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 Odds of Match Fixing – Facts & Figures on the integrity risk of certain sports bets”. By Ben Van Rompuy

Media reports and interested stakeholders often suggest that certain types of sports bets would significantly increase the risks of match fixing occurring. These concerns also surface in policy discussions at both the national and European level. Frequently calls are made to prohibit the supply of “risky” sports bets as a means to preserve the integrity of sports competitions.

Questions about the appropriateness of imposing such limitations on the regulated sports betting, however, still linger. The lack of access to systematic empirical evidence on betting-related match fixing has so far limited the capacity of academic research to make a proper risk assessment of certain types of sports bets. 

The ASSER International Sports Law Centre has conducted the first-ever study that assesses the integrity risks of certain sports bets on the basis of quantitative empirical evidence. 

We uniquely obtained access to key statistics from Sportradar’s Fraud Detection System (FDS). A five-year dataset of football matches worldwide, which the FDS identified as likely to have been targeted by match fixers, enabled us to observe patterns and correlations with certain types of sports bets. In addition, representative samples of football bets placed with sports betting operator Betfair were collected and analysed. 

The results presented in this report, which challenge several claims about the alleged risks generated by certain types of sports bets, hope to inform policy makers about the cost-effectiveness of imposing limits on the regulated sports betting offer.More...

The Pechstein ruling of the Oberlandesgericht München - Time for a new reform of CAS?

Editor's note (13 July 2015): We (Ben Van Rompuy and I) have just published on SSRN an article on the Pechstein ruling of the OLG. It is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2621983. Feel free to download it and to share any feedback with us!


On 15 January 2015, the earth must have been shaking under the offices of the Court of Arbitration for Sport (CAS) in Lausanne when the Oberlandesgericht München announced its decision in the Pechstein case. If not entirely unpredictable, the decision went very far (further than the first instance) in eroding the legal foundations on which sports arbitration rests. It is improbable (though not impossible) that the highest German civil court, the Bundesgerichtshof (BGH), which will most likely be called to pronounce itself in the matter, will entirely dismiss the reasoning of the Oberlandesgericht. This blogpost is a first examination of the legal arguments used (Disclaimer: it is based only on the official press release, the full text of the ruling will be published in the coming months).More...



In blood we trust? The Kreuziger Biological Passport Case. By Thalia Diathesopoulou

Over the last twenty years, professional cycling has developed the reputation of one of the “most drug soaked sports in the world”.[1] This should not come as a surprise. The sport’s integrity has plummeted down due to an unprecedented succession of doping scandals. La crème de la crème of professional cyclists has been involved in doping incidents including Tyler Hamilton, Floyd Landis, Alejandro Valverde and Lance Armstrong. The once prestigious Tour de France has been stigmatized as a race of “pharmacological feat, not a physical one”.[2]

In view of these overwhelming shadows, in 2008, the International Cycling Union (UCI), in cooperation with the World Anti-Doping Agency (WADA) took a leap in the fight against doping. It became the first International Sports Federation to implement a radical new anti-doping program known as the Athlete Biological Passport (ABP).[3] More...

A Question of (dis)Proportion: The CAS Award in the Luis Suarez Biting Saga

The summer saga surrounding Luis Suarez’s vampire instincts is long forgotten, even though it might still play a role in his surprisingly muted football debut in FC Barcelona’s magic triangle. However, the full text of the CAS award in the Suarez case has recently be made available on CAS’s website and we want to grasp this opportunity to offer a close reading of its holdings. In this regard, one has to keep in mind that “the object of the appeal is not to request the complete annulment of the sanction imposed on the Player” (par.33). Instead, Suarez and Barcelona were seeking to reduce the sanction imposed by FIFA. In their eyes, the four-month ban handed out by FIFA extending to all football-related activities and to the access to football stadiums was excessive and disproportionate. Accordingly, the case offered a great opportunity for CAS to discuss and analyse the proportionality of disciplinary sanctions based on the FIFA Disciplinary Code (FIFA DC).  More...

