EU

17 June 2022 - 10:34 AM

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Super League court case begs questions as to who should actually control football

  • European Super League company returns to the courtroom next month to challenge UEFA over the legitimacy of fines made against rebel clubs and its authority to stifle competitions
  • The Super League company argue that UEFA’s regulatory obligations are in conflict with its responsibilities as a competition organiser and these roles are in conflict with EU competition law.
  • Why it matters: UEFA derive authority from the “European Model for Sport” - considered a bulwark against US-style closed sports leagues, like NFL and NBA. The court case threatens to end this power
  • The perspective: If UEFA’s “monopoly” is successfully challenged it may lead to the biggest shake up in European football since the Bosman ruling.

The European Union’s highest court, the European Court of Justice, will next month hear a challenge to UEFA’s “monopoly” over the control of international club competitions in what may lead to the biggest shake up in European football since the Bosman ruling.

The case has been brought by the European Super League company, the Spanish domiciled company that led last April’s abortive breakaway league.

Real Madrid, Barcelona and Juventus remain actively involved in the company, and although the other nine clubs that partook have denounced it, it is unclear if they have succeeded in divesting their shareholdings.

The case against UEFA centres on whether the European governing body “engaged in concerted practices and abused their dominant position in the market for the organisation of international club football competitions in Europe” in sanctioning the rebel clubs.

The European Super League Company will also seek from the court “the adoption of interim measures aimed at enabling the organisation and development of the European Super League.”

In the filings, the company claims that UEFA and FIFA have a monopoly on the organization of international competitions.

At least 15 EU countries have supported UEFA’s position in their observations to the court, many citing protection for the European Model of Sport.

The European Model for Sport is considered a bulwark against US-style closed sports leagues, like NFL and NBA. However, in the court papers the Super League company argue that UEFA’s regulatory obligations are in conflict with its responsibilities as a competition organiser and these roles are in conflict with EU competition law.

Could the European Court of Justice be about to lob a hand grenade into the running of the richest football competition in the world?

Backdrop to a stand off

It is worth understanding in some detail the precise backdrop to the case. In the initial stages Barcelona brought a case to the Madrid Commercial Court seeking a declaration that would halt “a disciplinary investigation regarding a potential violation of UEFA’s legal framework” into the three remaining Super league clubs.

The other nine clubs, who remained shareholders of the Super League but who had publicly denounced it, had signed a “Club Commitment Declaration” with UEFA with fines of €1.7 million up front, plus 5 per cent of the 2020/21 season’s UEFA earnings.

The EU ruling will initially determine the applicability of EU law to the decision-making processes of UEFA and FIFA

The Madrid court initially ruled UEFA could not punish the clubs and referred the case to the European Court of Justice. UEFA announced a stay on all sanctions as a result of this, although in April 2022 the Madrid court reversed its decision.

European Court hearing

In parallel to that case is the one lodged in the European Courts, which will be heard on 11-12 July.

Stephen Taylor Heath, Head of Sports Law at JMW Solicitors, says that the ruling is a two-stage process, determining firstly whether EU law is applicable, then assessing whether it has been broken. He says that it is “wider in scope” than simply focussing on the ability of the governing bodies to impose sanctions on the Super League clubs.

"The EU ruling will initially determine the applicability of EU law to the decision-making processes of UEFA and FIFA,” he says.

“Once it is established it does apply it will then determine whether any relevant laws have been broken and possible sanctions.”

Consistency with law

Taylor Smith says that at the heart of UEFA’s defence is determining its right to exclude clubs that take part in its competitions from participating in those of a rival. However its own rulebook and statutes also need to be consistent with applicable laws.

“The easiest argument for UEFA to succeed with is that they retain the right to determine the rules under which a club can participate in the event properties they control even if it means being unable to participate in a rival competition,” he says.

Photo:

Alamy | UEFA President and lawyer Aleksander Čeferin

“UEFA cannot however have a constitution or a rule book that breaches applicable law. An obvious, extreme example would be rules as to participation that were deemed to be discriminatory.   

“Rather it goes to some fundamental issues regarding governance of football that could have repercussions in other sports as well particularly where that governance amounts to a monopoly.”

Potential conflicts

This is where there exists a potential conflict.  UEFA and FIFA are self-appointed authorities that are neither set up by law or statute by the EU or even a collective of countries. “Rather they exist by tacit approval of the national football associations and the proprietors of the domestic leagues,” explains Taylor Smith.  “Accordingly, FIFA and UEFA’s right to govern comes from within as is the case with the vast majority of sport governing bodies.”

This self governance, he adds “cannot operate above or in conflict with the law in a jurisdiction within which they operate.”    

As such EU competition law is being tested by the appellants on the basis that governing bodies are seeking to operate a monopoly and engage in anti-competitive practices. Regulatory law is also being tested on the basis that governing bodies are conflating their role as regulator with their role as a competition organiser and exceeding their powers in shutting down the ESL.

These are key issues, says Taylor Smith, that could have an impact that transcends the Super League case.

“The case could however have a wider impact as the principles on which it will be determined could have an impact on developments in other sports such as golf and cricket where regulators are also commercial rights holders and self-appointed,” he says.

“The Russian Football Federation recently took a case to CAS alleging FIFA exceeded their powers by banning Russia from the World Cup which they lost. The EU Court of Justice will have consideration for CAS reasoning as to the scope of FIFA’s authority. It is stating the obvious that Russia cannot bring a case in the EU court of Justice but will also have an interest in the courts reasoning.”

Shrouded in mystery

Taylor Smith believes the case could go either way - “My personal view is that the EU Court will find the governing bodies acted within their powers on similar reasoning to the CAS ruling however there is every possibility they will regard the threatened sanctions as anti-competitive” - although the whole affair has been handled in such an opaque way that some of the implications remain unclear.

For example, Taylor Smith says if the ruling goes in favour of the ESL “it may lead to the other clubs revisiting the circumstances and terms on which they agreed to pay substantial fines due to their participation."

Whether they would actually have a case to challenge those fines is another matter: neither the clubs nor UEFA have ever confirmed payment has been made.