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

What a month June turned out to be. Waking up the morning after the 23^rd, the results of the UK referendum on EU membership were final. The words of Mark Twain: “Apparently there is nothing that cannot happen today”, might provide the most apt description of the mood felt at the time.[1] The Leave campaign’s narrow victory has brought along tremendous economic, political and legal uncertainties for both the UK and the (other) Member States. To give but one example, with regard to the implications of Brexit on Europe’s most profiting football league, we recommend an older blog by Daniel Geey and Jonny Madill.

Perhaps just as shocking as the UK’s wish for secession, was the Bundesgerichtshof decision in the infamous Pechstein case. On 7 June the highest German civil court ruled in favour of the validity of forced CAS arbitration and the independence of the CAS, leaving Claudia Pechstein to cough up roughly EUR 300 000 in legal expenses. For a critical analysis of the decision see Antoine Duval’s blog.

Operación Puerto, deemed “one of the most infamous and obscure doping sagas in history”, saw a new chapter being added on 14 June. A Spanish special criminal appeal chamber held that the more than 200 blood bags of professional athletes (which had been stored since their confiscation in 2006) can be delivered to the Spanish Anti-Doping Agency (AEPSAD), WADA, the UCI and the Italian Olympic Committee (CONI). Oskar van Maren examined the case in a blog.

Last but not least, in June we witnessed the IAAF upholding its decision not to reinstate the Russian Athletics Federation (RusAF) for IAAF Membership. This means that Russian athletes will still not be allowed to compete in International Competitions under IAAF Rules including the European Championships and the Rio 2016 Olympic Games. A few days later, the 21th of June, the IOC endorsed IAAF’s position. Though it also potentially opened the door for Russian athletes to demonstrate that they are clean. The IAAF’s decision was appealed collectively by 61 Russian athletes to the CAS, and the final decision is due before the start of the Olympic Games in Rio. 

Case law

On June 3rd a temporary injunction was granted by the Landgericht München in the case between the International Basketball Federation (FIBA) and FIBA Europe versus several basketball clubs. The court ruled that FIBA may not prevent these clubs from participating in the so-called Euroleague competitions. The alleged abuse of a dominant position is addressed in a blog by Marine Montejo. Yet the injunction was annulled in a subsequent decision of the LG München.

Famous tennis star Maria Sharapova was found to have violated anti-doping rules for the use of the controversial ‘meldonium’. A specially appointed independent tribunal imposed a two-year ban, disqualifying her from professional tennis from 26 January 2016 to 25 January 2018 (see also this piece by James Segan). In reply, she appealed the decision to the CAS, which is due to decide the case in September. This will prevent her from participating at the Olympic Games in Rio.

A key player in our Unpacking Doyen’s TPO deals blogs, football club FC Twente, found itself in a rollercoaster of conflicting decisions during the end of season 2015/2016. On 18 May the licensing committee of the Dutch football federation (KNVB) issued a decision in which it relegated the club to the second (and lowest) professional league. It did so by creating a new ad hoc license for the second league, which did not exist before. Subsequently on 10 June, in summary proceedings before the district court, FC Twente’s request for provisional measures got rejected, and the relegation approved. Yet only a week later, the KNVB’s appeal committee overturned the licensing committee’s initial ruling. As a result FC Twente will stay in the highest professional league.  

Official documents and Press releases

CAS – Statement on the decision made by the German Federal Tribunal in the case between Claudia Pechstein and the International Skating Union (ISU)

CAS – Maria Sharapova files an appeal at the Court of Arbitration for Sport, Tennis, Anti-doping

CAS – List upcoming hearings

CAS – KS Skenderbeu files an appeal at the Court of Arbitration for Sport, Football

CAS – The Appeal filed by Galatasaray SK is rejected by the Court of Arbitration for Sport

European Council - Council conclusions on enhancing integrity, transparency and good governance in major sport events

European Commission - Mapping and Analysis of the Specificity of Sport, A Final Report to the DG Education & Culture of the European Commission

FIBA - FIBA Europe welcomes Munich court decision to cancel temporary injunction

FIFA - Attorneys for FIFA provide update on internal investigation and details on compensation for former top officials

FIFA - Overview of Important Provisions contained in the Employment Contracts of Messrs. Blatter, Valcke and Kattner since 2007

FIFA - Circular no. 1542, Amendments to the Regulations on the Status and Transfer of Players

