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

A Question of (dis)Proportion: The CAS Award in the Luis Suarez Biting Saga

The summer saga surrounding Luis Suarez’s vampire instincts is long forgotten, even though it might still play a role in his surprisingly muted football debut in FC Barcelona’s magic triangle. However, the full text of the CAS award in the Suarez case has recently be made available on CAS’s website and we want to grasp this opportunity to offer a close reading of its holdings. In this regard, one has to keep in mind that “the object of the appeal is not to request the complete annulment of the sanction imposed on the Player” (par.33). Instead, Suarez and Barcelona were seeking to reduce the sanction imposed by FIFA. In their eyes, the four-month ban handed out by FIFA extending to all football-related activities and to the access to football stadiums was excessive and disproportionate. Accordingly, the case offered a great opportunity for CAS to discuss and analyse the proportionality of disciplinary sanctions based on the FIFA Disciplinary Code (FIFA DC).  More...

The International Sports Law Digest – Issue II – July-December 2014

I. Literature


1. Antitrust/Competition Law and Sport

G Basnier, ‘Sports and competition law: the case of the salary cap in New Zealand rugby union’, (2014) 14 The International Sports Law Journal 3-4, p.155

R Craven, ‘Football and State aid: too important to fail?’ (2014) 14 The International Sports Law Journal 3-4, p.205

R Craven, ‘State Aid and Sports Stadiums: EU Sports Policy or Deference to Professional Football (2014) 35 European Competition Law Review Issue 9, 453


2. Intellectual Property Rights in Sports law / Betting rights/ Spectators’ rights/ Sponsorship Agreements

Books

W T Champion and K DWillis, Intellectual property law in the sports and entertainment industries (Santa Barbara, California; Denver, Colorado; Oxford, England: Praeger 2014)

J-M Marmayou and F Rizzo, Les contrats de sponsoring sportif (Lextenso éditions 2014) 

More...






Time to Cure FIFA’s Chronic Bad Governance Disease

 After Tuesday’s dismissal of Michael Garcia’s complaint against the now infamous Eckert statement synthetizing (misleadingly in his eyes) his Report on the bidding process for the World Cup 2018 and 2022, Garcia finally decided to resign from his position as FIFA Ethics Committee member. On his way out, he noted: “No independent governance committee, investigator, or arbitration panel can change the culture of an organization”. It took Garcia a while to understand this, although others faced similar disappointments before. One needs only to remember the forgotten reform proposals of the Independent Governance Committee led by Prof. Dr. Mark Pieth. More...

The CAS Ad Hoc Division in 2014: Business As Usual? - Part. 2: The Selection Drama

In a first blog last month we discussed the problem of the scope of jurisdiction of the Ad Hoc Division of the Court of Arbitration for Sport. The key issue was whether an athlete could get his case heard in front of the CAS Ad Hoc Division or not. In this second part, we will also focus on whether an athlete can access a forum, but a different kind of forum: the Olympic Games as such. This is a dramatic moment in an athlete’s life, one that will decide the future path of an entire career and most likely a lifetime of opportunities. Thus, it is a decision that should not be taken lightly, nor in disregard of the athletes’ due process rights. In the past, several (non-)selection cases were referred to the Ad Hoc Divisions at the Olympic Games, and this was again the case in 2014, providing us with the opportunity for the present review.

Three out of four cases dealt with by the CAS Ad Hoc Division in Sochi involved an athlete contesting her eviction from the Games. Each case is specific in its factual and legal assessment and deserves an individual review. More...

