Editor's Note: Frans M. de Weger is legal counsel for the Federation of Dutch Professional Football Clubs (FBO) and CAS arbitrator. De Weger is author of the book “The Jurisprudence of the FIFA Dispute Resolution Chamber”, 2nd edition, published by T.M.C. Asser Press in 2016. Frank John Vrolijk specialises in Sports, Labour and Company Law and is a former legal trainee of FBO and DRC Database.

This second blog will focus specifically on the sanctions available for FIFA under Article 12bis. It will provide explanatory guidelines covering the sanctions imposed during the period surveyed.

Introduction

The possibility to impose sanctions under article 12bis constitutes one of the pillars of the 12bis procedure. Pursuant to Article 12bis of the RSTP, edition 2016, the DRC and the PSC may impose a sanction on a club if the club is found to have delayed a due payment for more than 30 days without a prima facie contractual basis[1] and the creditor have put the debtor club in default in writing, granting a deadline of at least 10 days.[2] The jurisprudence in relation to Article 12bis also shows that sanctions are imposed ex officio by the DRC or the PSC and not per request of the claimant.

If the basic conditions for the application of Article 12bis are fulfilled, said provision provides for the following sanctions that may be imposed on the defaulting club:

1.    a warning;

2.    a reprimand;

3.    a fine; or

4.    a ban from registering any new players, either nationally or internationally, for one or two entire and consecutive registration periods (hereinafter: “the registration ban”).[3]

Based on the wording of Article 12bis, i.e. the use of the word ‘may’, it is left to the discretionary power of the DRC and the PSC to decide whether or not to impose a sanction on the debtor club.[4] However, this discretionary power has never been used in favour of a defendant in all the published DRC or PSC decisions under review. In other words, a sanction, going from a warning to a transfer ban of two entire and consecutive periods, was imposed in all decisions. Despite the fact that it follows from Article 12bis(4) that sanctions may apply cumulatively, this option was only used once.[5] It seems that it will come into play only if the debtor club did not comply with its obligations on multiple occasions and only after the maximum sanction of a transfer ban of two entire and consecutive periods has been imposed on the debtor club. The discretionary power under Article 12bis is different from the sanction of a transfer ban as laid down in Article 17(4) of the RSTP. The latter article states that the competent body ‘shall’ sanction, as opposed to Article 12bis, which states that the competent body ‘may’ sanction.[6]

 The Warning

Out of the 99 published 12bis decisions of the DRC, 17 warnings have been imposed. Additionally, seven warnings have been imposed out of the 38 published 12bis decisions before the PSC. As follows from the jurisprudence of FIFA,[7] (only) a warning will be given by the FIFA committees in the event two conditions are cumulatively met:

1.             the club (duly) replied to the claim; and

2.             it is not a repeated offence.

It is however important to note that the height of the outstanding amount of overdue payables is not correlated with the imposition of a warning. The outstanding overdue payables in the 24 proceedings ending with a warning range from an overdue payable of 3,468 Euros (hereinafter: “EUR”) in two decisions of the DRC,[8] up to an amount of EUR 1,000,000 in a PSC decision.[9]

The jurisprudence also points out that the debtor club must reply to the claim in order to contain the possible sanction to a warning. Although several decisions refer to the fact that the club should have “duly replied to the claim”,[10] other decisions do not mention “duly” and these consider it enough that the club only “replied to the claim”.[11] Despite this difference in terminology, we conclude that almost any form of reply provided by the debtor club will be considered sufficient. In fact, no distinctive value is ascribed to the word “duly”.

The respondents gave divergent reasons for their non-compliances. One club contested the applicability of Article 12bis,[12] other clubs stated to have administrative difficulties[13] or financial difficulties,[14] whereas others claimed that they were communicating with the player’s agent to settle the matter amicably.[15] Apart from the claim related to the applicability of Article 12bis, which was rejected because the claimant lodged his claim after the entry into force of Article 12bis RSTP,[16] all the arguments raised were not considered valid reasons for non-payment of the outstanding monies. Although the jurisprudence does not give an exact answer to the question what would be considered “a prima facie contractual basis”, it can be concluded that the aforementioned circumstances did not fulfil these criteria.

Notwithstanding the above, the condition of having “(duly) replied to the claim” has recently been tackled by the DRC. In its decision of 23 May 2016, the respondent replied to the claim per e-mail.[17] The DRC considered this reply not to be sufficient to fulfil the standards of “(duly) replied to the claim” because “the Respondent only replied to the claim by e-mail and e-mail petitions shall have no legal effect in accordance with art. 16 par. 3 of the Procedural Rules.” In other words, the respondent should have replied by fax or ordinary mail.

Additionally and in line with the above, the DRC or the PSC has only imposed a warning when there was no repeated offence. In other words, the respondent in a 12bis procedure must actually be considered as a “first offender” in order to (only) get a warning. From the 24 decisions in which a warning has been imposed, there is only one not fulfilling the abovementioned two conditions.[18] In this (PSC) decision, the respondent party did not reply to the claim. However, during the course of the proceedings the respondent made a partial payment to the claimant.[19] Therefore, the PSC decided to impose a warning on the respondent, irrespective of the absence of a reply. In light of this decision, it must be kept in mind that making a partial payment during the course of the 12bis proceedings might alleviate the duty to ‘reply to the claim’.

