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.

Concerns about adverse human rights impacts related to FIFA's activities have intensified ever since its late 2010 decision to award the 2018 and 2022 World Cup to Russia and Qatar respectively. However, until recently, the world's governing body of football had done little to eliminate these concerns, thereby encouraging human rights advocates to exercise their critical eye on FIFA. 

In response to growing criticism, the Extraordinary FIFA Congress, held in February 2016, decided to include an explicit human rights commitment in the revised FIFA Statutes which came into force in April 2016. This commitment is encapsulated in Article 3 which reads as follows: ''FIFA is committed to respecting all internationally recognized human rights and shall strive to promote the protection of these rights''. At around the same time, Professor John Ruggie, the author of the United Nations Guiding Principles on Business and Human Rights ('UN Guiding Principles') presented in his report 25 specific recommendations for FIFA on how to further embed respect for human rights across its global operations. While praising the decision to make a human rights commitment part of the organization's constituent document, Ruggie concluded that ''FIFA does not have yet adequate systems in place enabling it to know and show that it respects human rights in practice''.[1]

With the 2018 World Cup in Russia less than a year away, the time is ripe to look at whether Ruggie's statement about FIFA's inability to respect human rights still holds true today. This blog outlines the most salient human rights risks related to FIFA's activities and offers a general overview of what the world's governing body of football did over the past twelve months to mitigate these risks. Information about FIFA's human rights activities is collected primarily from its Activity Update on Human Rights published alongside FIFA's Human Rights Policy in June 2017.

The most salient human rights risks

FIFA faces human rights risks through its events, commercial subsidiaries and business partners, member associations or other parties. This section identifies sources of human rights risks that are most often associated with FIFA's activities.

Bidding and selection

Allegations of corruption have cast a shadow over FIFA's decision to organize the 2018 and 2022 World Cup in Russia and Qatar respectively.[2] If these allegations were proven to be true, it would be conceivable that financial incentives provided by the successful candidates helped them not only to secure the right to stage the tournament, but also to evade certain requirements, including those related to human rights. As Ruggie puts it, ''lack of financial integrity […] is a foundational source of human rights risks''.[3]

Moreover, in the past, countries bidding to host FIFA's tournaments have not been required to present a strategy addressing human rights risks that may arise in connection with the tournament’s organization. This allowed Qatar to win the bidding contest for the 2022 World Cup without explaining how it plans to protect migrant workers from the adverse impacts of the kafala system. Another example is Papua New Guinea that was awarded the 2016 U-20 Women's World Cup despite the country's high rate of sexual violence against women.

Construction

FIFA delegates the organization of the World Cup to the Local Organizing Committee ('LOC'), a separate legal entity created by the government and the national football association of the Host Country. The LOC is responsible, inter alia, for the delivery of World Cup-related infrastructure. In order to meet their deadlines, contractors hired by the LOC may ignore safety standards or force their employees to work overtime. Other reported practices include, for instance, appalling living and working conditions, non-payment of salaries, withholding identity documents or restrictions on the freedom of association.

In March 2017, Norwegian football magazine Josimar uncovered a series of human rights abuses faced by North Korean men working at Zenit Arena in Saint Petersburg. As recently as 14 June 2017, Human Rights Watch documented the mistreatment of construction workers at five other World Cup stadium construction sites in Russia. As the situation in Qatar has not been much better,[4] the Netherlands Trade Union Confederation filed in December 2016 a lawsuit with the Commercial Court of the Canton of Zürich, asking the court to find FIFA responsible for alleged human rights violations of migrant workers. The court dismissed the lawsuit on jurisdictional grounds in January 2017 (for a detailed analysis, see our blogs here and here).

Discrimination

Article 4 of the FIFA Statutes prohibits ''discrimination of any kind against a country, private person, or group of people on account of race, skin colour, ethnic, national or social origin, gender, disability, language, religion, political opinion or any other opinion, wealth, birth, or any other status, sexual orientation or any other reason''. In practice, FIFA must enforce this provision by taking further action to tackle issues such as anti-gay legislation in countries where its tournaments are staged, homophobic chants by fans or gender discrimination in the world of association football. 

Players' rights 

In January 2017, the international players' association FIFPro published a Global Employment Report on working conditions in men's professional football. Out of nearly 14,000 players interviewed, 41% reported having experienced delayed salary payments over the past two seasons. Players who lodge a formal complaint against their club put themselves at risk of being excluded from the squad or subjected to violence and harassment. FIFPro strongly condemned these practices and called upon FIFA to reform its Regulations on the Status and Transfer of Players ('RSTP') to ''provide stronger protections of players against material breaches of contracts by clubs''.[5] Another issue that merits closer attention is human trafficking in football, especially as it often involves minors.[6]

Other 

In addition to the above, FIFA could better address human rights abuses that may occur (i) in the supply chains of its licensees; (ii) in the process of land acquisition for stadiums and event-related infrastructure; or (iii) in connection with event-related security measures.

Overview of the measures taken by FIFA

First and foremost, FIFA strengthened its internal capacity to deal with human rights risks. In 2016, FIFA established the Governance Committee which provides, via its Human Rights Working Group, strategic guidance to the FIFA Council on human rights-related matters. At the operational level, the overall responsibility for the implementation of FIFA's human rights commitment rests with the Secretary General who delegates the day-to-day management of human rights-related work to the Sustainability and Diversity Department. In September 2016, FIFA employed a Human Rights Manager to work within this department. Moreover, in March 2017, FIFA appointed an independent Human Rights Advisory Board with the view of accelerating its efforts to embed respect for human rights. Composed of experts from the United Nations, trade unions, civil society and business, the Advisory Board is scheduled to meet at least twice a year. It has already contributed to the development of FIFA's Human Rights Policy, a landmark document clarifying FIFA's approach to the implementation of its human rights commitment in accordance with the UN Guiding Principles.

The rest of this section looks at the most significant steps taken by FIFA in each of the areas outlined above.

Bidding and selection

The FIFA Council has recently agreed that, as of the 2026 World Cup, human rights requirements will feature in the bidding procedure. This is of paramount importance as it means that countries failing to present an effective human rights strategy should not be allowed to host the World Cup. In other words, the protection of human rights will constitute a material factor in the bid evaluation. Had such requirements existed at the time of the bidding procedure for the 2022 World Cup, Qatar would arguably never have been selected.

The bidding procedure for the 2026 World Cup, the first to feature 48 teams, is currently in an early stage, and therefore bidding requirements are not yet available. The Host Country of the 2026 World Cup will be announced in 2020 at the latest.