The International Sports Law Digest – Issue II – July-December 2014

I. Literature


1. Antitrust/Competition Law and Sport

G Basnier, ‘Sports and competition law: the case of the salary cap in New Zealand rugby union’, (2014) 14 The International Sports Law Journal 3-4, p.155

R Craven, ‘Football and State aid: too important to fail?’ (2014) 14 The International Sports Law Journal 3-4, p.205

R Craven, ‘State Aid and Sports Stadiums: EU Sports Policy or Deference to Professional Football (2014) 35 European Competition Law Review Issue 9, 453


2. Intellectual Property Rights in Sports law / Betting rights/ Spectators’ rights/ Sponsorship Agreements

Books

W T Champion and K DWillis, Intellectual property law in the sports and entertainment industries (Santa Barbara, California; Denver, Colorado; Oxford, England: Praeger 2014)

J-M Marmayou and F Rizzo, Les contrats de sponsoring sportif (Lextenso éditions 2014) 

More...






Time to Cure FIFA’s Chronic Bad Governance Disease

 After Tuesday’s dismissal of Michael Garcia’s complaint against the now infamous Eckert statement synthetizing (misleadingly in his eyes) his Report on the bidding process for the World Cup 2018 and 2022, Garcia finally decided to resign from his position as FIFA Ethics Committee member. On his way out, he noted: “No independent governance committee, investigator, or arbitration panel can change the culture of an organization”. It took Garcia a while to understand this, although others faced similar disappointments before. One needs only to remember the forgotten reform proposals of the Independent Governance Committee led by Prof. Dr. Mark Pieth. More...

The CAS Ad Hoc Division in 2014: Business As Usual? - Part. 2: The Selection Drama

In a first blog last month we discussed the problem of the scope of jurisdiction of the Ad Hoc Division of the Court of Arbitration for Sport. The key issue was whether an athlete could get his case heard in front of the CAS Ad Hoc Division or not. In this second part, we will also focus on whether an athlete can access a forum, but a different kind of forum: the Olympic Games as such. This is a dramatic moment in an athlete’s life, one that will decide the future path of an entire career and most likely a lifetime of opportunities. Thus, it is a decision that should not be taken lightly, nor in disregard of the athletes’ due process rights. In the past, several (non-)selection cases were referred to the Ad Hoc Divisions at the Olympic Games, and this was again the case in 2014, providing us with the opportunity for the present review.

Three out of four cases dealt with by the CAS Ad Hoc Division in Sochi involved an athlete contesting her eviction from the Games. Each case is specific in its factual and legal assessment and deserves an individual review. More...

Should the CAS ‘let Dutee run’? Gender policies in Sport under legal scrutiny. By Thalia Diathesopoulou

The rise of Dutee Chand, India’s 100 and 200-meter champion in the under 18-category, was astonishing. Her achievements were more than promising: after only two years, she broke the 100m and 200m national junior records, competed in the 100m final at the World Youth Athletics Championships in Donetsk and collected two gold medals in the Asian Junior Championships in Chinese Taipei. But, in July 2014, this steady rise was abruptly halted. Following a request from the Athletics Federation of India (AFI), the Sports Authority of India (SAI) conducted blood tests on the Indian sprinters. Dutee was detected with female hyperandrogenism, i.e a condition where the female body produces high levels of testosterone. As a result, a few days before the Commonwealth Games in Glasgow, the AFI declared Dutee ineligible to compete under the IAAF Regulations and prevented her from competing in future national and international events in the female category. Pursuant to the IAAF ‘Hyperandrogenism Policy’, the AFI would allow Dutee to return to competition only if she lowers her testosterone level beneath the male range by means of medical or surgical treatment.[1] On 25 September 2014, Dutee filed an appeal before the CAS, seeking to overturn the AFI’s decision and declare IAAF and IOC’s hyperandrogenism regulations null and void. She is defending her right to compete the way she actually is: a woman with high levels of testosterone. Interestingly enough, albeit a respondent, AFI supports her case.

