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

Nudging, not crushing, private orders - Private Ordering in Sports and the Role of States - By Branislav Hock

Editor's note: Branislav Hock (@bran_hock)  is PhD Researcher at the Tilburg Law and Economics Center at Tilburg University. His areas of interests are transnational regulation of corruption, public procurement, extraterritoriality, compliance, law and economics, and private ordering. Author can be contacted via email: b.hock@uvt.nl.


This blog post is based on a paper co-authored with Suren Gomtsian, Annemarie Balvert, and Oguz Kirman.


Game-changers that lead to financial success, political revolutions, or innovation, do not come “out of the blue”; they come from a logical sequence of events supported by well-functioning institutions. Many of these game changers originate from transnational private actors—such as business and sport associations—that produce positive spillover effects on the economy. In a recent paper forthcoming in the Yale Journal of International Law, using the example of FIFA, football’s world-governing body, with co-authors Suren Gomtsian, Annemarie Balvert, and Oguz Kirman, we show that the success of private associations in creating and maintaining private legal order depends on the ability to offer better institutions than their public alternatives do. While financial scandals and other global problems that relate to the functioning of these private member associations may call for public interventions, such interventions, in most cases, should aim to improve private orders rather than replace them. More...



What Pogba's transfer tells us about the (de)regulation of intermediaries in football. By Serhat Yilmaz & Antoine Duval

Editor’s note: Serhat Yilmaz (@serhat_yilmaz) is a lecturer in sports law in Loughborough University. His research focuses on the regulatory framework applicable to intermediaries. Antoine Duval (@Ant1Duval) is the head of the Asser International Sports Law Centre.


Last week, while FIFA was firing the heads of its Ethics and Governance committees, the press was overwhelmed with ‘breaking news’ on the most expensive transfer in history, the come back of Paul Pogba from Juventus F.C. to Manchester United. Indeed, Politiken (a Danish newspaper) and Mediapart (a French website specialized in investigative journalism) had jointly discovered in the seemingly endless footballleaks files that Pogba’s agent, Mino Raiola, was involved (and financially interested) with all three sides (Juventus, Manchester United and Pogba) of the transfer. In fine, Raiola earned a grand total of € 49,000,000 out of the deal, a shocking headline number almost as high as Pogba’s total salary at Manchester, without ever putting a foot on a pitch. This raised eyebrows, especially that an on-going investigation by FIFA into the transfer was mentioned, but in the media the sketching of the legal situation was very often extremely confusing and weak. Is this type of three-way representation legal under current rules? Could Mino Raiola, Manchester United, Juventus or Paul Pogba face any sanctions because of it? What does this say about the effectiveness of FIFA’s Regulations on Working with Intermediaries? All these questions deserve thorough answers in light of the publicity of this case, which we ambition to provide in this blog.More...


International and European Sports Law – Monthly Report – April 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...

The Reform of FIFA: Plus ça change, moins ça change?

Since yesterday FIFA is back in turmoil (see here and here) after the FIFA Council decided to dismiss the heads of the investigatory (Cornel Borbély) and adjudicatory (Hans-Joachim Eckert) chambers of the Independent Ethics Committee, as well as the Head (Miguel Maduro) of the Governance and Review Committee. It is a disturbing twist to a long reform process (on the early years see our blogs here and here) that was only starting to produce some tangible results. More...