Construction

As part of the implementation of the Sustainability Strategy for the 2018 World Cup, FIFA and the Russia 2018 LOC have launched a Decent Work Monitoring System aimed at detecting non-compliance with labour standards at World Cup stadium construction sites. Under this system, two-day on-site inspections are conducted on a quarterly basis by the Klinsky Institute of Labour Protection and Working Conditions, at times accompanied by the Building and Wood Workers' International ('BWI') and the Russian Building Workers Union ('RBWU').[7] After each inspection, companies are provided with a report containing recommendations for further improvement of working conditions. This report is forwarded to FIFA and the Russia 2018 LOC, and, in cases where the health or safety of workers are seriously threatened, also to the competent Russian authorities. As of 14 June 2017, a total of 58 inspections have been carried out.[8]

In Qatar, the Supreme Committee for Delivery and Legacy ('Supreme Committee'), an entity tasked with the delivery of World Cup-related infrastructure,[9] has developed a comprehensive set of Workers' Welfare Standards ('WWS'). Inspired by international labour standards, the WWS are mandatory for all contractors working on World Cup-related construction projects. To see whether contractors are adhering to these standards, the Supreme Committee has designed a four-tier monitoring system which comprises due diligence conducted by the Supreme Committee, the British company Impactt Ltd.,[10] the Qatari Ministry of Labour and contractors themselves. As of February 2017, the implementation of the WWS is further monitored via on-site inspections carried out jointly by the Supreme Committee and the BWI.[11]

Discrimination 

Establishment of the Anti-Discrimination Monitoring System in May 2015 is regarded as the most significant step taken by FIFA to combat discrimination in the world of football. This system uses independent observers who are present at matches identified as involving heightened risks of discriminatory incidents. Based on the reports provided by these observers, FIFA may open disciplinary proceedings and eventually impose sanctions on member associations. For instance, several Latin American associations have been sanctioned for homophobic chants by spectators during the 2018 World Cup qualifying matches.

Internally, FIFA promotes gender equality by requiring each of the six confederations to reserve at least one seat in the FIFA Council for women.[12]

Players' rights

As far as the protection of players' rights is concerned, FIFA informs that it has introduced certain measures intended to preserve confidentiality of the data available in the Transfer Matching System.[13] Furthermore, on 1 March 2015, FIFA modified the RTSP so as to put in place 'fast-track' proceedings for disputes concerning overdue payable claims (for a detailed analysis, see our blogs here and here).[14]

Other

In addition to contractors working on World Cup-related construction projects, other companies having business relationships with FIFA are now required to strengthen their human rights compliance. These include the suppliers of FIFA-licensed balls, artificial turf and technology used in games. Before a license agreement is entered into between FIFA and the supplier, FIFA must satisfy itself that both the supplier and its manufacturer are in compliance with the World Federation of the Sporting Goods Industry ('WFSGI') Code of Conduct, whose purpose is ''to guide WFSGI members in the standards and practices expected in the workplaces that they operate or contract from''.[15] Should FIFA-licensees cease to comply with the standards laid down in the WFSGI Code of Conduct, FIFA may decide to withdraw its license.

Concluding Remarks

The aforementioned report on human rights violations of World Cup-related construction workers in Russia, published by Human Rights Watch in June 2017, came as a major setback to the otherwise encouraging measures taken by FIFA in respect of human rights compliance. This and similar reports demonstrate that FIFA's human rights activities have not yet produced their desired effect. To increase the efficiency of its human rights activities in the future, FIFA should probably engage in a tougher discussion with the competent authorities of the Host Country. This is important because event-related human rights abuses often flow from inadequate domestic legislation and administrative practices of the Host Country.[16] Examples from the past show that FIFA is able to exert pressure on the future Host Country to modify its domestic legislation when it is in the interest of FIFA's sponsors.[17] At the risk of stating the obvious, it is hard to understand why FIFA's sponsors should be prioritized over thousands of people facing human rights abuses in connection with the organization of the World Cup. Thus, a lot will depend on FIFA's amendment of the bidding requirements for the 2026 World Cup. Though it may sound optimistic and far-fetched, if FIFA were to award the World Cup taking into account human rights compliance of the potential Host Countries, it could become a strong force in spreading the human rights gospel across the globe.

[1]    John G. Ruggie, 'For the Game. For the World. FIFA and Human Rights' (April 2016) p. 19.

[2]    Jonathan Calvert and Heidi Blake, 'Plot to Buy the World Cup' (The Sunday Times, 1 June 2014). See also David Conn, 'France Investigates Votes for 2018 and 2022 World Cups and Questions Blatter' (The Guardian, 27 April 2017).

[3]    See Ruggie's report (n 1) p. 21.

[4]    Amnesty International, 'The Ugly Side of the Beautiful Game: Exploitation of Migrant Workers on a Qatar 2022 World Cup Site' (30 March 2016).

[5]    FIFPro, '2016 FIFPro Global Employment Report: Working Conditions in Professional Football' (January 2017) p. 30.

[6]    See Ruggie's report (n 1) p. 25.

[7]    In August 2016, the BWI and the RBWU signed a memorandum of understanding with FIFA and the 2018 World Cup LOC.

[8]    FIFA, 'Statement on Human Rights Watch Report on Russia' (14 June 2017).

[9]    The Supreme Committee works closely with the Qatar 2022 LOC.

[10]   In April 2017, Impactt Ltd. published its first report.

[11]   The Supreme Committee and the BWI signed a memorandum of understanding in November 2016.

[12]   FIFA Statutes, Article 33(5). See also FIFA, '2016 Reform Committee Report' (2 December 2015) p. 9.

[13]   RSTP, Definitions.

[14]   RSTP, Article 12bis.

[15]   WFSGI Code of Conduct, Introduction.

[16]   It should be noted that, in December 2016, the Qatari government introduced certain reforms to its labour laws. However, Amnesty International asserted that these reforms ''barely scratch the surface of labour exploitation''.

[17]   One such example is the well-known 'Budweiser Law' – a law enacted by Brazil in the run-up to the 2014 World Cup allowing beer sales at match venues despite the fact that the sale of alcohol had been prohibited in Brazil's stadiums for almost ten years.

Editor’s Note: Emre Bilginoglu[1] is an attorney in Istanbul and the co-founder of the Turkish E-Sports Players Association, a non-profit based in Istanbul that aims to provide assistance to professional gamers and to work on the relevant laws affecting them. 

The world is witnessing the rise of a new sport that is growing at an incredible speed: E-Sports. We are only starting to understand its legal implications and challenges.

In recent years, E-Sports has managed to attract thousands of fans to arenas to see a group of people play a video game. These people are literally professional gamers (cyber athletes)[2] who make money by competing in tournaments. Not all video games have tournaments in which professional players compete against each other.

