Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The New FIFA Intermediaries Regulations under EU Law Fire in Germany. By Tine Misic

I'm sure that in 1985, plutonium is available in every corner drugstore, but in 1955, it's a little hard to come by.” (Dr. Emmett L. Brown)[1]


Back to the future?

Availing oneself of EU law in the ambit of sports in 1995 must have felt a bit like digging for plutonium, but following the landmark ruling of the European Court of Justice (ECJ) in the Bosman case[2], 20 years later, with all the buzz surrounding several cases where EU law is being used as an efficient ammunition for shelling various sports governing or organising bodies, one may wonder if in 2015 EU law is to be “found in every drug store” and the recent cases (see inter alia Heinz Müller v 1. FSV Mainz 05, Daniel Striani ao v UEFA, Doyen Sports ao v URBSFA, FIFA, UEFA) [3] cannot but invitingly evoke the spirit of 1995.

One of the aforementioned cases that also stands out pertains to the injunction decision[4] issued on 29 April 2015 by the Regional Court (Landesgericht) in Frankfurt am Main (hereinafter: the Court) in the dispute between the intermediary company Firma Rogon Sportmanagement (hereinafter: the claimant) and the German Football Federation (Deutschen Fußball-Bund, DFB), where the claimant challenged the provisions of the newly adopted DFB Regulations on Intermediaries (hereinafter: DFB Regulations)[5] for being incompatible with Articles 101 and 102 TFEU.[6] The Court, by acknowledging the urgency of the matter stemming from the upcoming transfer window and the potential loss of clients, deemed a couple of shells directed at the DFB Regulations to be well-aimed, and granted an injunction due to breach of Article 101 TFEU. More...




Compatibility of fixed-term contracts in football with Directive 1999/70/EC. Part 2: The Heinz Müller case. By Piotr Drabik

Introduction
The first part of the present blog article provided a general introduction to the compatibility of fixed-term contracts in football with Directive 1999/70/EC[1] (Directive). However, as the Member States of the European Union enjoy a considerable discretion in the implementation of a directive, grasping the impact of the Directive on the world of football would not be possible without considering the national context. The recent ruling of the Arbeitsgericht Mainz (the lowest German labour court; hereinafter the Court) in proceedings brought by a German footballer Heinz Müller provides an important example in this regard. This second part of the blog on the legality of fixed-term contract in football is devoted to presenting and assessing the Court’s decision.


I. Facts and Procedure
Heinz Müller, the main protagonist of this case, was a goalkeeper playing for 1.FSV Mainz 05 a club partaking to the German Bundesliga. More...


Compatibility of Fixed-Term Contracts in Football with Directive 1999/70/EC. Part.1: The General Framework. By Piotr Drabik

Introduction
On 25 March 2015, the Labour Court of Mainz issued its decision in proceedings brought by a German footballer, Heinz Müller, against his (now former) club 1. FSV Mainz 05 (Mainz 05). The Court sided with the player and ruled that Müller should have been employed by Mainz 05 for an indefinite period following his 2009 three year contract with the club which was subsequently extended in 2011 to run until mid-2014. The judgment was based on national law implementing Directive 1999/70 on fixed-term work[1] (Directive) with the latter being introduced pursuant to art. 155(2) TFEU (ex art. 139(2) TEC). On the basis of this article, European social partners’ may request a framework agreement which they conclude to be implemented on the European Union (EU, Union) level by a Council decision on a proposal from the Commission. One of the objectives of the framework agreement,[2] and therefore of the Directive, was to establish a system to prevent abuse arising from the use of successive fixed-term employment contracts or relationships[3] which lies at the heart of the discussed problem.[4] More...

UEFA’s FFP out in the open: The Dynamo Moscow Case

Ever since UEFA started imposing disciplinary measures to football clubs for not complying with Financial Fair Play’s break-even requirement in 2014, it remained a mystery how UEFA’s disciplinary bodies were enforcing the Club Licensing and Financial Fair Play (“FFP”) regulations, what measures it was imposing, and what the justifications were for the imposition of these measures. For over a year, the general public could only take note of the 23 settlement agreements between Europe’s footballing body and the clubs. The evidential obstacle for a proper analysis was that the actual settlements remained confidential, as was stressed in several of our previous Blogs.[1] The information provided by the press releases lacked the necessary information to answer the abovementioned questions.

On 24 April 2015, the UEFA Club Financial Control Body lifted part of the veil by referring FC Dynamo Moscow to the Adjudicatory Body. Finally, the Adjudicatory Body had the opportunity to decide on a “FFP case. The anxiously-awaited Decision was reached by the Adjudicatory Chamber on 19 June and published not long after. Now that the Decision has been made public, a new stage of the debate regarding UEFA’s FFP policy can start.More...

