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

Unpacking Doyen’s TPO Deals: The Final Whistle

Footballleaks is now operating since nearly half a year and has already provided an incredible wealth of legal documents both on TPO (and in particular Doyen’s contractual arrangements) and on the operation of the transfer system in football (mainly transfer agreements, player contracts and agents contracts). This constant stream of information is extremely valuable for academic research to get a better grip on the functioning of the transfer market. It is also extremely relevant for the shaping of public debates and political decisions on the regulation of this market. As pointed out on the footballleaks website, it has triggered a series of press investigations in major European news outlets.

In this blog, I want to come to a closure on our reporting on Doyen’s TPO deals. In the past months, we have already dealt with the specific cases of FC Twente and Sporting Lisbon, reviewed Doyen’s TPO deals with Spanish clubs, as well as discussed the compatibility of the TPO ban with EU law. In the Sporting Lisbon case, Doyen has since earned an important legal victory in front of the CAS (the ensuing award was just published by Footballleaks). This victory should not be overstated, however, it was not unexpected due to the liberal understanding of the freedom of contract under Swiss law. As such it does not support the necessity of TPO as an investment practice and does not threaten the legality (especially under EU law) of FIFA’s ban.

In our previous blogs on Doyen’s TPO deals we decided to focus only on specific deals, Twente and Sporting Lisbon, or a specific country (Spain). However, nearly six months after the whole footballleaks project started, we can now provide a more comprehensive analysis of the TPO deals signed by Doyen. Though, it is still possible that other, yet unknown, deals would be revealed, I believe that few of Doyen’s TPO agreements are still hidden. Thanks to footballleaks, we now know how Doyen operates, we have a precise idea of its turnover, its return on investments and the pool of clubs with which it signed a TPO agreement. Moreover, we have a good understanding of the contractual structure used by Doyen in those deals. This blog will offer a brief synthesis and analysis of this data.More...





Unpacking Doyen’s TPO Deals: TPO and Spanish football, friends with(out) benefits?

Update: On 14 April footballleaks released a series of documents concerning Sporting de Gijón. Therefore, I have updated this blog on 19 April to take into account the new information provided.  

Doyen Sports’ TPO (or TPI) model has been touted as a “viable alternative source of finance much needed by the large majority of football clubs in Europe". These are the words of Doyen’s CEO, Nélio Lucas, during a debate on (the prohibition of) TPO held at the European Parliament in Brussels last January. During that same debate, La Liga’s president, Javier Tebas, contended that professional football clubs, as private undertakings, should have the right to obtain funding by private investors to, among other reasons, “pay off the club’s debts or to compete better”. Indeed, defendants of the TPO model continuously argue that third party investors, such as Doyen, only have the clubs’ best interests in mind, being the only ones capable and willing to prevent professional football clubs from going bankrupt. This claim constitutes an important argument for the defendants of the TPO model, such as La Liga and La Liga Portuguesa, who have jointly submitted a complaint in front of the European Commission against FIFA’s ban of the practice.[1]

The eruption of footballleaks provided the essential material necessary to test this claim. It allows us to better analyse and understand the functioning of third party investment and the consequences for clubs who use these services. The leaked contracts between Doyen and, for example, FC Twente, showed that the club’s short term financial boost came at the expense of its long-term financial stability. If a club is incapable of transferring players for at least the minimum price set in Doyen’s contracts, it will find itself in a financially more precarious situation than before signing the Economic Rights Participation Agreement (ERPA). TPO might have made FC Twente more competitive in the short run, in the long run it pushed the club (very) close to bankruptcy.

More than four months after its launch, footballleaks continues to publish documents from the football world, most notably Doyen’s ERPAs involving Spanish clubs.More...

International and European Sports Law – Monthly Report – March 2016. By Marine Montejo

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. 

Marine Montejo is a graduate from the College of Europe in Bruges and is currently an Intern at the ASSER International Sports Law Centre.