The most played games in E-Sports competitions are League of Legends (LoL), Defense of the Ancients 2 (DotA 2) and Counter-Strike: Global Offensive (CS:GO). LoL and DotA are both Multiplayer online battle arena (MOBA) games, a genre of strategy video games in which the player controls a single character in one of two teams. The goal of the game is to destroy the opponent’s main structure. CS:GO is a first-person shooter (FPS) game, a genre of video games where the player engages combat through a first-person perspective. The main objective in CS:GO is to eliminate the opposing team or to terrorize or counter-terrorize, planting bombs or rescuing hostages. Other games that have (popular) E-Sports competitions include Starcraft II (real time strategy), Hearthstone (collectible card video game), Call of Duty (FPS) and FIFA (football).

The gaming requires cooperation between team players, a high level of concentration, rapid reactions and some seriously fast clicking. E-Sports is a groovy term to describe organized competitive computer gaming. The E-Sports industry is exponentially growing, amounting to values expressed in billions of dollars. According to Newzoo, a website dedicated to the collection of E-Sports data, there are some 250 million occasional viewers of E-Sports with Asia-Pacific accounting for half of the total amount. The growth of the industry is indubitably supported by online streaming media platforms. This article aims to explain what E-Sports is and to give the readers an insight on the key legal questions raised by it. 

Is E-Sports a Sport?

The introductory legal question regarding E-Sports is whether it is a sport. There are different definitions of “sport”. According to the Council of Europe, “sport” means all forms of physical activity which, through casual or organised participation, aim at expressing or improving physical fitness and mental well-being, forming social relationships or obtaining results in competition at all levels.

SportAccord a non-profit association which is composed of autonomous and independent international sports federations and other international organisations contributing to sport in various fields, also offers a definition of sport. According to this definition, sport:

1) includes an element of competition;

2) does not rely on any element of “luck” specifically integrated into the sport;

3) does not pose an undue risk to the health and safety of its athletes or participants;

4) is in no way harmful to any living creature;

5) and does not rely on equipment that is provided by a single supplier.

Sport categories designated by SportAccord are primarily: physical sports (e.g. basketball); mind sports (e.g. chess); motorized sports (e.g. motorcycle racing); coordination sports (e.g. snooker); and animal-supported sports (e.g. equestrianism).

SportAccord also states that activities with limited physical or athletic activity would be carefully considered. E-Sports indeed involves a limited physical activity. The professional gamer generally sits in front of a designated computer. However, at this point it is important to highlight the existence of multiplayer video games that involve a considerable amount of physical activity. Home video game consoles that detect movement were released in early 2000s, paving the way for true E-Sports cyber athletes in the near future. Until now however, games that require physical activity have not been played at a professional level.

Having said this, E-Sports does involve a clear element of competition, does not rely only on luck, does not pose an undue risk to the health and safety of its competitors and is not harmful to any living creature. At some point, it does rely on equipment that is provided by a single supplier, as the subject game that is played is in general produced by a single supplier. In other words, E-Sports clearly complies with the remaining criteria (2 to 5) suggested to be defined as a “sport”.

Even though there are a myriad of multiplayer games, one mostly categorizes E-Sports as a primarily mind and coordinated sport. It does not require lots of physical activities except for very fast finger movement. A similar sport is chess. It is challenging to oppose the argument of David Papineau, professor of philosophy of science at King’s College London, who, as regards chess, said that “(t)he activity is playing a game, therefore it is not a sport but a game”. However, chess is a strategy board game and at the same time it is an organized sport with an international governing body, namely FIDE.

Can E-Sports Be an Olympic Sport?
The International Olympic Committee (IOC) is the supreme authority of the Olympic movement. The IOC decides which sports are included in the Olympic Games. Choices of the IOC always bring forth discussions and debates in the sports community. Some sports are discontinued and some are re-introduced. Wrestling was announced to be dropped from the 2020 Olympic Games in 2020, but was reinstated seven months after losing its place. Even though wrestling is one of the founding sports of the Olympics, the IOC could have removed it from the Olympic Games. The IOC recently reinstated baseball and softball, and added skateboarding -, karate, climbing and surfing- to the sports programme for the Olympic Games in Tokyo 2020. Therefore, it is possible to say that popularity is one of the crucial elements for a sport to be included to the Olympic Games. Chess, led by FIDE, is attempting to be an Olympic Sport. Although the attempt for Tokyo 2020 was not successful, things may change in the future.

In my opinion, E-Sports can very well be regarded as an Olympic sport in the near future. Whatever game that is played on a professional level, may be regarded as its discipline. The crucial setback is the perishability of games. Video games become “obsolete” with time. This is especially the case with sports games. Squads and the game play changes every season. That is one of the reasons why FIFA releases a new video game every single year. Therefore, video games such as FIFA are unlikely to make it to the top E-Sports games awarding prize money.

What type of Governance for E-Sports ?

The formation of a single internationally recognized E-Sports federation would be a first step in a long journey to reach the Olympics. Currently however, several international E-Sports organizations exist.

In South Korea, where E-Sports is what football is to Brazil, the South Korean E-Sports Association was founded in 2000. The Association regulates the working conditions of cyber athletes. The highest earnings in E-Sports by countries are listed as: China, the United States, South Korea, Sweden and Canada. As for international associations, three of them need to be mentioned.

First, there is the World E-Sports Association (WESA), founded in 2016 by a group of E-Sports teams and ESL (i.e. largest video game event company in the world). WESA aims to professionalize the industry, regulating matters regarding revenues and schedules. WESA even has an internal arbitration court, namely WESA Arbitration Court. It operates independently from WESA and is open to everyone involved in E-Sports, such as players, teams, organizers and publishers.

The second is the International e-Sports Federation (IeSF), an international organization based in Seoul, South Korea. A total of 46 nations are member of the IeSF. It has listed seven objectives in its Statute, the first one being as follows: to “constantly improve e-Sports and promote it in the light of its values - humanitarian, educational, cultural, unity of purpose and ability to promote peace”. IeSF is a signatory of the World Anti-Doping Code (WADC). ESL also endorsed the WADC and conducts doping tests on cyber athletes. Stimulants- drugs that improve reaction time and concentration are prohibited.

The third association worth mentioning is the International eGames Committee (IEGC), a non-profit E-Sports organization, supported by the government of the United Kingdom. It aims to positively shape the future of competitive gaming.

In my view, countries that seek to be a part of the E-Sports world should establish their own national federations and apply to IeSF. IeSF should collaborate with WESA, which is founded by the most significant organizations in the industry. IeSF is capable of growing into an internationally recognized authority that is in charge of international competitions between national teams, whereas WESA would be in charge of all competitions between clubs.

E-Sports and Free Speech
Since there is a certain amount of (virtual) killing and planting bombs involved, some games are not suitable for children. Deciding who can play which game is up to certain institutions around the world. One of them is Pan European Game Information (PEGI). PEGI is the age rating system for video games in Europe, Israel and Quebec. The Entertainment Software Rating Board (ESRB) is another institution providing an age rating system for video games, this time for North America. PEGI and ESRB standards are generally not legally binding. PEGI standards are legally enforced in few jurisdictions, one being the United Kingdom. Another example is Austria. In Austria, protection of minors are implemented by states. Two of the nine states, Vienna and Carinthia, legally adopted PEGI standards.

