (see here, here and here) to this blog. Therefore, the blog will follow the basic structure of an ECHR case. The following issues raised by Semenya shall be analysed: the applicability of the ECHR, Semenya’s right to private life (Article 8 ECHR) and to non discrimination (Article 14 ECHR), as well as the proportionality of the Regulations. More...


WISLaw Blog Symposium - Freedom of Expression in Article 10 of the ECHR and Rule 50 of the IOC Charter: Are these polar opposites? - By Nuray Ekşi

Editor's note: Prof. Dr. Ekşi is a full-time lecturer and chair of Department of Private International Law at Özyeğin University Faculty of Law. Prof. Ekşi is the founder and also editor in chief of the Istanbul Journal of Sports Law which has been in publication since 2019.


While Article 10 of the European Convention on Human Rights (‘ECHR’) secures the right to freedom of expression, Rule 50 of the Olympic Charter of 17 July 2020 (‘Olympic Charter’) restricts this freedom. Following the judgments of the European Court of Human Rights (‘ECtHR’) relating to sports, national and international sports federations have incorporated human rights-related provisions into their statutes and regulations. They also emphasized respect for human rights. For example, Article 3 of the Fédération Internationale de Football Association (‘FIFA’) Statutes, September 2020 edition, provides that “FIFA is committed to respecting all internationally recognised human rights and shall strive to promote the protection of these rights”. Likewise, the Fundamental Principles of Olympism which are listed after the Preamble of the of the Olympic Charter 2020 also contains human rights related provisions. Paragraph 4 of Fundamental Principles of Olympism provides that the practice of sport is a human right. Paragraph 6 forbids discrimination of any kind, such as race, colour, sex, sexual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status. In addition, the International Olympic Committee (‘IOC’) inserted human rights obligations in the 2024 and 2028 Host City Contract.[1] The IOC Athletes’ Rights and Responsibilities Declaration even goes further and aspires to promote the ability and opportunity of athletes to practise sport and compete without being subject to discrimination. Fair and equal gender representation, privacy including protection of personal information, freedom of expression, due process including the right to a fair hearing within a reasonable time by an independent and impartial panel, the right to request a public hearing and the right to an effective remedy are the other human rights and principles stated in the IOC Athletes’ Rights and Responsibilities Declaration. Despite sports federations’ clear commitment to the protection of human rights, it is arguable that their statutes and regulations contain restrictions on athletes and sports governing bodies exercising their human rights during competitions or in the field. In this regard, particular attention should be given to the right to freedom of expression on which certain restrictions are imposed by the federations even if it done with good intentions and with the aim of raising awareness. More...


New Event! The Court of Arbitration for Sport at the European Court of Human Rights - Prof. Helen Keller - 26 May - 16:00

On Wednesday 26 May 2021 from 16.00-17.00 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), is organising its fifth Zoom In webinar on the Court of Arbitration for Sport (CAS) from the perspective of the European Court of Human Rights (ECtHR).

We have the pleasure to be joined by Prof. Helen Keller, former Judge at the ECtHR and a prominent dissenter to the majority’s ruling in the Mutu and Pechstein case.

The ECtHR decision in the Mutu and Pechstein case rendered on 2 October 2018 is widely seen as one of the most important European sports law rulings. It was also the first decision of the Strasbourg court dealing with a case in which the CAS had issued an award. The applicants, Adrian Mutu and Claudia Pechstein, were both challenging the compatibility of CAS proceedings with the procedural rights enshrined in Article 6(1) of the European Convention on Human Rights (ECHR). The court famously declined to conclude that the CAS lacked independence or impartiality, but did find that, insofar as Claudia Pechstein was concerned, she was forced to undergo CAS arbitration and, therefore, that CAS proceedings had to fully comply with the procedural rights guaranteed in the ECHR. In particular, the court held that the refusal by CAS to hold a public hearing, in spite of Claudia Pechstein’s express request, was contrary to Article 6(1) ECHR. Beyond this case, as highlighted by the recent decision of Caster Semenya to submit an application to the ECtHR, the decision opens the way for a more systematic intervention of the Strasbourg court in assessing the human rights compatibility of CAS awards and more broadly of the transnational sports regulations imposed by international sports governing bodies.