Policing the (in)dependence of National Federations through the prism of the FIFA Statutes. By Tine Misic

…and everything under the sun is in tune,

but the sun is eclipsed by the moon…[1] 


The issue

Ruffling a few feathers, on 30 May 2015 the FIFA Executive Committee rather unsurprisingly, considering the previous warnings,[2] adopted a decision to suspend with immediate effect the Indonesian Football Federation (PSSI) until such time as PSSI is able to comply with its obligations under Articles 13 and 17 of the FIFA Statutes.[3] Stripping PSSI of its membership rights, the decision results in a prohibition of all Indonesian teams (national or club) from having any international sporting contact. In other words, the decision precludes all Indonesian teams from participating in any competition organised by either FIFA or the Asian Football Confederation (AFC). In addition, the suspension of rights also precludes all PSSI members and officials from benefits of any FIFA or AFC development programme, course or training during the term of suspension. This decision coincides with a very recent award by the Court of Arbitration for Sport (CAS) in this ambit, which shall be discussed further below.[4]More...


The Brussels Court judgment on Financial Fair Play: a futile attempt to pull off a Bosman. By Ben Van Rompuy

On 29 May 2015, the Brussels Court of First Instance delivered its highly anticipated judgment on the challenge brought by football players’ agent Daniel Striani (and others) against UEFA’s Club Licensing and Financial Fair Play Regulations (FFP). In media reports,[1] the judgment was generally portrayed as a significant initial victory for the opponents of FFP. The Brussels Court not only made a reference for a preliminary ruling to the European Court of Justice (CJEU) but also imposed an interim order blocking UEFA from implementing the second phase of the FFP that involves reducing the permitted deficit for clubs.

A careful reading of the judgment, however, challenges the widespread expectation that the CJEU will now pronounce itself on the compatibility of the FFP with EU law. More...

A Bridge Too Far? Bridge Transfers at the Court of Arbitration for Sport. By Antoine Duval and Luis Torres.

FIFA’s freshly adopted TPO ban entered into force on 1 May (see our Blog symposium). Though it is difficult to anticipate to what extent FIFA will be able to enforce the ban, it is likely that many of the third-party investors will try to have recourse to alternative solutions to pursue their commercial involvement in the football transfer market. One potential way to circumvent the FIFA ban is to use the proxy of what has been coined “bridge transfers”. A bridge transfer occurs when a club is used as an intermediary bridge in the transfer of a player from one club to another. The fictitious passage through this club is used to circumscribe, for example, the payment of training compensation or to whitewash a third-party ownership by transforming it into a classical employment relationship. This is a legal construction that has gained currency especially in South American football, but not only. On 5 May 2015, in the Racing Club v. FIFA case, the Court of Arbitration for Sport (CAS) rendered its first award involving directly a bridge transfer. As this practice could become prevalent in the coming years we think that this case deserves a close look. More...

20 Years After Bosman - The New Frontiers of EU Law and Sport - Special Issue of the Maastricht Journal of European and Comparative Law

Editor's note: This is a short introduction written for the special Issue of the Maastricht Journal of European and Comparative Law celebrating the 20 years of the Bosman ruling and dedicated to the new frontiers of EU law and Sport (the articles are available here). For those willing to gain a deeper insight into the content of the Issue we organize (in collaboration with Maastricht University and the Maastricht Journal) a launching event with many of the authors in Brussels tomorrow (More info here).More...

ASSER Exclusive! Interview with Charles “Chuck” Blazer by Piotr Drabik

Editor’s note: Chuck Blazer declined our official interview request but thanks to some trusted sources (the FIFA indictment and Chuck’s testimony) we have reconstructed his likely answers. This is a fictional interview. Any resemblance with real facts is purely coincidental.



Mr Blazer, thank you for agreeing to this interview, especially considering the circumstances. How are you doing?

I am facing ten charges concerning, among others, conspiracy to corrupt and money laundering. But apart from that, I am doing great (laughs)!

 

It is good to know that you have not lost your spirit. And since you’ve been involved in football, or as you call it soccer, for years could you please first tell us what was your career at FIFA and its affiliates like?

Let me see… Starting from the 1990s I was employed by and associated with FIFA and one of its constituent confederations, namely the Confederation of North, Central American and Caribbean Association Football (CONCACAF). At various times, I also served as a member of several FIFA standing committees, including the marketing and television committee. As CONCACAF’s general secretary, a position I proudly held for 21 years, I was responsible, among many other things, for negotiations concerning media and sponsorship rights. From 1997 to 2013 I also served at FIFA’s executive committee where I participated in the selection process of the host countries for the World Cup tournaments. Those years at the helm of world soccer were truly amazing years of travel and hard work mainly for the good of the beautiful game. I might add that I even managed to document some of my voyages on my blog. I initially called it “Travels with Chuck Blazer” but Vladimir (Putin) convinced me to change the name to “Travels with Chuck Blazer and his Friends”. You should check it out.