California passed a law that prohibited the sale of certain video games to minors. It was struck down by the U.S. Supreme Court. The Supreme Court ruled that video games were protected speech under the First Amendment.[3] The Supreme Court had its own reasons, such as “Psychological studies purporting to show a connection between exposure to violent video games and harmful effects on children do not prove that such exposure causes minors to act aggressively.” or “This country has no tradition of specially restricting children’s access to depictions of violence.”

E-Sports and IP Law
Apart from constitutional law, video games can be subject to other fields of the law. Intellectual property law is one of such fields. For example, DotA is a fan-made custom map originated with Warcraft III, a strategy video game created by Blizzard Entertainment. It was not a separate game until published by Valve Corporation as Dota 2. Blizzard sought to prevent registration by its competitor Valve of the trademark Dota by resorting to the United States Patent and Trademark Office. Subsequently, Blizzard and Valve reached a settlement agreement and Valve went on to publish Dota 2.

Playing Dota 2 is free of charge and Valve speedily hosted its first competition in 2011, with a prize pool of 1.6 million dollars. The International became an annual Dota 2 E-Sports tournament. The prize pool for the tournament in 2016 was approximately 20 million dollars. The team Wings Gaming of China completed the tournament in first place and was awarded 9.1 million dollars. The final was viewed by almost 6 million spectators. Dota 2 tournaments have awarded a total prize money of approximately 90 million dollars so far. League of Legends took the second place with 36 million dollars, followed by Counter Strike: GO (nearly 27 million dollars) and Starcraft II (nearly 22 million dollars). 

E-Sports Clubs, Athletes and the Law
The E-Sports teams that participate in these kind of high level competitions have different rosters for different games. They are starting to become more and more important business entities with their superstar players. The teams are mainly sponsored by tech firms, consumer electronics companies, gaming equipment producers, web hosting companies, automobile manufacturers, energy drinks manufacturers and business people who dream of owning a sports team but who cannot afford to acquire a professional football club. Football clubs themselves are also keen on forming their own E-Sports club, not only limited to football games. PSG (FIFA, LoL, Starcraft, CS, Call of Duty and Hearthstone) Schalke 04 (LoL) and Manchester City (FIFA) have already signed their own E-Sports players. Besiktas was the first football club in the world to form an E-Sports team in 2015. Fenerbahce has also entered the arena in 2016 and will be competing in the upcoming Turkish League of Legends season with a roster of accomplished players. As for football, FIFA and EA Sports organise the FIFA Interactive World Cup 2017. FIFA announced that the winning prize would be 200 thousand dollars.

High level cyber athletes are mostly men. However, the industry is trying to tackle gender discrimination and promote women cyber athletes. Cyber athletes sign contracts with their teams and sometimes receive salaries from video game developers. The developer of League of Legends, Riot Games chooses to pay salaries to competitors. Cyber athletes may want to make some extra money by streaming on online platforms, an important issue while drafting a contract. Therefore, E-Sports concerns both labor law and contract law. It also concerns criminal law, as there have been several incidents of betting-related match-fixing in E-Sports. In one such case, the manager of a LoL club was inciting his players to lose against big teams, claiming that the organizers would kick them out of the league should they win. The players allegedly did so, believing their manager. In the end, the manager was found to be betting against his own team, which finished the season with no wins. A player of the team attempted suicide, leaping off a building. Fortunately, he survived. In another case, a Dota 2 player placed a bet against his own team in a major event and won $322. “322” is now a nickname for players who deliberately fail in a game.

In Turkey, where I practice law, E-Sports players became athletes licensed by the “Federation of Developing Sports”, established by the Sports Ministry. There are about three thousand licensed players. The level of professionalism in elite clubs is surprising, and they are actually pretty successful in international tournaments. Space Soldiers (CS:GO), SuperMassive (LoL) are followed by tens of thousands of fans, even though they were founded only a few years ago.

The primary concern of the athletes and their families in general is the lack of opportunities after their brief but intense careers. Successful cyber athletes require a superordinate level of reactions and excellent reflexes. These attributes become slower with time. Consequently, cyber athletes are usually active between the ages 18-23. It is arduous for them to find time to study, as they need at least eight hours of training per day. National legislators around the world should also focus on devising E-Sports regulations, as more and more professional contracts are being signed. Cyber athletes are transferred from clubs to other clubs as in any other sport and foreign cyber athletes may encounter problems regarding their visas. France recently tackled the legal vacuum and granted a specific legal status for cyber athletes.

Conclusion
Call it a sport or not, E-Sports is growing exponentially. It is an industry worth billions and watched by millions. Although the industry is a commercial success, there are still lots of legal issues to tackle. These legal issues fall within the scope of various fields of law causing lawyers to work on improving their respective national laws.

Transfers of cyber athletes, drafting contracts for cyber athletes and the resolution of contractual disputes are some of the key issues, as well as tackling doping and match-fixing, intellectual property rights, broadcasting rights in particular, and the exploitation of minors or professional gamers. WESA and IeSF are significant international organizations that can endeavor on unifying E-Sports regulations and tackling legal problems faced by the players and the clubs.

The 21st century will offer more new games to play. Considering the current growth in the industry, I would dare predict that the industry will be worth hundreds of billions in the near future. I would recommend the countries and E-Sports governing bodies leading the industry to work together and bring forth certain essential regulations. This would also benefit game developers, as their games and gamers would find a place in the industry on a legal basis. I would also suggest the industry to incite women cyber athletes and facilitate their involvement in professional competitions, so that possible instances of discrimination are proactively precluded.

[1] Nurettin Emre Bilginoglu, LLM, Attorney-at-law - Istanbul, Turkey.  E-mail: emre@caglayanyalcin.com.

[2] Although there is no precise definition of a “professional E-Sports player”, the approach of FIFA could be deemed applicable by analogy. According to Article 2 of FIFA Regulations on the Status and Transfer of Players, a professional is a player who has a written contract with a club and is paid more for his footballing activity than the expenses he effectively incurs. In E-Sports, certain players are paid more for their gaming activities than the expenses they incur.

[3] Brown v. Entertainment Merchants Association, 564 U.S. 786 (2011).

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre. 

Part 2. EU competition law and sports funding

The first analysed impact of Brexit on sport was the one regarding EU internal market rules and free movement. However, all sport areas that are of interest to the European Union will be impacted by the result of the future Brexit negotiations. This second part of the blog will focus on EU competition law and the media sector as well as direct funding opportunities keeping in mind that if the UK reaches for an EEA type agreement competition law and state aid rules will remain applicable as much as the funding programs.  

