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

International and European Sports Law – Monthly Report – October 2017. By Tomáš Grell

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. More...

Multi-Club Ownership in European Football – Part II: The Concept of Decisive Influence in the Red Bull Case – By Tomáš Grell

 

Introduction 

The first part of this two-part blog on multi-club ownership in European football outlined the circumstances leading to the adoption of the initial rule(s) aimed at ensuring the integrity of the UEFA club competitions (Original Rule) and retraced the early existence of such rule(s), focusing primarily on the complaints brought before the Court of Arbitration for Sport and the European Commission by the English company ENIC plc. This second part will, in turn, introduce the relevant rule as it is currently enshrined in Article 5 of the UCL Regulations 2015-18 Cycle, 2017/18 Season (Current Rule). It will then explore how the UEFA Club Financial Control Body (CFCB) interpreted and applied the Current Rule in the Red Bull case, before drawing some concluding remarks.  More...

Multi-Club Ownership in European Football – Part I: General Introduction and the ENIC Saga – By Tomáš Grell

Editor’s note: Tomáš Grell holds an LL.M. in Public International Law from Leiden University. He contributes to the work of the ASSER International Sports Law Centre as a research intern.

 

Introduction

On 13 September 2017, more than 40,000 people witnessed the successful debut of the football club RasenBallsport Leipzig (RB Leipzig) in the UEFA Champions League (UCL) against AS Monaco. In the eyes of many supporters of the German club, the mere fact of being able to participate in the UEFA's flagship club competition was probably more important than the result of the game itself. This is because, on the pitch, RB Leipzig secured their place in the 2017/18 UCL group stage already on 6 May 2017 after an away win against Hertha Berlin. However, it was not until 16 June 2017 that the UEFA Club Financial Control Body (CFCB) officially allowed RB Leipzig to participate in the 2017/18 UCL alongside its sister club, Austrian giants FC Red Bull Salzburg (RB Salzburg).[1] As is well known, both clubs have (had) ownership links to the beverage company Red Bull GmbH (Red Bull), and therefore it came as no surprise that the idea of two commonly owned clubs participating in the same UCL season raised concerns with respect to the competition's integrity. More...


International and European Sports Law – Monthly Report – September 2017. By Tomáš Grell

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 

2024 and 2028 Olympic Games to be held in Paris and Los Angeles respectively

On 13 September 2017, the Session of the International Olympic Committee (IOC) held in Lima, Peru, elected Paris and Los Angeles as host cities of the 2024 and 2028 Olympic Games respectively. On this occasion, the IOC President Thomas Bach said that ''this historic double allocation is a 'win-win-win' situation for the city of Paris, the city of Los Angeles and the IOC''. The idea of a tripartite agreement whereby two editions of the Olympic Games would be awarded at the same time was presented by a working group of the IOC Vice-Presidents established in March 2017. Both Paris and Los Angeles have pledged to make the Olympic Games cost-efficient, in particular through the use of a record-breaking number of existing and temporary facilities. In addition to economic aspects, it will be worthwhile to keep an eye on how both cities will address human rights and other similar concerns that may arise in the run-up to the Olympic Games. More...

The limits to multiple representation by football intermediaries under FIFA rules and Swiss Law - By Josep F. Vandellos Alamilla

Editor’s note: Josep F. Vandellos Alamilla is an international sports lawyer and academic based in Valencia (Spain) and a member of the Editorial Board of the publication Football Legal. Since 2017 he is the Director of  the Global Master in Sports Management and Legal Skills FC Barcelona – ISDE.

I think we would all agree that the reputation of players’ agents, nowadays called intermediaries, has never been a good one for plenty of reasons. But the truth is their presence in the football industry is much needed and probably most of the transfers would never take place if these outcast members of the self-proclaimed football family were not there to ensure a fluid and smooth communication between all parties involved.

For us, sports lawyers, intermediaries are also important clients as they often need our advice to structure the deals in which they take part. One of the most recurrent situations faced by intermediaries and agents operating off-the-radar (i.e. not registered in any football association member of FIFA) is the risk of entering in a so-called multiparty or dual representation and the potential risks associated with such a situation.

The representation of the interests of multiple parties in football intermediation can take place for instance when the agent represents the selling club, the buying club and/or the player in the same transfer, or when the agent is remunerated by multiple parties, and in general when the agent incurs the risk of jeopardizing the trust deposited upon him/her by the principal. The situations are multiple and can manifest in different manners.