IAAF and IOC rules set limits to female hyperandrogenism, which is deemed an unfair advantage that erodes female sports integrity. While these rules have been contested with regard to their scientific and ethical aspects, this is the first time that they will be debated in court. This appeal could have far-reaching ramifications for the sports world. It does not only seek to pave the way for a better ‘deal’ for female athletes with hyperandrogenism, who are coerced into hormonal treatment and even surgeries to ‘normalise’ themselves as women[2], but it rather brings the CAS, for the first time, before the thorny question:

How to strike a right balance between the core principle of ‘fair play’ and norms of non-discrimination, in cases where a determination of who qualifies as a ‘woman’ for the purposes of sport has to be made? More...

The O’Bannon Case: The end of the US college sport’s amateurism model? By Zygimantas Juska

On 8 August, U.S. District Judge Claudia Wilken ruled in favour of former UCLA basketball player O'Bannon and 19 others, declaring that NCAA's longstanding refusal to compensate athletes for the use of their name, image and likenesses (NILs) violates US antitrust laws. In particular, the long-held amateurism justification promoted by the NCAA was deemed unconvincing.

On 14 November, the NCAA has appealed the judgment, claiming that federal judge erred in law by not applying a 1984 Supreme Court ruling. One week later, the NCAA received support from leading antitrust professors who are challenging the Judge Wilken’s reasoning in an amicus curiae. They are concerned that the judgment may jeopardize the proper regulation of college athletics. The professors argued that if Wilken’s judgment is upheld, it

would substantially expand the power of the federal courts to alter organizational rules that serve important social and academic interests…This approach expands the ‘less restrictive alternative prong’ of the antitrust rule of reason well beyond any appropriate boundaries and would install the judiciary as a regulatory agency for collegiate athletics”.   

More...

Image Rights in Professional Basketball (Part II): Lessons from the American College Athletes cases. By Thalia Diathesopoulou

In the wake of the French Labour Union of Basketball (Syndicat National du Basket, SNB) image rights dispute with Euroleague and EA Games, we threw the “jump ball” to start a series on players’ image rights in international professional basketball. In our first blogpost, we discussed why image rights contracts in professional basketball became a fertile ground for disputes when it comes to the enforcement of these contracts by the Basketball Arbitral Tribunal (BAT). Indeed, we pointed out that clubs might take advantage of the BAT’s inconsistent jurisprudence to escape obligations deriving from image rights contracts.

In this second limb, we will open a second field of legal battles “around the rim”: the unauthorized use of players’ image rights by third parties. We will use as a point of reference the US College Athletes image rights cases before US Courts and we will thereby examine the legal nature of image rights and the precise circumstances in which such rights may be infringed. Then, coming back to where we started, we will discuss the French case through the lens of US case law on players’ image rights. 


Source: http://philadelphia.cbslocal.com/2013/09/27/ea-sports-settles-college-likeness-case/ More...


Asser International Sports Law Blog | Bailing out your local football club: The Willem II and MVV State Aid decisions as blueprint for future rescue aid (Part 2)

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

Bailing out your local football club: The Willem II and MVV State Aid decisions as blueprint for future rescue aid (Part 2)

This is part two of the blog on the Willem II and MVV State Aid decisions. Where part one served as an introduction on the two cases, part two will analyze the compatibility assessment made by the Commission in two decisions.


The compatibility of the aid to MVV and Willem II (re-)assessed

Even though it was the Netherlands’ task to invoke possible grounds of compatibility and to demonstrate that the conditions for such compatibility were met, the aid granted to both Willem II and MVV was never notified. The Netherland’s failure to fulfill its notification obligation, therefore, appears to be at odds with the Commission’s final decision to declare the aid compatible with EU law. Yet, a closer look at the Commission’s decision of 6 March 2013 to launch the formal investigation shows that the Commission was giving the Netherlands a ‘second chance’ to invoke grounds that would lead to a justification of the measures. In paragraph 74, the Commission itself reached the conclusions that the clubs in question faced financial difficulties, consequently indicating that the Rescue and Restructuring Guidelines might apply. In fact, the Commission even suggested possible compensatory measures, which are very much related to “the peculiar nature of professional football”[1]. These suggested compensatory measures included:

- limiting the club’s number of registered players for a season or several seasons;

- accepting a cap on the relation between salaries and turnover;

- banning the payment of transfer fees for a certain period;

- offering additional expenditure on “pro bono” activities to the benefit of the community and training of amateurs.[2]

Furthermore, it invited the Dutch authorities “to provide all useful information allowing the Commission to decide whether the aid measures can be considered compatible with the Guidelines”.[3]

The observations and information submitted by the Netherlands between March 2013 and July 2016 proved more than sufficient for the Commission to carry out its compatibility assessment. As was insinuated in the decision to launch a formal investigation, the Rescue and Restructuring Guidelines proved fundamental to this assessment.  