RFC Seraing at the Court of Arbitration for Sport: How FIFA’s TPO ban Survived (Again) EU Law Scrutiny

Doyen (aka Doyen Sports Investment Limited) is nothing short of heroic in its fight against FIFA’s TPO ban. It has (sometimes indirectly through RFC Seraing) attacked the ban in front of the French courts, the Belgium courts, the European Commission and the Court of Arbitration for Sport. This costly, and until now fruitless, legal battle has been chronicled in numerous of our blogs (here and here). It is coordinated by Jean-Louis Dupont, a lawyer who is, to say the least, not afraid of fighting the windmills of sport’s private regulators. Yet, this time around he might have hit the limits of his stubbornness and legal ‘maestria’. As illustrated by the most recent decision of the saga, rendered in March by the Court of Arbitration for Sport (CAS) in a case opposing the Belgium club RFC Seraing (or Seraing) to FIFA. The arguments in favour of the ban might override those against it. At least this is the view espoused by the CAS, and until tested in front of another court (preferably the CJEU) it will remain an influential one. The French text of the CAS award has just been published and I will take the opportunity of having for once an award in my native language to offer a first assessment of the CAS’s reasoning in the case, especially with regard to its application of EU law. More...

The Validity of Unilateral Extension Options in Football – Part 1: A European Legal Mess. By Saverio Spera

Editor’s Note: Saverio Spera is an Italian lawyer and LL.M. graduate in International Business Law at King’s College London. He is currently an intern at the ASSER International Sports Law Centre.

                 

In the football world the use of unilateral extension options (hereafter UEOs) in favour of the clubs is common practice. Clubs in Europe and, especially, South America make extensive use of this type of contractual clauses, since it gives them the exclusive possibility to prolong the employment relationship with players whose contracts are about to come to an end. This option gives to a club the right to extend the duration of a player’s contract for a certain agreed period after its initial expiry, provided that some previously negotiated conditions are met. In particular, these clauses allow clubs to sign young promising players for short-term contracts, in order to ascertain their potential, and then extend the length of their contracts.[1] Here lies the great value of UEOs for clubs: they can let the player go if he is not performing as expected, or unilaterally retain him if he is deemed valuable. Although an indisputably beneficial contractual tool for any football club, these clauses are especially useful to clubs specialized in the development of young players.[2] After the Bosman case, clubs have increasingly used these clauses in order to prevent players from leaving their clubs for free at the end of their contracts.[3] The FIFA Regulations do not contain any provisions regulating this practice, consequently the duty of clarifying the scope and validity of the options lied with the national courts, the FIFA Dispute Resolution Chamber (DRC) and the CAS. This two-part blog will attempt to provide the first general overview on the issue.[4] My first blog will be dedicated to the validity of UEOs clauses in light of national laws and of the jurisprudence of numerous European jurisdictions. In a second blog, I will review the jurisprudence of the DRC and the CAS on this matter. More...

Call for papers: ISLJ Annual Conference on International Sports Law - 26-27 October 2017

The editorial board of the International Sports Law Journal (ISLJ) is very pleased to invite you to submit abstracts for its first Annual Conference on International Sports Law. The ISLJ, published by Springer in collaboration with ASSER Press, is the leading publication in the field of international sports law. Its readership includes both academics and many practitioners active in the field. On 26-27 October 2017, the International Sports Law Centre of the T.M.C. Asser Instituut and the editorial board of the International Sports Law Journal will host in The Hague the first ever ISLJ Annual Conference on International Sports Law. The conference will feature panels on the Court of Arbitration for Sport, the world anti-doping system, the global governance of sports, the FIFA transfer regulations, comparative sports law, and much more.

More...


International and European Sports Law – Monthly Report – March 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...

The legality of surety undertakings in relation to minor football players: the Lokilo case. By Adriaan Wijckmans

Editor's note: Adriaan Wijckmans is an associate specialized in sports law at the Belgium law firm Altius.

In a recent judgment, the Brussels Court of First Instance confirmed the legality of a so-called surety undertaking, i.e. an agreement in which the parents of a minor playing football guarantee that their child will sign a professional contract with a football club as soon as the child reaches the legal age of majority.

This long-awaited ruling was hailed, on the one hand, by clubs as a much needed and eagerly anticipated confirmation of a long-standing practice in Belgian football[1] and, on the other hand, criticised by FIFPro, the international player’s trade union, in a scathing press release. More...