This article will briefly outline the regulatory framework regarding multiparty representation applicable to registered intermediaries. It will then focus on provisions of Swiss law and the identification of the limits of dual representation in the light of the CAS jurisprudence and some relevant decisions of the Swiss Federal Tribunal.More...



The Evolution of UEFA’s Financial Fair Play Rules – Part 3: Past reforms and uncertain future. By Christopher Flanagan

Part Two of this series looked at the legal challenges FFP has faced in the five years since the controversial ‘break even’ requirements were incorporated. Those challenges to FFP’s legality have been ineffective in defeating the rules altogether; however, there have been iterative changes during FFP’s lifetime. Those changes are marked by greater procedural sophistication, and a move towards the liberalisation of equity input by owners in certain circumstances. In light of recent statements from UEFA President Aleksander Čeferin, it is possible that the financial regulation of European football will be subject to yet further change. More...

The Evolution of UEFA’s Financial Fair Play Rules – Part 2: The Legal Challenges. By Christopher Flanagan

The first part of this series looked at the legal framework in which FFP sits, concluding that FFP occupied a ‘marginal’ legal position – perhaps legal, perhaps not. Given the significant financial interests in European football – UEFA’s figures suggest aggregate revenue of nearly €17 billion as at clubs’ 2015 accounts – and the close correlation between clubs’ spending on wages and their success on the field,[1] a legal challenge to the legality of FFP’s ‘break even’ requirement (the Break Even Requirement), which restricts a particular means of spending, was perhaps inevitable.

And so it followed.

Challenges to the legality of the Break Even Requirement have been brought by football agent Daniel Striani, through various organs of justice of the European Union and through the Belgian courts; and by Galatasaray in the Court of Arbitration for Sport. As an interesting footnote, both Striani and Galatasaray were advised by “avocat superstar” Jean-Louis Dupont, the lawyer who acted in several of sports law’s most famous cases, including the seminal Bosman case. Dupont has been a vocal critic of FFP’s legality since its inception. More...





The Evolution of UEFA’s Financial Fair Play Rules – Part 1: Background and EU Law. By Christopher Flanagan

Editor's Note: Christopher is an editor of the Asser International Sports Law Blog. His research interests cover a spectrum of sports law topics, with a focus on financial regulatory disputes, particularly in professional football, a topic on which he has regularly lectured at the University of the West of England.

 

It is five years since the Union of European Football Associations (UEFA) formally introduced ‘Financial Fair Play’ (FFP) into European football through its Club Licensing and Financial Fair Play Regulations, Edition 2012. With FFP having now been in place for a number of years, we are in a position to analyse its effect, its legality, and how the rules have altered over the last half decade in response to legal challenges and changing policy priorities. This article is split into three parts: The first will look at the background, context and law applicable to FFP; Part Two will look at the legal challenges FFP has faced; and Part Three will look at how FFP has iteratively changed, considering its normative impact, and the future of the rules. More...


International and European Sports Law – Monthly Report – July and August 2017. By Tomáš Grell

 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.

 

The Headlines

ISLJ Annual Conference on International Sports Law 

On 26 and 27 October 2017, the T.M.C. Asser Institute in The Hague will host the first ever ISLJ Annual International Sports Law Conference. This year's edition will feature panels on the Court of Arbitration for Sport, the world anti-doping system, the FIFA transfer regulations, human rights and sports, the labour rights of athletes, and EU law and sport. We will also welcome the following distinguished keynote speakers:

  • Miguel Maduro, former Advocate General at the European Court of Justice and former head of the FIFA's Governance Committee;
  • Michael Beloff QC, English barrister known as one of the 'Godfathers' of sports law;
  • Stephen Weatherill, Professor at Oxford University and a scholarly authority on EU law and sport;
  • Richard McLaren, CAS Arbitrator, sports law scholar and former head of the World Anti-Doping Agency's investigation into the Russian doping scandal.

You will find all the necessary information related to the conference here. Do not forget to register as soon as possible if you want to secure a place on the international sports law pitch! [Please note that we have a limited amount of seats available, which will be attributed on a 'first come, first served' basis.] More...

