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

12th round of Caster Semenya’s legal fight: too close to call? - By Jeremy Abel

Editor's note: Jeremy Abel is a recent graduate of the LL.M in International Business Law and Sports of the University of Lausanne.

 

1.     Introduction

The famous South African athlete Caster Semenya is in the last lap of her long legal battle for her right to run without changing the natural testosterone in her body. After losing her cases before the Court of Arbitration for Sport (CAS) and the Swiss Federal Tribunal, she filed an application before the European Court of Human Rights (Court). In the meantime, the Court has released a summary of her complaint and a series of questions addressed to the parties of the case.

As is well known, she is challenging the World Athletics’ Eligibility Regulations for the Female Classification (Regulations) defining the conditions under which female and intersex athletes with certain types of differences of sex development (DSDs) can compete in international athletics events. Despite the Regulations emanating from World Athletics, the last round of her legal battle is against a new opponent: Switzerland.

The purpose of this article is to revisit the Semenya case from a European Convention on Human Rights (ECHR) perspective while considering certain excellent points made by previous contributors (see here, here and here) to this blog. Therefore, the blog will follow the basic structure of an ECHR case. The following issues raised by Semenya shall be analysed: the applicability of the ECHR, Semenya’s right to private life (Article 8 ECHR) and to non discrimination (Article 14 ECHR), as well as the proportionality of the Regulations. More...


[Conference] Towards a European Social Charter for Sport Events - 1 December - 13:00-17:00 - Asser Institute

Sport events, especially when they are of a global scale, have been facing more and more questions about their impact on local communities, the environment, and human rights. 

It has become clear that their social legitimacy is not a given, but must be earned by showing that sport events can positively contribute to society. During this half-day conference, we will debate the proposal of a European Social Charter for Sport Events in order to achieve this goal. 

In January 2021, a consortium of eight partners launched a three-year project, supported by the European Commission under the Erasmus+ scheme, aimed at devising a European Social Charter for Sport Events (ESCSE). The project ambitions to develop a Charter which will contribute to ensuring that sport events taking place in the European Union are socially beneficial to the local communities concerned and, more generally, to those affected by them. The project is directly inspired by the decision of the Paris 2024 bid to commit to a social charter enforced throughout the preparation and the course of the 2024 Olympics.

This first public event in the framework of the ESCSE project, will be introducing the project to a wider public. During the event we will review the current state of the implementation of the Paris 2024 Social Charter, discuss the expectations of stakeholders and academics for a European Social Charter and present for feedback the first draft of the ESCSE (and its implementing guidelines) developed by the project members. It will be a participatory event; we welcome input from the participants.

The Asser International Sports Law Centre, powered by the Asser Institute, is contributing to the project through the drafting of a background study, which we will introduce during the conference.

Please note that we can provide some financial support (up to 100 euros)  towards travel and/or accommodation costs for a limited number of participants coming from other EU Member States or the UK. To apply for this financial support please reach out to ConferenceManager@asser.nl.  `

Register HERE

undefined

undefined

New Event! Diversity at the Court of Arbitration for Sport: Time for a Changing of the Guard? - Zoom In Webinar - 14 October - 4pm

On Thursday 14 October 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), will be launching the second season of the Zoom-In webinar series, with a first episode on Diversity at the Court of Arbitration for Sport: Time for a Changing of the Guard?

The Court of Arbitration for Sport (CAS) is a well-known mainstay of global sport. It has the exclusive competence over challenges against decisions taken by most international sports governing bodies and its jurisprudence covers a wide range of issues (doping, corruption, match-fixing, financial fair play, transfer or selection disputes) including disciplinary sanctions and governance disputes. In recent years, the CAS has rendered numerous awards which triggered world-wide public interest, such as in the Semenya v World Athletics case or the case between WADA and RUSADA resulting from the Russian doping scandal (we discussed both cases in previous Zoom-In discussion available here and here). In short, the CAS has tremendous influence on the shape of global sport and its governance.

However, as we will discuss during this webinar, recent work has shown that the arbitrators active at the CAS are hardly reflective of the diversity of people its decisions ultimately affect. This in our view warrants raising the question of the (urgent) need to change the (arbitral) guard at the CAS. To address these issues with us, we have invited two speakers who have played an instrumental role in putting numbers on impressions widely shared by those in contact with the CAS: Prof. Johan Lindholm (Umea University) and attorney-at-law Lisa Lazarus (Morgan Sports Law). Johan recently published a ground-breaking monograph on The Court of Arbitration for Sport and Its Jurisprudence in which he applies empirical and quantitative methods to analyse the work of the CAS. This included studying the sociological characteristics of CAS arbitrators. Lisa and her colleagues at Morgan Sports Law very recently released a blog post on Arbitrator Diversity at the Court of Arbitration for Sport, which reveals a stunning lack of diversity (based on their calculations, 4,5% of appointed CAS arbitrators are female and 0,2% are black) at the institution ruling over global sport.