A) EU competition law and the media sector

As for the internal market rules, EU competition law applies to sport as long as an economic activity appears to have an impact on the European market. In the field of sport this is particularly true for the media sector, a key source of economic revenue for professional sport. 

EU competition law

It should be stated from the beginning that the UK, even completely outside of the EU, will not escape EU competition law (articles 101 and 102 TFEU). Indeed, if there is an economic activity within the European market EU law will continue to apply. The application of EU competition law leads to a convergence with national competition rules and most of the decisions relating to sport will probably remain enforceable through UK national law provisions unless there is an important change in their interpretation or a complete shift in competition law policy leading to a change of these rules. 

The main impact for the UK regarding the applicability of EU competition law appears to be in the media sector. With regard to the collective selling of media rights, for the time being national provisions should maintain the system in force which is derived from the Commission’s decisional practice (Football Association Premier League for a British example). Collective selling of media rights is compatible with EU competition law if the selling procedure is organised in a transparent and non-discriminatory manner, the contractual exclusivity runs for no more than three years and the rights are sold in several packages. The “no-single buyer” clause that was first imposed upon the Premier League to avoid the risk of monopolisation given the specific structure of the British sport media market (and now also applied by the German competition authority for the Bundesliga rights) might be questioned. This clause, providing that all the rights should not be sold to a single broadcaster, combined with the possibilities offered by EU free movement and impressive marketing skills from the Football Association, has made the Premier League the most valuable football competition in the world (6.9 billion euros for 2016-2019). It is highly probable that the UK national competition authority will keep that clause and the obligations for all sport media rights unless there is a major shift in national competition law policy. Remaining or leaving, in any case EU competition law will have left an important imprint on the British sport media rights landscape.

Other media related questions

In relation to media rights, two more points are interesting. Firstly, the question concerning multi-territory licensing of media rights in sport may arise. Sport rights are sold on a territorial basis. One of the many reasons for it are linguistic borders. However, the ECJ concluded that territorial exclusivity agreements relating to the transmission (using satellite decoders from broadcast providers based on another Member State) of football matches were a breach of competition law and the free movement of provision of services (Football Association Premier League v QC Leisure and Karen Murphy v. Media Protection Services Limited, joined cases C-403/08 and C-429/08). This important judgement caused great despair among sport organisers but it gave the opportunity to consumers to access a broader list of sport media providers around the EU. Depending on the position of the UK towards the EU, this possibility may vanish in the future. This judgment is also important for EU protection of property rights. The Court held that sport events cannot be considered intellectual creations, and, as such, cannot be protected by copyright. However, a clear distinction was made between private residence watching and public screening. The latter could amount to copyright infringement if some part of the event can be considered as unique and original and are duly protected (i.e. songs, slow motion extracts, etc.). In that case, it is for the Members States to regulate such a protection, but the EU is also developing a specific protection at the European level. Sport rights holders are exposed to financial damages due to breach of intellectual property rights with high economic value. This is the case for media rights but also for sport merchandising. The enforcement of those rights is conjointly overlooked by the Commission for harmonization of national legislations as well as the European Union Intellectual property Office (EUIPO) and Europol. In a situation where cross-border piracy and counterfeiting is difficult to tackle alone, the UK might consider to secure some kind of cooperation with the EU on that matter.

Secondly, also concerning the sports media industry, albeit with less ties to competition law provisions, the Audiovisual Media Services Directive (better known as the “Television Without Frontiers directive”) might not be applied to the UK in the future or at least as it stands at the moment. This directive regulates cross-border television broadcasting and allows EU Member States to establish a list of sport events of major importance for society that are offered on subscription-free TV channels (article 14 of the directive). The protected events list is then transmitted to the Commission in order to check its compliance with EU law and published in the EU Official Journal. Members States are entitled to create such a list but may choose not to. The UK is amongst the Members States that choose to set up such a list. Consequently, the 1996 Broadcasting Act lists those events for the UK (for example the Olympic Games, the Wimbledon Tennis Finals, the FA Cup Final, or the FIFA World Cup Finals Tournament). The national law relies on the directive which means that after Brexit, if the UK wants to keep with that requirement it should integrate the list into its national law. In a country where the subscriptions for premium sports pay television are the most expensive in Europe, it is quite doubtful whether this is good news for the British consumer and that might be an incentive to maintain a similar system. The directive also provides for a system of mutual recognition meaning that a provider of an audiovisual media services is subject to the law of its country of origin. Another Member State cannot impose other requirements than the one provided for by the directive. This principle, in case of Brexit, will surely disappear which is a potential problem for sports broadcasters seated in the UK and engaged in cross-border activities.  

EU State aid policy

Public funding and financial support is often used in sport and is a highly sensitive issue. Infrastructure and individual sport clubs are the main beneficiaries of public funds, which can make them subject to EU State aid provisions (article 107 TFEU). The Commission has closely monitored the application of State aid law in the field of sport, drawing a big line between professional and grassroots sports subsidies. Financial support to professional clubs is sometimes found incompatible with EU law as it distorts competition. An exception to this is where the objectives pursued are non-economic (subsidies for young training centres have been considered compatible as the main goal is to meet education obligations). Subsidies to amateur clubs are less likely to constitute State aid as they are not pursuing an economic activity. For sport infrastructures, only the ones pursuing economic activities and in competition at the European level are likely to be subject to State aid rules. A consequence of a complete Brexit might end the application of EU State aid rules in the UK. Anyway, given the expected negative economic consequences related to Brexit, it is rather unlikely that British public authorities will have the financial capacity to intensively fund professional clubs and sports infrastructures even if it they would have the freedom to do so. 

B) The money: securing sports funding

Finally, since the entry into force of the Lisbon Treaty, the EU developed a more proactive policy in sport via funding opportunities. These are also going to be impacted by Brexit and adverse consequences will specifically target amateur sport.  

EU funding for sport

The introduction of article 165 TFEU allowed the EU to create a specific funding programme for sport. Before that, sport related projects were indirectly funded through other EU programmes. The 2014-2020 Erasmus + Sport programme provides grants for a broad range of actions and activities in the field of sport. The aim of the programme is to promote the positive values of sport and physical activity and good governance in the sector as well as support dual careers of athletes and projects against match-fixing, doping, violence, racism and intolerance. These funds are directly targeted to grassroots sports through collaborative partnerships, not-for-profit European sport events, dialogue with European sport stakeholders as well as studies and conferences. British sport and sport-related organisations as well as public authorities can benefit from funding. However, these possibilities may disappear following Brexit. Erasmus + Sport is a European programme and, as such, helps to finance projects contributing to the development of a European dimension of sport. Consequently, it is difficult to give an exact number of projects financed through the programme in the UK. However, to give an illustration, in 2015, just for Erasmus + Sport projects for which a UK sport organisations was the lead coordinator, the EU funding amounted up to 1.1 million euros. It should be kept in mind that other British organizations are simple partners to many other projects and are entitled to be funded as well (the 2015 budget for the Erasmus + Sports programme was 18,8 million euros). Will the UK be entitled to keep some funding? If it secures an EEA type agreement, Erasmus + Sport will still apply but the UK will have to financially contribute to it. 