The Headlines

The Belgian Court of Appeal released its judgment this month regarding Doyen’s legal battle against the FIFA TPO ban. The Appeal Court confirmed the first instance decision and ruled out any provisional measures to block the ban’s implementation (for an in depth review, see our blog post). More importantly, the Court reaffirmed that Swiss based sport federations are liable in front of EU Members’ States courts when EU competition law is involved. That means the next important step for this legal battle is whether or not the European Commission is going to open a formal proceeding (Doyen already lodged a complaint) to assess the compatibility, and more importantly, the proportionality of the TPO ban with EU law. Only a preliminary ruling by the CJEU could hasten the decision if one of the European national courts, hearing a case brought by Doyen (France or Belgium), decided to refer a preliminary question.More...


Doyen’s Crusade Against FIFA’s TPO Ban: The Ruling of the Appeal Court of Brussels

Since last year, Doyen Sports, represented by Jean-Louis Dupont, embarked on a legal crusade against FIFA’s TPO ban. It has lodged a competition law complaint with the EU Commission and started court proceedings in France and Belgium. In a first decision on Doyen’s request for provisory measures, the Brussels Court of First Instance rejected the demands raised by Doyen and already refused to send a preliminary reference to the CJEU. Doyen, supported by the Belgium club Seraing, decided to appeal this decision to the Brussels Appeal Court, which rendered its final ruling on the question on 10 March 2016.[1] The decision (on file with us) is rather unspectacular and in line with the first instance judgment. This blog post will rehash the three interesting aspects of the case.

·      The jurisdiction of the Belgian courts

·      The admissibility of Doyen’s action

·      The conditions for awarding provisory measures More...

International and European Sports Law – Monthly Report – February 2016

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

The eagerly awaited FIFA Presidential elections of 26 February provided for a “new face” at the pinnacle of international football for the first time since 1998. One could argue whether Infantino is the man capable of bringing about the reform FIFA so desperately needs or whether he is simply a younger version of his predecessor Blatter. More...


Book Review: Despina Mavromati & Matthieu Reeb, The Code of the Court of Arbitration for Sport—Commentary, Cases, and Materials (Wolters Kluwer International 2015). By Professor Matthew Mitten

Editor’s note: Professor Mitten is the Director of the National Sports Law Institute and the LL.M. in Sports Law program for foreign lawyers at Marquette University Law School in Milwaukee, Wisconsin. He currently teaches courses in Amateur Sports Law, Professional Sports Law, Sports Sponsorship Legal and Business Issues Workshop, and Torts. Professor Mitten is a member of the Court of Arbitration for Sport (CAS), and has served on the ad hoc Division for the XXI Winter Olympic Games in Sochi, Russia.

This Book Review is published at 26 Marquette Sports Law Review 247 (2015).


This comprehensive treatise of more than 700 pages on the Code of the Court of Arbitration for Sport (CAS) (the Code) is an excellent resource that is useful to a wide audience, including attorneys representing parties before the CAS, CAS arbitrators, and sports law professors and scholars, as well as international arbitration counsel, arbitrators, and scholars.  It also should be of interest to national court judges and their law clerks because it facilitates their understanding of the CAS arbitration process for resolving Olympic and international sports disputes and demonstrates that the Code provides procedural fairness and substantive justice to the parties, thereby justifying judicial recognition and enforcement of its awards.[1]  Because the Code has been in existence for more than twenty years—since November 22, 1994—and has been revised four times, this book provides an important and much needed historical perspective and overview that identifies and explains well-established principles of CAS case law and consistent practices of CAS arbitrators and the CAS Court Office.  Both authors formerly served as Counsel to the CAS and now serve as Head of Research and Mediation at CAS and CAS Secretary General, respectively, giving them the collective expertise and experience that makes them eminently well-qualified to research and write this book.More...


International and European Sports Law – Monthly Report – January 2016

Editor’s note: Our first innovation for the year 2016 will be a monthly report compiling 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

The world of professional sport has been making headlines for the wrong reasons in January. Football’s governing body FIFA is in such a complete governance and corruption mess that one wonders whether a new President (chosen on 26 February[1]) will solve anything. More recently, however, it is the turn of the athletics governing body, IAAF, to undergo “the walk of shame”. On 14 January the WADA Independent Commission released its second report into doping in international athletics. More...