Guest speakers:


Moderators:


Register for free HERE.


Zoom In webinar series

In December 2020, The Asser International Sports Law Centre in collaboration with Dr Marjolaine Viret launched a new series of zoom webinars on transnational sports law: Zoom In. You can watch the video recordings of our past Zoom In webinars on the Asser Institute’s Youtube Channel.

Investment in Football as a Means to a Particular End – Part 2: The Multiple Layers of Multi-Club Ownership Regulation in Football - By Rhys Lenarduzzi

Editor's note: Rhys was an intern at the T.M.C. Asser Institute. He now advises on investments and Notre acquisitions in sport (mainly football) via Lovelle Street Advisory. Following a career as a professional athlete, Rhys has spent much of his professional life as an international sports agent, predominantly operating in football. Rhys has a Bachelor of Laws (LL.B) and a Bachelor of Philosophy (B.Phil.) from the University of Dame, Sydney, Australia. He is currently completing an LL.M at the University of Zurich in International Business Law / International Sports Law.


Having looked at the different types of investors in football in part one of this two-part blog series, “A non-exhaustive Typology”, it is fitting to now consider the regulations that apply to investors who seek to build a portfolio of football clubs.

One way to measure the momentum of a particular practice and how serious it ought to be taken, might be when that practice earns its own initialism. Multi-club ownership or MCO as it is increasingly known today, is the name given to those entities that have an ownership stake in multiple clubs. Within the little research and writing that has been undertaken on the topic, some authors submit that investors with minority stakes in multiple clubs ought not to be captured by the MCO definition.  This position appears problematic given some of the regulations draw the line at influence rather than stake.

There are now approximately 50 MCO’s across the football world that own approximately 150 clubs.[1] Given the way MCO is trending, one might consider it important that the regulations keep up with the developing MCO practice, so as to ensure the integrity of football competitions, and to regulate any other potentially questionable benefit an MCO might derive that would be contrary to football’s best interests.

In this blog, I focus on the variety of ways (and levels at which) this practice is being regulated.  I will move through the football pyramid from member associations (MA’s) to FIFA, laying the foundations to support a proposition that FIFA and only FIFA is positioned to regulate MCO. More...


New Event! Rule 50 of the Olympic Charter and the Right to Free Speech of Athletes - Zoom In Webinar - 14 July - 16:00 (CET)

On Wednesday 14 July 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret, is organizing a Zoom In webinar on Rule 50 of the Olympic Charter and the right to free speech of athletes.

As the Tokyo Olympics are drawing closer, the International Olympic Committee just released new Guidelines on the implementation of Rule 50 of the Olympic Charter. The latter Rule provides that ‘no kind of demonstration or political, religious or racial propaganda is permitted in any Olympic sites, venues or other areas’. The latest IOC Guidelines did open up some space for athletes to express their political views, but at the same time continue to ban any manifestation from the Olympic Village or the Podium. In effect, Rule 50 imposes private restrictions on the freedom of expression of athletes in the name of the political neutrality of international sport. This limitation on the rights of athletes is far from uncontroversial and raises intricate questions regarding its legitimacy, proportionality and ultimately compatibility with human rights standards (such as with Article 10 of the European Convention on Human Rights).

This webinar aims at critically engaging with Rule 50 and its compatibility with the fundamental rights of athletes. We will discuss the content of the latest IOC Guidelines regarding Rule 50, the potential justifications for such a Rule, and the alternatives to its restrictions. To do so, we will be joined by three speakers, Professor Mark James from Manchester Metropolitan University, who has widely published on the Olympic Games and transnational law; Chui Ling Goh, a Doctoral Researcher at Melbourne Law School, who has recently released an (open access) draft of an article on Rule 50 of the Olympic Charter; and David Grevemberg, Chief Innovation and Partnerships Officer at the Centre for Sport and Human Rights, and former Chief Executive of the Commonwealth Games Federation (CGF). 