 The Reprimand

Only two of the decisions published by FIFA contain a reprimand.[20] One decision was issued by the DRC,[21] the other one by the PSC.[22]

In the DRC decision, overdue payables of EUR 40,000 were due to the claimant based on a termination agreement.[23] In its reply to the claim, the respondent admitted that it had to pay compensation to the claimant, but only until he would have found a new club. The respondent considered that, since the claimant found a new club immediately after the agreed termination, no compensation was due.[24] Notwithstanding this, the DRC judge considered that there was no documentary evidence with regard to the argument of the respondent. Therefore, the DRC judge considered that the respondent had delayed a due payment for more than 30 days without a prima facie contractual basis. Based on the foregoing paragraph and the fact that the respondent replied to the claim, one would think that a sanction in the form of a warning should be imposed on the respondent. However, the DRC highlighted that the DRC judge had already imposed a warning on the respondent previously. Thus, it referred to Article 12bis(6), which establishes that “a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty”.[25] Therefore, a reprimand was imposed.[26] In a similar decision of 26 May 2016, the PSC also imposed a reprimand.[27]

In conclusion, one could say that a reprimand is considered as a severe sanction and thus will not be imposed on a first offender. Although there have only been two (published) decisions of FIFA wherein a reprimand was actually imposed, one can expect that a reprimand will be imposed on a repeated offender who replied to the claim in his first and second 12bis procedure. The crucial advice that can be derived from the above analysis is that a respondent club should always reply in a 12bis procedure, because the warning and reprimand do not bring any financial or sportive consequences with it, contrary to the fine and the registration ban, which will be discussed hereunder.

The Fine
Introduction 

The only sanction that leads to direct financial consequences is the fine. The fine is a sanction that can be imposed in a 12bis procedure and needs to be paid by the debtor club to FIFA. As opposed to the warning and the reprimand, the jurisprudence shows that a fine will be imposed in the event that the respondent did not reply to the claim.

66 out of the 99 DRC and 29 out of the 38 PSC decisions involved a fine. After analysing the jurisprudence, we conclude that it is necessary to distinguish between a fine in a DRC procedure and a PSC procedure. In fact, the amount of the outstanding overdue payables differs considerably in both procedures.[28] Additionally, the level of the corresponding fines in DRC procedures compared to the PSC procedures are different.[29] The amounts of overdue payables in a 12bis procedure before the PSC are structurally higher than the amounts in a 12bis procedure before the DRC, while the amount of the fine is not structurally higher in a PSC procedure. Due to these differences between the DRC and the PSC, we decided to discuss the use of fines in the DRC and PSC procedures separately. Our aim was to determine how the judges define the level of the fine in a 12bis procedure. To do so, we use the so-called “category method”, which will be explained below.

Fines imposed by the DRC 

After analysing the decisions of FIFA in which fines were imposed, it seems that they do not correspond to a percentage of the outstanding overdue payables.[30] Instead, the level of a fine can be determined by means of several categories of fines. At least four general conclusions can be derived from the jurisprudence regarding the level of the fine for a defaulting club. 

Firstly, the level of the fine imposed by the DRC increases when the overdue payable is higher. Secondly, there are three categories of fines: i) a fine for the club which did not reply to the claim and is considered to be a first offender (First Category Offence);[31] ii) a fine for a club which did not reply to the claim and has been found by the DRC to have neglected its contractual obligations in the recent past (not being a 12bis procedure) (Second Category Offence) ;[32] and iii) a fine for a club which did not reply to the claim and has been sanctioned in a 12bis procedure previously (Third Category Offence).[33] Thirdly, the fine for a respondent club in a Second Category Offence is double the size of the fine for a respondent club in a First Category Offence.[34] Finally, the fine in a Third Category Offence is three times the size of the given fine in a First Category Offence.[35]

Based on our comprehensive study, we can conclude that the DRC determines the level of the fine by taking into consideration the above-mentioned three categories (First, Second and Third Category Offence) subject to an approximate range in relation to the outstanding amount due. Although the ranges are very hard to define with only 66 published DRC decisions yet, the below table sheds some light and provides for eight standard situations referring to various ranges of overdue payables: 

Fines imposed by the PSC 

With regard to the PSC decisions, the authors tried to use the same method as for the DRC procedures. At first sight, it looks as if the PSC and the DRC use the same ranges for fines. However, the PSC decisions seem more arbitrary. It is therefore more difficult to draw definitive conclusions in relation to the PSC 12bis decisions. For example, in the decision of 12 October 2015, decided by a PSC’s Single Judge, a fine of CHF 15,000 was handed out to a first offender club with an overdue payable of EUR 1 million.[39] However, one can doubt whether this fine can be considered appropriate. In fact, a first offender club in another decision received the same fine, although with smaller overdue payables of EUR 200,000.[40] Another striking decision involves a fine of CHF 7,500 based on an overdue payable of USD 50,000.[41] In a comparable situation before the DRC, also with regard to a first offender, the club was sanctioned with a fine of CHF 5,000.[42] It is also remarkable that (only) in some cases the single judges did motivate the higher fines by mentioning the criteria for a Second- or Third Category Offence. After analysing these decisions more closely, one notices that two of the three Single Judges always mention the criteria of the Second- or Third Category Offence, while one only did it once (out of his six decisions). Because of this absence of motivation, one cannot definitely conclude whether these decisions fall into the Second- and Third Category Offence as defined in the context of the DRC’s jurisprudence. However, looking past these (minor) inconsistencies, we believe that most of the PSC decisions do fall within the ranges set out in Figure 2.[43] Additionally, one starts to see emerging an additional category, which is the fine of CHF 25,000. Figure 3 provides an overview of the height of the fines in relation to the various overdue payables in PSC proceedings.