Willem II and MVV as firms in financial difficulties

This first condition of the Guidelines was easily complied with. As regards Willem II, in the accounting year 2008/2009, it made a loss of €3.9 million on a turnover of €11.4 million. Meanwhile, its own equity decreased from €4.1 million to €200.000. The losses increased to €4.4 million on a turnover of €9.9 million for the 2009/2010 season, while its own equity decreased further from €200.000 to minus €2.1 million.[4]

MVV clearly was financially not doing much better. As the Commission itself summarizes in the MVV decision, “in 2008/2009, MVV made a loss of €1.1 million and its own equity was minus €3.8 million. By March 2010 additional losses amounting to €1.3 million had occurred and the own equity had dropped to minus €5.17 million. In April 2010, MVV was no longer able to pay salaries and other current expenditure and was on the brink of bankruptcy.”[5]

Another consequence of being in financial difficulties relates to the licensing system put in place by the Dutch football federation KNVB. As is explained in paragraph 11 of the decision to open a formal investigation, one of the obligations for clubs under the current system is submitting three financial reports a year to the KNVB. On the basis of these reports clubs are scaled in three categories (I: insufficient, II: sufficient, III: good). Clubs in category I may be obliged to present a plan for improvement in order to reach categories II or III. If the club fails to comply with the plan, sanctions may be imposed by the KNVB, including an official warning, a reduction of competition points and – as ultimate sanction – withdrawal of the licence.[6] At the time the State aid was granted, both Willem II and MVV were scaled in the insufficient category I.  


Willem II and MVV as small enterprises or medium-sized enterprises

This particular assessment is important for the two conditions below, i.e. the introduction of restructuring plans and compensatory measures. Depending on the size of the firm (or enterprise), different conditions apply. Willem II employed 53 people in 2012 and had an annual turnover of €11.4 million in 2008/2009.[7] Pursuant to the Annex of the Commission Recommendation concerning the definition of micro, small and medium-sized enterprises, Willem II just managed to be considered a medium-sized enterprise.[8]

MVV, on the other hand, is considered a small enterprise. In the season 2009/2010 it had 38 employees and in the season 2010/2011 it had 35 employees. Its turnover and balance sheet total remained well below €10 million in both years.[9] 


Restructuring plans

Though not initially communicated to the Commission, both rescue measures were subject to certain restructuring conditions. In principle, these consisted of reducing personnel costs, by introducing new managements, selling players, and signing players free of transfer payments. In the case of Willem II, in the two years following the rescue measure personnel costs were reduced by 30%.[10] The effects of MVV’s restructuring plan were even better, since it managed to book profits for the three seasons following the aid and was scaled in the highest category (III) by the KNVB in the beginning of the season 2011/2012.[11] 


Compensatory measures

For the compensatory measures it is important to take into account point 41 of the Rescue and Restructuring Guidelines. Under this provision, small enterprises, such as MVV, are not required to take compensatory measures. However, this exception did not apply to Willem II. The Commission noted more expenditure of Willem II for public benefit by the training of amateurs and a reduction of the number of registered players from 31 to 27. Similarly, no transfer payments were made during the restructuring period.[12] Potentially as a result of this, Willem II was relegated to the second league in 2011 and again in 2013. In the end, the Commission concluded that “the compensatory measures required by the Guidelines were taken, which had the effect of weakening Willem II's competitive position in professional football”.[13] 


