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

Investment in Football as a Means to a Particular End – Part 1: A non-exhaustive Typology - By Rhys Lenarduzzi

Editor's note: Rhys is currently making research and writing contributions under Dr Antoine Duval at the T.M.C. Asser Institute with a focus on Transnational Sports Law. Additionally, Rhys is the ‘Head of Advisory’ of Athlon CIF, a global fund and capital advisory firm specialising in the investment in global sports organisations and sports assets.

Rhys has a Bachelor of Laws (LL.B) and Bachelor of Philosophy (B.Phil.) from the University of Notre Dame, Sydney, Australia. Rhys is an LL.M candidate at the University of Zurich, in International Sports Law. Following a career as a professional athlete, Rhys has spent much of his professional life as an international sports agent, predominantly operating in football.

Rhys is also the host of the podcast “Sportonomic”.


Introduction

In the following two-part blog series, I will start by outlining a short typology of investors in football in recent years, in order to show the emergence of different varieties of investors who seek to use football as a means to a particular end. I will then in a second blog, explore the regulatory landscape across different countries, with a particular focus on the regulatory approach to multi-club ownership. Before moving forward, I must offer a disclaimer of sorts.  In addition to my research and writing contributions with the Asser Institute, I am the ‘Head of Advisory’ for Athlon CIF, a global fund and capital advisory firm specialising in the investment in global sports organisations and sports assets. I appreciate and hence must flag that I will possess a bias when it comes to investment in football.

It might also be noteworthy to point out that this new wave of investment in sport, is not exclusive to football. I have recently written elsewhere about CVC Capital Partners’ US$300 million investment in Volleyball, and perhaps the message that lingers behind such a deal.  CVC has also shown an interest in rugby and recently acquired a 14.3 per cent stake in the ‘Six Nations Championship’, to the tune of £365 million.  New Zealand’s 26 provincial rugby unions recently voted unanimously in favour of a proposal to sell 12.5 per cent of NZ Rugby’s commercial rights to Silver Lake Partners for NZ$387.5 million.  Consider also the apparent partnership between star footballer’s investment group, Gerard Pique’s Kosmos, and the International Tennis Federation.  Kosmos is further backed by Hiroshi Mikitani’s ecommerce institution, Rakuten, and all involved claim to desire an overhaul of the Davis Cup that will apparently transform it into the ‘World Cup of Tennis’. Grassroots projects, prizemoney for tennis players and extra funding for member nations are other areas the partnership claims to be concerned with. As is the case with all investment plays of this flavour, one can be certain that a return on the capital injection is also of interest.

So, what are we to conclude from the trends of investment in sport and more specifically for this blog series, in football? A typology elucidates that a multiplicity of investors have in recent years identified football as a means to achieve different ends. This blog considers three particular objectives pursued; direct financial return, branding in the case of company investment, or the branding and soft power strategies of nations.More...



WISLaw Blog Symposium - Rule 40 of the Olympic Charter: the wind of changes or a new commercial race - By Rusa Agafonova

Editor's note: Rusa Agafonova is a PhD Candidate at the University of Zurich, Switzerland   

The Olympic Games are the cornerstone event of the Olympic Movement as a socio-cultural phenomenon as well as the engine of its economic model. Having worldwide exposure,[1] the Olympic Games guarantee the International Olympic Committee (IOC) exclusive nine-digit sponsorship deals. The revenue generated by the Games is later redistributed by the IOC down the sports pyramid to the International Federations (IFs), National Olympic Committees (NOCs) and other participants of the Olympic Movement through a so-called "solidarity mechanism". In other words, the Games constitute a vital source of financing for the Olympic Movement.

Because of the money involved, the IOC is protective when it comes to staging the Olympics. This is notably so with respect to ambush marketing which can have detrimental economic impact for sports governing bodies (SGBs) running mega-events. The IOC's definition of ambush marketing covers any intentional and non-intentional use of intellectual property associated with the Olympic Games as well as the misappropriation of images associated with them without authorisation from the IOC and the organising committee.[2] This definition is broad as are the IOC's anti-ambush rules.More...

WISLaw Blog Symposium - Stick to Sports: The Impact of Rule 50 on American Athletes at the Olympic Games - By Lindsay Brandon

Editor's note: Lindsay Brandon is Associate Attorney at Law Offices of Howard L. Jacobs


“Tell the white people of America and all over the world that if they don’t seem to care for the things black people do, they should not go to see black people perform.” – American sprinter and Olympic Medalist John Carlos

On 21 April 2021, the Athletes’ Commission (AC) of the International Olympic Committee (“IOC”) received the “full support of the IOC Executive Board for a set of recommendations in regard to the Rule 50 of the Olympic Charter and Athlete Expression at the Olympic Games.” This came over a year after the 2020 Tokyo Olympic Games were postponed due to the Covid-19 pandemic, and almost a year after the IOC and AC embarked on an “extensive qualitative and quantitative” consultation process to reform Rule 50 involving over 3,500 athletes from around the globe.