International Sports Law in 2015: Our Reader

This post offers a basic literature review on publications on international and European sports law in 2015. It does not have the pretence of being complete (our readers are encouraged to add references and links in the comments under this blog), but aims at covering a relatively vast sample of the 2015 academic publications in the field (we have used the comprehensive catalogue of the Peace Palace Library as a baseline for this compilation). When possible we have added hyperlinks to the source.[1]

Have a good read. More...

Goodbye 2015! The Highlights of our International Sports Law Year

2015 was a good year for international sports law. It started early in January with the Pechstein ruling, THE defining sports law case of the year (and probably in years to come) and ended in an apotheosis with the decisions rendered by the FIFA Ethics Committee against Blatter and Platini. This blog will walk you through the important sports law developments of the year and make sure that you did not miss any. More...

Unpacking Doyen’s TPO Deals: In defence of the compatibility of FIFA’s TPO ban with EU law

FIFA’s Third-Party Ownership (TPO) ban entered into force on the 1 May 2015[1]. Since then, an academic and practitioner’s debate is raging over its compatibility with EU law, and in particular the EU Free Movement rights and competition rules. 

The European Commission, national courts (and probably in the end the Court of Justice of the EU) and the Court of Arbitration for Sport (CAS) will soon have to propose their interpretations of the impact of EU law on FIFA’s TPO ban. Advised by the world-famous Bosman lawyer, Jean-Louis Dupont, Doyen has decided to wage through a proxy (the Belgian club FC Seraing) a legal war against the ban. The first skirmishes have already taken place in front of the Brussels Court of first instance, which denied in July Seraing’s request for provisional measures. For its part, FIFA has already sanctioned the club for closing a TPO deal with Doyen, thus opening the way to an ultimate appeal to the CAS. In parallel, the Spanish and Portuguese leagues have lodged a complaint with the European Commission arguing that the FIFA ban is contrary to EU competition law. One academic has already published an assessment of the compatibility of the ban with EU law, and many practitioners have offered their take (see here and here for example). It is undeniable that the FIFA ban is per se restrictive of the economic freedoms of investors and can easily be constructed as a restriction on free competition. Yet, the key and core question under an EU law analysis, is not whether the ban is restrictive (any regulation inherently is), but whether it is proportionate, in other words justified. More...

Asser International Sports Law Blog | Can a closed league in e-Sports survive EU competition law scrutiny? The case of LEC - By Thomas Terraz

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

Can a closed league in e-Sports survive EU competition law scrutiny? The case of LEC - By Thomas Terraz

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.


1.     Introduction

The organizational structure of sports in Europe is distinguished by its pyramid structure which is marked by an open promotion and relegation system. A truly closed system, without promotion and relegation, is unknown to Europe, while it is the main structure found in North American professional sports leagues such as the NFL, NBA and the NHL. Recently, top European football clubs along with certain members of UEFA have been debating different possibilities of introducing a more closed league system to European football. Some football clubs have even wielded the threat of forming an elite closed breakaway league. Piercing through these intimidations and rumors, the question of whether a closed league system could even survive the scrutiny of EU competition law remains. It could be argued that an agreement between clubs to create a completely closed league stifles competition and would most likely trigger the application of Article 101 and 102 TFEU.[1] Interestingly, a completely closed league franchise system has already permeated the European continent. As outlined in my previous blog, the League of Legends European Championship (LEC) is a European e-sports competition that has recently rebranded and restructured this year from an open promotion and relegation system to a completely closed franchise league to model its sister competition from North America, the League Championship Series. This case is an enticing opportunity to test how EU competition law could apply to such a competition structure.

As a preliminary note, this blog does not aim to argue whether the LEC is a ‘real’ sport competition and makes the assumption that the LEC could be considered as a sports competition.[2]



2.     LEC’s Position in the League of Legends Competitive Structure

The LEC is the pinnacle of League of Legends (LoL) competition in Europe that is organized by its developer, Riot Games. Currently, the LEC is the only path to the League of Legends World Championship. Its previous name was the EU League Championship Series (EU LCS), and it featured a promotion and relegation system with the EU Challenger Series. The EU Challenger Series has been replaced with the European Masters, which is a tournament that places the top seed from European regional leagues against each other. It is important to highlight that the teams in the LEC do not compete on behalf of their region (although some of the organizations from the LEC have their second team competing in a regional leagues).