The financial participation from the EU in UK sports is also possible through other EU programmes. It is worth mentioning the European Structural and Investment funds which promotes the socio-economic development of European regions (10.7 billion euros were awarded to the UK for 2014-2020). The EU also provides funding for sport related studies to which several UK-based academics and think tanks have already participated. One should not forget that the EU is also actively supporting academic and PhD research through several programmes (the main one being Horizon 2020) and that in case of Brexit it will have a negative impact on the UK’s capacity to produce academic output on sport (think about anti-doping, sports law and governance, economics studies, etc…). 

Gambling and sport betting

The British market for gambling and sports betting generated 12.6 billion pounds last year. It is one of the biggest markets in Europe and British betting operators seized the opportunities offered by the EU’s freedom to provide services to develop their activities in other EU Members States as the EU pushed for the opening of gambling and online betting to competition. As a consequence of Brexit, Gibraltar-based online betting firms (let’s face it, due to a favourable taxation system) might lose their access to the European market. The Gibraltar betting and gambling authority tried to put on a brave face in the aftermath of the Brexit vote but, in the case of Brexit, the best solution for the operators will be to leave Gibraltar for an EU Member State and secure its access to the European market (for example Malta, a very popular host for betting operators).

The economic impact for the gambling sector is sure to be important, but it is just as important for the sport sector as part of the betting industry’s revenue constitutes an important source of income for sport, and in particular grassroots sport via taxes. Furthermore, betting operators are active in sponsorship for professional club and athletes. If the financial stability of these companies is undermined, it will probably have an impact on both their participation in the financing of sport and their marketing strategy. 

Another problem that might arise for the UK in that area concerns the fight against corruption and match fixing that threatens the integrity of sport and its economic value. The UK cannot handle this problem alone and the EU, given the sector’s inherent cross-border nature, is encouraging cooperation between Members States and sport organisations to tackle the issue. Europol, the EU’s law enforcement agency, provides assistance to EU Member States and sport organisers (collaborating for example with UEFA). Brexit might imply that the UK will leave that organisation, yet it could also maintain a cooperation via operational or/and strategic agreements. In any event, the UK remains a member of Interpol also very active in the fight against match-fixing and illegal gambling. 

Conclusion

Just about everything is going to change between the EU and the UK and it is the same for sport. At this stage, a lot of guesswork is involved in trying to elucidate a picture of the impact of Brexit on sport. Whether with a direct positive action through its funding policy or because of the rules on the internal market and competition having an indirect impact, the EU had an influence on the whole of British sport. This blog tackled the main issues at stake in sport for the EU and the UK before the latter starts its negotiations to formally rescind its membership. But it also should be noted that the EU is an important arena for formal and informal discussion on subject that interest sport in general. For example the EU Work Plan for sport for 2014-2017 sets up EU expert groups to work on topical issues in the field of sport. The European Parliament also hosts a sport-intergroup. By leaving the EU, the UK is also leaving behind an opportunity to deepen its cooperation at the EU level.

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

Editor’s note: Ariel N. Reck is an Argentine lawyer specialized in the football industry. He is a guest professor at ISDE’s Global Executive Master in International Sports Law, at the FIFA CIES Sports law & Management course (Universidad Católica Argentina) and the Universidad Austral Sports Law diploma (Argentina) among other prestigious courses. He is a regular conference speaker and author in the field of sports law.

Being an Argentine lawyer, Ariel will focus on the impact FIFA’s TPO ban will have (and is already having) on South American football.

Introduction

Before discussing the impact of the TPO ban, it is important to highlight that the purposes of TPO in South America are somehow different than in Europe. Here “economic rights” (that’s how we call it) are basically assigned in four different moments and/or situations:

First, when a youth player is first registered for the club at amateur level. This is a recognition to the person or entity that brings the player to the club and is usually between 10% and 20% of a future transfer. This practice widens the club’s scouting net and attracts promising young players from the small clubs to the big ones. The percentage can be assigned to the former club of the player, a third person who brings the player (a scout / intermediary) or to the player’s family if he comes as a free or unregistered player. In these cases the position of the beneficiary is really passive and the assigned rights are fragile and dependent of many factors (the player is not even a professional yet).

A second stage in which rights are assigned to third parties is when the club needs money to cover other obligations, unrelated to that particular player. Every club has one or more starlets and investors are willing to take the risk and acquire a percentage of the player’s economic rights. For the club, the sale of portions of the economic rights helps to balance its books and provides an alternative source of credit. In this case there’s no “standard” percentage, it depends on the money the investor is willing to pay, the potential value of the player and the needs of the club. The influence, or the ability to “force” a transfer of the player, of the third party is also subject to each particular agreement, with a direct correlation between percentage owned and influence.[1]

The third situation is when a club wants to hire a player but does not have the financial resources to do it. The rights of such a player might be owned by a company or a company might be willing to acquire the player’s rights from the former club and bring him to the new club. Consequently, the new club is used as showcase only. Under this situation, the player is usually hired for a single season with an option for the purchase of a percentage in favor of the new club, triggering –if executed- a long term employment contract. Sometimes, even if the option is not executed the TP owner recognizes the club a small percentage (around 10%) as “showcase rights” in case the player is immediately hired with a long term contract by another club after the termination of his one season contract. Under these circumstances, the influence of the TP owner is clearly strong, irrespective of how the relevant documents are drafted. 

Clubs could also turn to selling economic rights to third parties in order to cancel debts or to seduce a player for a contractual renewal. A club accepts to assign a share to the player against previous salary debts or in order to convince him to renew the contract without a mayor salary raise. If the club cannot pay the amounts wanted by the player to renew, it offers to assign the player a percentage of his own transfer. In most South American countries, the law or a collective bargaining agreement grants players a minimum percentage of the proceeds of his own transfer (between 10% and 20% depending the country)[2], but this additional assignment is heavily used to satisfy a player’s demands at a renewal of the employment contract.

With so many purposes, and taking into account the financial needs of clubs, the lack of alternative sources of financing and the number of South American players transferred each year, it is obvious that the use of TPO in South America is definitively widespread. Therefore, the impact of the ban will be certainly important, especially in the first years when clubs have not yet found alternative forms of financing.  

The impact of the FIFA Ban

The situation is aggravated by the short transitional period established by FIFA. While previous statements of FIFA officials suggested a period of 3 to 4 seasons[3], the FIFA Circular letter 1264 reduced it to just four months.