Figure 3

Transfer Ban

The toughest sanction that can be imposed by the DRC or the PSC in a 12bis procedure is the ban from registering any new players, either nationally or internationally, for one or two entire and consecutive registration periods. Contrary to the transfer ban enshrined in Article 17(4) of the RSTP, in a 12bis procedure a club can be banned from registering new players for the next one or two registration periods. This ban will be imposed if the amount due to the claimant is not paid by the respondent within 30 days as from the date of notification of an Article 12bis decision.[49]

Out of the 137 published 12bis decisions, 16 decisions (15 from the DRC, 1 from the PSC) indicated that a ban will be imposed if the amount due to the respective claimant is not paid by the respondent within 30 days as from the date of notification of the decision. Moreover, 13 decisions refer to a ban for one entire registration period. In three decisions the DRC decided to threaten a ban for the next entire two registration periods. 

What is striking is that in all decisions the respondents did not only not reply to the claim (or only after the investigation phase was closed which is equivalent to not replying)[50], but more importantly the respondents were found to have breached their financial obligations several times before. Either, the defaulting clubs were found to have delayed several outstanding payments for more than 30 days, or the respondent had (also) been found by the DRC as well as the DRC judge responsible for not complying with its financial obligations on various other recent occasions. We also encountered cases in which both conditions were met.[51]

Another striking element of the decisions in 12bis procedures is that the amount due is not deemed relevant to justify the imposition of a registration ban on the debtor club. In fact, a registration ban has been imposed with regard to an overdue payable of EUR 7,500,[52] but also regarding an overdue payable of EUR 250,000.[53]  

It seems that a ban for one entire period will be imposed in two situations:

1) the debtor club has been found by the DRC or the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis once, as a result of which a fine was imposed, and the debtor club has been found by the DRC to be responsible for not complying with its financial obligations towards players on various occasions in the recent past;[54] or

2) the debtor club has been found by the DRC or the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis twice, as a result of which a fine was imposed in at least one of the decisions.[55]

Put differently: the jurisprudence of the DRC and the PSC clearly shows a debtor club systematically receiving a registration ban for one entire period if the club had neglected its financial obligation towards players in more than one earlier decision by the DRC or the PSC, and if in these proceedings the respondent failed to reply to the claim and therefore received a fine from FIFA. What remains not entirely clear is what the DRC and PSC exactly mean by “various occasions in the recent past”. This could also refer to convictions in employment-related matters prior to the introduction of the 12bis procedure on 1 April 2015.

In the only PSC decision wherein a registration ban for one entire period was imposed, the debtor club had only once been found by the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis, as a result of which a fine was imposed.[56] The decision of the PSC did not mention that the respondent was responsible for not complying with its financial obligations towards players on various occasions in the recent past. This might suggest a differing interpretation between the DRC and the PSC.

The two years of jurisprudence further show that a registration ban for two entire and consecutive periods will be imposed when the debtor club has been found by the DRC or the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis twice, as a result of which fines (or even a registration ban of 1 period)[57] has been imposed and the debtor club has been found by the DRC to be responsible for not complying with its financial obligations towards players on various occasions in the recent past.[58]

Final Remarks 

The 12bis procedure can be considered as a powerful instrument for swift dispute resolution, which could be of great benefit to players and clubs. FIFA has put in place a fast track procedure and a strong enforcement system with respect to overdue payables by defaulting clubs towards players and clubs. So far, FIFA has contributed to the resolution of international disputes in 12bis procedures in a very efficient manner leading to a shortened timeframe for decisions, with an average duration of approximately two months.

The sanctioning power of FIFA is one of the fundamental strengths of the 12bis procedure. In all the 137 published decisions of the DRC and the PSC, a sanction was imposed on the defaulting clubs, varying from a warning to a registration ban. 

From the FIFA decisions, in which fines were imposed on defaulting clubs, it can also be derived that the level of the fine is determined by taking into consideration the earlier-mentioned three categories of wrongdoings (First, Second and Third Category Offence), subject to an approximate range in relation to the outstanding amount due. However, the 12bis decisions of the DRC so far are more systematic and predictable than the PSC’s. Finally, the heaviest sanction, the transfer ban, will only be imposed in case the defaulting club not only did not reply to the claims, but also breached its financial obligations several times in the past. Fortunately, FIFA does not shy away from using sanctions, but only clubs that went too far will face the more severe ones.

Although the conclusions drawn by the authors can help practitioners confronted to 12bis procedures, they are based only on the published jurisprudence between 1 April 2015 and 1 April 2017. It must be taken into account that FIFA committees might change their interpretation and implementation practice regarding the 12bis procedure in the future. However, the jurisprudence of FIFA committees reviewed and analysed in this article can at least shed some light on the functioning of FIFA’s 12bis procedure, and in particular on its effective sanctioning regime, over the last two years.

[1] Art. 12bis(2) RSTP, edition 2016.

[2] Art. 12bis(3) RSTP, edition 2016.

[3] Art. 12bis(4) RSTP, edition 2016.