Prof. Helen Keller will discuss with us the implications of the ECtHR’s Mutu and Pechstein decision and the potential for future interventions by the court in the realm of the lex sportiva.

The webinar will take the form of an interview followed by a short Q&A open to the digital public. 

Please note the discussion will NOT be recorded and posted on our Youtube channel. 

Register HERE!


The SFT’s Semenya Decision under European human rights standards: Conflicting considerations and why a recourse could be successful at Strasbourg - By Kevin Gerenni

Editor's note: Kevin Gerenni is Assistant Professor in Public International Law (Facultad de Derecho de la Universidad de Buenos Aires) and LLM Candidate 2021 in Public International Law at the London School of Economics.


Even though the decision rendered by the SFT in the Semenya Case was foreseeable, the Tribunal did put forward some concerning reasoning in terms of public policy (“ordre public”) and human rights. In case Semenya decides to challenge the Swiss state before the ECtHR, one can expect the case to shake some grounds at the ECtHR, which would be faced with the question of the application to sport not of fair trial guarantees (as in Mutu & Pechstein) but of substantial human rights provisions such as the prohibition of discrimination on the basis of sex (Article 14 ECHR) and the right to private life (Article 8 ECHR).

Under Swiss law, the reasons that may lead to the annulment of an arbitral award are enumerated in art. 190 of the Swiss Private International Law Act (PILA). Semenya’s strongest case relied on art. 190(2)(e): the award’s incompatibility with public policy. Naturally, this point concentrated most of the SFT’s attention. In order to analyze the compatibility of the CAS award with Swiss public policy, the SFT focused on three main potential breaches of human rights: prohibition of discrimination, personality rights, and human dignity. In doing so, it put forward certain observations that differ with European human rights standards and the ECtHR’s jurisprudence. The purpose of this short article is to analyze those discrepancies and, consequently, Semenya’s prospects of success before the Strasbourg Tribunal.More...


The “Victory” of the Court of Arbitration for Sport at the European Court of Human Rights: The End of the Beginning for the CAS

My favourite speed skater (Full disclosure: I have a thing for speed skaters bothering the ISU), Claudia Pechstein, is back in the news! And not from the place I expected. While all my attention was absorbed by the Bundesverfassungsgericht in Karlsruhe (BVerfG or German Constitutional Court), I should have looked to the European Court of Human Rights in Strasbourg (ECtHR). The Pechstein and Mutu joint cases were pending for a long time (since 2010) and I did not anticipate that the ECtHR would render its decision before the BVerfG. The decision released last week (only available in French at this stage) looked at first like a renewed vindication of the CAS (similar to the Bundesgerichtshof (BGH) ruling in the Pechstein case), and is being presented like that by the CAS, but after careful reading of the judgment I believe this is rather a pyrrhic victory for the status quo at the CAS. As I will show, this ruling puts to rest an important debate surrounding CAS arbitration since 20 years: CAS arbitration is (at least in its much-used appeal format in disciplinary cases) forced arbitration. Furthermore, stemming from this important acknowledgment is the recognition that CAS proceedings must comply with Article 6 § 1 of the European Convention of Human Rights (ECHR), in particular hearings must in principle be held in public and decisions freely available to all. Finally, I will criticise the Court’s finding that CAS complies with the requirements of independence and impartiality imposed by Article 6 § 1 ECHR. I will not rehash the  well-known facts of both cases, in order to focus on the core findings of the decision. More...

International and European Sports Law – Monthly Report – January 2018 - By Tomáš Grell

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


The Headlines 

Anti-doping whereabouts requirements declared compatible with the athletes' right to privacy and family life

On 18 January 2018, the European Court of Human Rights rendered a judgment with important consequences for the world of sport in general and the anti-doping regime in particular. The Strasbourg-based court was called upon to decide whether the anti-doping whereabouts system – which requires that a limited number of top elite athletes provide their National Anti-Doping Organisation or International Federation with regular information about their location, including identifying for each day one specific 60-minute time slot where the athlete will be available for testing at a pre-determined location – is compatible with the athletes' right to private and family life under Article 8 of the European Convention on Human Rights and their freedom of movement pursuant to Article 2 Protocol No. 4 of the Convention. The case was brought by the French cyclist Jeannie Longo and five French athlete unions that had filed their application on behalf of 99 professional handball, football, rugby, and basketball players.