Kosovo at the Court of Arbitration for Sport – Constructing Statehood Through Sport? By Ryan Gauthier (Thompson Rivers University)

Editor's Note: Ryan is Assistant Professor at Thompson Rivers University, he defended his PhD at Erasmus University Rotterdam in December 2015. His dissertation examined human rights violations caused by international sporting events, and how international sporting organisations may be held accountable for these violations. 


“Serious sport…is war minus the shooting.” – George Orwell

 

In May 2016, the Union of European Football Associations (UEFA) admitted the Football Federation of Kosovo (Kosovo) as a member. The voting was close, with 28 member federations in favour, 24 opposed, and 2 whose votes were declared invalid. The practical outcome of this decision is that Kosovo would be able participate in the UEFA Euro championship, and that Kosovo teams could qualify for the UEFA Champions’ League or Europa League. More...


Asser International Sports Law Blog | The Scala reform proposals for FIFA: Old wine in new bottles?

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 Scala reform proposals for FIFA: Old wine in new bottles?

Rien ne va plus at FIFA. The news that FIFA’s Secretary General Jérôme Valcke was put on leave and released from his duties has been quickly overtaken by the opening of a criminal investigation targeting both Blatter and Platini.

With FIFA hopping from one scandal to the next, one tends to disregard the fact that it has been attempting (or rather pretending) to improve the governance of the organisation for some years now. In previous blogs (here and here), we discussed the so-called ‘FIFA Governance Reform Project’, a project carried out by the Independent Governance Committee (IGC) under the leadership of Prof. Dr. Mark Pieth of the Basel Institute on Governance. Their third and final report, published on 22 April 2014, listed a set of achievements made by FIFA in the area of good governance since 2011, such as establishing an Audit and Compliance Committee (A&C). However, the report also indicated the reform proposals that FIFA had not met. These proposals included the introduction of term limits for specific FIFA officials (e.g. the President) as well as introducing an integrity review procedure for all the members of the Executive Committee (ExCo) and the Standing Committees.

In the interest of, and commitment to, transparency”, FIFA made publicly available on 10 September 2015 an 8-point reform plan issued by the Chairman of the Audit and Compliance Committee, Domenico Scala. The report maps the current governance problems FIFA is facing and outlines a list of reform proposals the A&C wants FIFA to implement. More concretely, the A&C believes that the ExCo is FIFA’s main problem, and urges the ExCo to reform itself.

This blog post aims to analyse the proposals submitted by the A&C. It will do so by firstly explaining what the FIFA Executive Committee is, what its powers are and how its members get elected. This allows us to understand the criticism this institution has received in the past by, e.g. the Independent Governance Committee, and by the A&C today. In continuation, a comparison will be made between this latest report on FIFA governance and the 2014 report issued by the IGC. The comparison will help us answer the question to what extent FIFA is seriously trying to undergo the necessary reforms. Lastly, the blog post will determine whether the proposals made by Scala and the A&C can be realistically implemented by FIFA and, where necessary, its Members and the Confederations. 


The FIFA Executive Committee: How it works and why it is criticised

The ExCo is the executive body of FIFA and consists of 25 members: The FIFA President, eight Vice-Presidents and 16 members, including one female member. The FIFA President and the female Member of the ExCo are elected by the FIFA Congress (the legislative body of FIFA, of which all the National Associations are a Member and have one vote each)[1], whereas the Vice-Presidents and the other members are appointed by the Confederations (i.e. UEFA, CONMEBOL, AFC, CAF, CONCACAF and OFC)[2]. It should be noted that the Confederations themselves are not members of FIFA. All members of the ExCo are elected for four years and may be re-elected indefinitely.[3] The tasks of the ExCo include determining the dates, locations and format of the FIFA tournaments and electing the General Secretary on the proposal of the FIFA President.[4] Moreover, the ExCo designates the members of each standing committee.[5] An example of such a standing committee is the Finance Committee, whose task is to monitor the financial management and advise the ExCo on financial matters and asset management.[6]