[4] Art. 12bis(2) RSTP and Art. 12bis(4) RSTP, edition 2016.

[5] DRC 14 November 2016, no. op11161545-E. For a more detailed analysis of DRC decisions, the authors make reference to this more extensive ISLJ article.

[6] Although it follows however from a literal interpretation of Art. 17(4) RSTP that it is a duty of the competent body to impose sporting sanctions whenever a club is found to have breached an employment contract during the protected period, according to the CAS there is a well-accepted and consistent practice of the FIFA DRC not to apply automatically a sanction but to leave it to its free discretion to evaluate the particular and specific circumstances on a case by case basis. See CAS 2014/A/3765 Club X. v. D. & FIFA, award of 5 June 2015.

[7] See inter alia DRC 16 February 2016, no. op02161765.

[8] DRC 28 January 2016, no. op1501703 and DRC 28 January 2016, no. op01161539.

[9] See PSC 7 May 2015, no. op0515353. Even EUR 50,000 higher in PSC 2 June 2016, no. op0616540. The highest outstanding payable in a DRC decision is EUR 950,000. See DRC 11 September 2015, no. 09151030.

[10] See inter alia DRC 28 January 2016, no. op01161539.

[11] See inter alia DRC 13 January 2016, no. op0116826.

[12] DRC 15 October 2015, no. op1015914. See also CAS 2015/A/4153 Al-Gharafa SC v. Nicolas Fedor & FIFA, award of 9 May 2016 and CAS 2016/A/4387 Delfino Pescara 1936 v. Royal Standard Liège & FIFA, award of 8 July 2016. 

[13] PSC 9 July 2015, no. op0715599 and PSC 7 May 2015, no. op0515353.

[14] DRC 13 January 2016, no. op0116826, DRC 25 April 2016, no. op0416115, DRC 7 July 2016, no. op0716778, PSC 2 June 2016, no. op0616540 and PSC 13 September 2016, no. op09161090.

[15] DRC 16 February 2016, no. op02161765 and DRC 15 March 2016, no. op0316303.

[16] Also confirmed in CAS 2016/A/4387 Delfino Pescara 1936 v. Royal Standard Liège & FIFA, award of 8 July 2016.

[17] DRC 23 May 2016, no. op0516571. The DRC can be quite sceptical towards information that is contained in emails. See inter alia DRC 31 July 2013, no. 07133206.

[18] PSC 3 June 2015, no. op0615400.

[19] For a more detailed analysis of the DRC decision, see our pending ISLJ article.

[20] However, some decisions – wherein a heavy sanction such as a transfer ban was issued – refer to an earlier conviction of the debtor club wherein a reprimand was given. See inter alia DRC 26 October 2016, no. op10160931-E.

[21] See DRC 26 November 2015, no. op11151356.

[22] See PSC 26 May 2016, no. op05160482.

[23] DRC 26 November 2015, no. op11151356.

[24] DRC 26 November 2015, no. op11151356, paras. (II) 7 and 8.

[25] DRC 26 November 2015, no. op11151356, para. (II) 17.

[26] DRC 26 November 2015, no. op11151356, para. (II) 18.

[27] For a more detailed analysis of this decision, see our pending ISLJ article.

[28] For a more detailed analysis of DRC decisions in this regard, see our pending ISLJ article.

[29] Cf. DRC 28 January 2016, no. op01161541 and PSC 12 October 2015, no. op10151035. In the DRC decision, the debtor club had an overdue payable of USD 100,807. In this case, the DRC imposed a fine of CHF 15,000. In the PSC decision, the debtor club had an overdue payable of EUR 1 million. However, the PSC imposed the same fine of CHF 15,000.

[30] For a more detailed analysis of the “percentage method”, see our pending ISLJ article.

[31] If these criteria were cumulatively met, the jurisprudence points out that a fine was given by FIFA to a club in a 12bis procedure. A First Category Offence was also given to a debtor club who responded to the claim, but was already sanctioned with a warning and reprimand in earlier 12bis procedures. In that case, the warning and the reprimand sanctions were exhausted and, thus, a fine was ordered by the DRC.

[32] See inter alia DRC 18 May 2016, no. op0516646. For a more detailed analysis of the DRC decisions, see our pending ISLJ article.

[33] See inter alia DRC 3 July 2015, no. op0715641. For a more detailed analysis of the DRC decision, t see our pending ISLJ article.

[34] For a more detailed illustration of DRC decisions, see our pending ISLJ article.

[35] Idem.

[36] This range differs from the range the authors have set in a previous article (see Global Sports Law and Taxation Reports, ‘Overview of the jurisprudence of the FIFA DRC in 12bis procedures’, March 2017). This difference is based on recently published jurisprudence: see DRC 28 February 2017, no. op02172117-E.

[37] DRC 11 September 2015, no. 09151030.

[38] For a more detailed analysis of DRC decisions, see our pending ISLJ article.

[39] PSC 12 October 2015, no. op10151035.

[40] PSC 12 October 2015, no. op10151010. Even more striking is the fact that this decision was dealt with on the same date as the aforementioned decision in footnote 61 above, by the same Single Judge. Only two weeks later, in PSC 29 October 2015, no. op10151014, the PSC imposed a fine of CHF 25,000 with regard to an overdue payable of EUR 590,000 to a first offender club.

[41] PSC 9 July 2015, no. op0715584.

[42] DRC 5 October 2015, no. op10151049.

