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

Blog Symposium: Third-party entitlement to shares of transfer fees: problems and solutions - By Dr. Raffaele Poli (Head of CIES Football Observatory)

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

Editor’s note: Raffaele Poli is a human geographer. Since 2002, he has studied the labour and transfer markets of football players. Within the context of his PhD thesis on the transfer networks of African footballers, he set up the CIES Football Observatory based at the International Centre for Sports Studies (CIES) located in Neuchâtel, Switzerland. Since 2005, this research group develops original research in the area of football from a multidisciplinary perspective combining quantitative and qualitative methods. Raffaele was also involved in a recent study on TPO providing FIFA with more background information on its functioning and regulation (the executive summary is available here).

This is the third blog of our Symposium on FIFA’s TPO ban, it is meant to provide an interdisciplinary view on the question. Therefore, it will venture beyond the purely legal aspects of the ban to introduce its social, political and economical context and the related challenges it faces. More...






Blog Symposium: FIFA must regulate TPO, not ban it. The point of view of La Liga.

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

Editor's note: This is the first blog of our symposium on FIFA's TPO ban, it features the position of La Liga regarding the ban and especially highlights some alternative regulatory measures it would favour. La Liga has launched a complaint in front of the European Commission challenging the compatibility of the ban with EU law, its ability to show that realistic less restrictive alternatives were available is key to winning this challenge. We wish to thank La Liga for sharing its legal (and political) analysis of FIFA's TPO ban with us.

INTRODUCTION

The Spanish Football League (La Liga) has argued for months that the funding of clubs through the conveyance of part of players' economic rights (TPO) is a useful practice for clubs. However, it also recognized that the practice must be strictly regulated. In July 2014, it approved a provisional regulation that was sent to many of the relevant stakeholders, including FIFA’s Legal Affairs Department. More...






Blog Symposium: FIFA’s TPO ban and its compatibility with EU competition law - Introduction - Antoine Duval & Oskar van Maren

Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

On 22 December 2014, FIFA officially introduced an amendment to its Regulations on the Status and Transfers of Players banning third-party ownership of players’ economic rights (TPO) in football. This decision to put a definitive end to the use of TPO in football is controversial, especially in countries where TPO is a mainstream financing mechanism for clubs, and has led the Portuguese and Spanish football leagues to launch a complaint in front of the European Commission, asking it to find the FIFA ban contrary to EU competition law.

Next week, we will feature a Blog Symposium discussing the FIFA TPO ban and its compatibility with EU competition law. We are proud and honoured to welcome contributions from both the complainant (the Spanish football league, La Liga) and the defendant (FIFA) and three renowned experts on TPO matters: Daniel Geey ( Competition lawyer at Fieldfisher, aka @FootballLaw), Ariel Reck (lawyer at Reck Sports law in Argentina, aka @arielreck) and Raffaele Poli (Social scientist and head of the CIES Football Observatory). The contributions will focus on different aspects of the functioning of TPO and on the impact and consequences of the ban. More...





The CAS and Mutu - Episode 4 - Interpreting the FIFA Transfer Regulations with a little help from EU Law

On 21 January 2015, the Court of arbitration for sport (CAS) rendered its award in the latest avatar of the Mutu case, aka THE sports law case that keeps on giving (this decision might still be appealed to the Swiss Federal tribunal and a complaint by Mutu is still pending in front of the European Court of Human Right). The decision was finally published on the CAS website on Tuesday. Basically, the core question focuses on the interpretation of Article 14. 3 of the FIFA Regulations on the Status and Transfer of Players in its 2001 version. More precisely, whether, in case of a dismissal of a player (Mutu) due to a breach of the contract without just cause by the player, the new club (Juventus and/or Livorno) bears the duty to pay the compensation due by the player to his former club (Chelsea). Despite winning maybe the most high profile case in the history of the CAS, Chelsea has been desperately hunting for its money since the rendering of the award (as far as the US), but it is a daunting task. Thus, the English football club had the idea to turn against Mutu’s first employers after his dismissal in 2005, Juventus and Livorno, with success in front of the FIFA Dispute Resolution Chamber (DRC), but as we will see the CAS decided otherwise[1]. More...

The UCI Report: The new dawn of professional cycling?

