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

Blog Symposium: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code. By Mike Morgan

Introduction: The new WADA Code 2015
Day 1: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies
Day 2: The “Athlete Patient” and the 2015 World Anti-Doping Code: Competing Under Medical Treatment
Day 3: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code

Editor's note
Mike Morgan is the founding partner of Morgan Sports Law LLP. His practice is focused exclusively on the sports sector. He advises on regulatory and disciplinary issues and has particular experience advising on doping and corruption disputes.

Mike acted on behalf of National Olympic Committees at three of the last four Olympic Games and has represented other sports bodies, clubs and high profile athletes in proceedings before the High Court, the FIFA Dispute Resolution Chamber, the American Arbitration Association and the Court of Arbitration for Sport. More...






Blog Symposium: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code. By Howard L. Jacobs

Introduction: The new WADA Code 2015
Day 1: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies
Day 2: The “Athlete Patient” and the 2015 World Anti-Doping Code: Competing Under Medical Treatment
Day 4: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code

Editor's note

Howard Jacobs is solo practitioner in the Los Angeles suburb of Westlake Village, California. Mr. Jacobs has been identified by various national newspapers and publications as one of the leading sports lawyers in the world. His law practice focuses on the representation of athletes in all types of disputes, with a particular focus on the defense of athletes charged with doping offenses.Mr. Jacobs has represented numerous professional athletes, Olympic athletes, world record holders,  and amateur athletes in disputes involving doping, endorsements, unauthorized use of name and likeness, salary issues, team selection issues, and other matters.  He is at the forefront of many cutting edge legal issues that affect athletes, winning cases that have set precedents that have benefited the athlete community. More information is available at www.athleteslawyer.com. More...





Blog Symposium: The “Athlete Patient” and the 2015 World Anti-Doping Code: Competing Under Medical Treatment. By Marjolaine Viret and Emily Wisnosky

Introduction: The new WADA Code 2015
Day 1: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies
Day 3: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code
Day 4: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code

Editor's Note
Marjolaine Viret: An attorney-at-law at the Geneva bar, specialising in sports and health law. Her doctoral work in anti-doping was awarded a summa cum laude by the University of Fribourg in early 2015. She gained significant experience in sports arbitration as a senior associate in one of Switzerland’s leading law firms, advising clients, including major sports federations, on all aspects of anti-doping. She also holds positions within committees in sports organisations and has been involved in a variety of roles in the implementation of the 2015 WADC. Her book “Evidence in Anti-Doping at the Intersection of Science & Law” is scheduled for publication in 2015.

Emily Wisnosky: An attorney-at-law admitted to the California bar, she currently participates in the WADC 2015 Commentary research project as a doctoral researcher. She also holds an LLM from the University of Geneva in International Dispute Settlement, with a focus on sports arbitration. Before studying law, she worked as a civil engineer. More...





Blog Symposium: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies. By Herman Ram

Introduction: The new WADA Code 2015
Day 2: The “Athlete Patient” and the 2015 World Anti-Doping Code: Competing Under Medical Treatment
Day 3: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code
Day 4: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code

Editor's note
Herman Ram is the Chief Executive Officer of the Anti-Doping Authority the Netherlands, which is the National Anti-Doping Organization of the country. He has held this position since 2006. After working twelve years as a librarian, Herman Ram started his career in sport management in 1992, when he became Secretary general of the Royal Netherlands Chess Federation. In 1994, he moved on to the same position at the Netherlands Badminton Federation. He was founder and first secretary of the Foundation for the Promotion of Elite Badminton that was instrumental in the advancement of Dutch badminton. In 2000 he was appointed Secretary general of the Netherlands Ski Federation, where he focused, among other things, on the organization of large snowsports events in the Netherlands. Since his appointment as CEO of the Anti-Doping Authority, he has developed a special interest in legal, ethical and managerial aspects of anti-doping policies, on which he has delivered numerous presentations and lectures. On top of that, he acts as Spokesperson for the Doping Authority. Herman Ram holds two Master’s degrees, in Law and in Sport Management. More...