The franchise agreement between the LEC and the participant e-sport organizations required organizations to buy-in at 10.5 million euros into the LEC. The ensuing partnership lasts three years and ensures that the organization is guaranteed a spot in the LEC during this period, unless there are “consistent poor performance or disciplinary issues”. The agreement effectively prevents any other European organization/team from the regional leagues and the European Masters from accessing the highest LoL championship in Europe (the LEC) and completely cuts off any opportunity to reach the League of Legends World Championships for at least three years.

The previous system of relegation and promotion has helped foster talent and create new successful European e-sports organizations. Currently, the winners of Mid-Season Invitational 2019 (a mid-year world championship) is G2 Esports, which was able to rise to the EU LCS through the EU Challenger Series in late 2015. As a result, concerns have been expressed that by adopting the closed league model, the LEC will not be able to nurture new talent and competitive organizations. This worry goes to the heart of Article 165 TFEU’s aim to develop the ‘openness’ of sporting competitions and gives merit to analyzing the LEC under EU competition law rules.[3]

 

3.     EU Competition Law and its Application to Sports

Generally speaking, EU competition law seeks to ensure ‘effective’ competition between undertakings in Europe. Concerning the field of sports, the CJEU asserted that rules of sport governing bodies fall under the inspection of EU competition law even if they are purely sporting in nature.[4] However, the CJEU left room for sport governing bodies to defend their measures which fall within the scope of competition rules. Sporting rules can escape the prohibitions of EU competition law if it can be shown that the concerned measures are inherent to the objectives it seeks to achieve and that they are “proportionate to the legitimate genuine sporting interest pursued”.  In other words, the specificity of sport must be taken into account.[5] Additionally, the CJEU has recognized that the participation in sport competitions can constitute economic activity because of the exposure that participation may provide.[6] Thus, preventing other organizations and their athletes from taking part in a league competition and as a consequence, the world championships, can have detrimental economic impacts on that organization and its athletes.

For this reason, the organizational structure of sport competitions may have colossal economic ramifications and easily fall within the scope of the Treaties. Articles 101 and 102 TFEU are the two cornerstones of EU competition law that prima facie would be applicable to this case. Essentially, Article 101 TFEU prohibits agreements between undertakings that restrict competition, and Article 102 TFEU forbids an undertaking or group of undertakings (collective dominance) from abusing its dominant position on the relevant market. So when a group of undertakings hold a dominant position in the relevant market and make an agreement which abuses their dominant position, the CJEU has recognized that both Article 101 and 102 TFEU may be applied. Nevertheless, the following analysis will concentrate on Article 102 TFEU.

 

4.     Does LEC (and its participant organizations) have a Dominant Position?

4.1.Are the LEC (and its participant organizations) undertakings?

As a preliminary point, the European Commission and the CJEU has repeatedly qualified sport governing bodies as undertakings under EU competition law.[7] The key criteria to determine whether an entity is an undertaking under EU law is whether the entity is engaged in ‘economic activity’. In MOTOE, the CJEU ruled that ELPA, a body that was organizing motorcycling events, was engaged in economic activity because it entered into “sponsorship, advertising and insurance contracts designed to exploit those events commercially”.[8] In the present case, there is little doubt that the League European Championship Limited, which is a private company limited by shares incorporated in the Republic of Ireland controlled by Riot Games, could be considered an undertaking since it concludes sponsorships and advertises its events.

The organizations that have signed the franchise agreement with Riot Games are mainly private limited companies.[9] These organizations enter into sponsorship agreements, and as stated earlier, the CJEU found that the participation in a sport competition could constitute economic activity. It follows that these e-sport organizations would easily be considered as undertakings.

 

4.2.What is the relevant market?