While acknowledging that the whereabouts requirements clash with the athletes' right to private and family life, the judges took the view that such a restriction is necessary in order to protect the health of athletes and ensure a level playing field in sports competitions. They held that ''the reduction or removal of the relevant obligations would lead to an increase in the dangers of doping for the health of sports professionals and of all those who practise sports, and would be at odds with the European and international consensus on the need for unannounced testing as part of doping control''. Accordingly, the judges found no violation of Article 8 of the Convention and, in a similar vein, ruled that Article 2 Protocol No. 4 of the Convention was not applicable to the case.

 

Football stakeholders preparing to crack down on agents' excessive fees

It has been a record-breaking January transfer window with Premier League clubs having spent an eye-watering £430 million on signing new acquisitions. These spiralling transfer fees enable football agents, nowadays also called intermediaries, to charge impressive sums for their services. However, this might soon no longer be the case as the main stakeholders in European football are preparing to take action. UEFA, FIFPro, the European Club Association and the European Professional Football Leagues acknowledge in their joint resolution that the 2015 FIFA Regulations on Working with Intermediaries failed to address serious concerns in relation to the activities of intermediaries/agents. They recognise in broad terms that a more effective regulatory framework is needed and call among other things for a reasonable and proportionate cap on fees for intermediaries/agents, enhanced transparency and accountability, or stronger provisions to protect minors.

 

The CAS award in Joseph Odartei Lamptey v. FIFA 

On 15 January 2018, FIFA published on its website an arbitral award delivered on 4 August 2017 by the Court of Arbitration for Sport (CAS) in the dispute between the Ghanian football referee Joseph Odartei Lamptey and FIFA. The CAS sided with FIFA and dismissed the appeal filed by Mr Lamptey against an earlier decision of the FIFA Appeal Committee which (i) found him to have violated Article 69(1) of the FIFA Disciplinary Code as he unlawfully influenced the 2018 World Cup qualifying match between South Africa and Senegal that took place on 12 November 2016; (ii) as a consequence, banned him for life from taking part in any football-related activity; and (iii) ordered the match in question to be replayed. In reaching its conclusion, the CAS relied heavily on multiple reports of irregular betting activities that significantly deviated from usual market developments.  More...


Asser International Sports Law Blog | The Evolution of UEFA’s Financial Fair Play Rules – Part 1: Background and EU Law. By Christopher Flanagan

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The Evolution of UEFA’s Financial Fair Play Rules – Part 1: Background and EU Law. By Christopher Flanagan

Editor's Note: Christopher is an editor of the Asser International Sports Law Blog. His research interests cover a spectrum of sports law topics, with a focus on financial regulatory disputes, particularly in professional football, a topic on which he has regularly lectured at the University of the West of England.

 

It is five years since the Union of European Football Associations (UEFA) formally introduced ‘Financial Fair Play’ (FFP) into European football through its Club Licensing and Financial Fair Play Regulations, Edition 2012. With FFP having now been in place for a number of years, we are in a position to analyse its effect, its legality, and how the rules have altered over the last half decade in response to legal challenges and changing policy priorities. This article is split into three parts: The first will look at the background, context and law applicable to FFP; Part Two will look at the legal challenges FFP has faced; and Part Three will look at how FFP has iteratively changed, considering its normative impact, and the future of the rules.

 

Background

Certain aspects of FFP were incredibly controversial from the outset. To a neutral observer, this might seem confusing: FFP is, ostensibly, a set of rules designed to make sure clubs pay their bills on time, stay solvent, and do not need to look to external benefactors to cover their losses. Leading sports economist Stefan Szymanski described insolvency as “a chronic problem in the world of professional Association football”, so, superficially at least, a regulatory response to this would seem natural and appropriate. Where the market fails, it is the regulator’s duty to respond.