Should the CAS ‘let Dutee run’? Gender policies in Sport under legal scrutiny. By Thalia Diathesopoulou

The rise of Dutee Chand, India’s 100 and 200-meter champion in the under 18-category, was astonishing. Her achievements were more than promising: after only two years, she broke the 100m and 200m national junior records, competed in the 100m final at the World Youth Athletics Championships in Donetsk and collected two gold medals in the Asian Junior Championships in Chinese Taipei. But, in July 2014, this steady rise was abruptly halted. Following a request from the Athletics Federation of India (AFI), the Sports Authority of India (SAI) conducted blood tests on the Indian sprinters. Dutee was detected with female hyperandrogenism, i.e a condition where the female body produces high levels of testosterone. As a result, a few days before the Commonwealth Games in Glasgow, the AFI declared Dutee ineligible to compete under the IAAF Regulations and prevented her from competing in future national and international events in the female category. Pursuant to the IAAF ‘Hyperandrogenism Policy’, the AFI would allow Dutee to return to competition only if she lowers her testosterone level beneath the male range by means of medical or surgical treatment.[1] On 25 September 2014, Dutee filed an appeal before the CAS, seeking to overturn the AFI’s decision and declare IAAF and IOC’s hyperandrogenism regulations null and void. She is defending her right to compete the way she actually is: a woman with high levels of testosterone. Interestingly enough, albeit a respondent, AFI supports her case.

IAAF and IOC rules set limits to female hyperandrogenism, which is deemed an unfair advantage that erodes female sports integrity. While these rules have been contested with regard to their scientific and ethical aspects, this is the first time that they will be debated in court. This appeal could have far-reaching ramifications for the sports world. It does not only seek to pave the way for a better ‘deal’ for female athletes with hyperandrogenism, who are coerced into hormonal treatment and even surgeries to ‘normalise’ themselves as women[2], but it rather brings the CAS, for the first time, before the thorny question:

How to strike a right balance between the core principle of ‘fair play’ and norms of non-discrimination, in cases where a determination of who qualifies as a ‘woman’ for the purposes of sport has to be made? More...

The O’Bannon Case: The end of the US college sport’s amateurism model? By Zygimantas Juska

On 8 August, U.S. District Judge Claudia Wilken ruled in favour of former UCLA basketball player O'Bannon and 19 others, declaring that NCAA's longstanding refusal to compensate athletes for the use of their name, image and likenesses (NILs) violates US antitrust laws. In particular, the long-held amateurism justification promoted by the NCAA was deemed unconvincing.

On 14 November, the NCAA has appealed the judgment, claiming that federal judge erred in law by not applying a 1984 Supreme Court ruling. One week later, the NCAA received support from leading antitrust professors who are challenging the Judge Wilken’s reasoning in an amicus curiae. They are concerned that the judgment may jeopardize the proper regulation of college athletics. The professors argued that if Wilken’s judgment is upheld, it

would substantially expand the power of the federal courts to alter organizational rules that serve important social and academic interests…This approach expands the ‘less restrictive alternative prong’ of the antitrust rule of reason well beyond any appropriate boundaries and would install the judiciary as a regulatory agency for collegiate athletics”.   

More...

Image Rights in Professional Basketball (Part II): Lessons from the American College Athletes cases. By Thalia Diathesopoulou

In the wake of the French Labour Union of Basketball (Syndicat National du Basket, SNB) image rights dispute with Euroleague and EA Games, we threw the “jump ball” to start a series on players’ image rights in international professional basketball. In our first blogpost, we discussed why image rights contracts in professional basketball became a fertile ground for disputes when it comes to the enforcement of these contracts by the Basketball Arbitral Tribunal (BAT). Indeed, we pointed out that clubs might take advantage of the BAT’s inconsistent jurisprudence to escape obligations deriving from image rights contracts.

In this second limb, we will open a second field of legal battles “around the rim”: the unauthorized use of players’ image rights by third parties. We will use as a point of reference the US College Athletes image rights cases before US Courts and we will thereby examine the legal nature of image rights and the precise circumstances in which such rights may be infringed. Then, coming back to where we started, we will discuss the French case through the lens of US case law on players’ image rights. 


Source: http://philadelphia.cbslocal.com/2013/09/27/ea-sports-settles-college-likeness-case/ More...


The Olympic Agenda 2020: The devil is in the implementation!