The world of professional cycling and doping have been closely intertwined for many years. Cycling’s International governing Body, Union Cycliste Internationale (UCI), is currently trying to clean up the image of the sport and strengthen its credibility. In order to achieve this goal, in January 2014 the UCI established the Cycling Independent Reform Commission (CIRC) “to conduct a wide ranging independent investigation into the causes of the pattern of doping that developed within cycling and allegations which implicate the UCI and other governing bodies and officials over ineffective investigation of such doping practices.”[1] The final report was submitted to the UCI President on 26 February 2015 and published on the UCI website on 9 March 2015. The report outlines the history of the relationship between cycling and doping throughout the years. Furthermore, it scrutinizes the role of the UCI during the years in which doping usage was at its maximum and addresses the allegations made against the UCI, including allegations of corruption, bad governance, as well as failure to apply or enforce its own anti-doping rules. Finally, the report turns to the state of doping in cycling today, before listing some of the key practical recommendations.[2]

Since the day of publication, articles and commentaries (here and here) on the report have been burgeoning and many of the stakeholders have expressed their views (here and here). However, given the fact that the report is over 200 pages long, commentators could only focus on a limited number of aspects of the report, or only take into account the position of a few stakeholders. In the following two blogs we will try to give a comprehensive overview of the report in a synthetic fashion.

This first blogpost will focus on the relevant findings and recommendations of the report. In continuation, a second blogpost will address the reforms engaged by the UCI and other long and short term consequences the report could have on professional cycling. Will the recommendations lead to a different governing structure within the UCI, or will the report fundamentally change the way the UCI and other sport governing bodies deal with the doping problem? More...

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

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/

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The aftermath of the Pechstein ruling: Can the Swiss Federal Tribunal save CAS arbitration? By Thalia Diathesopoulou

It took only days for the de facto immunity of the Court of Arbitration for Sport (CAS) awards from State court interference to collapse like a house of cards on the grounds of the public policy exception mandated under Article V(2)(b) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards . On 15 January 2015, the Munich Court of Appeals signalled an unprecedented turn in the longstanding legal dispute between the German speed skater, Claudia Pechstein, and the International Skating Union (ISU). It refused to recognise a CAS arbitral award, confirming the validity of a doping ban, on the grounds that it violated a core principle of German cartel law which forms part of the German public policy. A few weeks before, namely on 30 December 2014, the Court of Appeal of Bremen held a CAS award, which ordered the German Club, SV Wilhelmshaven, to pay ‘training compensation’, unenforceable for non-compliance with mandatory European Union law and, thereby, for violation of German ordre public. More...

‘The reform of football': Yes, but how? By Marco van der Harst

'Can't fight corruption with con tricks
They use the law to commit crime
And I dread, dread to think what the future will bring
When we're living in gangster time'
The Specials - Gangsters


The pressing need for change 

The Parliamentary Assembly (PACE) of the Council of Europe (CoE), which is composed of 318 MPs chosen from the national parliaments of the 47 CoE member states, unanimously adopted a report entitled ‘the reform of football’ on January 27, 2015. A draft resolution on the report will be debated during the PACE April 2015 session and, interestingly, (only?) FIFA’s president Sepp Blatter has been sent an invitation

The PACE report highlights the pressing need of reforming the governance of football by FIFA and UEFA respectively. Accordingly, the report contains some interesting recommendations to improve FIFA’s (e.g., Qatargate[1]) and UEFA’s governance (e.g., gender representation). Unfortunately, it remains unclear how the report’s recommendations will actually be implemented and enforced. 

The report is a welcomed secondary effect of the recent Qatargate directly involving former FIFA officials such as Jack Warner, Chuck Blazer, and Mohamed Bin Hammam[2] and highlighting the dramatic failures of FIFA’s governance in putting its house in order. Thus, it is undeniably time to correct the governance of football by FIFA and its confederate member UEFA – nolens volens. The real question is how to do it.



            Photograph: Fabrice Coffrini/AFP/Getty Images                   Photograph: Octav Ganea/AP

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SV Wilhelmshaven: a Rebel with a cause! Challenging the compatibility of FIFA’s training compensation system with EU law

Due to the legitimate excitement over the recent Pechstein ruling, many have overlooked a previous German decision rendered in the Wilhelmshaven SV case (the German press did report on the decision here and here). The few academic commentaries (see here and here) focused on the fact that the German Court had not recognized the res judicata effect of a CAS award. Thus, it placed Germany at the spearhead of a mounting rebellion against the legitimacy of the CAS and the validity of its awards. None of the commentators weighed in on the substance of the decision, however. Contrary to the Court in Pechstein, the judges decided to evaluate the compatibility of the FIFA rules on training compensations with the EU free movement rights. To properly report on the decision and assess the threat it may constitute for the FIFA training compensation system, we will first summarize the facts of the case (I), briefly explicate the mode of functioning of the FIFA training compensation system (II), and finally reconstruct the reasoning of the Court on the compatibility of the FIFA rules with EU law (III).More...