UEFA’s President at the time, Michel Platini, said “You, we, the fans and football lovers, have no interest in seeing clubs, the real heritage of European football, disappear due to risky management”. This is a sentiment with which most fans would agree.

Accordingly, UEFA incorporated FFP into its existing licensing requirements, meaning any club that wished to compete in a UEFA competition would be required to meet the financial standards set by FFP. These standards would be overseen and enforced by a new body within UEFA’s administration called the ‘Club Financial Control Body’. The Club Financial Control Body would be further segregated into an Investigatory Chamber and an Adjudicatory Chamber.

So, why the controversy? The contentious aspect of FFP was its ‘break even’ requirement. The ‘break even’ requirement is a de facto soft salary cap, tying the maximum amount a club can spend (with defined exceptions) to its revenue generation. An overview of the break even requirement as originally conceived can be found here. In essence, “The break-even result for a reporting period is calculated as relevant income less relevant expenses’’.[1] “Income” includes receipts such as gate receipts, sponsorship, broadcasting rights, commercial activities and player sales; “expenses” includes wages, the cost of purchasing players and the cost of finance.[2]

Crucially, when FFP was first introduced, losses could not be met or offset by equity participants (i.e. owners). This was pertinent to the prevailing financial climate in football, in which certain clubs across Europe were spending unprecedented sums with the support of wealth benefactors, who would cover the clubs’ losses. Such spending was seen at clubs such as Chelsea, Manchester City, Paris Saint Germain, Monaco, Malaga and Anzhi Makhachkala, with mixed results on and off the pitch.

Thus FFP was accused of calcifying football’s competitive hierarchy[3] and foreclosing smaller clubs from sporting and consequent business success. This debate has been played out over the last five years in the academic literature[4] and in various legal fora. The rules and the mechanisms for enforcing the rules have become increasingly sophisticated as the years have passed. UEFA, perhaps in response to these challenges, has made gradual, iterative changes to FFP that have seen the rules soften to accommodate exogenous equity input in defined permissible circumstances. These changes will be looked at in greater depth in Part Three.

 

The challenge of EU law

FFP has been described ‘legally fragile’, which is an apt description. This is because the rules cannot be said to be unquestionably permissible under European Union (EU) law; nor can they be said to be categorically in breach of EU law. The rules exist in a regulatory ‘grey’ area – FFP, in its particularly in its original, more restrictive, guise, may or may not have been illegal. This is a question for a competent (judicial) authority to decide; however, as will be discussed in more detail in Part Two, the route to such a decision has been far from straight forward, and in the intervening years, FFP has changed substantially.

The essential legal questions to determine the legality of FFP are:

  1. Does FFP breach EU competition law?
  2. Does FFP breach EU free movement law?
  3. Is there a sanctuary for any breach of EU law under the doctrine of the specificity of sport?

 

EU competition law

Article 101 of the Treaty of the Functioning of the European Union (TFEU) prohibits agreements that have as their object or effect “prevention, restriction or distortion of competition within the internal market”.[5] This puts regulatory associations such as UEFA in a difficult position. It is the very nature of regulation that competition is restricted or distorted; indeed, it is the very purpose of regulatory rules that participants subject to those rules alter their behaviour accordingly, which has an inevitable consequence on the competitive landscape.

Consideration should also be given to Article 102 TFEU, which prohibits undertakings (and in some circumstances collections of undertakings, i.e. oligopolies) that are in a dominant position from abusing their market dominance.

In view of this friction, the European courts have developed, through the case of Wouters, the concept of regulatory ancillarity.[6] This is the doctrine under which, subject to a test of proportionality, reasonability and necessity, even in circumstances where there is a prima facie breach of competition law by a regulatory body (in that particular case by the Dutch Bar Association), this may be permissible under EU competition law where the regulatory body in question “could reasonably have considered that that regulation, despite the effects restrictive of competition that are inherent in it, is necessary for the proper practice of the [relevant profession]”.