FIFA - Circular no. 1545, FIFA Forward Programme/2016 financial support - operational costs

IAAF – Ethics board statement 10 June 2016

IAAF - Response to Ethics Board statement

IAAF - Decision on Russia's participation in Rio Olympics

IAAF – IAAF Taskforce: Interim report to IAAF Council, 17 June 2016

IOC - Declaration of the Olympic Summit

ISU - Decision of the Bundesgerichtshof in the case of Ms. Claudia Pechstein

KNVB – Besluit licentiecommissie betaald voetbal 26 november 2015

WADA - International Standard for Laboratories (ISL)

WADA - WADA Update regarding Maria Sharapova Case

WADA - Acknowledges Madrid Court decision to provide access to "Operation Puerto" athlete blood bags

WADA - WADA Suspends the Accreditation of the Almaty Laboratory 

In the news

Athletics

Rebecca R. Ruiz, Juliet Macur and Ian Austen - Even With Confession of Cheating, World’s Doping Watchdog Did Nothing

Cycling

Stuart Clarke - Judge rules athletes implicated in Operation Puerto can be identified

Culture, Media and Sport Committee – Whistleblower Dan Stevens in front of the Committee

Football

Guardian - Football clubs in England’s top four tiers generated more than £4bn in 2014-15

Brian Homewood - No formal proceedings against FIFA chief Infantino says ethics committee

Mary Papenfuss - Auditor KPMG pulling out of Fifa because of 'lack of commitment' to reform

SBD - Barcelona Pleads Guilty To Fraud In Neymar Case, Agrees To Pay $6.2M Fine 

Olympics

Nick Butler - Exclusive: Clause at centre of European Championships contract row is "superseded"

James M. Dorsey - Kuwaiti Rulers Fight their Internal Battles on the Sports Field

Sam Morshead - 'It's like a badminton player playing tennis': Boxing comes under fire after voting for professionals to compete at Rio Olympics just 10 weeks before the Games

Dan Roan - Russia and Rio 2016: How the IOC is working up an Olympic compromise

SBS - Sailors take Olympic appeal bid to CAS

Pechstein case

Deutschlandfunk - "Sportler sollten Gerichtsbarkeit wählen können"

FAZ - Claudia Pechstein droht Schuldenberg

FIFPro - Despite decision, Pechstein must trigger reform

Johannes Herber - Urteil im Fall Pechstein, "Siegen oder sterben"

Swimming

Kor. Herald - Park Tae-hwan resumes arbitration proceedings against Olympic ban

David Leggat - Kane Radford, Charlotte Webby set to appeal Olympic snubs 

Academic materials

Dawn Aquilina and Angelo Chetcuti, The Aftermath of a Match-Fixing Case that Shook Two Nations: Insights into How Malta and Norway Are Seeking to Redeem Their Football

Bruce W. Bean, FIFA — The Reform Charade Continues

Richard Bunworth - Egg-shell skulls or institutional negligence? The liability of World Rugby for incidents of concussion suffered by professional players in England and Ireland

Antoine Duval, Getting to the games: the Olympic selection drama(s) at the court of arbitration for sport

Antoine Duval, Herman Ram, Marjolaine Viret, Emily Wisnosky, Howard L. Jacobs and Mike Morgan - The World Anti-Doping Code 2015: ASSER International Sports Law Blog symposium

Arnout Geeraert and Edith Drieskens, Theorising the EU and International Sport: The Principal-Agent Model and Beyond

Andrew C. Harmes, Forecheck, backcheck . . . paycheck? Employment status of the quasi-professional athlete: A case study of the CHL and the Major junior hockey player

Thomas Margoni, The Protection of Sports Events in the EU: Property, Intellectual Property, Unfair Competition and Special Forms of Protection

Despina Mavromati, The Legality of an Arbitration Agreement in Favour of CAS Under German Civil and Competition Law - The Pechstein Ruling of the German Federal Tribunal (BGH) of 7 June 2016

Karen Petry, The Beginnings and Development of European Sport Research at Universities: From Marginalisation to Fragmentation?