 More...



Financial Fair Play: Lessons from the 2014 and 2015 settlement practice of UEFA. By Luis Torres

UEFA announced on 8 May that it had entered into Financial Fair Play settlement agreements with 10 European football clubs. Together with the four other agreements made in February 2015, this brings the total to 14 FFP settlements for 2015 and 23 since UEFA adopted modifications in its Procedural rules and allowed settlements agreements to be made between the Clubs and the Chief Investigator of the UEFA Club Financial Control Body (CFCB).[1] 

In the two years during which UEFA’s FFP regulations have been truly up and running we have witnessed the centrality taken by the settlement procedure in their enforcement. It is extremely rare for a club to be referred to the FFP adjudication chamber. In fact, only the case regarding Dynamo Moscow has been referred to the adjudication chamber. Thus, having a close look at the settlement practice of UEFA is crucial to gaining a good understanding of the functioning of FFP. Hence, this blog offers a detailed analysis of this year’s settlement agreements and compares them with last year’s settlements. More...

Asser International Sports Law Blog | FFP the Day After : Five (more or less realistic) Scenarios

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

FFP the Day After : Five (more or less realistic) Scenarios

Yesterday, UEFA published the very much-expected settlements implementing its Financial Fair Play (FFP) regulations. Today, we address tomorrow’s challenges for FFP, we offer five, more or less realistic, scenarios sketching the (legal) future of the FFP regulations.

 

Scenario 1 : Happily ever after

We enter the brave new world of FFP. The settlements are not contested and Dupont’s EU law crusade sinks into oblivion. Meanwhile, the Qatari owners of PSG come up with a new marketing concept, the club recruits four locally trained players and wins the Champions league fielding the same starting team 14 times.[1] Thanks to FFP, in 2015, nobody is losing money anymore[2], Cristiano Ronaldo’s transfer to PSG for EUR 30 Mio. is by far the most expensive one and Arsenal’s coach Wenger feels rich for the first time in his career. No new FFP violation is registered, except for Shakhtar Donetsk, which messed up its financial accounts due to the move back to the rubble.

 

Scenario 2: Here we go again

FFP ends here for 2014, but history repeats itself in 2015. Clubs are still losing money and appear to fail to comply with the agreed settlements.[3] However, Manchester City and PSG have recourse to new innovative marketing contracts to turn their losses into profits.[4] To this end, the PSG squad members are named official ambassadors of the State of Qatar and their wages are covered by the Qatari state. The nightmare continues for Platini, who is stuck between a rock and a hard place. On one side he counts on Qatar’s vote and influence to win the FIFA presidency in June 2015, on the other he needs to defend his credibility in the eye of the German austerity hawks. The procedure is delayed until July, at which point the cases are referred to the adjudicatory chamber.[5] Both clubs are found in breach again, the chamber imposes a EUR 100 Mio. fine and Champions League squads are reduced to 18 players.[6]

 

Scenario 3: Settlements are not enough

Wenger is outraged! Fining PSG and Manchester City is a bit like fining a central bank: they’ll just print more money. 2014 was supposed to be the year his side would eventually get to play the Champions League without having to go through the preliminary rounds. Thus, Arsenal, backed by Everton, decides, on the 25 May 2014, to contest the settlements in front of the Adjudicatory Chamber.[7] Olympique de Marseille, always keen on fighting PSG on any turf, also appeals the settlement. However, in a final decision, the Adjudicatory Chamber dismisses the complaints. Far from abandoning their quest for justice, the clubs decide to refer the decision to CAS[8], where Everton, Arsenal and Marseille obtain a re-devaluation of the controversial sponsoring agreements. CAS hands out a two-year ban on transfers for both clubs, but comes short of kicking them out of the Champions League.[9] As usual, the final appeal to the Swiss Federal Tribunals is a waste of time: Arsenal will have to go through the preliminary round...again.

 

Scenario 4: My name is Dupont, Jean-Louis Dupont

All the parties agree with the settlements proposed, FFP seems to be heading for a smooth run. All, but one. Belgian lawyer Jean-Louis Dupont, secretly backed by wealthy clubs, challenged FFP in front of the Belgian Courts and the European Commission. He claims, loud and clear, that FFP is a restriction of EU Free Movement and Competition Law. In 2018, after 4 years of protracted litigation, the Court of appeal of Bruxelles finally decides to refer the matter to the Court of Justice of the EU in Luxembourg.[10] Meanwhile, the European Commission has also been enquiring on a putative infringement of EU competition law, but the new Commissioner for Competition Law, former French minister Pierre Moscovici, freezes the final decision after a phone call with Platini. On the 15 December 2020, the Court, in its instantly famous Striani judgement[11], considers FFP a clear restriction on EU free movement and competition law. In spite of the specificity of sport, its proportionality cannot be warranted. However, the judgement has no retroactive effect and both the Court and Advocate General considered that a better system could have been worked out. As soon as the ruling is known, UEFA enters in résistance: Platini calls up Sarkozy (by then old-new President of France), who, in a moment of rage, decides to leave the EU.