The applicability of Wouters to a sporting regulatory context is confirmed and clarified in the landmark Meca-Medina case. In considering whether a regulatory rule breaches competition law, the European courts must determine: 

  1. Whether the rules are necessary for the proper conduct of the sport;
  2. Whether the penalties are inherent to the restrictions in questions; and
  3. Whether the effects of the rules are proportionate to the aims pursued.

Should UEFA be unable to meet the test under the regulatory ancillarity doctrine, there is an alternative exemption with a lower threshold to which it could look. Within Article 101(3) TFEU, there is an exemption for agreements which promote “technical or economic progress, while allowing consumers a fair share of the resulting benefit” as long as such restrictions do not (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; or (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

It is open to UEFA to argue that FFP dampens inflation in football in a way that is for the improvement of the game and passes a benefit to ‘consumers’ (i.e. fans) by, for example, reducing the need for ticket price increases to sustain escalating players’ wages. This would perhaps be difficult for UEFA to establish, but the economics of FFP are complicated and second order effects should be borne in mind.

 

EU free movement – workers, services and/or capital 

The EU is built upon certain deeply enshrined freedoms. These include the free movement of workers (Article 45 TFEU), the free movement of services (Article 56 TFEU), and the free movement of capital. Any agreement that acts as an impediment to these freedoms is susceptible to a finding of illegality.

In order to be permissible under EU law, any rule or agreement that restricts any fundamental freedom must be:

  1. Justified by a necessary objective in the general interest;
  2. Suitable for achieving that objective; and
  3. Proportionate.

In the case of sporting rules, the European courts have determined that the rule in question must not “go beyond what is necessary for achieving the aim pursued”,[7] which is to reiterate that it must be proportionate – a recurrent theme in considering the legality of rules made by the governing bodies of sport, such as UEFA.

The criteria to be met by UEFA in establishing that FFP does not breach EU fundamental freedoms is in line with the threshold to be met in establishing compliance with EU competition law: FFP must be necessary, suitable and proportionate.

However, in the case of free movement law, it is far from obvious that FFP will have a substantive impact on fundamental freedoms. In previous writing on the subject, I have made the following analogy:

The restriction does not emanate from the rule per se, rather by the size of the club’s turnover; players are no more restricted from moving between clubs by FFP than this author is denied a Ferrari by his credit rating.[8]


The specificity of sport under EU law

In the event that a competent adjudicative authority makes a prima facie finding that FFP is in breach of EU competition law or EU free movement law, there is still a possibility of an overall finding that FFP is not illegal under the doctrine of the specificity of sport; however, this would require the adjudicative body in question to row back considerably from the current position, and general trajectory, of the level of latitude granted to the governing bodies of sport by the European courts.

The concept of specificity will be familiar to all those with an interest in sports law and policy. It is the hypothesis under which, at its starkest interpretation, suggests governing bodies, not courts (or governments or other legislative bodies), are best placed to determine how sport should be run. Sports, it is argued, should have rule making autonomy. A more moderate view on specificity holds that due regard should be paid to the idiosyncrasies of the sports sector and the legitimate governance function played by governing bodies. 

The role of sports governing bodies, whose rules, as was the case with FFP, are often enacted in a broadly consensual way, with engagement, input and consent from key stakeholders, should be acknowledged and some due reverence should be paid to governing bodies' ability to regulate the sporting aspects under their aegis.

Indeed, the European Union had no express competence to in respect of sport until the introduction of Article 165 TFEU, a soft competency, which states that, “The Union 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.”

However, the distinction between elite football as being ‘purely sport’ and elite football as a business has become blurred in to the point of being indistinguishable; and the EU clearly has express competence to deal with business.

The general trend in decisions of the European courts has been to circumscribe self-determination by the governing bodies of sport. Through cases such as Bosman,[9] Meca-Medina, and Bernard,[10] the European courts have made it clear that sport cannot avoid or cherry-pick the applicability of EU law. This is acutely relevant in the case of FFP, which, after all, deals with how football clubs are run financially. There are obvious sporting consequences to this, but it is difficult to characterise FFP as anything other than a rule restrictive of the business of sport.