It is hard to predict the effectiveness of the prohibition. The current scenario shows many parties looking for forms or mechanisms to circumvent the prohibition, while others are trying to challenge it before the courts. If we consider the experience of art.18bis of the FIFA Regulations on the Status and Transfer of Players (RSTP) (an article included in the FIFA rules right after the Tévez affair as an attempt to protect the independence of clubs in its transfers decisions limiting the power to force a transfer, third parties usually had in TPO agreements), the forecast for the effectiveness of art.18ter is not good. But, as we will show, in the case of art.18ter there’s a clear new impulse and moreover, UEFA stands strongly behind the prohibition. Therefore, in my opinion, we can expect a different outcome. I think the ban will be especially effective in cases of players involved in transfers from South America to the European leagues. Transfers to Portugal, Spain or Greece (countries that relied on TPO in the recent past) will be heavily scrutinized. Nonetheless, it is unclear whether at domestic level, especially in South America, the practice will be banned with similar efficiency or if it will continue secretly with limited or no control by the national Associations. Some federations already implemented their own form of TPO ban (even when art.18ter RSTP is mandatory at national level). Brazil was one of the pioneers[4] and in Argentina, the fiscal authorities, passed a regulation banning TPO agreements.[5]

As to the ways to try to circumvent the TPO ban, I think we will see a raise in the use of “bridge transfers”, which is basically the registration of a player in a club just to cover the TPO with a federative “shell”. With this maneuver, the TP owner artificially enjoys all the benefits of being a club, like retaining a percentage of the player’s future transfer or controlling the player’s career by signing a long term contract with a huge buyout clause loaning the player to different clubs each year.[6] According to the FIFA regulations any club that had ever registered the player is not a “third party” (see definition 14[7]). There is no further requirement, no “sporting interest” in the registration or playing time, the simple act of registration allows a club to have a share of the player’s future transfers. To this regard, while it is true that FIFA already sanctioned clubs for “bridge transfers”[8], it was only an isolated case (still pending at CAS) and we can see examples of patent “bridge transfers” in every transfer window and in the top-5 leagues, not just in minor competitions. 

Another way to deceive TPO is to assign a share to the player and a further (hidden) assignment from the player to a third party. At this point, a big question arises: is the player a third party according to the FIFA regulations? Can a club assign a percentage of the player’s future transfers to the player himself?
As said, the opportunity for a player to profit from his own transfer is a labour right in many South American countries. While South American employment laws, statutes and/or CBAs tend to fix a minimum percentage of the transfer fee for the player, there is no cap and in theory a player can receive up to 100% of the transfer price. 

The FIFA regulations only exclude the two clubs involved in a transfer and the previous clubs where the player was registered from being a third party. Hence, in principle, the player seems to be a “third party” too.

But art.18ter provides that “no club or player shall enter into an agreement with a third party”, based on the wording of this provision it is clear that a player should not be considered a “third party”. Moreover, the player is a necessary party in every transfer agreement and he is also subject to sanctions if he violates the aforementioned FIFA prohibition on TPO according to paragraph 6 of art.18ter.

In addition, the fact that in many South American countries the player’s entitlement to a share of his own transfer is a labour right, a systematic interpretation of art.18ter makes it plausible to sustain the validity of the assignment of a percentage of the transfer fee to the player. In that regard, it is important to recall that FIFA’s prohibition has in principle effect only at federative level. This means that at civil level, any assignment will still be valid and enforceable.

Furthermore, the jurisprudence of the majority of the South American countries holds that federative rules have only effect within the framework of the federation and cannot contradict the civil legislation, of a higher hierarchy.

Argentina is an exception in South America. Ordinary Argentine courts settled that Federative rules are the “lex specialis” in relation to the general rules of the civil code. Therefore, if the regulations of FIFA and/or the Argentine Federation prohibit TPO, any contract in that sense will be null and void, even when under our civil code the assignment of a future transfer is perfectly valid.

Saved for this exception, the result of this is that FIFA’s remedy might be worse than the disease. Since FIFA can only sanction its own members (meaning clubs and players), if a club or a player enters into a TPO agreement, such player or club might be subject to disciplinary sanctions and the contract will still be valid and enforceable.

It is not unthinkable that a player or a club surrendering to the need of funds and signing a TPO agreement despite FIFA’s ban, thereby placing himself in a difficult position. The counterpart (the third party) might force the compliance of the agreement by threatening with reporting the deal to FIFA. In the end, the ban will have the opposite effect to what was sought: Players and clubs will be more vulnerable in their relationship with the third-party than before the introduction of art.18ter RSTP.

As said, it is hard to think that clubs will immediately find an alternative source of funding or will be able to live within their own means. Therefore, it is probable that clubs will try to circumvent or challenge the rule.

Again, the final consequences are hard to predict, but will of an important magnitude. TPO is not just a financing method ‎to bring players to clubs, sharing the risk with the investor, it is also a way to get cash-flow without the need to transfer the player to another club. Furthermore, it is an essential part of the scouting method that widens the club’s network, attracts young talents to the clubs and is also a way to cancel debts towards the player or to achieve a renewal of his contract.  

Conclusion

To conclude, I don’t think the TPO ban is the best way to achieve the –alleged- objectives declared by FIFA. Obligation to disclose, controlled payments (via TMS for example) and other regulatory approaches would have been better options. The pressure from an investor could have been diluted by setting a limit (maximum percentage or maximum number of players under TPO) and the reality is that the pressure to “force” a transfer comes in general from other actors, mainly the player and/or his agent. 

Now the new “pushers” will be the European clubs. How will it be possible for an Argentine club to refuse a -say- € 5 million transfer for a 19 year old player even if the club knows his value will double or triple if he stays at the club? With the TPO ban the club cannot rely on an investor paying, for example, € 3 million for 50% of the player's economic rights to “hold on” a few years. It is worth remembering that Chelsea tried to seal the transfer of Neymar for € 20 million when he was 18. However, Santos managed to reject such offer relying on TPO.

South American players account already for approximately 25% of all the international transfers worldwide[9], after the TPO ban this percentage will certainly raise.

As to the “morals” arguments, recently reiterated by UEFA’s president Platini who said TPO is “a form of slavery”[10], I believe they are just a fallacy. Every transfer needs the player’s consent and the investor owns a share of the profit of a potential future transfer, not a part of the human being. Otherwise, for clubs, owning 100% of a human being would be equally immoral.

Moreover, other types of assignments, like third party litigation funding, are legal in many countries, including the UK and France. The similarities and analogies than can be made with TPO are immense and nobody is claiming third party litigation funding is a way of “owning a person’s justice”.

With the introduction of the Financial Fair Play Regulations European clubs and federations are looking into ways to reduce expenditures and also scrutinizing what the “neighbors” are doing. Clubs want cheaper players and clubs from countries were TPO was long ago banned had a handicap for UEFA spots against clubs from countries were TPO was allowed and relied on TPO to acquire players.[11] The TPO ban serves both objectives: A reduction in the player’s transfer price and an end to the Spanish and Portuguese transfer “tactics” that relied heavily on TPO. 