Guest speakers:

  • Prof. Mark James (Metropolitan Manchester University)
  • Chui Ling Goh (PhD candidate, University of Melbourne)
  • David Grevemberg (Centre for Sport and Human Rights)

Moderators:


Free Registration HERE

Investment in Football as a Means to a Particular End – Part 1: A non-exhaustive Typology - By Rhys Lenarduzzi

Editor's note: Rhys is currently making research and writing contributions under Dr Antoine Duval at the T.M.C. Asser Institute with a focus on Transnational Sports Law. Additionally, Rhys is the ‘Head of Advisory’ of Athlon CIF, a global fund and capital advisory firm specialising in the investment in global sports organisations and sports assets.

Rhys has a Bachelor of Laws (LL.B) and Bachelor of Philosophy (B.Phil.) from the University of Notre Dame, Sydney, Australia. Rhys is an LL.M candidate at the University of Zurich, in International Sports Law. Following a career as a professional athlete, Rhys has spent much of his professional life as an international sports agent, predominantly operating in football.

Rhys is also the host of the podcast “Sportonomic”.


Introduction

In the following two-part blog series, I will start by outlining a short typology of investors in football in recent years, in order to show the emergence of different varieties of investors who seek to use football as a means to a particular end. I will then in a second blog, explore the regulatory landscape across different countries, with a particular focus on the regulatory approach to multi-club ownership. Before moving forward, I must offer a disclaimer of sorts.  In addition to my research and writing contributions with the Asser Institute, I am the ‘Head of Advisory’ for Athlon CIF, a global fund and capital advisory firm specialising in the investment in global sports organisations and sports assets. I appreciate and hence must flag that I will possess a bias when it comes to investment in football.

It might also be noteworthy to point out that this new wave of investment in sport, is not exclusive to football. I have recently written elsewhere about CVC Capital Partners’ US$300 million investment in Volleyball, and perhaps the message that lingers behind such a deal.  CVC has also shown an interest in rugby and recently acquired a 14.3 per cent stake in the ‘Six Nations Championship’, to the tune of £365 million.  New Zealand’s 26 provincial rugby unions recently voted unanimously in favour of a proposal to sell 12.5 per cent of NZ Rugby’s commercial rights to Silver Lake Partners for NZ$387.5 million.  Consider also the apparent partnership between star footballer’s investment group, Gerard Pique’s Kosmos, and the International Tennis Federation.  Kosmos is further backed by Hiroshi Mikitani’s ecommerce institution, Rakuten, and all involved claim to desire an overhaul of the Davis Cup that will apparently transform it into the ‘World Cup of Tennis’. Grassroots projects, prizemoney for tennis players and extra funding for member nations are other areas the partnership claims to be concerned with. As is the case with all investment plays of this flavour, one can be certain that a return on the capital injection is also of interest.

So, what are we to conclude from the trends of investment in sport and more specifically for this blog series, in football? A typology elucidates that a multiplicity of investors have in recent years identified football as a means to achieve different ends. This blog considers three particular objectives pursued; direct financial return, branding in the case of company investment, or the branding and soft power strategies of nations.More...



WISLaw Blog Symposium - Rule 40 of the Olympic Charter: the wind of changes or a new commercial race - By Rusa Agafonova

Editor's note: Rusa Agafonova is a PhD Candidate at the University of Zurich, Switzerland   

The Olympic Games are the cornerstone event of the Olympic Movement as a socio-cultural phenomenon as well as the engine of its economic model. Having worldwide exposure,[1] the Olympic Games guarantee the International Olympic Committee (IOC) exclusive nine-digit sponsorship deals. The revenue generated by the Games is later redistributed by the IOC down the sports pyramid to the International Federations (IFs), National Olympic Committees (NOCs) and other participants of the Olympic Movement through a so-called "solidarity mechanism". In other words, the Games constitute a vital source of financing for the Olympic Movement.

Because of the money involved, the IOC is protective when it comes to staging the Olympics. This is notably so with respect to ambush marketing which can have detrimental economic impact for sports governing bodies (SGBs) running mega-events. The IOC's definition of ambush marketing covers any intentional and non-intentional use of intellectual property associated with the Olympic Games as well as the misappropriation of images associated with them without authorisation from the IOC and the organising committee.[2] This definition is broad as are the IOC's anti-ambush rules.More...

WISLaw Blog Symposium - Freedom of Expression in Article 10 of the ECHR and Rule 50 of the IOC Charter: Are these polar opposites? - By Nuray Ekşi

Editor's note: Prof. Dr. Ekşi is a full-time lecturer and chair of Department of Private International Law at Özyeğin University Faculty of Law. Prof. Ekşi is the founder and also editor in chief of the Istanbul Journal of Sports Law which has been in publication since 2019.