[43] Only PSC 12 October 2015, no. op10151035 seems to be the odd one out.

[44] See footnote  58.

[45] This border is brought to 250,000, based on PSC 16 November 2015, no. op11151300, wherein a fine based on a Third Category Offence of CHF 45,000 was imposed with an overdue payable of USD 250,000, which sets the border at approximately 250,000.

[46] This border is brought to 500,000, based on PSC 25 February 2016, no. op0216170, wherein a fine of CHF 20,000 based on a First Category Offence was imposed with an overdue payable of EUR 450,093, which sets the border at approximately 500,000.

[47] This border is brought to 750,000, based on the decision PSC 29 June 2016, no. op0616676, wherein a fine of CHF 30,000 based on a First Category Offence was imposed with an overdue payable of EUR 750,000. In a decision with an overdue payable of EUR 675,000 (PSC 24 November 2015, no. op11151385), a fine of CHF 50,000 based on a Second Category Offence was given, which sets the border at approximately 750,000.

[48] At least until an overdue payable of USD 1,367,500 falls within this category; see PSC 21 August 2015, no. op0815530.

[49] See inter alia DRC 8 September 2016, no. op0916308. However, this may differ in a situation where sanctions are imposed cumulatively.

[50] See DRC 8 September 2016, no. op0916308 and DRC 15 July 2016, no. op0716703.

[51] In the context of a retroactive application of Article 12bis, as discussed in the context of the CAS award of 17 June 2016 (see CAS 2015/A/4310 Al Hilal Saudi Club v. Abdou Kader Mangane, award of 17 June 2016), it can be questioned whether the decisions of FIFA bodies prior to the date of 1 April 2015 (which per definition were decisions in ‘regular’ FIFA proceedings) can be taken into account and held against the club in default. For a more detailed analysis of this legal issue of retro-active application, see our pending ISLJ article. See also Lombardi, P., Worlds Sports Law Report, September 2016, “Article 12bis of the FIFA Regulations: 18 months on”, p. 5.

[52] DRC 26 May 2016, no. op0516585.

[53] PSC 20 June 2016, no. op0616676.

[54] See inter alia DRC 8 September 2016, no. op0916308.

[55] See inter alia DRC 27 October 2015, no. op10151248, wherein the debtor club had received a fine in both earlier decisions. In DRC 17 October 2016, no. op10161355-E, the debtor club had only received a fine in the second decision.

[56] PSC 20 June 2016, no. op0616676.

[57] DRC 29 July 2016, no. op0716699. The previous decision, wherein a transfer ban for one entire period was imposed, is also published: DRC 4 February 2016, no. op02161733.

[58] See inter alia DRC 13 September 2016, no. op09161247.

Editor’s note: Mario Vigna is a Senior Associate at Coccia De Angelis Vecchio & Associati in Rome, Italy. His main practice areas are sports law, commercial law, and IP law. He also has extensive experience in the Anti-doping field, serving as Deputy-Chief Prosecutor of the Italian NADO and as counsel in domestic and international sports proceedings. He is a frequent speaker at various conferences and workshops. He was not involved in either of the cases discussed below.

I.               Introduction 

Gambling in football is a popular and potentially lucrative activity. It also raises numerous issues. When faced with the issue of gambling, the European Court of Justice (now Court of Justice of the EU) determined that gambling was economic activity per se, notwithstanding gambling’s vulnerability to ethical issues, and thus could not be prohibited outright.[1] With the legality of gambling established, it was left to the proper legislative bodies (national legislatures, national and international federations, etc.) to regulate gambling in order to guard against fraud and corruption. Gambling was not going to disappear; the dangers inherent to gambling would require attention. 

Given the amounts of money sometimes at stake, it is unsurprising that fraud and corruption are constant threats in football gambling. Match-fixing, i.e. wherein participants in a match deliberately attempt to secure a specific result to allow certain gamblers to obtain favorable rewards, is one prominent form of such corrupt activity. FIFA and UEFA, as well as other relevant bodies, have attempted to regulate match-fixing to protect the integrity of football competitions. After all, illicit gambling not only enables unjust enrichment on behalf of the corrupt gamblers and their accomplices; illicit gambling undermines the trust that spectators have in an activity and can lead to a decline in interest as a result.

The Italian Football Federation (FIGC) has adopted a strict liability approach to deter and punish match-fixing. Under the operative rules, clubs and federations whose agents or members engage in match-fixing activity are liable for match-mixing regardless of whether the club or federation itself knew of or condoned the conduct. Unfortunately, two relatively recent appeal decisions—Novara and Pro Patria—have handicapped this strict liability regime by allowing clubs to escape or reduce their liability on account of dubious mitigating circumstances. These decisions have undermined the efficacy of strict liability as a doctrine, and consequently diminish the efforts against match-fixing.

This blog post argues first that strict liability is effective in deterring match-fixing activity so long as adjudicatory bodies enforce it with appropriate rigidity. In fact, the doctrine of strict liability is widespread, in sports law and other fields, precisely because it can be effective. Next, this post critiques the decisions in Novara and Pro Patria, contending that both decisions misapply the principle of proportionality and erroneously recognize certain circumstances to mitigate against liability. As a corrective to these two decisions, this post concludes by outlining an effective application of strict liability and highlighting important regulatory efforts that out to be adopted. And while the discussion herein focuses on Italian football, the ideas explained are widely applicable across all sports and throughout all levels of competition. 