Since its introduction of the new guidelines in January 2020, Rule 50 has been touted by the IOC as a means to protect the neutrality of sport and the Olympic Games, stating that “No kind of demonstration or political, religious or radical propaganda is permitted in any Olympic sites, venues, or other areas.”  In other words, the Olympics are a time to celebrate sport, and any political act or demonstration might ruin their “moment of glory”.

In fact, the Rule 50 Guidelines say that a fundamental principle of sport is that it is neutral, and “must be separate from political, religious or any other type of interference.” But this separation is not necessarily rooted in totality in modern sports culture[1], particularly in the United States (“U.S.”).  This is evidenced by the United States Olympic and Paralympic Committee (“USOPC”) committing to not sanctioning Team USA athletes for protesting at the Olympics. The USOPC Athletes stated “Prohibiting athletes to freely express their views during the Games, particularly those from historically underrepresented and minoritized groups, contributes to the dehumanization of athletes that is at odds with key Olympic and Paralympic values.” More...



WISLaw Blog Symposium - Legal and other issues in Japan arising from the postponement of the Tokyo 2020 Olympic Games due to COVID-19 - By Yuri Yagi

Editor's note: Yuri Yagi is a sports lawyer involved in Sports Federations and Japanese Sports Organizations including the Japan Equestrian Federation (JEF), the International Equestrian Federation (FEI), the Japanese Olympic Committee (JOC), the Japan Sports Council (JSC) and the All-Japan High School Equestrian Federation.


1. Introduction

Japan has held three Olympic Games since the inception of the modern Olympics;Tokyo Summer Olympic Games in 1964, Sapporo Winter Olympic Games in 1972, and Nagano Winter Olympic Games in 1998. Therefore, the Tokyo 2020 Olympic Games (Tokyo 2020) are supposed to be the fourth to be held in Japan, the second for Tokyo. Tokyo 2020 were originally scheduled for 24 July 2020 to 9 August 2020. Interestingly, the word ‘postpone’ or ‘postponement’ does not appear in the Host City Contract (HCC).

However, the International Olympic Committee (IOC), the Tokyo Metropolitan Government (TMG), the Japanese Olympic Committee (JOC), and the Tokyo Organising Committee of the Olympic and Paralympic Games (TOCOG) decided on 24 March 2020 that Tokyo 2020 would be postponed because of the pandemic of COVID-19. Later on, the exact dates were fixed ‘from 23 July 2021 (date of the Opening Ceremony) to 8 August 2021 (date of the Closing Ceremony).

The process of the decision is stipulated in the ‘ADDENDUM N° 4’ signed by IOC, TMG, JOC and TOCOG.

This paper provides an overview of the current situation, along with legal and other issues in Japan that have arisen due to the postponement of Tokyo 2020 due to COVID-19. The overview is offered from the perspective of a citizen of the host city and includes a consideration of national polls, the torch relay, vaccination, training camps, ever increasing costs, and the related provisions in the Candidature File and the Host City Contract. More...



WISLaw Blog Symposium - Why the existing athletes' Olympic entering system does not comply with the fundamental principles of Olympism enshrined in the Olympic Charter - By Anna Antseliovich

Editor's note: Anna Antseliovich heads the sports practice at the Moscow-based legal group Clever Consult. She also works as a senior researcher at the Federal Science Center for Physical Culture and Sport (Russia).


The Olympic Games have always been a source of genuine interest for spectators as Olympians have repeatedly demonstrated astounding capacity of the human body and mind in winning Olympic gold, or by achieving success despite all odds.

At the ancient and even the first modern Olympic Games, there was no concept of a national team; each Olympian represented only himself/herself. However, at the 1906 Intercalated Games[1] for the first time, athletes were nominated by the National Olympic Committees (‘NOCs’) and competed as members of national teams representing their respective countries. At the opening ceremony, the athletes walked under the flags of their countries. This was a major shift, which meant that not only the athletes themselves competed against each other, but so too did the nations in unofficial medal standings.  