While Article 10 of the European Convention on Human Rights (‘ECHR’) secures the right to freedom of expression, Rule 50 of the Olympic Charter of 17 July 2020 (‘Olympic Charter’) restricts this freedom. Following the judgments of the European Court of Human Rights (‘ECtHR’) relating to sports, national and international sports federations have incorporated human rights-related provisions into their statutes and regulations. They also emphasized respect for human rights. For example, Article 3 of the Fédération Internationale de Football Association (‘FIFA’) Statutes, September 2020 edition, provides that “FIFA is committed to respecting all internationally recognised human rights and shall strive to promote the protection of these rights”. Likewise, the Fundamental Principles of Olympism which are listed after the Preamble of the of the Olympic Charter 2020 also contains human rights related provisions. Paragraph 4 of Fundamental Principles of Olympism provides that the practice of sport is a human right. Paragraph 6 forbids discrimination of any kind, such as race, colour, sex, sexual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status. In addition, the International Olympic Committee (‘IOC’) inserted human rights obligations in the 2024 and 2028 Host City Contract.[1] The IOC Athletes’ Rights and Responsibilities Declaration even goes further and aspires to promote the ability and opportunity of athletes to practise sport and compete without being subject to discrimination. Fair and equal gender representation, privacy including protection of personal information, freedom of expression, due process including the right to a fair hearing within a reasonable time by an independent and impartial panel, the right to request a public hearing and the right to an effective remedy are the other human rights and principles stated in the IOC Athletes’ Rights and Responsibilities Declaration. Despite sports federations’ clear commitment to the protection of human rights, it is arguable that their statutes and regulations contain restrictions on athletes and sports governing bodies exercising their human rights during competitions or in the field. In this regard, particular attention should be given to the right to freedom of expression on which certain restrictions are imposed by the federations even if it done with good intentions and with the aim of raising awareness. More...


Asser International Sports Law Blog | Why the European Commission will not star in the Spanish TV rights Telenovela. By Ben Van Rompuy and Oskar van Maren

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

Why the European Commission will not star in the Spanish TV rights Telenovela. By Ben Van Rompuy and Oskar van Maren

The selling of media rights is currently a hot topic in European football. Last week, the English Premier League cashed in around 7 billion Euros for the sale of its live domestic media rights (2016 to 2019) – once again a 70 percent increase in comparison to the previous tender. This means that even the bottom club in the Premier League will receive approximately €130 million while the champions can expect well over €200 million per season.

The Premier League’s new deal has already led the President of the Spanish National Professional Football League (LNFP), Javier Tebas, to express his concerns that this could see La Liga lose its position as one of Europe’s leading leagues. He reiterated that establishing a centralised sales model in Spain is of utmost importance, if not long overdue.

Concrete plans to reintroduce a system of joint selling for the media rights of the Primera División, Segunda División A, and la Copa del Rey by means of a Royal Decree were already announced two years ago. The road has surely been long and bumpy. The draft Decree is finally on the table, but now it misses political approval. All the parties involved are blaming each other for the current failure: the LNFP blames the Sport Governmental Council for Sport (CSD) for not taking the lead; the Spanish Football Federation (RFEF) is arguing that the Federation and non-professional football entities should receive more money and that it should have a stronger say in the matter in accordance with the FIFA Statutes;  and there are widespread rumours that the two big earners, Real Madrid and FC Barcelona, are actively lobbying to prevent the Royal Decree of actually being adopted.

To keep the soap opera drama flowing,  on 30 December 2014, FASFE (an organisation consisting of groups of fans, club members, and minority shareholders of several Spanish professional football clubs) and the International Soccer Centre (a movement that aims to obtain more balanced and transparent football and basketball competitions in Spain) filed an antitrust complaint with the European Commission against the LNFP. They argue that the current system of individual selling of LNFP media rights, with unequal shares of revenue widening the gap between clubs, violates EU competition law.


Source:http://www.gopixpic.com/600/buscar%C3%A1n-el-amor-verdadero-nueva-novela-de-televisa/http:%7C%7Cassets*zocalo*com*mx%7Cuploads%7Carticles%7C5%7C134666912427*jpg/


The complaint will surely be frowned upon in Brussels. First, Spain is on the verge of introducing a joint selling arrangement. So what is the point of using competition law as an instrument to obtain … a joint selling arrangement? Second, the argument that a horizontal agreement, preventing LNFP clubs from individually competing in the sale of their media rights, is needed to ensure fair and effective competition seems, to put it mildly, counterintuitive. Third, who files an antitrust complaint on 30 December?