II.             Italian Law, Rules, and Regulations Against Match-fixing in Football

On the eve of the 2006 World Cup, which Italy won, Italian investigators uncovered efforts involving several major football clubs aimed at rigging referee selection for matches. This scandal became known as Calciopoli and implicated clubs from both Serie A and Serie B (respectively the first and second divisions in Italian football). Subsequent investigations in 2011 and 2015 led to additional scandals concerning clubs competing in Serie B and Lega Pro (the third division of Italian football), among them Scommessopoli (Bet City), Last Bet, Dirty Soccer, and Treni del Gol. Match-fixing, it was revealed, was a real problem in Italian football.

The FIGC, as the national football federation, maintains regulatory and disciplinary authority over all Italian football competitions and activity. To address the problem of match-fixing, the FIGC employs a set of regulation that deems match-fixing activity improper and sanctionable under a strict liability principle. Article 4 of the FIGC Code of Sport Justice (CSJ) states:

2. Clubs are strictly liable for disciplinary purposes for the actions of their managers, members and the individuals set forth in art. 1, par. 5

[…]

5. Clubs are presumptively liable for the wrongdoing committed for their benefit by any person. Liability is excluded when it is clearly or reasonably doubtful that the club participated in the wrongdoing or ignored it. [2]

Thus, clubs are liable for match-fixing even if they are not intimately aware of or complicit in the match-fixing efforts that benefit the club; liability is found once someone associated with the club—a player, an agent, etc.—engages via their acts or omissions in match-fixing activity. Match-fixing is explicitly prohibited in Article 7 of the CSJ[3], which also provides that strict liability applies for match-fixing and is punishable subject to the degree of fault borne by the club.[4] Here, it is important to note that under Article 7 the adjudicating body has discretion to assess a club’s degree of fault and reduce accordingly the corresponding sanction(s). This discretion is important; it is, however, in making use of this discretion that the appeal bodies erred in Novara and Pro Patria.

III.           Novara and Pro Patria: Setting the Wrong Precedent

The FIGC Code of Sport Justice applies strict liability to clubs for match-fixing but allows for consideration of mitigating circumstances to reduce the sanction(s) if appropriate. The problem is that currently there is no standard for what qualifies as appropriate mitigating circumstances. Novara and Pro Patria highlight this problem. In both cases, Italian football clubs—Novara Calcio and Aurora Pro Patria—were sanctioned for match-fixing, but later had those sanctions reduced on appeal on the basis of mitigating factors. This blog post contends that those reductions were ill-informed. If strict liability is to work as a deterrent and truly discourage match-fixing, acceptable mitigating factors against strict liability require greater scrutiny than provided in these two cases.

A.    Novara Calcio

An investigation by the Italian media, coined Scommessopoli, uncovered one of the largest match-fixing schemes in Italian footnall history. Scommessopoli was a wide-ranging, multi-dimensional enterprise; players were involved, as were Italian and foreign criminal groups—in total, the investigation alleged that at least twenty-two clubs and sixty-one people participated in match-fixing efforts. One of the individuals involved, Cristian Bertani, played for Novara Calcio, a club in the Italian Serie B. According to the findings of the National Disciplinary Commission, Bertani conspired with a foreign gambling group and a local criminal group to fix matches. Consequently, the National Disciplinary Commission sanctioned Bertani’s club Novara Calcio under the strict liability regime in effect. Novara Calcio was fined EUR 35,000 and received a four-point deduction from the league table.[5]

The club appealed the decision to the FIGC Court of Justice. On appeal, the court reduced the deduction to three points and eliminated the fine entirely:

“[The reduced sanction] leads to a more accurate assessment of the overall conduct of the Appellant of all the activity carried out by the club, whether in a preventative or subsequent manner, specifically aimed at fighting the phenomenon of illicit sports or eliminating the consequences… In this sense, recalling among others, the approval by Novara Calcio of the first organizational model of the legislative decree no. 231/2001 related to the Code of Ethics; earning the ISO 9001:2008 certification of quality, being the first football association to earn it; having contracted since February 2012 the professional services in order to study the betting quota over the matches played by the club, bringing a discipline scheme over those studies thanks to an Antifraud Code in April 2012 “[6]

In essence, the Court reduced the sanctions on account of the club’s implementation of self-protection tools in accordance with the organizational model set forth in the Legislative Decree no. 231/2001. The problem with this decision, however, is that the efforts in question were taken after the incident. The Court treated this post-incident measures as mitigating circumstances, even though these measures were not operative when Bertani attempted to fix matches.

Such allowance of post-incident mitigating factors is inappropriate and undercuts the effort to prevent match-fixing. Indeed, only the prior adoption of an adequate organizational model against match-fixing by a club should (potentially) mitigate against strict liability. Two requirements should be satisfied: (1) prior adoption, and (2) adequate measures. Legislative decree no. 231/2001 and Italian jurisprudence both distinguish between superficial adoption of an organizational model—which is insufficient by itself—and the adoption of an organizational model with demonstrated sufficient, concrete measures to prevent wrong-doing. Only the latter satisfactorily deters potential wrong-doing, and only the latter should (potentially) shield against strict liability so long as a club can prove its preventative efforts were adequately effected. With Novara Calcio, the problem was that the adoption of an organization model was merely superficial, in addition to being after-the-fact, and that the club did not have to prove that the adopted measures were or would be effective in combatting match-fixing.

