This post is an extended version of an article published in August on hostcity.net.

The recent debacle among the candidate cities for the 2022 Winter Games has unveiled the depth of the bidding crisis faced by the Olympic Games. The reform process initiated in the guise of the Olympic Agenda 2020 must take this disenchantment seriously. The Olympic Agenda 2020 took off with a wide public consultation ending in April and is now at the end of the working groups phase. One of the working groups was specifically dedicated to the bidding process and was headed by IOC vice-president John Coates.  

The bidding crisis: From Mega to Giga events

The century started with two successful summer and winter Olympics in Sydney and Salt Lake City. However, since then, we could witness the oversized Athens Games that helped to bankrupt Greece, the first Olympic Games of China’s communist dictatorship, and the most expensive Winter Olympics ever in Sochi. In fact, the Olympic Games seem to have left the world of mega-events to enter the universe of giga-events: events that require investments on a massive scale, which are under a permanent global scrutiny and which can have a dramatic impact on local social, economic and environmental life worlds. Meanwhile, the growing competition from countries whose leaders’ political accountability is (to say the least) relative, crowds out modest (and more sustainable) bids. Recent Games, culminating evidently in the Sochi experiment, have shown a propension for grandiosity leading to a lack of respect for their negative impact in terms of environmental, social and economical sustainability. This has led to widespread distrust from the global citizenry; clearly noticeable in places where public opinion is sought after and practically demonstrated by the string of defections in the bids for the 2022 Winter Games. To end this crisis and regain the necessary trust, confidence and passion of the citizens, real changes to the bidding process are required.     

Changing the Olympic bidding process

How could these changes to the bidding process look like? Three types of proposals can be sketched: changing the weighing formula of the different evaluation criteria in order to clearly favour sustainability; introducing a budget ceiling to bids (a kind of financial fair play rule); and, finally, increasing the transparency and fairness of the selection process itself. This is only a set of potential reform orientations, many more good proposals to improve the bidding process have been suggested. 

Changing the weighing of the Olympic criteria

How much weight is currently put on the sustainability of a candidacy? Very little. To be precise, in the case of Sochi, merely 5,7% of the final mark depended on the quality of the project in terms of its environmental legacy. At the moment, the social and economic sustainability of a project is not even considered in the evaluation process. This explains that despite its very poor environmental showing, the Sochi bid managed to go through the evaluation process unharmed. In an era apprehensive about climate change and environmental hazards, in a time of heightened inequality and economic austerity, however, the sustainability of giga-events cannot be easily brushed aside. The image of the Olympic Games has tremendously suffered from the IOC’s doublespeak: on one side, praising sustainability and environmental responsibility in the Olympic Charter and, on the other, knowingly awarding the Games to bids incompatible with these proclaimed values. Not only must the Olympic Charter be taken seriously, but it is also time for the IOC to put its money where its mouth is. These are exactly the kind of concerns, which, thanks to the Olympic Agenda 2020 process, should finally find their way into the bidding process. 

Introducing a ‘Financial Fair Play’ for bidding

From a purely economic point of view, the Olympics are faced with the emergence of the “nouveau riches”, BRICS and others, which are ready to spend lavishly and sometimes irrationally on “their” Games. In certain countries, where the accountability of government towards their citizens is relative, there are no limits in sight to the size of the investments incurred to get and organize the Games. This competition drives the price of the Games through the roof and crowds out a growing number of countries from the exclusive circle of Game organizers. What can be done to rein it? Why not try out a form of financial fair play: a golden rule limiting on the basis of a reasonable (and context-dependent) formula the amounts a host-city is authorized to spend on bidding for, and organizing of, the Games. Such a rule would limit the costs of organizing the Games to a reasonable amount and refocus the bidding competition on non-economic dimensions. Furthermore, it would pre-empt the prospect of governments overspending on the Games and later facing a wave of global criticisms when the price tag is disclosed and the citizens’ awareness of the costs, in terms of schools or hospitals not-built, turns into anger.  