In Egypt, Broadcasting Football is a Question of Sovereignty … for Now! By Tarek Badawy, Inji Fathalla, and Nadim Magdy

On 15 April 2014, the Cairo Economic Court (the “Court") issued a seminal judgment declaring the broadcasting of a football match a sovereign act of State.[1]


Background

In Al-Jazeera v. the Minister of Culture, Minister of Information, and the Chairman of the Board of Directors of the Radio and Television Union, a case registered under 819/5JY, the Al-Jazeera TV Network (the “Plaintiff” or “Al-Jazeera”) sued the Egyptian Radio and Television Union (“ERTU” or the “Union”) et al. (collectively, the “Respondents”) seeking compensation for material and moral damages amounting to three (3) million USD, in addition to interest, for their alleged breach of the Plaintiff’s exclusive right to broadcast a World Cup-qualification match in Egypt.  Al-Jazeera obtained such exclusive right through an agreement it signed with Sportfive, a sports marketing company that had acquired the right to broadcast Confederation of African Football (“CAF”) World Cup-qualification matches.

ERTU reportedly broadcasted the much-anticipated match between Egypt and Ghana live on 15 October 2013 without obtaining Al-Jazeera’s written approval, in violation of the Plaintiff’s intellectual property rights.

More...


Asser International Sports Law Blog | State Aid and Sport: does anyone really care about rugby? By Beverley Williamson

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

State Aid and Sport: does anyone really care about rugby? By Beverley Williamson

There has been a lot of Commission interest in potential state aid to professional football clubs in various Member States.  The huge sums of money involved are arguably an important factor in this interest and conversely, is perhaps the reason why state aid in rugby union is not such a concern. But whilst the sums of money may pale into comparison to those of professional football, the implications for the sport are potentially no less serious.

At the end of the 2012/2013 season, Biarritz Olympique (Biarritz) were relegated from the elite of French Rugby Union, the Top 14 to the Pro D2.  By the skin of their teeth, and as a result of an injection of cash from the local council (which amounted to 400,000€), they were spared administrative relegation to the amateur league below, the Fédérale 1, which would have occurred as a result of the financial state of the club. Article 8 of the Statuts et Règlements Générqaux (the rules that govern professional rugby) states that if it is determined by the DNACG (Direction Nationale d’Aide et de Contrôl de Gestion; the organisation charged with overseeing the administrative, financial and legal aspects of rugby in France) that a professional team is unable to satisfy its projected financial commitments, it will be relegated to the amateur leagues. Biarritz have been one of the great Top 14 clubs, having won the league in 2005 and 2006, having reached the Heineken Cup final in 2010 and won the smaller of the European competitions, the Challenge Cup in 2012 and they look set to make their return to the Top 14 next year, something that would not have been possible had the local council not intervened, an intervention that was permitted by the DNACG.

Article 107 TFEU provides for a very inclusive definition of state aid, declaring as incompatible with the internal market any aid whatsoever, granted by the State or funded with state resources, which distorts or threatens to distort competition by favouring certain undertakings in so far as it affects trade between Member States. There is a four part test for determining whether or not state aid has been granted; (i) did the money come from state resources; (ii) was it given to an undertaking; (iii) did that money confer selective advantage; and (iv)did it have the potential to distort competition. 

The definition of state resources in this context is fairly wide, and covers money provided by local government and so is easily satisfied in this case. The European jurisprudence is clear that a sporting club or association can be considered to be an undertaking within the meaning of the Treaty provisions in so far as its economic activity is concerned; again, this is easily satisfied in this instance. Given the lack of information available as to the nature of Biarritz’s financial concerns or the terms of the grant, it is difficult to determine whether selective advantage has been conferred by the grant. Selective advantage, of this particular type, is conferred when the undertaking could not have obtained that economic advantage under normal market conditions (market economy operator principle), so had Biarritz been unable to obtain a grant on similar terms to that which was provided by the Council, selective advantage will have been obtained. Finally, the aid has to have the potential to distort competition, and idea that is explored below alongside its affect upon trade between Member States.  