The nomination and selection of athletes by their NOCs to compete under their national flag and represent their country is a matter of pride for the vast majority of athletes. However, to what extent does such a scheme correspond to the ideals which the Olympic Games were based on in ancient times? Is it possible to separate sport and politics in the modern world? More...


WISLaw Blog Symposium - Freedom of Expression in Article 10 of the ECHR and Rule 50 of the IOC Charter: Are these polar opposites? - By Nuray Ekşi

Editor's note: Prof. Dr. Ekşi is a full-time lecturer and chair of Department of Private International Law at Özyeğin University Faculty of Law. Prof. Ekşi is the founder and also editor in chief of the Istanbul Journal of Sports Law which has been in publication since 2019.


While Article 10 of the European Convention on Human Rights (‘ECHR’) secures the right to freedom of expression, Rule 50 of the Olympic Charter of 17 July 2020 (‘Olympic Charter’) restricts this freedom. Following the judgments of the European Court of Human Rights (‘ECtHR’) relating to sports, national and international sports federations have incorporated human rights-related provisions into their statutes and regulations. They also emphasized respect for human rights. For example, Article 3 of the Fédération Internationale de Football Association (‘FIFA’) Statutes, September 2020 edition, provides that “FIFA is committed to respecting all internationally recognised human rights and shall strive to promote the protection of these rights”. Likewise, the Fundamental Principles of Olympism which are listed after the Preamble of the of the Olympic Charter 2020 also contains human rights related provisions. Paragraph 4 of Fundamental Principles of Olympism provides that the practice of sport is a human right. Paragraph 6 forbids discrimination of any kind, such as race, colour, sex, sexual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status. In addition, the International Olympic Committee (‘IOC’) inserted human rights obligations in the 2024 and 2028 Host City Contract.[1] The IOC Athletes’ Rights and Responsibilities Declaration even goes further and aspires to promote the ability and opportunity of athletes to practise sport and compete without being subject to discrimination. Fair and equal gender representation, privacy including protection of personal information, freedom of expression, due process including the right to a fair hearing within a reasonable time by an independent and impartial panel, the right to request a public hearing and the right to an effective remedy are the other human rights and principles stated in the IOC Athletes’ Rights and Responsibilities Declaration. Despite sports federations’ clear commitment to the protection of human rights, it is arguable that their statutes and regulations contain restrictions on athletes and sports governing bodies exercising their human rights during competitions or in the field. In this regard, particular attention should be given to the right to freedom of expression on which certain restrictions are imposed by the federations even if it done with good intentions and with the aim of raising awareness. More...


WISLaw Blog Symposium - 2020 Tokyo Olympic Games - Introduction

Women In Sports Law (WISLaw) is an international, non-profit association based in Switzerland and aimed at promoting women in the sports law sector, through scientific and networking events, annual meetings and annual reports. WISLaw’s objectives are to raise awareness of the presence, role and contribution of women in the sports law sector, enhance their cooperation, and empower its global membership through various initiatives.

This year, WISLaw has partnered with the Asser International Sports Law Blog to organise a special blog symposium featuring WISLaw members. The  symposium will entail both the publication of a series of blog posts authored by WISLaw members, and a virtual webinar (accessible at https://lnkd.in/dgWsy6q with the Passcode 211433) to promote discussion on the selected topics. Article contributions were invited on the topic of legal issues surrounding the Tokyo 2020 Olympics. In the midst of a pandemic and the rise of social justice movements around the world, the Games and their organisation gave rise to a number of interesting legal issues and challenges, which will be explored through a variety of lenses. 

We hope that you enjoy and participate in the discussion.

New Event! The Court of Arbitration for Sport at the European Court of Human Rights - Prof. Helen Keller - 26 May - 16:00

On Wednesday 26 May 2021 from 16.00-17.00 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), is organising its fifth Zoom In webinar on the Court of Arbitration for Sport (CAS) from the perspective of the European Court of Human Rights (ECtHR).

We have the pleasure to be joined by Prof. Helen Keller, former Judge at the ECtHR and a prominent dissenter to the majority’s ruling in the Mutu and Pechstein case.

The ECtHR decision in the Mutu and Pechstein case rendered on 2 October 2018 is widely seen as one of the most important European sports law rulings. It was also the first decision of the Strasbourg court dealing with a case in which the CAS had issued an award. The applicants, Adrian Mutu and Claudia Pechstein, were both challenging the compatibility of CAS proceedings with the procedural rights enshrined in Article 6(1) of the European Convention on Human Rights (ECHR). The court famously declined to conclude that the CAS lacked independence or impartiality, but did find that, insofar as Claudia Pechstein was concerned, she was forced to undergo CAS arbitration and, therefore, that CAS proceedings had to fully comply with the procedural rights guaranteed in the ECHR. In particular, the court held that the refusal by CAS to hold a public hearing, in spite of Claudia Pechstein’s express request, was contrary to Article 6(1) ECHR. Beyond this case, as highlighted by the recent decision of Caster Semenya to submit an application to the ECtHR, the decision opens the way for a more systematic intervention of the Strasbourg court in assessing the human rights compatibility of CAS awards and more broadly of the transnational sports regulations imposed by international sports governing bodies.