 

Scenario 5: The Reality Check

The FFP settlements will stand as they are; it is rather unlikely, though possible, that any affected party will raise an objection against them. PSG and Manchester City will not recruit any big players unless they sell big, but will most likely focus on getting decent locally-trained players on-board for the Champions League bench. The 2015 FFP edition will probably feature a replay of the current edition. We do not see, at least for PSG, any chance that it could accrue its revenues (except very creatively), in order to meet the target of a maximum EUR 30 Mio deficit. The main conundrum for the 2015 FFP process will be to design credible sanctions for a recidivist. On the EU law front, the process will take a lot of time. Regarding the Belgium Courts, any first instance decision will be appealed all the way to the highest Court and will undoubtedly end up in a very time-consuming procedural ping-pong with the Court of Justice of the EU (earliest final decision not before 2019-2020). The EU competition law complaint launched with the European Commission might be quicker to unfold, but will most likely be a forum for re-negotiating the FFP rules rather than to abolish them altogether (the transfer system overhaul at the turn of the century could serve as a model). On a final note, Wenger is surely disappointed by the apparent leniency of the sanctions, but for once he might be able to throw a bit of his weight around on the transfer market.



[1] The settlement for PSG and Manchester City include specific restrictions of the squads size for the Champions League: “[the club] accepts that for the duration of the settlement it will be subject to a limitation on the number of players that it may include on the “A” list for the purposes of participation in UEFA competitions. Specifically, for season 2014/15 PSG may only register a potential maximum of 21 players on the “A” list, instead of the potential maximum of 25 as foreseen in the relevant competition regulations.” Furthermore, pursuant to Article 18.08 of the Regulations of the UEFA Champions League: “As a minimum, eight places are reserved exclusively for “locally trained players” and no club may have more than four “association-trained players” listed on these eight places on List A.”

[2] The goals of the UEFA Club Licensing and FFP Regulations are stated at article 2.2. They affirm that FFP aims “to introduce more discipline and rationality in club football finances” and “to encourage clubs to operate on the basis of their own revenues”.

[3] The settlements read as follows: “In case [the Club] fails to comply with any of the terms of this Agreement, the  UEFA CFCB Chief Investigator shall refer the case to the Adjudicatory Chamber, as  foreseen in Art. 15 (4) of the Procedural Rules.”

[4] The reason why both clubs failed to adhere to the FFP rules is that their sponsorship contracts with related parties were deemed overvalued and therefore adjusted as required by Article 58.4 of the UEFA FFP Regulations.

[5]Article 15.4 of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014, states that: “If a defendant fails to comply with the terms of a settlement agreement, the CFCB chief investigator shall refer the case to the adjudicatory chamber.”

[6] Article 29 of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014 foresees that:

The following disciplinary measures may be imposed against any defendant other than an individual:

a) warning,

b) reprimand,

c) fine,

d) deduction of points,

e) withholding of revenues from a UEFA competition,

f) prohibition on registering new players in UEFA competitions,

g) restriction on the number of players that a club may register for participation in UEFA competitions, including a financial limit on the overall aggregate cost of the employee benefits expenses of players registered on the A-list for the purposes of UEFA club competitions,

h) disqualification from competitions in progress and/or exclusion from future competitions,

i) withdrawal of a title or award.

[7] Indeed, directly affected party (as Everton, Arsenal and Marseille in those case) can ask the adjudicatory chamber to review the settlements. Article 16.2. of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014 foresees that: “Any decision of the CFCB chief investigator to conclude a settlement agreement or to apply disciplinary measures within the meaning of Article 14(1)(c) may be reviewed by the adjudicatory chamber at the request of a directly affected party within ten days from the date of publication of the decision.”

[8] Article 34 of the Procedural rules governing the UEFA Club Financial Control Body, edition 2014 confers to directly affected party a right to appeal final decisions to CAS.

[9] Supra, No 6

[10] Article 267 of the Treaty on the Functioning of the EU gives to national courts the possibility to refer a question concerning the interpretation of EU law to the Court of Justice of the EU.

[11] Daniel Striani is a player agent on who’s behalf the complaints by Dupont against FFP were launched.

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