Towards a transparent and independent selection process

Finally, there is an urgent need of opening up the selection process to public scrutiny. This is not exclusively a concern for the Olympic Games as illustrated by the on-going FIFA World Cup Qatar 2022 scandal. Its two phases, evaluation and nomination, should be institutionally neatly separated. A team composed equally of Olympic family members and external experts should lead the evaluation phase. Its findings should be binding in designating the candidate cities and to some extent binding on the election of the host city by the IOC. Especially, since host-city elections have historically been marred with intrigues and suspicions of votes being sold to the highest bidder. Hence, to restore the image of the Games, the Agenda 2020 should consider making the individual votes public and limiting as much as possible the contacts between bidders and IOC members. In many ways, the IOC operates still as though it were a local Swiss chess club. Political power is concentrated in the hands of its non-elected members, but it has widely outgrown a chess club and now affects millions of people’s lives around the world. Those deserve at least to be able to fully scrutinize the decisions taken, if not to participate in their adoption.  

Bidders of the world Unite!

The Olympic Agenda 2020 might be unsatisfactory in terms of transparency and inclusiveness. Nevertheless, this is a unique opportunity to publicly influence the way the Olympic Games are run and to shape Olympic policies for the years to come. It is the bidders’ (cities, countries, federations) responsibility to seize this opportunity and to raise their voices to impose the changes they see fit, in order to restore the trust of citizens and improve the Games’ public perception. Thus, one can only welcome the recent initiative taken by four NOCs, which have produced a thoroughly argued joint paper on ‘the bid experience’, making an immediate impact on the Olympic Agenda 2020 and forcing the IOC to acknowledge publically the necessity to reform the bidding process. The political battle for the future of the Olympics will be played out until 8 and 9 December 2014, when the IOC Session is due to adopt the changes to the Olympic Charter and its bylaws brought forward in the framework of the Olympic Agenda 2020 process. Until then, stakeholders with a lot at stake, like the bidders, should publically call and argue for the reforms they wish for. A united front of the bidders can and should drive forward the Olympic Agenda 2020 and bear on the fundamental orientations the Games will take in the upcoming years.

Camille Boillat & Raffaele Poli: Governance models across football associations and leagues (2014)

Vol. 4, Centre International d'Etude du Sport, Neuchâtel, Switzerland, softback, 114 pages, ISBN 2-940241-24-4, Price: €24

Source: http://www.cies.ch/en/cies/news/news/article/new-publication-in-the-collection-editions-cies-governance-models-across-football-associations-an/

This book derives from a research mandate carried out by the Centre International d'Etude du Sport (CIES) on behalf of FIFA. Camille Boillat is a scientific collaborator at the CIES, while Raffaele Poli is the head of the CIES Football Observatory. The book maps the various existing models of national football associations and leagues and attempts to study the relationship between the two. It is divided into the following four chapters: (1) Structural models, legal forms and agreements between national association leagues; (2) The league in the national association structure; (3) Division of labour between national associations and leagues and; (4) League internal governance. The authors studied thirty-two FIFA member associations from each football confederation representing various levels of football development. The methodology for the research consisted of collecting information from reports, official documents and online sources.

In chapter 1, the authors make a distinction between the association model and the separate entity model. In the association model, leagues take the legal form of an association, similar to the national football association to which they belong. The separate entity model refers to leagues for which the legal form is that of a company with an independent ownership structure. The association model is further divided in countries where the leagues are managed by the national associations on the one hand, and countries where leagues enjoy a wide margin of autonomy, called “self-management” leagues, on the other. The consequent mapping of the different models using these two distinctions forms the basis for many of the conclusions drawn in the book. Leagues will usually have less voting power within their national association when they themselves enjoy a large amount of independence. Equally, in association model leagues with national association management the league president will be chosen by the national association. Leagues that are self-managed will have greater autonomy when devising its own executive committee.