Prof. Helen Keller will discuss with us the implications of the ECtHR’s Mutu and Pechstein decision and the potential for future interventions by the court in the realm of the lex sportiva.

The webinar will take the form of an interview followed by a short Q&A open to the digital public. 

Please note the discussion will NOT be recorded and posted on our Youtube channel. 

Register HERE!


Never let a good fiasco go to waste: why and how the governance of European football should be reformed after the demise of the ‘SuperLeague’ - By Stephen Weatherill

Editor’s note: Stephen Weatherill is the Jacques Delors Professor of European Law at Oxford University. He also serves as Deputy Director for European Law in the Institute of European and Comparative Law, and is a Fellow of Somerville College. This blog appeared first on eulawanalysis.blogspot.com and is reproduced here with the agreement of the author. 

 


The crumbling of the ‘SuperLeague’ is a source of joy to many football fans, but the very fact that such an idea could be advanced reveals something troublingly weak about the internal governance of football in Europe – UEFA’s most of all – and about the inadequacies of legal regulation practised by the EU and/ or by states. This note explains why a SuperLeague is difficult to stop under the current pattern of legal regulation and why accordingly reform is required in order to defend the European model of sport with more muscularity. More...



Asser International Sports Law Blog | Dahmane v KRC Genk: Bosman 2.0 or Storm in a Teacup?

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

Dahmane v KRC Genk: Bosman 2.0 or Storm in a Teacup?

Mohamed Dahmane is a professional football player of French-Algerian origin, who has played for a variety of European clubs, including French club US Mauberge, Belgian club RAEC Mons and Turkish club Bucaspor. However, he will mostly be remembered as the player whose legal dispute with his former club (Belgian club KRC Genk) revived the debate on football players’ labour rights.  

Journalists wasted no time in comparing it to the Bosman case.[1] Fair enough, Dahmane and Bosman do show some striking similarities: the two cases concerned players employed by mediocre Belgian football clubs claiming their right to be treated as normal workers. Furthermore, in both cases the respective Courts met (to a large extend) the players’ demands. The Bosman case not only changed labour conditions for all footballers, it shook the whole transfer system. In Dahmane, the case is essentially about whether it is justifiable to have a special law that obliges professional football players who unilaterally break their players’ contract to compensate their club for up to 36 months of salary. After all, “normal” workers are only obliged to pay a 12 months of salary compensation in an identical situation. Whether the Dahmane case will have the same weight as Bosman depends on the effects of the judgment on footballers in Belgium, but also on the European football sector in general. Therefore, a close look at the ruling is needed to understand its potential consequences.

Dahmane signed a four-year contract with KRC Genk on 1 July 2007, he then unilaterally terminated the contract in January 2008 following a row with his coach. Due to the contract termination, KRC Genk demanded a compensation amounting to EUR 878.888,88. The demand was based on Articles 4 § 4 and 5 § 2 of the Law for Professional Athletes and the Royal Decree of 13 July 2004. Indeed, according to the Royal Decree, the compensation had to be equal to 36 months of salary. Dahmane disagreed with KRC Genk’s demands and argued that the compensation should be calculated in accordance with Article 40 § 1 of the general Labour Agreements Law. Pursuant to this Article the severance pay can only amount to a maximum of 12 months of salary.

In a judgment of 25 May 2009, the Labour Court (Court of first instance) concurred with the demands of KRC Genk and ordered Dahmane to compensate KRC Genk for EUR 878.888,88.