The complainants essentially target the polarization of revenues between the two top clubs (Real Madrid and FC Barcelona) and the other clubs. This is a well-known and long-standing feature of the LNFP, which is only in part attributable to disparities in the clubs’ media rights income. The complainants point out, however, that media coverage is also an important driver of other main revenue streams (e.g. value of sponsorship deals, ticket sales, and merchandising). 

Since the end of the 1990s, clubs have been selling the LNFP media rights individually. In a system of individual selling, a club’s bargaining power is evidently determined by the market potential of the matches of a specific club and not by the collective attractiveness of the competition as a whole. This has resulted in a pronounced imbalance between the two top clubs Real Madrid and FC Barcelona, who are able to extract supra-normal profits, and the other clubs.

For the 2010-2011 season, for example, the two Spanish giants both received around €125 million for their live media rights, leaving their domestic peers fighting over the scraps (i.e. the next biggest clubs earned around €40 million and the majority of the clubs sold their rights for about €15 million). In other words, Real Madrid and FC Barcelona generate ten times more revenue from their media rights as compared to the smaller clubs.

While it is easy to see why this situation may be considered unfair from the perspective of the majority of the clubs, it is less evident to find a competition law problem. 


A competition law perspective 

As stated above, the complaint is launched against the LNFP who, according to FASFE, by means of authorising the individual selling of TV rights system, is violating EU competition law.

First, the complainants argue that the system of individual selling strengthens the dominant positions of Real Madrid and FC Barcelona and, subsequently, undermines the competitive position of the other clubs. So far so good. But then they jump to the conclusion that Article 102 TFEU is being violated, not by the LNFP, but by Real Madrid and FC Barcelona. 

There they lost us – and presumably anyone remotely familiar with EU competition law. But let’s be a good sport and contemplate this line of reasoning a bit further.  

It might be argued that Real Madrid and FC Barcelona hold a (collective) dominant position on certain product markets in Spain and, by extension, in a substantial part of the internal market – even though the complaint fails to properly define those relevant markets. On the upstream market for the acquisition of media rights of La Liga, both clubs behave to a certain extent independently of their competitors. Spanish broadcasters first seek to acquire the media rights to their matches, which undercuts the bargaining position of the other clubs in the subsequent negotiations for the purchase of their rights. A more fundamental flaw is that the complainants contend that the possession or even strengthening of a dominant position by way of competition falls within the prohibition of Article 102 TFEU. The complaint does not put forward a single argument substantiating how both clubs engage in abusive conduct. 

Second, the complainants argue that the LNFP, according to Article 49 of its statutes, must look after the common interests of the competitions that it organises and of its members. In their view, the 1996 decision of the LFNP General Assembly to re-introduce a system of joint selling, which has negatively affected the majority of clubs and a large majority of fans, does not comply with this objective. 

While it can be argued that the LNFP’s decision constitutes a decision of an association of undertakings within the meaning of Article 101(1) TFEU, it is difficult to see how it has an anti-competitive object or effect. Quite on the contrary, the decision lifted the competitive constraints on the clubs’ independent decision-making that were in place up until the season 1997-1998. 

It should be noted that a system of joint selling of media rights does not necessarily bring about an equitable distribution of the revenues among the clubs. Albeit connected, the distribution mechanism is a separate measure, which is typically for the most part performance-based. Moreover, financial solidarity can also be implemented through other mechanisms, such as a taxation system or the redistribution of voluntary contributions. That said, it must be acknowledged that a system of joint selling does facilitate the sharing of revenues among clubs. The ability of sports organisers to impose alternative financial solidarity mechanisms might be constrained by the pressure of the larger clubs (which evidently wish to see a larger share of the revenues flow back to them because they are primarily responsible for generating these revenues). The clubs’ media rights income ratio in the other top European football leagues, where media rights are sold collectively, illustrates this point. In the season 2011-2012 the earnings ratio of the top to the bottom club was as follows: Premier League (1,55 to 1); Serie A (4,35 to 1); Bundesliga (2,3 to 1); and Ligue 1 (3,2 to 1).[1] 

Considering that joint selling only creates incentives for horizontal solidarity, the financial solidarity justification in itself could not outweigh the anti-competitive effects of a joint selling arrangement. The restrictions of competition are considerable. First, joint selling agreements prevent clubs from individually competing in the sale of their media rights. Access to the market can therefore be foreclosed to competing buyers. Second, joint selling leads to uniform prices and other trading conditions. Price-fixing is a hard-core restriction that is normally prohibited. Third, joint selling could lead to output restrictions when certain rights are withheld from the market. 