The Pro D2 is an entirely domestic league, it has no international fixtures whatsoever, so potentially is a purely domestic matter. In Stevenage Borough Football Club v The Football League (1996) Times Law Review, 6 July, it was deemed too remote that Stevenage would be able to compete for a place in European competitions and so there was no effect on trade between Member States in that case. However, the Commission have been clear that trade between Member States may be affected by aid given to an undertaking that is not itself, trading across borders (Case C-102/87 France v Commission [1988] ECR 4067, para.19) and indeed, have recently opened an investigation into a second division football team in the Netherlands. The Stevenage case can be contrasted with Biarritz where, despite a rocky start to the season, they have now climbed the table and sit second place. They have a serious chance of being promoted back into the Top 14, or at the very least, occupying one of the coveted promotion playoffs spots, thereby altering who could potentially win promotion (in France two teams go up and two teams come down).  Every team in the Top 14 competes in one of two European competitions: the European Championship Cup or the European Challenge Cup.  The potential effect on trade between Member States starts therefore, to become more evident. The concept of ‘trade between Member States’ has traditionally been given a wide interpretation and can be said to include situations which affect the competitive structure of the market, within its scope. The Top 14 has fixtures with other European countries, including England, Ireland and Italy.  Who enters (and who leaves) therefore will affect the competitive structure of those international fixtures. Article 107 however, states that aid is only prohibited ‘in so far as it’ has an effect on trade between Member States, rather than in Article 101 or 102 which rely on ‘may’ as a limiting concept. The jurisprudence is clear that it is the effect of the aid, rather than the intent or form of the aid which is determinative.  A full market analysis of the effect on trade, as occurs under Article 101 and 12, is not required under Article 107, although justification for the finding of a distortion of competition, or threatened distortion, would be necessary (Case 730/79 Philip Morris Holland BV v Commission, [1980] ECR 2671). In the case of Biarritz, the provision of the 400,000€ saved the team from relegation to the Fédéral 1 and therefore put them in a position in which they could immediately fight for promotion back into the Top 14 (which they look likely to achieve). It does not appear therefore, that an investigation would stumble at this stage of its inquiry.   

Due to the inclusive nature of the Article 107 prohibition, many investigations turn on whether they satisfy the exemption criteria of 107(3). The one most typically utilised in the case of investigations of professional football clubs in 107(3)(c) which states that aid used to facilitate the development of certain economic areas or activities may not be incompatible with the internal market, or the ‘failing firm’  defence. The local mayor hinted at the economic implications for the town itself of the teams fall from professionalism, as the primary motive for providing the aid. There is however, no (public) suggestion that the club would have folded without the injection of cash, merely that it would have had to compete in the amateur Fédérale 1. The definition of a failing firm is necessarily flexible. Nevertheless, it is a requirement when considering rescue aid (as opposed to restructuring aid as appears to be the case here) that the difficulties faced by the firm be short/medium term difficulties that are dependent upon short term government help for their resolution. As Biarritz have performed so well this season, it seems that there is an argument to be made that their difficulties were indeed short-term in nature, and have been resolved by the injection of cash provided by the local council. The aid itself would also have to be a ‘one time, last time’ injection of financial help, something that is not entirely clear from the local media reports. Further, the question of whether demotion to an amateur league is comparable to the outright failure of a firm would have to be addressed. Fellow former Top 14 great and rival, Union Sportive Montalbanaise (Montauban) faced administrative relegation in 2010. The local council there did not provide the club with the money required to prevent their fall. The club filed for bankruptcy after being unable to prove to the DNACG that they would be able to address the rumoured 1.7 million Euro shortfall in their budget for that season. After 4 years in the amateur league they succeeded in winning promotion back into the Pro D 2 for the 2014/2015 season, where they currently sit mid-table. Using this as an example, and provided that the criteria laid out in 3.1.1. of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty are satisfied, it seems there is at least a basis for defending the council loan. 

However, as there is very little by the way of detailed information available as to the nature of the financial difficulties of the club or the terms of the financial assistance provided by the Council, it is impossible to be determinative as to its standing under Article 107. On the face of it though, the case of Biarritz looks at least worthy of some Commission interest and could well be an example of unlawful state aid, aid that looks likely to have enabled Biarritz re-admittance to the Top 14, the ‘richest league in the world’. 400,000€ may seem like peanuts when compared with the figures the Commission is looking at in respect of professional football, but in this case it seems, paying peanuts gets you a lot more than monkeys. 

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