The next issue is determining the relevant market, including the relevant product and geographic market, the LEC and its participant organizations occupy. To identify the relevant product market, EU competition law examines the substitutability of the product or service. For example, in defining the relevant product or service market, the CJEU in MOTOE quite readily found that ELPA was “engaged ... in the organisation of motorcycling events and … their exploitation by means of sponsorship, advertising and insurance contracts”.[10]

From the outset, it should be underlined that games considered as e-sports greatly differ from one another.[11] E-sports usually fall within different genres of games, such as Real-Time Strategy (RTS), First-Person Shooter (FPS), Fighting, and Sports games. LoL falls within the Multiplayer Online Battle Arena (MOBA) genre. Thus, one may argue the relevant market in this case is e-sports competitions in the MOBA market. One way to test this market definition would be examining the ability of e-sports players to move from one e-sport to another.

Unfortunately, there has not been a complete study on the maneuverability of e-sport professionals between games of the same genre or of a different genre. As a result, it is difficult to have a complete view on the issue. Nevertheless, while there have been cases where certain players from e-sports of a different genre were able to move to LoL successfully (Ggoong [e-sports players are known by their own made up player names]) and others who have moved from LoL to another e-sport (Gesture, Bischu), there have been others who have attempted such moves without success (Destiny). On the other hand, when examining ‘traditional’ sports there are also many examples of athletes who have moved from one sport to another. For example, Primož Roglič was a high-level ski jumper, and even won the Junior Ski World Championship in this discipline, who then moved into professional road cycling and most recently came third in the Giro d’Italia. Ski jumping and road cycling arguably have very little in common, and it would be highly doubtful that the Commission or the CJEU would include both in the same market. Such an extreme example demonstrates that focusing on the maneuverability of e-sports athletes between e-sports may not always be the best way to define an e-sport market, and perhaps a more suitable approach would be to examine the specific features of the e-sport.

In this sense, it should be borne in mind that e-sports in the same genre, while sharing many basic characteristics and many of the fine motor skills, still diverge in terms of gameplay and strategy. If this were not the case, a professional LoL player could become a professional DOTA 2 (another MOBA e-sport) player without any extra effort. In reality, to make a transition, the professional LoL player would have to learn the intricacies and nuances of DOTA 2 compared to LoL, e.g. the champions and their builds, the pace of play, meta (the best strategies to win the game) etc. All of these differences support the argument that perhaps defining the product or service market in this case to MOBA e-sport competitions may be too broad, and it could be more appropriate to narrow the definition to LoL e-sport competitions.

Lastly, the geographic market is much more straightforward to define since the LEC Regulations define the EU Competitive Region in its 2019 Season Official Rules.[12] Therefore, the relevant geographic market would most likely be the EU Competitive Region.

 

4.3.Does LEC (and its participating organizations) have a dominant position in this market?

The Commission provides the most relevant criteria to ascertain whether an undertaking or undertakings hold a dominant position on the relevant market in its Guidance on enforcement of Article 82 of the EC Treaty (now Article 102 TFEU). Pertinent benchmarks include the “position of the dominant undertaking and its competitors”, “expansion and entry” of actual or future competitors, and the “bargaining strength of the undertaking’s customers” (countervailing buyer power). Usually, market shares are used to give a preliminary indication whether an undertaking occupies a dominant position in the market. The minimum threshold market share for which an undertaking or undertakings may be found to hold a dominant position is around 40-50%.[13]

If the relevant market was defined as the e-sport competitions in the MOBA market in the EU Competitive Region, one would have to examine competitive LoL in comparison to other e-sport competitions in the MOBA genre in Europe. For the purposes of this blog, there is rather limited information on the market share of LoL competitions in comparison to other MOBA e-sports in Europe. However, to at least give an idea of the size and dominance of LoL in the general MOBA market, LoL was projected to have an estimated 66% market share in 2016. When one compares this share to the second place, DOTA 2 with 14 %, it is evident that LoL generally holds a powerful position in the MOBA market and this most likely extends to its e-sports competitions.