The 40 recommendations of the Olympic Agenda 2020 are out! First thought: one should not underplay the 40 recommendations, they constitute (on paper at least) a potential leap forward for the IOC. The media will focus on the hot stuff: the Olympic channel, the pluri-localisation of the Games, or their dynamic format. More importantly, and to some extent surprisingly to us, however, the IOC has also fully embraced sustainability and good governance. Nonetheless, the long-term legacy of the Olympic Agenda 2020 will hinge on the IOC’s determination to be true to these fundamental commitments. Indeed, the devil is always in the implementation, and the laudable intents of some recommendations will depend on future political choices by Olympic bureaucrats. 

For those interested in human rights and democracy at (and around) the Olympics, two aspects are crucial: the IOC’s confession that the autonomy of sport is intimately linked to the quality of its governance standards and the central role the concept of sustainability is to play in the bidding process and the host city contract.  More...

UEFA’s tax-free Euro 2016 in France: State aid or no State aid?

Last week, the French newspaper Les Echos broke the story that UEFA (or better said its subsidiary) will be exempted from paying taxes in France on revenues derived from Euro 2016. At a time when International Sporting Federations, most notably FIFA, are facing heavy criticisms for their bidding procedures and the special treatment enjoyed by their officials, this tax exemption was not likely to go unnoticed. The French minister for sport, confronted with an angry public opinion, responded by stating that tax exemptions are common practice regarding international sporting events. The former French government agreed to this exemption. In fact, he stressed that without it “France would never have hosted the competition and the Euro 2016 would have gone elsewhere”. More...

The New Olympic Host City Contract: Human Rights à la carte? by Ryan Gauthier, PhD Researcher (Erasmus University Rotterdam)

Three weeks ago, I gave a talk for a group of visiting researchers at Harvard Law School on the accountability of the IOC for human rights abuses caused by hosting Olympic Games. On the day of that talk, Human Rights Watch announced that the International Olympic Committee (“IOC”) would insert new language into the Host City Contract presumably for the 2022 Olympic Games onwards. The new language apparently requires the parties to the contract to:

“take all necessary measures to ensure that development projects necessary for the organization of the Games comply with local, regional, and national legislation, and international agreements and protocols, applicable in the host country with regard to planning, construction, protection of the environment, health, safety, and labour laws.”More...

Asser International Sports Law Blog | UEFA Financial Fair Play Regulations Put PSG and Manchester City on a Transfer Diet

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

UEFA Financial Fair Play Regulations Put PSG and Manchester City on a Transfer Diet

The main lesson of this year’s transfer window is that UEFA’s Financial Fair Play (FFP) rules have a true bite (no pun intended). Surely, the transfer fees have reached usual highs with Suarez’s move to FC Barcelona and Rodriguez’s transfer from AS Monaco to Real Madrid and overall spending are roughly equal to 2013 (or go beyond as in the UK). But clubs sanctioned under the FFP rules (prominently PSG and Manchester City) have seemingly complied with the settlements reached with UEFA capping their transfer spending and wages.

 

FFP's Transfer Diet

PSG’s summer of impuissance

It was widely expected, and trumpeted, that PSG and Manchester City would disregard the transfer restrictions imposed on them. Besides all the talking and the costly recruitment of David Luiz for nearly 50M€ earlier this summer, PSG’s transfer activity was limited to Serge Aurier’s arrival on loan from modest Toulouse. Moreover, the talks over Di Maria’s move to PSG faltered over the inability of the French club to pay a transfer fee due to the FFP constraints. Thus, PSG was forced into relative thrift by the FFP rules, a remarkable achievement in itself. This has recently triggered widespread critique against UEFA and FFP by PSG officials.

 

Manchester City overtaken by Manchester United

Even though Manchester City has largely dominated the transfer contest against its arch-rival over the latest years, this balance has dramatically tilted during this summer. United was able to attract a number of high-ranked and expensive players, most notably Di Maria for the total sum of 66M€ (more than City’s total spending). In a final transfer twist, United was even able to snap away Falcao from City apparently due to FFP concerns.  City did not engage in the usual frenzy spending spree of the previous years. It did spend around 60 M€ (and racked in 25M€ in transfer fees), but this number pales in regard to the 116M€ spent in 2013. Here again, despite talks to the contrary and vouching to disregard UEFA’s FFP rules, one cannot ignore the toll taken by them on the capacity of Manchester City to outrageously dominate the UK transfer market.