Ryan M. Rodenberg, Jeff Sackmann and Chris Groer - Tennis integrity: a sports law analytics review

Stephen Kirwan, Levelling the Playing Field? Remuneration Caps, EU Competition Law and Article 7(3) of the FIFA Regulations on Working With Intermediaries

Zachary Shapiro, Regulation, prohibition, and dantasy: The case of FanDuel, DraftKings, and Daily Fantasy Sports in New York and Massachusetts

Joshua D. Winneker, Philip Schultze and Sam C. Ehrlich, Lights, Camera, … Injury! The NBA Needs to Ban Courtside Cameramen 

Books

Michael Barry, James Skinner and Terry Engelberg, Research Handbook of Employment Relations in Sport

Antoine Duval, Ben Van Rompuy (Eds.), The Legacy of Bosman, Revisiting the Relationship Between EU Law and Sport

LawInSport and the British Association for Sport and Law, Sports Law Yearbook 2015/16 - UK, Ireland and EU eBook.

Götz Schulze, Aktuelle Rechtsfragen im Profifußball: Psychologische Faktoren und rechtliche Gestaltung Taschenbuch  

Blogs

Gregory Basnier, Joint selling of French Rugby’s tv rights: A review of the recent competition law cases

Carol Couse and Jake Cohen, The potential impact of Brexit on European football

Johanna Croon-Gestefeld, Der BGH und Pechstein: Transnationaler Konstitutionalismus sieht anders aus

Thomas Croxford and Nick De Marco, Fiduciary duties, football, and the fundamental importance of the contractual relationship

Juan de Dios and Crespo Pérez, Operación Puerto: A long and winding road in the fight against doping

Antoine Duval, The BGH’s Pechstein Decision: A Surrealist Ruling

Antoine Duval, The Pechstein case: Transnational constitutionalism in inaction at the Bundesgerichtshof

Antonia Foster, Advice for Athletes facing false allegations by the press – Practical and Legal Options

Ryan Lake, Signing new talent: How the entry draft system works in the National Hockey League

Daniel Lowen, Determining the level of compensations for out of contract football players: The PFCC Danny Ings Award

Jonny Madill and Jack Jones, Sharing sports clips in the digital age: 6 things you should know

Oskar van Maren, The EU State aid and Sport Saga: Hungary revisited? (Part 2)

Oskar van Maren, Operación Puerto Strikes Back!

Kester Mekenkamp, The Müller case: Revisiting the compatibility of fixed term contracts in football with EU Law

Lance Miller, Celeste Koravos and Nick Fitzpatrick, Sustainable procurement at Tokyo 2020 Olympics: Top 10 tips for a winning bid

Marine Montejo, FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München

Kimberly Morris and Barry Lysaght, How FIFA TMS Investigations increase transparency and accountability in international football transfers

Tim Owen, Sport, corruption and the criminal law: the need for an expert investigative body

Fabian Reinholz, Das Pechstein urteil nimmt dem sport reformdruck

Jennifer E. Rothman and Eugene Volokh, Brief of 28 constitutional law and intellectual property law professors as Amici Curiae in support of petitioner in, No. 15-1388, In the Supreme Court of the United States, National Collegiate Athletic Association, petitioner, v. Edward C. O’Bannon et al., Respondents

James Segan, A riddle wrapped in a mystery inside an enigma: the Sharapova case

Andrew Smith, A review of the updates to FIFA’s Regulations on the Status and Transfer of Players

The Swiss Rambler, Nottingham Forest - From The Ritz To The Rubble

The Swiss Rambler, Wolverhampton Wanderers - After The Gold Rush

WADC Commentary Team, Meldonium and Moral Fault: Five Lessons Learned from the Sharapova ITF Tribunal Decision

Mathias Wittinghofer and  Sylvia Schenk, A Never Ending Story: Claudia Pechstein’s Challenge to the CAS

John Wolohan, The integrity of education in college sport: does the NCAA model compromise athlete welfare? 

Upcoming events

14 July - Sports Corruption 2016 Conference, MBL Seminars London

19 – 21 July - Executive Programme in International Sports Law, Sports Law and Policy Centre, Ravello, Italy

2 & 3 September - International Sport Arbitration 6th Conference CAS & SAV, The Court of Arbitration for Sport (CAS), the Swiss Bar Association (SAV / FSA) and the Swiss Arbitration Association (ASA), Lausanne Switzerland

16 September - The future of the ‘legal autonomy’ of sport, Anglia Ruskin University, Cambridge, UK

26 September - Soccerex - Global Convention 2016, Manchester, UK 

[1] Mark Twain, American author (30 November 1835/21 April 1910)

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.