Also, the inclusion or exclusion of the player in the definition of “third party” triggers conflictive issues. In most South American countries national labour laws or CBAs allow the player to obtain a percentage of the proceeds of his own transfer. If FIFA tries to extend the definition of “third party” to include players, this might certainly prevent a complete implementation of FIFA´s TPO ban in South America. 

As a conclusion I can say that, for South American clubs, the TPO ban just changed the “predator” in the transfer market. Our clubs can now stand stronger against investors, but as counter-effect they are in a much weaker position against European clubs‎.

[1] For a discussion on “buy-sell” clauses (the core of any TPO agreement) and whether they constitute prohibited influence see my opinion: Do “Buy-Sell” Clauses In Third Party Ownership Agreements Constitute Undue Influence Under FIFA’s Art 18bis?

 http://www.lawinsport.com/blog/argentine-sports-law-blog/item/do-buy-sell-clauses-in-third-party-ownership-agreements-constitute-undue-influence-under-fifa-s-art-18bis

[2] Brazil, Peru and Bolivia are exceptions to this rule; no such right is established in their regulations. In Argentina the minimum percentage is 15% according to art.8 of the CBA 557/2009 http://infoleg.mecon.gov.ar/infolegInternet/anexos/155000-159999/158453/norma.htm , in Paraguay 20% for international transfers, art.12 law 5322 from 29^th  October 2014 http://www.escritosdederecho.com/2014/11/ley-5322-del-29-10-2014-estatuto-del-futbolista-profesional.html , in Uruguay 20%, art.34 of the Professional Footballers Statute http://www.mutual.com.uy/index.php?option=com_content&view=article&id=49&Itemid=83 , in Ecuador 15%, Chile 10% law 20.178 http://www.sifup.cl/wp-content/uploads/2014/12/Ley-20178-Estatuto-Laboral-del-Futbolista-Profesional-Chileno.pdf , and Colombia 8% art.14 Colombian Players Status Regulations http://fcf.com.co/index.php/la-federacion-inferior/normatividad-y-reglamento/158-estatuto-del-jugador

[3] http://www.fifa.com/aboutfifa/organisation/footballgovernance/news/newsid=2463828/

[4] http://www.insideworldfootball.com/world-football/south-america/16188-brazil-conforms-and-sets-date-for-ending-tpo-funding-practices

[5] General Resolution 3740/2015 http://eco-nomicas.com.ar/7183-rg-3740-afip-ganancias-transferencia-de-jugadores

[6] For more on “Bridge Tranfers” http://www.lawinsport.com/sports/football/item/what-is-a-bridge-transfer-in-football

[7] “Third party: a party other than the two clubs transferring a player from one to the other, or any previous club, with which the player has been registered.”

[8] http://www.fifa.com/aboutfifa/organisation/news/newsid=2292724/index.html

[9] Source: FIFA TMS Global Transfer Market Report 2015, page 78.

[10] http://in.reuters.com/article/2015/03/16/soccer-platini-tpo-idINKBN0MC1B220150316

[11] http://www.e-comlaw.com/world-sports-law-report/article_template.asp?Contents=Yes&from=wslr&ID=1388

Yesterday, the press revealed that the European Commission decided to reject the complaint filed by Jean-Louis Dupont, the former lawyer of Bosman, on behalf of a player agent Striani, against the UEFA Financial Fair Play (FFP) Regulations. The rejection as such is not a surprise. The Commission had repeatedly expressed support of the principles underlying the UEFA FFP. While these statements were drafted vaguely and with enough heavy caveats to protect the Commission from prejudicing a proper legal assessment, the withdrawal of its support would have been politically embarrassing.

Contrary to what is now widely assumed, this decision does not entail that UEFA FFP regulations are compatible with EU Competition Law. UEFA is clearly the big victor, but the legal reality is more complicated as it looks.

UEFA’s Austerlitz

UEFA, which most probably leaked the decision to the press, must have been enchanted by it. At a time when Europe is buzzing with rumours on the potential illegality of the UEFA FFP Regulations, it is fully vindicated by this decision. Indeed, at least in the short run, the UEFA FFP regulations will not be legally threatened anymore. Basically, for the time being, FFP is here to stay.

The European Commission’s Death Sentence to the Striani complaint

The Commission’s decision to reject the complaint is less far-reaching than one would think. The decision does not enter into the substance of the compatibility of the UEFA FFP regulations with EU Competition law. Rather, the EC has chosen the easy way out of what it must have perceived as a toxic case, with much political capital to lose for a single player agent. The elegant way out of a potential mess was to consider Striani not directly affected by the UEFA FFP Regulations. We can gather from the press reports that the Commission argued that Striani as a Player Agent was not an addressee of the FFP rules and was not substantially affected by them (as he was claiming only a symbolic euro of damages in front of the Belgian Courts), thus leaving him with no legitimate interest. Moreover, the fact that the UEFA FFP Regulations were welcomed by diverse groups of stakeholders (ECA, FIFPro) corroborates in the eyes of the Commission that there is no interest for it to act ex officio in light of such a consensus. This decision can now be contested in front of the EU General Court. However, the European Commission enjoys, in light of its very limited resources, a wide discretion in deciding which cases deserve to be investigated. Hence, it is very unlikely that the Court would annul this decision. But is it the end of the legal war?

Is a Waterloo still possible for UEFA?

After Austerlitz, came the Berezina and finally Waterloo: the war over the UEFA FFP regulations is far from done. The European Commission has not pronounced itself on the substantial merit of the claim and Dupont has still a case ongoing in front of the Belgium Courts. If it goes all the way up the legal ladder, it will most probably be referred, via the preliminary reference procedure, to the EU Court of Justice, giving it the opportunity to address the merits of the case. However, it is obvious that Player agents are perceived as the dark sheep of the football family. This is not a Bosman-like situation with a player barred from exercising his job because of a European-wide boycott and rules discriminating expressly on the ground of nationality. Therefore, we doubt that Striani will be more successful in front of the Courts. Nevertheless, if the players, for example via FIFPro, or the clubs decided to go after the UEFA FFP regulations (for now FIFPro and ECA are officially supporting FFP) it would be a completely different story. Such a complaint would be difficult to disregard by the Commission.

The Commission is certainly the guardian of Treaty, but not its interpreter. One would be ill-advised to throw caution to the wind and assume that the UEFA FFP regulations are definitely compatible with EU law. The European Commission conveniently avoided deciding on this matter. But, as Bosman reminded us, the Commission can also err in its evaluation of EU law’s bite and nothing precludes the Judges in Luxembourg from assessing the compatibility with EU law in a different way.

UEFA may have won a crucial battle, but there is still a legal war to fight.