|
In recent years football in Europe has been enjoying
a period of unparalleled public profile and financial prosperity
largely as the result of the expansion in the number of broadcasting
outlets for the game, and the associated influx of TV monies into
the game. Football has always played a central role in the cultural
life of most European countries, and from the advent of European
club championships in the 1950s the international dimension of such
competition has proved a very important and popular complement to
the activities of domestic leagues. This rude good health has been
achieved under the auspices of the game’s traditional national governing
bodies under the overall umbrella of football’s federal European
governing body, UEFA. Since the beginning of the 1990s, however, the
dramatic increase in the financial turnover of the major clubs as
a result of the advent of pay TV channels, and the latter’s determination
to buy the broadcasting rights for European football at ever-increasing
prices, has unleashed commercial forces which are actively challenging
the legitimacy of the traditional regulatory structures of the game
in Europe. UEFA has carried off the difficult task of preserving
the primacy of domestic leagues, so that they continue to safeguard
the central role of football as a social and cultural activity in
their respective countries; administered a highly successful series
of European club competitions; and at the same time provided a secure
regulatory régime through which to channel the increased revenues
coming into the game in a way which safeguards the interests of
the widest possible number of clubs and national associations. This
is now under threat. The primary reason may be that, since the Bosman
case, certain parties see European law as a tool they can use to
attack sports rules and structures that they do not like. Furthermore,
the European Commission has found it difficult to come to terms
with the specific structure of sport, and to accept that it has
certain unique characteristics that set it apart from ordinary business
or commerce. Historically it has not been possible for businesspeople
to make large sums of money from the ownership of football clubs
in Europe. Most local associations had in place rules confirming
the primary purpose of clubs as sporting associations. Since the
beginning of the 1990s this has changed and increasingly many clubs
have been transformed into limited companies run for profit. As
a result, UEFA and its constituent national member associations
have been subjected to a growing number of legal challenges as to
their rights to govern the game in the traditional fashion. The
Bosman ruling has encouraged these legal challenges and the atmosphere
of legal uncertainty that has prevailed since the European Court
of Justice made that ruling at the end of 1995. In fact many of the sports structures that have
been challenged in Europe have already been considered and held
legal in the United States. For example, in the US there is a national
statute recognising the legality of central marketing of television
rights by professional sports leagues. There is no such legislation
in Europe, although in the United Kingdom the central marketing
of television rights by the English Premier League was held to be
lawful under UK competition law by the Restrictive Practices Court.
To date, however, the European Commission has taken no view on the
issue. Let us look at a number of other examples. Multi-Club Ownership One would have thought that it would be self-evident
that allowing the same owner to control two contestants in the same
competitive event presents the potential for a conflict of interest.
In the UK there has long been a rule forbidding one person from
owning more than one club. The need for such a rule is clear from
the example of the late Robert Maxwell, who achieved control of
Derby County, Reading and Oxford United.1 The necessity for having
such a rule was underlined when, after his death, it was revealed
that he was a fraudster on a grand scale who had embezzled huge
sums of money from the Mirror Group pension fund whilst chairman
of the company. In 1998 UEFA had to invoke its own guidelines on
this matter after three teams controlled by ENIC reached the latter
stages of the European Cup-Winners’ Cup. ENIC challenged UEFA’s
ruling in the Court of Arbitration for Sport (CAS) and lost. In
a lengthy and detailed ruling, the CAS held that the UEFA rule was
a legitimate means to deal with conflicts of interest and that it
was not contrary to European law. In written statements to the European
Parliament, the European Union had also endorsed the UEFA rule. Preserving the Integrity of National Competitions Another area where the integrity of UEFA’s regulatory
approach is being challenged is on the question of teams from one
country playing in another. UEFA still allows national football
associations to decide who can compete in their leagues, and largely
this consists of clubs located within their national jurisdictions.
This structure poses a potential problem for the EU, as the single
European market, as it was originally conceived, was about eliminating
national barriers to business; in football, national barriers are
vitally important in preserving the integrity of individual leagues.
This presents the Commission with a difficult legal conundrum when
faced with challenges like Wimbledon FC’s proposal that they were
legally entitled to relocate their home matches in the English Premier
League from south London to Dublin on the basis of European law.
At its core the logic of Wimbledon’s argument was that if, under
European law, a Dutch bank can do business in England, why can an
English football club not conduct business in Ireland? This position
could be supported by the purest interpretation of European law.