Aid limited to a minimum

Since the aid measures rescued both football clubs from bankruptcy without creating equity surplus, the Commission believed the amount of aid granted limited to what was necessary. Furthermore, the Commission highlighted that the restructuring plans were to a large extent financed by external contributors just as the Rescue and Restructuring Guidelines requested. Private entities had agreed to lend €2.25 million to Willem II for the restructuring, which is well over the 40% of €2.4 million (the total amount of State aid granted) required for medium-sized enterprises under the Guidelines.[14] In the case of MVV, several private creditors decided to waive (part of) their debt, which amounted to €2.25 million. This amount is more than 25% of the €5.8 million granted by the Netherlands, the minimum requirement for a small enterprise like MVV.[15] 


One time, last time

The Commission believes this condition to be fulfilled, as the Netherlands specified that Willem II and MVV did not receive rescue or restructuring aid in the ten years before the aid measures, nor will it award any new rescue or restructuring aid to the clubs during a period of ten years.[16] 


Conclusion

At the time of writing, the non-confidential versions of the positive decisions regarding State aid granted in favour of the Dutch professional football clubs FC Den Bosch and NEC Nijmegen are not published. Nonetheless, this does not prevent us from drawing the following lessons from the Willem II and MVV decisions.

First of all, these decisions show that there is no need to draft sector specific guidelines for State aid to professional football clubs in difficulty. The Rescue and Restructuring Guidelines are all the Commission needs in order to carry out the compatibility assessment. This approach is radically different when compared to the Commission’s decisional practice for the State aid to sport infrastructure cases between 2011 and 2013.[17] Only after the Commission dealt with ten different cases, was its approach (to a large extent) codified in Article 55 of the 2014 General Block Exemption Regulation.[18]

In this regard it is important to highlight that the Commission seems to take into account “the peculiar nature of professional football”[19] when assessing the compatibility of State aid measures under the Rescue and Restructuring Guidelines. For example, it showed demonstrated its awareness of the UEFA Club Licensing and Financial Fair Play Regulations[20] as well as national (KNVB) licensing rules when assessing the compensatory measures taken by Willem II. Moreover, it clearly endorsed the decision taken by the club not to make transfer payments during the restructuring period, since this prevents the club from spending money it might not have, while simultaneously limiting the club’s competitiveness on the field.

A further lesson that can be drawn from these decisions is that, in my opinion, the threshold to ‘pass the compatibility test’ under the Rescue and Restructuring Guidelines is quite low. With regard to the condition that the club needs to be in financial difficulties in order to get the State aid, it is clear that granting State aid to professional football clubs in financial difficulties is one of the most (if not the most) common form of State aid in the sector. This was the case for the five Dutch clubs scrutinized by the Commission, as well as the three clubs from Valencia of which the non-confidential version of the decision still needs to be published. Other clubs like FC Twente and Sporting de Gijón have also received State aid over financial difficulties, even though the Commission did not investigate these measures (yet).[21] In other words, a majority of the cases are assessable under these Guidelines.

The condition that the beneficiary football club needs to stick to a restructuring plan in order to receive the State aid is key. As is elucidated in the two decisions, the restructuring plans consisted of selling players, reducing the costs of wages and not paying transfer fees for new players for a period of three years. In my view, these conditions are rather proportionate when considering that the clubs in question were on the verge of bankruptcy prior to the State aid measures. In fact, one could argue that FIFA’s transfer ban imposed on FC Barcelona for international transfers of minors, or excluding FC Dynamo from the next UEFA club competition for which the club would otherwise qualify in four seasons (i.e. the 2015/16, 2016/17, 2017/18 and 2018/19 seasons) for breaching UEFA’s FFP Regulations,[22] are harsher than the restructuring conditions accepted by the Commission.

The same can be said about the need to take compensatory measures. The measures taken by Willem II (reducing the number of employees and players, and reducing the cost of wages to 48% of the turnover) could be considered a direct consequence of the abovementioned restructuring plans. The only additional compensatory measure taken by Willem II was increasing expenditure of the club for the training of amateurs, though the decision does not specify what this implied in practice.