Asser International Sports Law Blog | The EU State aid and Sport Saga – Setting the scene

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 EU State aid and Sport Saga – Setting the scene

The last years has seen the European Commission being put under increasing pressure to enforce EU State aid law in sport. For example, numerous Parliamentary questions have been asked by Members of the European Parliament[1] regarding alleged State aid to sporting clubs.  In reply to this pressure, on 21 March 2012, the European Commission, together with UEFA, issued a statement. In this statement, the Commission held that the objectives of the UEFA’s Financial Fair Play (FFP) Regulations are consistent with the aims and objectives of European Union policy in the field of State aid. Moreover, the Commission highlighted that it is willing to cooperate with UEFA when enforcing the rules on EU State aid onto professional football. According to the Commission, when football clubs experience financial difficulties, there is a particular risk that public authorities may be tempted to grant State aid. Thus, enforcing EU rules on State aid will ensure prudent economic management by football clubs that will serve to protect both the interests of individual clubs and players as well as the football sector in Europe as a whole.

Now that UEFA is in the process of enforcing its FFP regulations on football clubs, the question remains whether the European Commission has kept its word about its part of “the deal”. In other words, is there a visible change regarding the enforcement of the EU State aid rules by the European Commission?

Article 107 of the treaty on the Functioning of the European Union (TFEU) foresees that a Member State may not aid or subsidize private parties in distortion of free competition. The State aid rules constitute one of the four policy areas forming EU competition law. The others being the rules on cartels, abuse of dominance and mergers. The European Court of Justice established long ago that EU competition Law was also applicable to sporting entities[2], but very little has ever been done or said about State aid in sport. In fact, one could easily get the impression that the Commission deliberately avoided to get its hands dirty with such problems. One famous example concerns a terrain qualification change in Madrid in the late 90’s that proved hugely advantageous for Spanish football club Real Madrid[3]. In this case, the Commission, even though agreeing that an advantage was conferred to the club, simply stated that the new qualification of the terrain in question does not appear to involve any transfer of resources by the State and could therefore not be regarded as State aid within the meaning of article 107 TFEU.

So has anything changed since then, or more specifically, since 21 March 2012? The Commission has never been famous for its celerity, meaning that it could take another few years before true change can be witnessed. The continuous delays in coming to decisions has also been one of the main points of criticism by the European Ombudsman on the way the Commission is dealing with State aid in sport. However, on a close look, one can distinguish the beginning of a shift towards active enforcement of EU State aid law in sports.

On the day of the joint statement, the Commission published a decision indicating that it would initiate a formal investigation into alleged State aid granted by Sweden for the construction of a sporting arena for ice hockey and other indoor sports in the town of Uppsala. The Swedish State notified the Commission that it had planned to grant EUR 16.5 million directly plus EUR 1.7 million for 25 years for the construction because the arena would fulfil an objective of common interest. Moreover, due to its multifunctional character, the arena would also be used for other sports and events, such as concerts. Nonetheless, the Commission had doubts as regards the necessity to use public funding for this projects and the reasons advanced by Sweden to justify the need of a completely new arena instead of renovating an old one.

The Commission’s scrutiny of State aid in the field of sport did not end there. Since March 2012 the Commission has dealt with 12 cases in which it had to decide whether to launch an official investigation or not. The cases included possible State aid to over 30 beneficiaries in six different Member States, the latest one published 9 April of this year (see table). The aid measures varied from grants for renovating old stadiums or constructing new ones, debt waivers and reduced tax-rates for certain clubs, to acquisition of a stadium by the municipality, guarantees on bank loans by the club and suspected advantageous property transfers between a club and the municipality. In five out of the 12 cases, the Commission has decided to launch an official investigation in accordance with article 108(2) TFEU.

TableStateAidInSport.pdf (95.1KB)


Launching an official investigation does not mean that the Member State in question will get sanctioned for granting unauthorized State aid. Article 108(2) TFEU allows the Member States and concerned parties, such as the beneficiaries, to submit comments and to respond to any doubts the Commission might have regarding the legality of the aid. Indeed, on 2 May 2013, in its final decision regarding the construction of a sporting arena in the town of Uppsala, the Commission concluded that the granted aid is compatible with the internal market in accordance with article 107(3)(c) TFEU[4] and is therefore authorized. Nonetheless, four cases, which will be analyzed in future blog posts, are still pending a final decision by the Commission. For now, it is fair to say that the Commission has shifted towards an active enforcement of EU State aid law in sports. However, whether the Commission is prepared to “show its teeth” and sanction the Member States who granted unlawful aid to sporting clubs remains unclear.





[1] See for example: E-005417/2011, E-004360/2011 and P-4699/09

[2] Case 36/74 Walrave and Koch, (1974)

[3] The qualification change allowed Real Madrid to sell its old training grounds. Though the exact price for the grounds remains unknown, Real Madrid was suddenly capable of buying players like Figo and Zidane for record fees.

[4] Article 107(3)(c) TFEU: “The following shall be compatible with the internal market: aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest”.

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