Other conclusions drawn in this book do not directly flow from the clear-cut distinction in models described in chapter 1. The English Premier league is a separate entity and therefore enjoys a large amount of independence. Nonetheless, it is the English FA that governs the disciplinary proceedings in English professional football. On the other hand, Cameroon’s top tier league follows the association model and is financially dependent of the national association. However, as regards the disciplinary proceedings, it is the league of Cameroon that is in charge.

Being geographers by training, the authors do not provide a legal analysis of their findings. For example, the book does not touch on the question whether the selection of a certain model finds its origin in the national law of a certain country, nor whether the differences found in jurisdictions can be transposed to the differences in models.

Although the authors do not state whether one model is better than another, the book is a useful tool to understand what it entails for countries to have a certain model and identify specific problems related to those models. For example, Spain is currently trying to reform its broadcasting rights distribution system from an individualised selling system to a joint selling system. However, the Spanish national association (RFEF), the Spanish league (LNFP) and the Sport Governmental Council for Sport (CSD) are encountering difficulties in reaching an agreement. Each party involved is trying to get the best deal possible for themselves. With the information provided by this book in the back of your mind, one can better understand the political and legal game being played: at which level decisions are being made, who the stakeholders are and what their voting power is. In other words, the analytical model provided by this book is very useful for analysing concrete examples.

All models show overlaps with other models. Nonetheless, there are no two national models that are exactly the same. The main difference between the different national models lies in the scope of independence that a league will have from its national association. Some leagues will be more independent than others, but no league is completely independent. In conclusion, finding the right balance is a delicate and thorny issue.

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre. 

Part 2. EU competition law and sports funding

The first analysed impact of Brexit on sport was the one regarding EU internal market rules and free movement. However, all sport areas that are of interest to the European Union will be impacted by the result of the future Brexit negotiations. This second part of the blog will focus on EU competition law and the media sector as well as direct funding opportunities keeping in mind that if the UK reaches for an EEA type agreement competition law and state aid rules will remain applicable as much as the funding programs.  

A) EU competition law and the media sector

As for the internal market rules, EU competition law applies to sport as long as an economic activity appears to have an impact on the European market. In the field of sport this is particularly true for the media sector, a key source of economic revenue for professional sport. 

EU competition law

It should be stated from the beginning that the UK, even completely outside of the EU, will not escape EU competition law (articles 101 and 102 TFEU). Indeed, if there is an economic activity within the European market EU law will continue to apply. The application of EU competition law leads to a convergence with national competition rules and most of the decisions relating to sport will probably remain enforceable through UK national law provisions unless there is an important change in their interpretation or a complete shift in competition law policy leading to a change of these rules. 

The main impact for the UK regarding the applicability of EU competition law appears to be in the media sector. With regard to the collective selling of media rights, for the time being national provisions should maintain the system in force which is derived from the Commission’s decisional practice (Football Association Premier League for a British example). Collective selling of media rights is compatible with EU competition law if the selling procedure is organised in a transparent and non-discriminatory manner, the contractual exclusivity runs for no more than three years and the rights are sold in several packages. The “no-single buyer” clause that was first imposed upon the Premier League to avoid the risk of monopolisation given the specific structure of the British sport media market (and now also applied by the German competition authority for the Bundesliga rights) might be questioned. This clause, providing that all the rights should not be sold to a single broadcaster, combined with the possibilities offered by EU free movement and impressive marketing skills from the Football Association, has made the Premier League the most valuable football competition in the world (6.9 billion euros for 2016-2019). It is highly probable that the UK national competition authority will keep that clause and the obligations for all sport media rights unless there is a major shift in national competition law policy. Remaining or leaving, in any case EU competition law will have left an important imprint on the British sport media rights landscape.