As the discussion of the competition law decisional practice below will demonstrate, it is even unclear whether the financial solidarity argument can be invoked as a partial legal defence against the prohibition of restrictive agreements. 


The financial solidarity conundrum

One of the key assumptions underlying the complaint is that the EU institutions advocate the joint selling of media rights. This is presumably one of the main reasons why they are turning to Brussels for help. While it is true that the European Council (e.g. in the 2001 Nice Declaration) and the European Parliament have always been supportive of the link between joint selling and the principle of financial solidarity, the same cannot be said about the European Commission. In policy documents, the Commission has refrained from making (strong) pronouncements on the solidarity benefits of joint selling vis-à-vis individual selling. In the Helsinki Report on Sport (1999) the Commission underscored the need to examine the precise link between the joint selling of media rights and financial solidarity between professional and amateur sport. In its White Paper on Sport (2007) the Commission acknowledged that joint selling “can be a tool for achieving greater solidarity within sports”, but immediately added that also a system of individual selling by clubs can be linked to a robust solidarity mechanism. Only in the Communication on Developing the European Dimension of Sport (2011) the Commission expressed some general support for a system of joint selling. Surely some of the Commission’s press releases coinciding its decisions in this area mention benefits for financial solidarity (see e.g. here). If the complainants had looked at the actual decisions, however, they would have realised that that rhetoric is inconsistent with the legal argumentation.

After the need to address competition issues in relation to joint selling arrangements for football media rights emerged in the 1990s, several National Competition Authorities (NCAs) found that the system was incompatible with the national competition rules. The NCAs were sceptical about the necessary link between joint selling and revenue distribution and, subsequently, did not consider it to be a pro-competitive benefit capable of offsetting the identified restrictive effects. Even though the NCAs spoke out uniformly against the joint selling of football media rights, in three Member States their decisions were either overruled by a national court (United Kingdom) or circumvented through legislative action (Germany) or executive orders (the Netherlands).[2] This created uncertainties regarding the circumstances under which joint selling could be considered compatible with EU and national competition law. 

In the UEFA Champions League decision (2003) the European Commission for the first time assessed the compatibility of the joint selling of football media rights with Article 101 TFEU. In two subsequent decisions, German Bundesliga (2005) and FA Premier League (2006), the Commission raised similar competition concerns and imposed similar remedies to address these concerns. 

In all three decisions, the Commission found that joint selling arrangements are caught by the prohibition of Article 101(1) TFEU, but may create substantial efficiency gains so that Article 101(3) TFEU could be invoked as a legal defence. It identified three main benefits: (1) the creation of a single point of sale (which creates efficiencies by reducing the transaction costs for sports organisers and media content operators); (2) branding of the output by one entity (which creates efficiencies as it helps the media products receive wider recognition and distribution); and (3) the creation of a league product focused on the competition as a whole rather than individual clubs. 

To ensure that the efficiency benefits outweigh the toxic cocktail of anti-competitive effects (i.e. price-fixing and considerable risks of market foreclosure and output restrictions), the Commission carefully prescribed the way in which the rights must be marketed by imposing a list of behavioural remedies. 

Competition concern

Remedy

UEFA

DFB

FAPL

Risk of foreclosure effects in downstream markets

Non-discriminatory and transparent tendering procedure

X

X

X

Independent monitoring trustee overseeing tender process

 

 

X

No conditional bidding

 

 

X

Risk of market foreclosure effects in downstream markets as a result of exclusivity and bundling of media rights.

Limitation of scope of exclusive contracts:

-       a reasonable amount of different rights packages

-       no combination of large and small packages

-       earmarked packages for special markets/platforms (new media rights)

 

X

 

X

 

X

 

X

 

X

X

X

Limitation of duration of exclusive contracts: max. three football seasons

X

X

X

Risk of output restrictions

Fall-back option to clubs for unsold or unused rights

X

X

X

Parallel exploitation of less valuable rights by clubs

X

 

 

Risk of monopolisation

“No single buyer” obligation

 

 

X

In all three of the Commission’s investigations, the parties put forward the financial solidarity argument as the main justification for an exemption of their joint selling arrangements under Article 101(3) TFEU.[3] Yet the Commission never substantially addressed that argument. Only in the UEFA Champions League decision, the point was briefly considered. The Commission simply noted that UEFA had failed to substantiate the indispensability of a joint selling agreement for the redistribution of revenue and, subsequently, for the organisation of the Champions League.[4] Since it could exempt the joint selling agreement on economic efficiency grounds, however, the Commission concluded that “it is not necessary for the purpose of this procedure to consider the solidarity argument any further”.[5] As such, the Commission conveniently got round the issue.