Blog Symposium: The new WADA Code 2015 - Introduction

Day 1: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies
Day 2: The “Athlete Patient” and the 2015 World Anti-Doping Code: Competing Under Medical Treatment
Day 3: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code
Day 4: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code

On 1 January, a new version of the World Anti-Doping Code (WADC or Code) entered into force. This blog symposium aims at taking stock of this development and at offering a preliminary analysis of the key legal changes introduced. The present blog will put the WADC into a more general historical and political context. It aims to briefly retrace the emergence of the World Anti-Doping Agency (WADA) and its Code. It will also reconstruct the legislative process that led to the adoption of the WADC 2015 and introduce the various contributions to the blog symposium.More...






To pay or not to pay? That is the question. The case of O’Bannon v. NCAA and the struggle of student athletes in the US. By Zlatka Koleva

Editor's note
Zlatka Koleva is a graduate from the Erasmus University Rotterdam and is currently an Intern at the ASSER International Sports Law Centre.

The decision on appeal in the case of O’Bannon v. NCAA seems, at first sight, to deliver answers right on time regarding the unpaid use of names, images and likenesses (NILs) of amateur college athletes, which has been an ongoing debate in the US after last year’s district court decision that amateur players in the college games deserve to receive compensation for their NILs.[1] The ongoing struggle for compensation in exchange for NILs used in TV broadcasts and video games in the US has reached a turning point and many have waited impatiently for the final say of the Court of Appeal for the 9th circuit. The court’s ruling on appeal for the 9th circuit, however, raises more legitimate concerns for amateur sports in general than it offers consolation to unprofessional college sportsmen. While the appellate court agreed with the district court that NCAA should provide scholarships amounting to the full cost of college attendance to student athletes, the former rejected deferred payment to students of up to 5,000 dollars for NILs rights. The conclusions reached in the case relate to the central antitrust concerns raised by NCAA, namely the preservation of consumer demand for amateur sports and how these interests can be best protected under antitrust law. More...



The European Commission’s ISU antitrust investigation explained. By Ben Van Rompuy

In June 2014, two prominent Dutch speed skaters, Mark Tuitert (Olympic Champion 1500m) and Niels Kerstholt (World Champion short track), filed a competition law complaint against the International Skating Union (ISU) with the European Commission.


ChanceToCompeteTwitter.png (50.4KB)


Today, the European Commission announced that it has opened a formal antitrust investigation into International Skating Union (ISU) rules that permanently ban skaters from competitions such as the Winter Olympics and the ISU World and European Championships if they take part in events not organised or promoted by the ISU. The Commissioner for Competition, Margrethe Vestager, stated that the Commission "will investigate if such rules are being abused to enforce a monopoly over the organisation of sporting events or otherwise restrict competition. Athletes can only compete at the highest level for a limited number of years, so there must be good reasons for preventing them to take part in events."

Since the case originates from legal advice provided by the ASSER International Sports Law Centre, we thought it would be helpful to provide some clarifications on the background of the case and the main legal issues at stake. More...





Interview with Wil van Megen (Legal Director of FIFPro) on FIFPro’s EU Competition Law complaint against the FIFA Transfer System

Editor’s note
Wil is working as a lawyer since 1980. He started his legal career at Rechtshulp Rotterdam. Later on he worked for the Dutch national trade union FNV and law firm Varrolaan Advocaten. Currently he is participating in the Labour Law Section of lawfirm MHZ-advocaten in Schiedam in the Netherlands. He is also a member of a joint committee advising the government in labour issues.

Since 1991 he is dealing with the labour issues of the trade union for professional football players VVCS and cyclists’ union VVBW. Since 2002, he works for FIFPro, the worldwide union for professional football players based in Hoofddorp in the Netherlands. He is involved in many international football cases and provides legal support for FIFPro members all over the world. Wil was also involved in the FIFPro Black Book campaign on match fixing and corruption in Eastern Europe. More...


The Scala reform proposals for FIFA: Old wine in new bottles?

Rien ne va plus at FIFA. The news that FIFA’s Secretary General Jérôme Valcke was put on leave and released from his duties has been quickly overtaken by the opening of a criminal investigation targeting both Blatter and Platini.

With FIFA hopping from one scandal to the next, one tends to disregard the fact that it has been attempting (or rather pretending) to improve the governance of the organisation for some years now. In previous blogs (here and here), we discussed the so-called ‘FIFA Governance Reform Project’, a project carried out by the Independent Governance Committee (IGC) under the leadership of Prof. Dr. Mark Pieth of the Basel Institute on Governance. Their third and final report, published on 22 April 2014, listed a set of achievements made by FIFA in the area of good governance since 2011, such as establishing an Audit and Compliance Committee (A&C). However, the report also indicated the reform proposals that FIFA had not met. These proposals included the introduction of term limits for specific FIFA officials (e.g. the President) as well as introducing an integrity review procedure for all the members of the Executive Committee (ExCo) and the Standing Committees. More...