Yet the danger of allowing this logic to dictate the application
of competition policy in the football context is that it will lead
to the break-up of existing national league structures which have
been so successful and which are deeply appreciated by supporters
across Europe. There is a danger that if the EU does not recognise
that sport is a special case then existing structures may be dismembered
by the back door through legal cases founded on competition law
as it applies to conventional markets and which offers an inappropriate
regulatory framework in the sports league context. The danger posed by the ‘Super League’ concept The attempt to establish a European ‘super league’
– a breakaway league from UEFA structures – by a number of leading
European clubs in the 1998–99 season led to another legal complaint
against UEFA. A complaint was lodged against UEFA that it had abused
its ‘monopoly’ power by allegedly preventing the creation of a European
super league. Of course, it is not so difficult to accuse UEFA
of being a ‘monopolist’ since every sports governing body has some
element of monopoly power. The core of the complaint against UEFA
was that it had ‘abused’ its monopoly power by somehow preventing
the emergence of a super league. There was no substance whatsoever
to this complaint. The reality is that the clubs exercised their
own commercial choice to stay within UEFA structures. Nevertheless,
in view of the atmosphere of legal uncertainty, it was perhaps not
surprising that the whole matter was dragged before the EU. The Role of the European Union Under current competition laws it is not difficult
to make a complaint against a sports governing body as, by definition,
they do have a kind of natural monopoly position; however, if you
are organising a league it is essential that there is one central
body to organise the league and adjudicate on disputes. This leads
to a situation where any time UEFA does something that any other
party is unhappy with then they lodge a complaint to the European
Commission and accuse UEFA of an abuse of monopoly power and they
have at least some kind of prima facie case. Such complaints are
often devoid of any substantive basis. In any event, European law
needs to recognise that sports governing bodies, providing they
are democratically elected and that they reflect all the varied
interests of the sport, have some area of discretion and manoeuvre
and cannot be subject to legal challenge for everything they do.
The absence of such recognition has led to what
can only be described as quite bizarre cases in Europe in the late
1990s. Probably the best example was where an athlete sued the Belgian
Judo Federation for failing to select her for the national team.
Her argument was that the failure to select her deprived her of
the opportunity to ‘provide services’ under Article 59 of the EU
Treaty. While the case clearly has a surreal quality to it, the
matter was still referred to the European Court of Justice. It has
not yet been adjudicated on, but one assumes that the court will
say it is for a national federation to select its own national team.
Nevertheless, the case does illustrate how, in the absence of clear
leadership on this and related sports administration issues by the
European Commission, as conventional business organisations play
an increasingly influential role in sports marketplaces virtually
every last sports association rule and regulation is subject to
legal challenge. I think that UEFA and other European sports governing
bodies are operating to a large extent in a legal vacuum, and there
is a need to convince the European authorities to take account of
the specific and special characteristics of sport when it applies
new laws to them. The Role of Political Pressure in Reforming
EU Competition Law I also think there is a role for the football supporters’
organisations in that process. The European Commission as it currently
functions is a rather undemocratic institution. It responds primarily
to pressure exerted on it by national governments. It is really
through influencing the Sports Minister, or the Prime Minister if
possible, of the individual national governments, that we can influence
the European Union countries to persuade the Commission to reform
competition law regarding sports leagues. In this respect the effective
manner in which supporters of Manchester United were able to organise
was an important reason influencing the UK in deciding to block
BSkyB’s bid for the club. That decision was based not only on narrow
competition law considerations but also took account of the wider
interests of football, and the influence of the supporters was particularly
significant in this latter respect. At the moment we are certainly witnessing a growing
influence by the European Commission on sports matters, but in UEFA’s
view this influence could be negative unless the Commission is able
to understand the specific nature of sport. Sport is not a conventional
commercial commodity, a mere business. Furthermore there is no reason
to suppose that the European Union would regulate sport any more
efficiently than the governing bodies do at present. The European
Union and sports governing bodies have differing objectives. The
EU is not actually about protecting the traditional structure of
sport and national structures; it is about the abolition of national
frontiers and national barriers to business. The primary mandate
of the European Union is to create a single European market, not
to respond to the characteristics of a special case industry like
football. The EU has, thus far, demonstrated little ability to recognise
the validity of these special characteristics. As Gordon Taylor,
chief executive of the PFA, has noted, the structures of sport in
the United States actually allow and respect balance in the league,
and allow collective selling of TV rights.2 We are still trying
to convince the European courts that these are the correct things
to do. It is proving to be a tough job. Conclusion In conclusion, I would reiterate the central point,
namely that until and unless the EU actually show some more sympathy
and understanding regarding the special characteristics of sports
leagues, in my view any continued involvement by the Commission
in the regulation of the sector is unlikely to be helpful. |