In a concept paper from September 2011, the IGC described the ExCo as an “assembly of member delegates” rather than executive body. “The nature of the Executive Committee as an assembly of delegates is further supported by its large size (24 members in 2011) and few meetings (two meetings per year)”.[7]

The often-mentioned governance problem of the ExCo involves the ‘double’ or even ‘triple heads’ of some of its members. For example, the man who is president of the Spanish football association (RFEF) since 1988, Ángel María Villar, is also vice-president of UEFA since 1992 and FIFA Executive Committee member since 1998. Having important functions in three related, though different, organisations could trigger severe independency and conflict of interest issues. Furthermore, as the A&C pointed out in his 8-point reform plan, “the misconduct of some, even if it happens ‘only’ at the Confederation / national association level, has a tremendous impact in FIFA itself”.[8] One only needs to remember the example of former ExCo Members, Jack Warner and Chuck Blazer, who in their other function as president and vice president of the CONCACAF laundered millions of dollars and were charged with corruption.[9]

In its concept paper, the IGC already underlined the lack of independent supervision within the ExCo and suggested introducing a number of independent ExCo Members.[10] Further recommendations were substantiated in the IGC’s final report, which included implementing integrity review procedures for all members of the ExCo and the Standing Committees performed by FIFA centrally, and having the FIFA Congress confirm each ExCo member appointment or re-appointment by the Confederations.[11] Nonetheless, more than four years after the publication of the first IGC report and even after the 2015 FIFA corruption scandal, which led to the arrests of ExCo Members Jeffrey Webb and Eugenio Figueredo, the way ExCo Members get elected has not changed. For example, so far a requirement for integrity checks of new Members has not been introduced. 


Comparing the Final Report by the Independent Governance Committee and the Scala reform plan

The Final Report by the IGC contained a list of achievements including:

• Dividing the Ethics Committee into an investigatory and an adjudicatory chamber;

• Revising the Code of Ethics, through which the rules of conduct and expected behaviour (e.g. new standards regarding conflicts of interest, gifts and other benefits, bribery and corruption) are more clearly described;

• Establishing an Audit & Compliance Committee with the typical supervisory role of an Audit Committee and the additional responsibilities for a Compliance Program as well as for Compensation & Benefits;

• Establishing that the Chairman and Vice-Chairman of the Audit & Compliance Committee are independent and meet the necessary professional requirements.[12]

In addition to the list of achievements, the report listed a set of recommendations that were not implemented. The main recommendations are listed in the table below, together with the list of reform proposals found in the 8-point reform plan. 


 

Report by the Independent Governance Committee

Scala reform plan

Term Limits

The introduction of term limits for all ExCo members, not only the President.

Introduction of Term limits for the President, the (other) ExCo members, the Secretary General and members of independent committees to three terms of office (each of four years).

Age Limits

Introducing age limits is less important in case terms of office will be implemented.

The introduction of age limits appears to be less effective.

Election of the ExCo Members

The ExCo Members should each be individually confirmed by Congress decision upon their appointment or re-appointment by the Confederations.

Direct election of FIFA Executive Committee members by the Congress. Confederations will retain a right to propose candidates.

 

Integrity Check of ExCo Members

Integrity review procedure for ExCo and Standing Committee members performed by FIFA centrally.

Enhanced and centralized integrity checks performed by the Investigatory Chamber of the FIFA Ethics Committee.

Further recommendations with the aim of improving the functioning of the ExCo

At least two independent Members to be added to the Executive Committee.

 

Division of the present ExCo into two separate bodies: a Governing Body (strategic matters, supervision) and a Management Board (executive functions).

Disclosure of individual compensations

A publication of information in the area of compensation and benefits on a best-practice level inspired from multinational corporations or international organization.

Individual and detailed disclosure of the remunerations of the President, the other ExCo members, the Secretary General and (at least) of the Chairmen of the independent committees.