In contrast, if the relevant market is narrowed to LoL e-sport competitions in the EU Competitive Region only, there would be an even higher chance of the LEC and its participant organizations being found to hold a dominant position. It could be argued that the European Masters (although Riot Games is a co-organizer) and the LoL regional leagues could be seen as ‘competitors’. Once more, direct information on market shares is scant. However, if one observes the viewership numbers of the LEC versus the European Masters, the LEC completely dwarfs the European Masters. The LEC in its 2019 Spring Split had a peak viewership of over 475,000 viewers and an average concurrent viewership of over 200,000 viewers. By comparison, the European Masters Spring 2019 competition had a peak viewership of just over 60,000 viewers and an average concurrent viewership of 32,000 viewers. From these numbers, it is evident that the LEC is overwhelmingly more popular and as a corollary, it may indicate that the LEC’s market share is likely to also reflect this.

 

5.     Does LEC abuse its Dominant Position?

5.1.Is the dominant position being abused and can it be justified (sporting exceptions)?

The finding of a dominant position is not enough to constitute a breach of EU competition law. Article 102 TFEU also requires that the dominant undertaking or undertakings abuse its dominant position, and it allows the dominant undertaking(s) to demonstrate how the relevant measures may be justified and proportionate. Within the sport context, the sport governing body must explain how the conduct which restricts competition pursues a legitimate objective and the anti-competitive effects must be “inherent in the pursuit of those objectives … and are proportionate to them”.[14]  There are a variety of ways an undertaking may abuse its dominant position, but in the present case, the LEC and its participant organizations agreement to seal the LEC and the LoL World Championship from any other European competitors would most likely fall under a non-price based exclusionary abuse. More specifically, exclusionary conduct must constitute ‘anti-competitive foreclosure’ which according to the Commission’s Guidance Paper is “a situation where effective access of actual or potential competitors to supplies or markets is hampered or eliminated as a result of the conduct of the dominant undertaking whereby the dominant undertaking is likely to be in a position to profitably increase prices to the detriment of consumers” (emphasis added).[15] 

The foreclosure requirement in this case is quite evidently satisfied since the LEC and its participant organizations have effectively excluded other organizations in Europe from the highest European competition of LoL and as a result, the LoL World Championship. Actually assessing whether there has been an increase in price to the detriment of consumers is not necessary, and the CJEU has ruled that “Article 102 TFEU must be interpreted as referring not only to practices which may cause damage to consumers directly, but also to those which are detrimental to them through their impact on competition”.[16] Moreover, a dominant undertaking “has a special responsibility not to allow its conduct to impair genuine undistorted competition in the internal market” and “[Article 102 TFEU] is aimed not only at the practices which may cause prejudice to consumers directly, but also at those which are detrimental to them through their impact on the competition structure”.[17] Therefore, it is not necessary to show direct harm to consumers, but that the foreclosure effects damage competition to a sufficient degree to their disadvantage.

As discussed earlier, the former promotion and relegation system helped promote new talent and organizations that were able to develop new fanbases, giving the opportunity for the European LoL viewers to get behind up and coming organizations. By stifling the prospects of new organizations from emerging in the LEC or the Worlds stage, market development may be hindered in contravention with Article 102 (b) TFEU at the European LoL e-sport’s expense.

Nonetheless, the LEC hopes that the closed structure “provides teams with more security to make longer investments that will strengthen and support pros, and provide better experiences for fan (sic)”, to “unlock revenue sharing” and “to focus on shaping the long-term future”. Basically, the LEC and its members seek greater financial security for themselves in order to invest more in its players and fans. The question is then whether the restrictions of competition resulting from the closed league described above are inherent to the pursuit of the aforementioned objectives.[18] While “the ensuring of financial stability of sport clubs/teams” could be a legitimate objective,[19] it is possible to envisage less restrictive means to achieve financial stability without completely excluding other European organizations from competing for the final LEC title and the LoL World Championship. For example, perhaps the LEC play-offs could give the opportunity for teams number 5 and 6 from the regular season to first face off against the top two teams of the European Masters Tournament.[20] A similar play-in format could easily be introduced for the LoL World Championships. Despite these changes, new organizations would still be precluded from joining the LEC. Perhaps this would require the LEC to come up with new creative structures that allow new organizations to join the LEC after having proven their worth. An example of such a system can be found in the top European basketball competition, EuroLeague, which issues different license/partner tiers for its participating clubs in order to provide better financial security for itself and its participants but still provides the possibility for a better performing national team to participate in the EuroLeague.[21] Based on my analysis, it is probable that the anti-competitive effects of a completely closed league will not be found to be entirely ‘inherent’ in the pursuit of financial stability.