Why the CAS #LetDuteeRun: the Proportionality of the Regulation of Hyperandrogenism in Athletics by Piotr Drabik

Editor's note
Piotr is an intern at the ASSER International Sports Law Centre.

Introduction

On 24 July the Court of Arbitration for Sport (CAS) issued its decision in the proceedings brought by the Indian athlete Ms. Dutee Chand against the Athletics Federation of India (AFI) and the International Association of Athletics Federations (IAAF) in which she challenged the validity of the IAAF Regulations Governing Eligibility of Female with Hyperandrogenism to Compete in Women’s Competition (Regulations). The Regulations were established in 2011 as a response to the controversies surrounding South African athlete Caster Semenya (see e.g. here, here, and here), and for the purpose of safeguarding fairness in sport by prohibiting women with hyperandrogenism, i.e. those with excessive levels of endogenous (naturally occurring) testosterone, from competing in women athletics competitions. Owing to the subject-matter that the Regulations cover, the case before the CAS generated complex legal, scientific and ethical questions. The following case note thus aims at explaining how the Panel addressed the issues raised by the Indian athlete. It follows a previous blog we published in December 2014 that analysed the arguments raised in favour of Ms. Chand. More...




Asser International Sports Law Blog | UEFA’s Financial Fair Play Regulations and the Rise of Football’s 1%

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

UEFA’s Financial Fair Play Regulations and the Rise of Football’s 1%

On 12 January 2017 UEFA published its eighth club licensing benchmarking report on European football, concerning the financial year of 2015. In the press release that accompanied the report, UEFA proudly announced that Financial Fair Play (FFP) has had a huge positive impact on European football, creating a more stable financial environment. Important findings included a rise of aggregate operating profits of €1.5bn in the last two years, compared to losses of €700m in the two years immediately prior to the introduction of Financial Fair Play.



Source: UEFA’s eighth club licensing benchmarking report on European football, slide 107.


 Meanwhile the aggregate losses dropped by 81% from €1.7bn in 2011 to just over €300m in 2015.



Source: UEFA’s eighth club licensing benchmarking report on European football, slide 108.


 Furthermore, net debt as a percentage of revenue has fallen from 65% in 2009 to 40% in 2015.[1]



Source: UEFA’s eighth club licensing benchmarking report on European football, slide 125.


UEFA’s Financial Fair Play vindicated?

As was clear from the UEFA Club Licensing Benchmarking Report Financial Year ending 2011, the deficit of clubs with a UEFA License increased from €0.6 billion in 2007 to a peak of €1.7 billion in 2011, with some historic European football clubs, like FC Parma, going bankrupt. Though the increasing indebtedness might have been to a large extent related to the global economic crisis[2], UEFA considered that it was mainly the result of irresponsible spending by the clubs.[3] Consequently, UEFA introduced the FFP Regulations, whose objectives are, inter alia, improving the economic and financial capabilities of clubs; introducing more discipline and rationality in club football finances; encouraging clubs to operate on the basis of their own revenues; and protecting the long-term viability and sustainability of European club football. UEFA’s primary tool to achieve those is the break-even requirement imposed on clubs having qualified for a UEFA club competition.[4] Accordingly, clubs must demonstrate that their expenditure does not exceed their revenue  should they wish to avoid sanctions by the UEFA Club Financial Control Body.[5] With these objectives in mind, it does not come as a surprise that UEFA is celebrating in this report the success of the FFP regulations.