FIFA’s Member Associations and the Confederations

An overall greater focus should be on the Confederations and their leadership.

The Member Associations, through their votes at a Confederation level and at the FIFA Congress, should take over a more active and independent role in choosing the future FIFA leadership.

Introduction of higher standards of governance at Confederation and member association levels.

Introduction of equal integrity checks at Confederation and National Association level.

Introduction of equal term limits at Confederation and National Association level.

Other recommendations

The Chairman of the Audit & Compliance Committee should have access to and can participate as an observer in all Committee meetings within FIFA, including the ExCo.

Significant reduction of the number and size of the standing committees.

Committees that bear a high risk of conflicts of interests occurring must have independent chairmen.


Analysing the two governance reports

As a preliminary note, it is worth mentioning that the establishment of the FIFA Audit and Compliance Committee came about after the IGC suggested doing so in their report, published on 20 March 2012.[13]

A quick look at the above table shows that the recommendations by the IGC and those listed in the 8-point reform plan are very similar. First of all, the introduction of term limits for the FIFA President and ExCo Members is encouraged in both reports, whereas introducing age limits is discouraged. Secondly, both reports agree that there should be an integrity check for at least the President and the ExCo Members performed by FIFA itself. What these integrity checks would entail still needs to be clarified. Thirdly, it is clear that individual compensations of the President and the ExCo Members need to be disclosed to the public. Both reports contend this is essential to improve the governance and transparency of FIFA. Lastly and, in our opinion, most importantly, both reports agree that the Confederations and Member Associations play a most essential role when attempting to effectively improve the governance of FIFA. Where the two reports slightly differentiate from one another is on what the exact position of the Confederations and Member Associations should be, how they are involved in the electoral process of the FIFA President and ExCo members, and how they should be reformed themselves.

In its report, the IGC highlights the importance of the Confederations and national associations, but it does not suggest any substantial reform in this regard. In fact, the second recommendation of the report stipulates that “the members of the Executive Committee should each be individually confirmed by Congress decision upon their appointment or re-appointment by the Confederations”.[14] The IGC’s suggestion of a limitation of the Confederation’s role in the election process of the ExCo members was heavily criticised by, most notably, UEFA. All the UEFA members voted unanimously against the introduction of term limits for ExCo members during the FIFA Congress of January 2013. UEFA also held the view that the Congress should not have the right to confirm Confederation candidates delegated to the ExCo and that integrity checks on candidates should not be performed by FIFA but by the Confederations.[15]

The Scala proposal has a slightly different take on the role of the Member Associations and the Confederations, especially with regard to the election to the ExCo: “all members of the FIFA Executive Committee (are) to be directly elected by the FIFA Congress. The Confederations will retain a right to propose candidates.”[16] Furthermore, “Confederations and FIFA Member Associations have to issue adequate ethics and disciplinary regulations and set up the bodies required to implement them. All persons assigned to FIFA bodies have to pass strict integrity checks in their respective Confederations and national associations.”[17] Lastly, there has to be an obligation for Confederations and Member Associations “to establish integrity checks with regard to positions in their top governing bodies as a precondition for eligibility”.[18]

A conclusion that can be drawn from the Scala reform plan is that it assumes the same governance problems highlighted in the IGC reports, especially as regards the ExCo, but suggest more far-reaching proposals. Improving the governance of the ExCo cannot simply be achieved by introducing term limits and integrity checks at FIFA level, rather similar reforms must be introduced in the Confederations and in the National Associations. This would require that the Confederations and National Associations put in place credible integrity self-checks. Yet, it is clear from the recent past that the Confederations are not willing to implement this type of accountability mechanisms, nor are they really committed to giving them the necessary teeth. 


Conclusion: Can the Scala reform plan be implemented?