Dahmane placed an appeal with The Court of Labour arguing that Article 4 § 4 of the Law for Professional Athletes and the Royal Decree breached Articles 10 and 11 of the Belgian Constitution on equal treatment and non-discrimination.[2] KRC Genk, for its part, argued that the difference between labour agreements of professional footballers on the one hand and “normal” labour agreements on the other is based on the ‘specific character of labour agreements of professional footballers and the specific character of sport in general’. Thus, the ‘specificity of sport’ would imply a special status for sport, whereby ‘normal’ law (i.e. the general Labour Agreements Law) cannot be applied unabridged. KRC Genk highlighted that to achieve the objectives inherent to football, which include avoiding competition distortions and the preservation of the stability of participating sport clubs, certain specific measures, such as the Royal Decree of 2004, can be taken in order to safeguard the legal certainty of labour relationships in the sport sector.[3]

The Court of Labour dismissed the arguments raised by KRC Genk, and held that the Royal Decree applies to all professional sports, not only to football, thereby denying validity to RKC Genk’s claims on the specificity of football.[4]

The Court agreed with KRC Genk that sport exhibits certain characteristics that can deviate from other labour relationships between employer and employee. However, the Royal Decree in question did not mention the specificity of sport in its text, nor does it provide any objective justifications as to why separate rules regarding compensation after a unilateral termination of a labour contract is necessary for the sport sector. Furthermore, the pursuit of financial profits, and the importance of preserving a fair competition have to be taken into account. Those economic objectives are not specific to the sport sector. Therefore, the Court saw no valid reason justifying a separate Royal Decree, when sport’s economic dimension can be equally covered by existing legislation. In other words, the same laws should be used to achieve the same objectives.[5]

As regards KRC Genk’s view that some rules preventing richer clubs from buying all the good players from smaller clubs, thereby distorting competition, are justifiable, the Court found that to be incorrect. Even though it is true that football’s transfer system is different from “normal” movement of workers, a distinction needs to be made between buying and selling of players on the one hand, and the unilateral termination of a player’s contract on the other hand. Here again the Court found the breach of the Constitutional Articles on equal treatment and non-discrimination based on the specificity of the football transfer system was not objectively justified in the Royal Decree.

The Court reminded the parties that the transfer system, which only allows two periods a year for clubs to buy and sell players, would limit the possibility for professional footballers to change clubs. Moreover, it highlighted that compensation equal to 12 months of salary comprises two transfer periods, and should therefore not be seen as unreasonable. Lastly, the Court took into account that the average career of a professional sportsman is relatively short (12 years according to KRC Genk and six to eight years according to Dahmane). A compensation amounting to 36 months of salary would, for many professional players, amount to 1/3 of the player’s revenue during his career and should therefore be deemed unjustifiable.[6]

Hence, the Court considered that a Royal Decree imposing a compensation of 36 months of salary on a player breaching his contract is disproportionate. Furthermore, the Court found the Royal Decree unjustifiable under the Constitutional principle of equal treatment and non-discrimination.

Dahmane revives a debate that has occupied academics in the fields of sports law, labour law and other fields of law for many decades. Is sport special and do its specificities oblige the European and national legislators to make laws that answer the specificities of sport? Should professional athletes be treated different from normal workers because sport is “special”? After Bosman, no transfer fees needed to be paid for players whose contract had ended and no limitations on the number of EU nationals were allowed to be imposed by the football clubs. In other words, the European Court of Justice (ECJ) found professional footballers to be very much like normal workers. Similarly, the Dahmane case lead the Belgian Court of Labour to deny any difference between professional athletes and normal workers regarding compensation after a unilateral termination of the labour contract. Even though Dahmane, as appellant, had asked the Court to raise a preliminary question to the ECJ on the compatibility of the law with the free movement of workers[7], the Court decided the case under Belgian law only.[8] It is therefore highly unlikely that Dahmane will have the same transnational effect as Bosman and mass unilateral contract terminations by professional athletes across the EU are not to be expected. 

Dahmane could set a precedent and encourage professional players in Belgium to simply break their contract, move to another club and pay compensation equal to 12 months of salary. This would be the worst-case scenario for Belgian clubs, since a compensation equal to 12 months of salary will nearly always be inferior to a transfer fee. On the other hand, mass unilateral contract terminations by footballers in Belgium would vindicate the need for specific regulation for football clubs.

In many ways the Belgian Court of Labour has “passed the ball” back to the Belgian legislator. Should the Belgian legislator feel that professional athletes, or footballers for that matter, have to be treated differently compared to normal workers then it could always decide to adopt specific laws or Royal Decrees for professional athletes. However, Dahmane will serve as a warning that these separate laws or Royal Decrees will need proper objective justifications as to why professional athletes are to be treated differently.



[1] See for example: Zaak-Dahmane krijgt allure van zaak-Bosman

[2] Arrest A.R. 2009/AH/199 (6 may 2014) Sub II, §1

[3] Ibid, Sub III §6

[4] Ibid, §7

[5] Ibid, §6

[6] Ibid, §7

[7] Ibid, Sub II, §1

[8] Ibid, Sub III §12

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