The negative side effect of FFP: The rise of the 1%

The FFP regulations are still facing controversy and legal challenges in spite of (or, maybe, because of) the results highlighted in this report. As early as 2012, critics pointed out that FFP could nurture the competitive imbalance between European football clubs. Basically, a successful club will yield more revenue, leading to the club being able to afford better players, in turn leading to the club being more successful, and so on and so forth. Since small clubs are no longer allowed to overinvest their way to a greater market size in the future, people predicted that FFP would trigger an era of competitive imbalance.[6] Indeed, this competitive imbalance was one of the primary arguments used by player agent Striani and his lawyer Dupont in their complaint to the European Commission.[7]

UEFA has so far successfully managed to withstand the legal challenges launched against the FFP rules, such as a Commission complaint, a preliminary reference to the Court of Justice of the EU, challenges in front of Belgian courts, a challenge in front of a French court, and a challenge in front of the Court of Arbitration for Sport. However, it is now forced to acknowledge that “the top 15 European clubs have added €1.51bn in sponsorship and commercial revenues in the last six years (148% increase), compared to the €453m added by the rest of the approximately 700 top-division clubs in Europe (17% increase)”.[8] UEFA is clearly concerned about the increasing gap between the “global super clubs” and the rest, though it is adamant that “overspending and unsustainable business models cannot be the answer to financial inequality”.[9]

Nonetheless, it is not completely fair to argue that by attempting to solve one problem (i.e. reducing the increasing debts of football clubs) UEFA single-handedly created another problem (i.e. the growing inequality between the global super clubs and the rest).[10] There are of course other factors that contributed to this increasing financial gap, most notably the discrepancies in incomes derived from the selling of media rights at national level. As can be seen in UEFA’s latest Benchmarking report, English Premier League clubs received an average of €108m for their media rights in 2015. This figure is considerably higher than other clubs from the “top five leagues”, namely the Italian (€47.7m), Spanish (€36.7m), German (€36.1m) and French clubs (€24.9m).[11] In fact, 17 out of the top 20 clubs by broadcast revenues in 2015 are English, the other three being Real Madrid, FC Barcelona and Juventus.[12] Nonetheless, even though UEFA is not responsible for the differences in media rights revenue, the FFP Regulations remain a clear obstacle for clubs from other leagues to get investment from alternative sources.  


What has UEFA done to counter this growing inequality?

The pressing question on many people’s mind is whether UEFA will, or even can, do something about the ever-growing financial inequality between football clubs. The FFP Regulations can be changed, as was demonstrated in 2015. An important innovation in this regard was the introduction of Annex XII on voluntary agreements with UEFA for the break-even requirement. Under this Annex, UEFA allows, inter alia, a club to apply for such an agreement if the club has been subject to a significant change in ownership and/or control within the 12 months preceding the application deadline.[13] When applying for a voluntary agreement the club will (among other obligations) need to:

- submit a long-term business plan, including future break-even information;
- demonstrate its ability to continue as a going concern until at least the end of the period covered by the voluntary agreement;
- and submit an irrevocable commitment by an equity participant (i.e. shareholder) to make contributions for an amount at least equal to the aggregate future break-even deficits for all the reporting periods covered by the voluntary agreement.[14]

The relaxation of the FFP Regulations to leave more room for investment has probably led to an increase of foreign acquisitions of European football clubs. As the graph below shows, only four clubs were bought by non-Europeans in the years 2012 and 2013, a period in which a stricter version of the FFP Regulations was in force, whole nine clubs were bought in 2016 alone, seven of which were bought by Chinese investors.



Source: UEFA’s eighth club licensing benchmarking report on European football, slide 56.


Nonetheless, upcoming media rights deals will ensure financial inequality for years to come, regardless of any particular FFP relaxation. It is estimated that Premier League clubs will receive an average of €141m per season for the 2016/17 – 2018/19, while e.g. Spanish clubs are predicted to make an average of ‘only’ €64m for the 2016/17 season.[15] Meanwhile, the highest earning Dutch club (Ajax) is expected to make a meagre €9.3m from the selling of its media rights for the 2016/17 season.  


Conclusion: Can UEFA equalize?

With the financial gap between clubs increasing instead of decreasing, should UEFA’s regulatory focus shift from good corporate governance (limited debt, small deficit) to redistribution and the fight against inequalities in football? The recently installed UEFA President Aleksander Čeverin held that “UEFA, together with its stakeholders, will need to continuously review and adapt its regulations”[16], but it is unclear what concrete adaptations he has in mind.

Possible options to tackle inequality would include: limiting media rights income; sharing media rights income at a European level; introducing salary caps; or even introducing a solidarity mechanism that would oblige clubs to redistribute some of their income to poorer clubs.[17] However, such proposals will always be strongly resisted by rich clubs, which are in a position to threaten to put in place a breakaway league at any time.[18] UEFA is hardly equipped to resist them. Unless UEFA’s regulatory monopoly is fully recognized and endorsed by the European Commission, it will not be able to face down a breakaway rebellion. Instead, it risks facing a FIBA-like bitter and costly secession. Hence, for UEFA the status quo remains the safest option, and facing criticisms from small clubs way less harmful economically and politically.