B.    Aurora Pro Patria 

In 2015, the Catanzaro Police Department arrested more than forty individuals for alleged participation in match-fixing in matches of the Italian 4^th Division. Three arrestees were former members of the club Aurora Pro Patria—two players and one coach—accused of match-fixing activities while employed by Pro Patria. All three were found guilty in the ensuing proceedings. Thus, under the doctrine of strict liability, Pro Patria received a seven-point deduction as a sanction for the conduct of its employees.[7]

Pro Patria appealed the ruling and sanction. And like the Novara case, the sanction was reduced: 

Having found the defendant liable, it cannot but follow the confirmation of the strict liability held by the association (Club). As marked by the vast jurisprudence, indeed, the referred liability cannot be avoided but graduated in the presence of circumstances that would see to deserve special consideration.

… the thorough preventative activity put in action by Aurora Pro Patria, that even when they were not obliged to, they still adopted the model of conduct as set out in the rule Legislative Decree no. 231/2001, they imposed a Code of anti-fraud and have entered into a contract with Federbet [a monitoring company] by which said company will check the flux of the bets related to the activity of the club, we determine that, given the relevant circumstances, the sanction against the association (club) must be reduced…”[8]

The Court reduced the sanction to a three-point deduction. Although the appeal court affirmed strict liability, it undercut its potency by accepting as mitigating circumstances factors that were not in place when the unlawful conduct occurred. The appeal court was in some ways excusing a violation, at least partially, for efforts the responsible party undertook to not commit the same violation again in the future. The efforts had no impact on the violation that already took place.

C.    Problems Posed by the Novara and Pro Patria Rulings 

After being charged with match-fixing, both Novara and Pro Patria hired monitoring companies that supposedly help prevent, or at least detect, potential match-fixing activity. These post-facto efforts were deemed by ruling bodies compelling enough to reduce sanctions imposed for match-fixing. This precedent of reducing on account of mitigating circumstances occurring after the match-fixing activity occurred poses two issues.

First, the precedent undermines the strict liability regime by allowing the reduction of a club’s liability where it fixes the problem ex post facto, thereby providing clubs with a loophole to escape with minimal harm. Second, the precedent does not consider the actual efficacy of the hired monitoring companies or their methods. Without a regulatory framework and established standards for monitoring companies and certification of their services, i.e. no way of assessing whether the hired companies actually make any difference when it comes to the prevalence of match-fixing, nothing separates effective monitoring from the appearance or claim of monitoring.

IV.           A Better Way of Evaluating Mitigating Circumstances

An adjudicatory body rightfully must consider the particular context of each case. Accurate and fair decisions acknowledge that not all cases concerning similar issues deserve equal treatment. Mitigating circumstances are an important aspect of any fair legal system. With Novara and Pro Patria, however, the appeal bodies erred by giving weight to certain post-incident mitigating circumstances that had no bearing on the issue at hand. Further, allowing the hire of a monitoring company to mitigate a club’s liability introduces a separate issue, i.e. the efficacy of the monitoring company and its services. Both appeal decisions reduced the capacity of strict liability to deter match-fixing. If a strict liability regime is to be effective in combatting match-fixing, then clear standards for evaluating mitigating circumstances in cases like Novara and Pro Patria are necessary.

Before proposing a way forward, it is important to first try and understand why the appeal decisions reduced the sanctions in the cases at hand. Inherent to the appeals’ justification is the doctrine of proportionality, or the notion that any punishment must fit the crime and cannot be more extreme than is warranted. In Novara and Pro Patria, it seems that the appeal bodies thought that the clubs’ liability for the conduct of their employees should be limited. In other words, while the appeal bodies certainly assigned liability to the clubs, they were unwilling to allow that liability to support too onerous sanctions.

This, of course, misses the point of strict liability in the first place. Strict liability is used to assign liability notwithstanding immediate fault because the liable party is best positioned to absorb the liability and/or work to prevent the wrongful conduct. Punishments for strict liability in match-fixing, if reduced to minimal amounts, do little to nothing to promote clubs to actively prevent match-fixing. The Court of Arbitration for Sport (CAS) re-affirms this point:

With regard to the alleged disproportionality of the Decision, the Panel first of all wishes to stress that the fight against match-fixing is considered to be extremely important for the purpose of preserving confidence in and the integrity of sport.[9]

Part of the proportionality calculus must be the severity of the wrongdoing concerned. Match-fixing is, arguably, the greatest wrong in sports. Therefore, hefty punishments should not violate proportionality. 

The Novara and Pro Patria appeal decisions also over-value the post-incident preventative actions (which is an oxymoron!). The treatment of post-incident actions as mitigating circumstances suggests future offenders will be able to correct wrongful conduct after-the-fact simply by hiring a company that claims to monitor match-fixing activity. Even if a club were to hire a monitoring company prior to any wrongful conduct, the mere signing of a contract with a monitoring company is generally a questionable preventative measure. Clubs that employ monitoring companies and are then subsequently charged with liability for match-fixing should only have sanctions (and thus liability) reduced if they prove to the court that the monitoring company undertook actual and sufficient efforts to monitor and prevent match-fixing.

Merely employing a monitoring company without any regard for the efficacy of its services is an inadequate escape route from strict liability. After all, these companies are unregulated and unaccredited; there is no guarantee that the companies do any work, or that any work the company performs is effective. At a minimum, then, a club must demonstrate that in conjunction with a monitoring company it undertook significant and adequate measures to prevent match-fixing by its employees and agents.