The national decisional practice subsequent to the Commission’s precedents equally refrained from addressing the issue. The NCAs started focusing their assessments exclusively on efficiency benefits, as instructed by the Commission.  

In short, in competition law proceedings related to joint selling arrangements, the financial solidarity defence has never been very compelling – it was either considered unsound (early national enforcement practice) or remained unaddressed. Of course, one may still argue that the elephant in the room was surreptitiously taken into account (bearing in mind that the acceptance of a similar price-fixing cartel in other sectors would be difficult to imagine).[6] 


Redistribution formulas for media rights income  

After the European Commission de facto legitimized the joint selling of football media rights, the system became the common practice for marketing such rights in Europe. Since Italy reintroduced the system of joint selling in 2010, Cyprus, Portugal, and Spain are now the last EU markets in which first division football clubs sell their rights individually. 

To put the distribution key foreseen in the pending Spanish Royal Decree into perspective, we will first summarize how the other four big European leagues redistribute the media rights income. 

England: Since 1992, the year in which the Premier League was formed, it was decided that 50% of the revenue is split equally between the 20 clubs, 25% is paid in Merit Payments (depending on where a club finishes in the final League table), and the final 25% is paid in Facility Fees (based on each time a club’s matches are broadcast in the UK). All international broadcast revenue, and central commercial revenue, is split equally amongst the 20 clubs. For the season 2013/2014, the ratio between the top (Liverpool at €132 million Euros) and the bottom earning club (Cardiff City at €84 million) was 1.57:1.

Germany: Within the German Bundesliga clubs, the criteria for the distribution of revenues will be determined by a 2:1 ratio between the top-ranked and the bottom-ranked teams in an ad hoc distribution ranking for the years 2013 – 2017. This means that the revenue sharing distribution will range from a maximum of 5.8% of the total amount for the first place team to at least 2.9% for the 18th place team. The Bundesliga’s international media rights income distribution, however, remains based on both international and domestic sport performance.

Italy: Italy’s Serie A joint selling system had an earnings ratio of the top to bottom club of 5.25:1 for the season 2013/2014. Juventus, the top earning club, had an income from TV rights of €94 million, whereas the bottom earning club, Sassuolo, of €17.9 million.[7] Out of the total amount distributed, 40% is distributed to all the clubs as a fixed amount. Furthermore, 30% is distributed on the basis of past results (15% on results during last five seasons, 10% on historical results[8], and 5% on last season’s final league position); and 25% according to club supporters base.  

The planned Royal Decree in Spain will have a distribution system that guarantees Real Madrid and FC Barcelona an amount that is very close to what they earn now. The income ratio of the clubs will start at 4:1 and diminishes as the total amount of income increases. From the total income, about 3% will be deducted for the Spanish FA and for non-professional sports. Additionally, 10% will be assigned to the Second Division. The remaining amount will be distributed as follows: 50% as fixed amount for all the clubs, 25% depending on sports results while taking into account historical results. The other 25% will be distributed in relation to public awareness similar the Italian system (calculated on the basis of TV audiences, city population, and number of fans of the club).  


Conclusion

It is safe to say that the competition complaint launched by FASFE will not lead to the European Commission opening a formal investigation. The complainants fail to demonstrate how the current Spanish individual selling system breaches, or even potentially breaches, Article 101 and/or 102 TFEU. In that regard, it should be noted that they already tried their luck with the national competition authority (CNC), alleging infringements of national competition law. On 8 January 2013, the CNC decided to reject the complaint because it only prescribed the results of the current media rights sales process without demonstrating violations of the national competition rules. 

Whether FASFE is aware of the same judicial inaccuracies in its Commission complaint is unknown. On the other hand, it is quite evident that invoking competition law to argue for the introduction of a cartel with significant anti-competitive effects is paradoxical. The ex post fairness (i.e. the outcome of market competition) that FASFE is looking for is quite different from the ex ante fairness in the market place that competition policy is concerned with. One can therefore interpret the complaint as an attempt to add pressure on the involved Spanish parties (the CSD, the LNFP, and the RFEF) to introduce the new Royal Decree once and for all. Although the Spanish public is provided daily episodes full of jabbering, backstabbing and other drama, as with all Telenovelas, the soap is dragging on and on and should have ended ages ago. 