Other media related questions

In relation to media rights, two more points are interesting. Firstly, the question concerning multi-territory licensing of media rights in sport may arise. Sport rights are sold on a territorial basis. One of the many reasons for it are linguistic borders. However, the ECJ concluded that territorial exclusivity agreements relating to the transmission (using satellite decoders from broadcast providers based on another Member State) of football matches were a breach of competition law and the free movement of provision of services (Football Association Premier League v QC Leisure and Karen Murphy v. Media Protection Services Limited, joined cases C-403/08 and C-429/08). This important judgement caused great despair among sport organisers but it gave the opportunity to consumers to access a broader list of sport media providers around the EU. Depending on the position of the UK towards the EU, this possibility may vanish in the future. This judgment is also important for EU protection of property rights. The Court held that sport events cannot be considered intellectual creations, and, as such, cannot be protected by copyright. However, a clear distinction was made between private residence watching and public screening. The latter could amount to copyright infringement if some part of the event can be considered as unique and original and are duly protected (i.e. songs, slow motion extracts, etc.). In that case, it is for the Members States to regulate such a protection, but the EU is also developing a specific protection at the European level. Sport rights holders are exposed to financial damages due to breach of intellectual property rights with high economic value. This is the case for media rights but also for sport merchandising. The enforcement of those rights is conjointly overlooked by the Commission for harmonization of national legislations as well as the European Union Intellectual property Office (EUIPO) and Europol. In a situation where cross-border piracy and counterfeiting is difficult to tackle alone, the UK might consider to secure some kind of cooperation with the EU on that matter.

Secondly, also concerning the sports media industry, albeit with less ties to competition law provisions, the Audiovisual Media Services Directive (better known as the “Television Without Frontiers directive”) might not be applied to the UK in the future or at least as it stands at the moment. This directive regulates cross-border television broadcasting and allows EU Member States to establish a list of sport events of major importance for society that are offered on subscription-free TV channels (article 14 of the directive). The protected events list is then transmitted to the Commission in order to check its compliance with EU law and published in the EU Official Journal. Members States are entitled to create such a list but may choose not to. The UK is amongst the Members States that choose to set up such a list. Consequently, the 1996 Broadcasting Act lists those events for the UK (for example the Olympic Games, the Wimbledon Tennis Finals, the FA Cup Final, or the FIFA World Cup Finals Tournament). The national law relies on the directive which means that after Brexit, if the UK wants to keep with that requirement it should integrate the list into its national law. In a country where the subscriptions for premium sports pay television are the most expensive in Europe, it is quite doubtful whether this is good news for the British consumer and that might be an incentive to maintain a similar system. The directive also provides for a system of mutual recognition meaning that a provider of an audiovisual media services is subject to the law of its country of origin. Another Member State cannot impose other requirements than the one provided for by the directive. This principle, in case of Brexit, will surely disappear which is a potential problem for sports broadcasters seated in the UK and engaged in cross-border activities.  

EU State aid policy

Public funding and financial support is often used in sport and is a highly sensitive issue. Infrastructure and individual sport clubs are the main beneficiaries of public funds, which can make them subject to EU State aid provisions (article 107 TFEU). The Commission has closely monitored the application of State aid law in the field of sport, drawing a big line between professional and grassroots sports subsidies. Financial support to professional clubs is sometimes found incompatible with EU law as it distorts competition. An exception to this is where the objectives pursued are non-economic (subsidies for young training centres have been considered compatible as the main goal is to meet education obligations). Subsidies to amateur clubs are less likely to constitute State aid as they are not pursuing an economic activity. For sport infrastructures, only the ones pursuing economic activities and in competition at the European level are likely to be subject to State aid rules. A consequence of a complete Brexit might end the application of EU State aid rules in the UK. Anyway, given the expected negative economic consequences related to Brexit, it is rather unlikely that British public authorities will have the financial capacity to intensively fund professional clubs and sports infrastructures even if it they would have the freedom to do so. 

B) The money: securing sports funding

Finally, since the entry into force of the Lisbon Treaty, the EU developed a more proactive policy in sport via funding opportunities. These are also going to be impacted by Brexit and adverse consequences will specifically target amateur sport.  