  

 

 

The general timidity of FFP culprits

This is not an isolated development. Other clubs concerned by FFP settlements have followed a similar path (see graph below). In general, clubs sanctioned under FFP rules have reduced their transfer spending in comparison to previous years. More surprisingly, big players like PSG and Manchester City have complied with the net transfer limit of 49M€ imposed on them in the settlement. This points at an apparent success of the FFP regulations, which have not materialised, as many feared, as a public relations exercised in the guise of a toothless regulation. The rules have a real-world impact, and in spite of the high profiles of certain clubs concerned those have felt the urge to internalize them reinforcing UEFA’s claim that FFP is a serious regulation. As will be shown below, however, this also supports the claims that FFP regulations constitute a restriction on competition in need of adequate justification.


 


New strategies to bypass FFP rules 

This development has also led clubs to devise bypassing strategies to the FFP rules. The first strategy is to use loans as temporary or differed transfers by including a mandatory transfer clause in the contract. This is the solution adopted by PSG in the transfer of Serge Aurier from Toulouse. In a way there is no reason why this should not be considered as a new liability for accounting purposes, as it is akin to a delayed payment but not to a delayed transfer. Finally, there is the possibility of using affiliated clubs to store the long-term liabilities (wages and fees), while getting a player on short-term loans. This is likely the strategy used by Manchester City in the now infamous recruitment of Frank Lampard from its sister club New York City FC. Hence, one should not underestimate the ability of clubs to sidestep the FFP rules, albeit a way more difficult and protracted transfer game as before.

 

FFP’s compatibility with EU competition law still a threat

Does this real-world efficacy change anything to the assessment of FFP’s compatibility with EU competition law? Not really. On the one hand, it is all the more evident that the FFP rules have a restraining effect on free competition; certain economic actors are undoubtedly not free to invest their money, as they would see fit. On the other hand, the real test for evaluating the FFP’s compatibility with EU law is the Wouters/Meca-Medina proportionality test developed by the EU Court. First of all UEFA will have to identify the legitimate objective it intends to pursue with these regulations. This is likely to be good corporate governance, as one cannot consider that FFP rules improve the competitive balance by reducing the inequality between clubs in the absence of any redistributive effects. Actually, FFP will most likely sclerotize the pre-existing hierarchies. If good corporate governance in football is deemed a worthy objective (it probably will), the next question will be: are these regulations a proportionate mean to achieve it? At this stage UEFA will need to explain why the existing national bankruptcy frameworks are inadequate for this purpose (due, for example, to the political influence of clubs like in Spain, or to the particular feature of football competition that cannot tolerate the vagaries of a normal bankruptcy process), but also why the existing debt stock is not taken into account by the rules. Here, the brunt of the socio-political debate on the need of FFP will unfold.

 

As UEFA’s FFP rules strengthen their grip over clubs, they will be more and more incentivized to contest the rules in front of the EU Commission (PSG and Manchester City fans have recently submitted a complaint) or national tribunals. Thus, these questions will not remain hypothetical and will have to be met by UEFA with hard facts and convincing arguments. If not the FFP rules will be remembered as an ephemeral, though remarkable, interlude of the summer 2014.

 

Clubs

Amount spend on transfers in 2010 (in millions)

2011

2012

2013

2014

Manchester City

€182.45

€96.05

€61.95

€116.0

€65.5

PSG

€9.0

€107.1

€149.45

€135.9

€49.5

Galatasaray

€29.5

€23.6

€30.05

€41.84

€15.75

Trabzonspor

€7.9

€24.45

€8.06

€4.7

€29.11

Bursaspor

€1.38

€10.2

€3.66

€2.33

€1.8

FC Zenit

€43.0

€16.2

€103.76

€32.8

€22.8

Rubin Kazan

€43.6

€23.35

€29.0

€25.1

€8.0

FC Anzhi

€31.2

€84.5

€67.9

€59.4

€0

Levski Sofia

€0.8

€0.95

€1.25

€0.59

€0.05

 Data from transfermarkt.com






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