Whether the switch to a joint selling arrangement will significantly improve the competitive balance in La Liga remains to be seen. Since FC Barcelona and Real Madrid are guaranteed an amount similar to what they receive now, this will ultimately depend on how much the total income from the sale of the media rights will increase. The inexorable rise in the value of the broadcasting deals in the UK, which is the unique result of a duopoly of two powerful deep-pocket players (i.e. the incumbent dominant pay-TV operator Sky and new market entrant BT) that emerged after the introduction of the “no single buyer” obligation, cannot be realistically expected – at least not in the short term. Yet it is relatively certain that the overall income from media rights will go up – ultimately to the benefit of all the clubs. A (minimum) earnings ratio of the top to bottom club of 4:1 is not overly ambitious, but surely is a welcome step towards remedying the current imbalance between the two top clubs and their less fortunate competitors.


[1] See T.M.C. Asser Institute and Institute for Information Law, “Study on Sports Organisers' Rights in the EU”, Commissioned by the European Commission, DG Education and Culture, February 2014.

[2] Idem.

[3] See e.g. Commission, “Case No IV/37.214 - DFB - Central marketing of TV and radio broadcasting rights for certain football competitions in Germany” (Notice) (1999) OJ C/610, para. 7; Commission, “Notice published pursuant to Article 19(3) of Council Regulation No 17 concerning case COMP/C.2/38.173 and 38.453 - joint selling of the media rights of the FA Premier League on an exclusive basis” (2004) OJ C 115/3, para. 10.

[4] UEFA Champions League (Case COMP/37.398) Commission decision 2003/778/EC (2003) OJ L291/25, para. 131.

[5] Idem, para. 167.

[6] See e.g. Giorgio Monti, “Article 81 EC and Public Policy” (2002) 39 CMLR 1057 (calling it a “sector-specific exemption”).

[7] FASFE Antitrust Complaint of 30 December 2014, page 11

[8] In other words, this revenue is determined by overall league placings since 1946. In this category, Juventus, AC Milan and Inter Milan are the top earning clubs. For more info see: http://www.financialfairplay.co.uk/latest-news/tv-revenue-distribution-%E2%80%93-comparing-italian-and-english-models.

Comments (2) -

  • José Antonio Rodríguez Miguez

    2/17/2015 1:09:50 PM |

    Congratulations for this very interesting and solid post. A Spanish sayung days that “Barça is more than a club”; we can say that football is more than a sport, it’s basically a bussness, and a level playing field must be guaranted. It’s the best and only way to go forward as a sport and as bussness.  

  • Count of Egmont

    2/19/2015 2:13:50 PM |

    FASFE's complaint is indeed quite weak and amateurish (more posturing than anything else as they fail to raise some well known issues that could have significantly strengthened their case) but you forgot to mention that, irrespective of the merits of the complaint, their chances of succeeding against Real Madrid in a competition case would be near zero at the moment since the current EC Deputy Director-General for Antitrust, Mr. Cecilio Madero-Villarejo is a die-hard Real Madrid fan and club member who regularly attends football games at the VIP area of the Bernabeu Stadium. It is therefore highly unlikely that he will be very keen to open an investigation into this issue as it would go against his own personal interests. Could this be the reason why a series of unfortunate events has surrounded all Real Madrid related investigations?

    The British newspaper, The Independent, reported about this situation two years ago:

    "After Real Madrid’s victory in the 2000 Champions League final, a supporter of the club who identified himself then as a 43-year-old European Union official living in Brussels wrote to the newspaper El Pais to convey his joy at the club’s eighth European title.

    In the letter published in the newspaper on 14 June 2000, he described how after the match, in a state of some emotion, he placed a Real “Campeones” flag on the balcony of his Brussels flat. To some eyes, it looked uncomfortably like a reference to the Spanish phrase “poner una pica en flandes” – literally “putting a pike in Flanders” – which refers to the Spanish occupation of the territory in the 16th and 17th centuries.

    Not in the best taste, but given the individual’s euphoria and the memories he said it brought back of his childhood, perhaps it was understandable. The letter was written by Cecilio Madero Villarejo, who still lives in Brussels but has a better job than he did 13 years ago.

    These days, Madero is one of the four men who make up the directorate-general at the European Commission under the leadership of commissioner and fellow Spaniard Joaquin Almunia, whose job it is to enforce the rules on big business, from anti-trust, to mergers and, of course, state aid."

    Real Madrid is safe for as long as he is in DG-Comp, in any case safer than the reputation of the EC's competition policy that will surely face some scrutiny in the light of the UK's EU referendum .

Comments are closed