Perhaps the only condition that could be problematic for some football clubs is the “one time, last time” criterion. Under this condition, the public authorities cannot rescue Willem II and MVV again until at least 2020. Although Willem II and MVV are currently in category III and II on the KNVB’s scale respectively, falling back to category I before 2020 could have dramatic consequences.

Be that as it may, now that the Commission’s approach for the assessment of State aid to professional football clubs in financial difficulties is out in the open, public authorities and football clubs alike should use this knowledge to their own advantage. They should remember that the Commission is willing to accept rescue aid and that the restructuring conditions are far from impossible to match. One can even wonder whether a club like FC Twente would have turned to Doyen when it was facing financial difficulties, if it had been aware of the conditions imposed by the European Commission for receiving compatible State aid under the Rescue and Restructuring Guidelines.



[1] Commission Decision on State Aid SA.40168 of 4 July 2016 implemented by the Netherlands in favour of the professional football club Willem II in Tilburg, para. 50.

[2] Commission Decision SA.33584 of 6 March 2013 – The Netherlands Alleged municipal aid to the Professional Dutch football clubs Vitesse, NEC, Willem II, MVV, PSV and FC Den Bosch in 2008-2011, para. 80.

[3] Ibid, para. 77.

[4] SA.40168, para. 45.

[5] Commission Decision on State Aid SA.41612 of 4 July 2016 implemented by the Netherlands in favour of the professional football club MVV in Maastricht, para. 13.

[6] SA.33584, para. 11.

[7] SA.40168, para. 9.

[8] A firm is not considered a small enterprise i fit has more than 50 employees and an annual turnover of more than €10 million. See footnote 27.

[9] SA.41612, para. 9.

[10] SA.40168, para. 48.

[11] SA.41612, para. 52.

[12] SA.40168, para. 51. Indeed, according to www.transfermarkt.de, Willem II only paid a mere €20.000 for the signing of Kevin Brands in July 2012.

[13] Ibid.

[14] SA.40168, para. 52.

[15] SA.41612, para. 54.

[16] SA.40168, para. 55 and SA.41612, para. 61.

[17] Commission Decision of 9 November 2011, SA.31722 – Hungary - Supporting the Hungarian sport sector via tax benefit scheme; Commission Decision of 2 May 2013, SA.33618 Uppsala arena; Commission Decision of 15 May 2013, SA.33728 Multiarena in Copenhagen; Commission Decision of 20 March 2013, SA.35135 Multifunktionsarena der Stadt Erfurt; Commission Decision of 20 March 2013, SA.35440 Multifunktionsarena der Stadt Jena; Commission Decision of 18 December 2013, SA.35501 Financement de la construction et de la renovation des stades pour l’EURO 2016; Commission Decision of 2 October 2013, SA.36105 Fuβballstadion Chemnitz; Commission Decision of 20 November 2013, SA.37109 Football stadiums in Flanders; Commission Decision of 9 April 2014, SA.37342 Regional Stadia Development in Northern Ireland; and Commission Decision of 13 December 2013, SA.37373 Contribution to the renovation of ice arena Thialf in Heerenveen.

[18] For a deeper analysis of whether sport-specific guidelines are necessary, see Oskar van Maren, “EU State Aid Law and Professional Football: A threat or a Blessing?”, European State Aid Law Quarterly, Volume 15 1/2016, pages 31-46. To find out how sector-specific rules for State aid are usually articulated, see Ben Van Rompuy and Oskar van Maren, “EU Control of State Aid to Professional Sport: Why Now?” In: “The Legacy of Bosman. Revisiting the relationship between EU law and sport”, T.M.C. Asser Press, 2016.

[19] SA.40168, para. 50.

[20] In paragraph 51 of SA.40168, the Commission referred to a UEFA rule, which holds that the cost of salaries should not exceed 70%.

[21] For more information of the precarious financial situation of these two clubs, see our previous blogs: “Unpacking Doyen’s TPO Deals: FC Twente's Game of Maltese Roulette”, and “TPO and Spanish football, friends with(out) benefits?”.

[22] For more information on the FC Dynamo case, see our blog “UEFA’s FFP out in the open: The Dynamo Moscow Case”.

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