UEFA’s position on Article 165 is that “while sport is not ‘above the law’, there is now a provision in the Treaty itself recognising that sport cannot simply be treated as another ‘business’, without reference to its specific characteristics”. This is not an unreasonable position; sport is a unique industry in which, unlike other industries, the survival of competitors is important for any given club to flourish. Perhaps the courts could be persuaded that a carve-out based on specificity should be applicable to FFP – but this would require a seismic change of direction.

So it is incredibly unlikely that specificity as a discrete sui generis doctrine would give sanctuary to FFP were the rules deemed to be otherwise in breach of EU law. However, facts peculiar to the football industry (i.e. its specificity) should be considered as part of an assessment as to whether FFP is a proportionate mechanism to pursue UEFA’s objectives. As noted above, proportionality is a limb of the tests for derogations to EU competition and fundamental freedom law.

I have previously commented that: 

For football clubs, there is a strong correlational link between spending money and playing success. This has encouraged clubs to risk financial vulnerability in pursuit of improved match results, despite the mathematical impossibility of all clubs being able to improve their fortunes on the field. This innate instability has resulted in persistent insolvencies despite the remarkable growth in turnover seen in the professional game. Regrettably, when balance sheets weaken, the risk of insolvency increases; and once a club becomes insolvent, its survival is subject to the predilections of its creditors. The game’s governing bodies should aim to militate against…this volatility.

UEFA would doubtless argue that, given the specific nature of the industry it regulates, instituting a soft salary cap such as that implemented by FFP is a proportionate response. In that sense at least, the specificity of sport might be of consideration in the legality of FFP.

 

Conclusion 

It is difficult to say with any degree of conclusiveness whether FFP is legal or not. There are strong arguments either way. The marginal nature of the legal position has been problematic for UEFA and has undoubtedly led to the legal challenges to FFP over the last five years, which are discussed in greater depth in Part Two of this series.

The uncertain legal position, and the challenges generated by that lack of clarity has also, in all likelihood, shaped UEFA’s policy decisions as FFP has evolved in the years since its inception. These are discussed in Part Three of this series.

FFP has certainly been fertile ground for debate, and will likely continue to be so until such a time as there has been a determinative, binding view of its legality. When or whether this will happen remains to be seen.


[1] Annex X, Club Licensing and Financial Fair Play Regulations, Edition 2012.

[2] Ibid.

[3] Thomas Peeters and Stefan Szymanski , 'Financial Fair Play in European Football ' [2014] 29(78) Economic Policy 343-390

[4] See, for example, Serby, T. (2016) The state of EU sports law: lessons from UEFA’s ‘Financial Fair Play’ regulations, International Sports Law Journal 16(1–2):37–51; Flanagan, C (2013) A tricky European fixture: an assessment of UEFA’s Financial Fair Play regulations and their compatibility with EU law, International Sports Law Journal 13(1):148; Lindholm, J (2010) The Problem with Salary Caps Under European Union Law: The Case Against Financial Fair Play, Texas Review of Entertainment and Sports Law, Vol. 12.2, pp. 189-213

[5] Noting that UEFA certainly constitute an association of undertakings in the relevant legal sense, see for example Case T-193/02 Piau (2005) ECR I-209, (2005) 5 CMLR 42 or EU Commission decision 2003/778/EC, 23 July 2003, Case COMP C.2-37.398 - Joint selling of the commercial rights of the UEFA Champions League §§ 106-107

[6] As identified and defined by Whish and Bailey in Competition Law (OUP, 8th)

[7] Case C-176/96, Jyri Lehtonen and Castors Canada Dry Namur- Braine ASBL v Fédération Royale Belge des Sociétés de Basketball ASBL (FRBSB) ECR (2000) I-2681

[8] Flanagan, C (2013) A tricky European fixture: an assessment of UEFA’s Financial Fair Play regulations and their compatibility with EU law, International Sports Law Journal 13(1).

[9] Case C-415/93 Union Royale Belge des Socie ́te ́s de Football Association ASBL v Jean-Marc Bosman (1995) ECR I-4921.

[10] C-325/08 Olympique Lyonnais v Olivier Bernard and Newcastle United FC (2010) ECLI:EU:C:2010:143.

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