A final option, favoured by the many opponents of FFP, would be to abandon FFP all together. This way, there would be no more restrictions to (private) investors willing to pour their (often borrowed) money in (European) football clubs. However, it would also imply renouncing the key achievement of FFP, European football clubs are financially way healthier than in 2009 and their governance better scrutinized. Furthermore, taking into account the Premier League’s latest media rights deal, it is questionable whether abandoning FFP could in any way lead to a narrower gap between the rich clubs and the rest. 




[1] The definition of net debt according to UEFA includes net borrowings (i.e. bank overdrafts and loans, other loans and accounts payable to related parties less cash and cash equivalents) and the net player transfer balance (i.e. the net of accounts receivable and payable from player transfers) – see UEFA’s eighth club licensing benchmarking report on European football, slide 125

[2] Oskar van Maren, “The Real Madrid case: A State aid case (un)like any other?” (2015) Competition Law Review, Volume 11 Issue 1, pages 86-87.

[3] See for example, UEFA Club Licensing Benchmarking Report Financial Year ending 2008, slide 4.

[4] Article 2 (2) of both the 2012 and 2015 FFP Regulations.

[5] 58-63 of the FFP Regulations. Article 61 allows for an acceptable deviation of €5 million, i.e. the maximum aggregate break-even deficit possible for a club to be deemed in compliance with the break-even requirement.

[6] Markus Sass, “Long-term Competitive Balance under UEFA Financial Fair Play Regulations” (2012), Working Paper No. 5/2012.

[7] For an analysis of FFP under EU competition law, see for example Stefan Szymanski, “Financial Fair Play and the law Part III: Guest post by Professor Stephen Weatherill”, 14 May 2013, Soccernomics.

[8] UEFA Press release of 12 January 2017, “European club football’s financial turnaround”.

[9] Ibid.

[10] In fact, the discussion on financial balance between football clubs has been a constant theme for decades. Particularly the elaborated opinion of A.G. Lenz in the Bosman case is worth reading in that regard (paras. 218-234).

[11] UEFA’s eighth club licensing benchmarking report on European football, slide 74.

[12] Ibid, slide 75.

[13] Annex XII under A (2)iii) of the 2015 FFP Regulations. The application deadline is the 31 December preceding the licence season in which the voluntary agreement would come into force.

[14] Annex XII under B of the 2015 FFP Regulations.

[15] FC Barcelona and Real Madrid are expected to make €150m and €143m respectively, meaning that the other clubs would receive an average of €55m.

[16] UEFA Press release of 12 January 2017, “European club football’s financial turnaround”.

[17] Once again, see the opinion of A.G. Lenz in the Bosman case (paras. 218-234).

[18] Threatening to put in place a breakaway (European) league is a favoured method by some of the top clubs. For example, during last week’s row it had with La Liga following the postponement of the Celta – Real Madrid game, Real Madrid held that the Spanish league is not very well organised and that they are better off playing in a European Super League.

Comments (2) -

  • Stephan

    2/21/2017 3:16:36 PM |

    Interesting article.
    I've one remark on your claim that UEFA is not responsible for the differences in media rights revenue.
    I believe they do since UEFA prize money, specifically the market pool component,  is a protectionist measure to grow big leagues, disrupting uefa's own principals (even their mission) on fair competition.

    Why?
    Because uefa market pool is based on national TV deals, which is a false assumption causing to grow big leagues instead of big clubs. "Big club" already reflect domestic market pool only more direct to it's fanbase actually in stadiums instead of those watching tv around the world. Since CL needs to be the biggest platform, current reasoning is flawed: TV market should and could never be a driver for performance based incentives. Currently, this prize money is given directly to big countries.

    And yes, UEFA prize money is a big part is in club finances.

  • Stephan

    2/21/2017 3:24:02 PM |

    Also, in conclusion prize money is the easiest way to equalize between big leagues and smaller leagues. Leaving out this marketpool component, thus only reward prestation based prize money would potentially shift lot's of money from subtop clubs in big leagues to top clubs in smaller leagues.

Comments are closed