EU funding for sport

The introduction of article 165 TFEU allowed the EU to create a specific funding programme for sport. Before that, sport related projects were indirectly funded through other EU programmes. The 2014-2020 Erasmus + Sport programme provides grants for a broad range of actions and activities in the field of sport. The aim of the programme is to promote the positive values of sport and physical activity and good governance in the sector as well as support dual careers of athletes and projects against match-fixing, doping, violence, racism and intolerance. These funds are directly targeted to grassroots sports through collaborative partnerships, not-for-profit European sport events, dialogue with European sport stakeholders as well as studies and conferences. British sport and sport-related organisations as well as public authorities can benefit from funding. However, these possibilities may disappear following Brexit. Erasmus + Sport is a European programme and, as such, helps to finance projects contributing to the development of a European dimension of sport. Consequently, it is difficult to give an exact number of projects financed through the programme in the UK. However, to give an illustration, in 2015, just for Erasmus + Sport projects for which a UK sport organisations was the lead coordinator, the EU funding amounted up to 1.1 million euros. It should be kept in mind that other British organizations are simple partners to many other projects and are entitled to be funded as well (the 2015 budget for the Erasmus + Sports programme was 18,8 million euros). Will the UK be entitled to keep some funding? If it secures an EEA type agreement, Erasmus + Sport will still apply but the UK will have to financially contribute to it. 

The financial participation from the EU in UK sports is also possible through other EU programmes. It is worth mentioning the European Structural and Investment funds which promotes the socio-economic development of European regions (10.7 billion euros were awarded to the UK for 2014-2020). The EU also provides funding for sport related studies to which several UK-based academics and think tanks have already participated. One should not forget that the EU is also actively supporting academic and PhD research through several programmes (the main one being Horizon 2020) and that in case of Brexit it will have a negative impact on the UK’s capacity to produce academic output on sport (think about anti-doping, sports law and governance, economics studies, etc…). 

Gambling and sport betting

The British market for gambling and sports betting generated 12.6 billion pounds last year. It is one of the biggest markets in Europe and British betting operators seized the opportunities offered by the EU’s freedom to provide services to develop their activities in other EU Members States as the EU pushed for the opening of gambling and online betting to competition. As a consequence of Brexit, Gibraltar-based online betting firms (let’s face it, due to a favourable taxation system) might lose their access to the European market. The Gibraltar betting and gambling authority tried to put on a brave face in the aftermath of the Brexit vote but, in the case of Brexit, the best solution for the operators will be to leave Gibraltar for an EU Member State and secure its access to the European market (for example Malta, a very popular host for betting operators).

The economic impact for the gambling sector is sure to be important, but it is just as important for the sport sector as part of the betting industry’s revenue constitutes an important source of income for sport, and in particular grassroots sport via taxes. Furthermore, betting operators are active in sponsorship for professional club and athletes. If the financial stability of these companies is undermined, it will probably have an impact on both their participation in the financing of sport and their marketing strategy. 

Another problem that might arise for the UK in that area concerns the fight against corruption and match fixing that threatens the integrity of sport and its economic value. The UK cannot handle this problem alone and the EU, given the sector’s inherent cross-border nature, is encouraging cooperation between Members States and sport organisations to tackle the issue. Europol, the EU’s law enforcement agency, provides assistance to EU Member States and sport organisers (collaborating for example with UEFA). Brexit might imply that the UK will leave that organisation, yet it could also maintain a cooperation via operational or/and strategic agreements. In any event, the UK remains a member of Interpol also very active in the fight against match-fixing and illegal gambling. 

Conclusion

Just about everything is going to change between the EU and the UK and it is the same for sport. At this stage, a lot of guesswork is involved in trying to elucidate a picture of the impact of Brexit on sport. Whether with a direct positive action through its funding policy or because of the rules on the internal market and competition having an indirect impact, the EU had an influence on the whole of British sport. This blog tackled the main issues at stake in sport for the EU and the UK before the latter starts its negotiations to formally rescind its membership. But it also should be noted that the EU is an important arena for formal and informal discussion on subject that interest sport in general. For example the EU Work Plan for sport for 2014-2017 sets up EU expert groups to work on topical issues in the field of sport. The European Parliament also hosts a sport-intergroup. By leaving the EU, the UK is also leaving behind an opportunity to deepen its cooperation at the EU level.