The Scala report offers a newish take on old recipes to solve FIFA’s bad governance syndrome. Nearly all of the reforms proposed require amending the FIFA Statutes. For example, “the passing of the integrity check and the introduction of equivalent integrity checks by Confederations and Member Associations to qualify for elections to FIFA governing bodies need to be included in the FIFA Statutes and therefore need to be adopted by the Congress”.[19] Similarly, “direct elections of members of the FIFA Executive Committee mandatorily needs to be provided for in the FIFA Statutes; corresponding revisions would therefore have to be approved by the FIFA Congress”.[20] In accordance with Article 26(6) of the FIFA Statutes, for a proposal to adopt or amend the Statutes, a simple majority (more than 50%) of the valid votes cast is required. Procedurally, implementing the reforms proposed by Scala is straightforward: a simple majority of the votes at a FIFA Congress (the next one being on 26 February 2016) is needed.

However, achieving a simple majority might not be as simple as that. Introducing term limits, for example, would mean that many of the Members voting for this measure would create an “expiration date” for a job they have held for years (decades even in many cases) and do not want to lose. One only needs to remember the fact that during the FIFA Congress of January 2013, the Members of UEFA voted unanimously against the introduction of term limits for ExCo members.

Introducing integrity checks at FIFA level is one thing, but having similar checks at the Confederation and/or National level would imply that the people voting at the FIFA Congress would introduce integrity checks against themselves. In any normal global organisation this should not be a problem. However, as regards the governance of football, in light of the never-ending list of scandals, one can easily understand why many members would prefer not to see such integrity checks taking place in their backyard.

Scala attacks the ‘old boys’ networks’ within the ExCo, the Confederations and the Member Associations.[21] Similarly, the IGC held that “the ultimate success of the reform depends on a change in culture on all levels of the organization, especially with the key opinion leaders who need to lead by example and act in the interest of FIFA and football overall”.[22] Changing FIFA is not only about pushing a reform measure through the FIFA Congress, already an extremely difficult endeavour, it is also about changing a culture of omerta and corruption that has been around since the organisation’s earliest days, and to which the key players want to cling on as long as possible. Whether this can be done from inside the organization is doubtful. Instead, only the pressure of the public and the external legal control exercised by national (and European) authorities will force the great leaders of the beautiful game to bend and finally put in place mechanisms securing their accountability.



[1] Article 25(2)q) of the FIFA Statutes (2015 Edition) – available at http://resources.fifa.com/mm/document/affederation/generic/02/58/14/48/2015fifastatutesen_neutral.pdf.

[2] Article 20(3)g) of the FIFA Statutes.

[3] Article 30 of the FIFA Statutes

[4] Articles 30 and 31 of the FIFA Statutes

[5] Article 34(3) of the FIFA Statutes. This provision also stipulates that the members of the Audit and Compliance Committee are elected by the FIFA Congress.

[6] Article 35 of the FIFA Statutes.

[7] Governing FIFA – Concept Paper and Report, 19 September 2011, page 13.

[8] “Substantiation of the Reform Proposals Presented at the FIFA Executive Committee Meeting of 20 July 2015”, Reports submitted to the FIFA Executive Committee by the independent Chairman of the FIFA Audit and Compliance Committee, page 4.

[9] For more information on the Chuck Blazer case, read our previous Blog post.

[10] “Governing FIFA”, Concept Paper and Report, 19 September 2011, pages 23-25.

[11] “FIFA Governance Reform Project”, Final Report by the Independent Governance Committee to the Executive Committee of FIFA, page 12.

[12] Ibid, pages 11-12.

[13] “FIFA Governance Reform Project”, First Report by the Independent Governance Committee to the Executive Committee of FIFA, page 9.

[14] Supra 11, page 12.

[15] Ibid, page 10

[16] Supra 8, page 26.

[17] Ibid.

[18] Ibid, page 25.

[19] Ibid, page 8.

[20] Ibid, page 11.

[21] Ibid, page 4.

[22] Supra 11, page 11

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