 

6.     Conclusion

Taken altogether, the issue with EU competition law does not solely materialize because the LEC aims to provide greater financial stability for itself and its partners. Instead, the problems arise when there are no or very limited avenues for new competitors, in this case European e-sport organizations and their cyberathletes, to progress to the highest levels of competitive LoL in Europe. The closed league structure of the LEC precludes any outside organizations from playing in the LEC Playoffs and Finals, and as a result, they also may never participate in the LoL World Championship. On the other hand, it is understandable that the LEC seeks to create further financial stability for itself, the organizations and ultimately the cyberathletes. However, this should not come at the detriment of new competitors who could help elevate the level of competition in the LEC.

By extending this analysis to the wider sports world, it would be advisable for sports governing bodies who wish to create a more closed competitive league to pay close attention to the anti-competitive effects such restructuring could produce. Moreover, these effects would have to be proportionate and in the sporting context, “inherent in the pursuit of those objectives”.[22] All things considered, it does seem rather difficult to reconcile a completely closed league, as the one found in the LEC, with EU competition law.



[1] Stephen Weatherill, Principles and Practice in EU Sports Law (1st edn, Oxford University Press 2017) 282-283.

[2] See my previous blog for an analysis of whether LoL and the LEC could be a sport.

[3] Weatherill (n 1) 283.

[4] Case C-519/04 David Meca-Medina and Igor Majcen v Commission of the European Communities [2006] ECR I-06991 para. 27; White Paper on Sport, COM (2007) 391, 11 July 2007, 13.

[5] White Paper on Sport ibid.

[6] Joined Cases C-51/96 and C-191/97 Christelle Deliège v Ligue francophone de judo et disciplines associées ASBL, Ligue belge de judo ASBL, Union européenne de judo [2000] ECR I-02549 para 57.

[7] Cases IV/33.384 and IV/33.378 FIFA-distribution of package tours during the 1990 World Cup [1992] European Commission, OJ L326/31; Meca-Medina (n 4); Case C-49/07 Motosykletistiki Omospondia Ellados NPID (MOTOE) v Elliniko Dimosio [2008] ECR I-04863.

[8] MOTOE (n 7) para 23.

[9] See for example: Fnatic (Private limited company), G2 Esports (GmbH) and Origen Esports (ApS).

[10] MOTOE (n 7) para 33.

[11] Cem Abanazir, ‘E-sport and the EU: the view from the English Bridge Union’ (2019) International Sports Law Journal 102.

[12] The LEC 2019 Season Official Rules Glossary defines the EU Competitive Region as: “Albania, Andorra, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom (UK), Vatican City (Holy See)”.

[13] Alison Jones and Brenda Sufrin, EU Competition Law: Text, Cases, and Materials (6th edn, Oxford University Press 2016) 325.

[14] Meca-Medina (n 4) para 42; also see Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings [2009] OJ C45/02 para 28.

[15] Guidance on the Commission’s enforcement priorities in applying Article 82 (n 14) para 19.

[16] Case C-52/09 Konkurrensverket v TeliaSonera Sverige AB [2011] ECR I-00527 para 24.

[17] ibid; Case C-95/04 British Airways plc v Commission of the European Communities [2007] ECR I-02331 para 106.

[18] Meca-Medina (n 4) para 42; Commission Staff Working Document - The EU and Sport: Background and Context - Accompanying document to the White Paper on Sport (2007) COM 391 at 2.1.5.

[19] White Paper on Sport (n 4) 68.

[20] See here for the current format of the 2019 LEC Playoffs.

[21] See Chapter II and III of the EuroLeague Bylaws.

[22] Meca-Medina (n 4) para 42.

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