A standard for monitoring companies is important in light of the Novara and Pro Patria rulings, which will support a booming (and unregulated) market for monitoring companies. Clubs may now look to symbolically contract with these companies to escape liability if/when they are accused of match-fixing. The football community should not allow such a deregulated and opaque market to emerge.

V.             Conclusion

Match-fixing poses one of the most elemental dangers to professional football—it damages the credibility of the sport and could potentially damage the market. The doctrine of strict liability discourages a club’s participation in match-fixing activities, and incentivizes clubs to put into place measures that ensure their employees abide by anti-match-fixing regulations. Judges and tribunals must not lose sight of the broader picture when determining sanctions in match-fixing cases. In light of the Novara and Pro Patria decisions, this blog post offers a way forward to maintain strict liability’s capacity to effectively combat match-fixing: (1) post-incident efforts should not be considered as mitigating circumstances, and (2) monitoring companies and their services must meet a certain standard if they are to absolve, partially or fully, a club from its liability.

Strict liability can be effective so long as courts and tribunals do not unduly handicap it. Match-fixing is still a prominent threat in football and in sports in general. Now is not the time to weaken the most effective tool (strict liability) available to combat match-fixing. While the preceding discussion focuses on Italian football, the lessons are universal for all sports, at all levels.

[1] Case Her Majesty's Customs and Excise v. Gerhart Schindler and Jôrg Schindler, C-275/92 Judgement of 24th March 1994 [1994] ECR 1-01039.

[2] Unofficial translation from Italian: “Responsabilità delle società 1 […]; 2. Le società rispondono oggettivamente, ai fini disciplinari, dell'operato dei dirigenti, dei tesserati e dei soggetti di cui all’art. 1 bis, comma 5; 3 […]; 4 […] 5. Le società sono presunte responsabili degli illeciti sportivi commessi a loro vantaggio da persone a esse estranee. La responsabilità è esclusa quando risulti o vi sia un ragionevole dubbio che la società non abbia partecipato all'illecito o lo abbia ignorato; 6 […].”

[3] “Committing, by any means, acts to alter the development or outcome of a match or competition or to assure any advantages in the ranking constitutes a sporting wrongdoing.” Unofficial translation from Italian: “1. Il compimento, con qualsiasi mezzo, di atti diretti ad alterare lo svolgimento o il risultato di una gara o di una competizione ovvero ad assicurare a chiunque un vantaggio in classifica costituisce illecito sportivo.”

[4] Art. 7, par. 4: It is considered the strict liability of a club in the sense of art. 4, par. 5 and the fact is punishable subject to the degree of fault, with the sanctions foreseen in art. 18, par. 1 sections (g), (h), (i), (l), and (m). Unofficial translation from Italian: “Se viene accertata la responsabilità oggettiva o presunta della società ai sensi dell'art. 4, comma 5, il fatto è punito, a seconda della sua gravità, con le sanzioni di cui alle lettere g), h), i), l), m) dell’art. 18, comma 1.” The sanctions consist, broadly speaking, in the deduction of points, to be sent to the bottom of the table, to be disqualified from the competition, to have a tittle taken away or the barred from participating in a specific competition.

[5] The sport prosecutor had sought a six-point deduction.

[6] Unofficial translation from Italian: “A ciò conduce una più attenta valutazione della complessiva condotta della reclamante, di tutta la attività da questa posta in essere, invero tanto in via preventiva che successiva ed espressamente finalizzata a combattere il fenomeno degli illeciti sportivi ovvero ad eliminarne le conseguenze… In questo ambito vanno riassuntivamente richiamati, tra gli altri interventi, l’approvazione da parte del Novara Calcio del primo modello organizzativo ex decreto legislativo n. 231/01 e relativo Codice etico; l’approvazione nel gennaio del 2012 di un nuovo modello organizzazione e di gestione; il conseguimento nel marzo ancora di quest’anno di certificazione di qualità ISO 9001:2008 come prima società calcistica in Italia; l’aver affidato nel febbraio 2012 a soggetto professionale lo studio dell’andamento delle quote di scommesse legate alle partite che avrebbe giocato il Novara da quel momento alla fine del campionato, successivamente deliberando di continuare l’opera di monitoraggio delle partite; disciplinando infine tale sistema con l’adozione di un Codice Antifrode.”

[7] The sport prosecutor sought a twenty-point reduction as an exemplary punishment and to increase its deterrent effect.

[8] Federazione Italiana Giouco Calcio; COMUNICATO UFFICIALE N. 48/TFN – Sezione Disciplinare (2015/2016), p. 81.

[9] CAS 2013/A/3297 Public Joint-Stock Company “Football Club Metalist” v. UEFA & PAOK FC, award of 29 November 2013. (Case about match-fixing and sanctions under UEFA rules.)

Doyen (aka Doyen Sports Investment Limited) is nothing short of heroic in its fight against FIFA’s TPO ban. It has (sometimes indirectly through RFC Seraing) attacked the ban in front of the French courts, the Belgium courts, the European Commission and the Court of Arbitration for Sport. This costly, and until now fruitless, legal battle has been chronicled in numerous of our blogs (here and here). It is coordinated by Jean-Louis Dupont, a lawyer who is, to say the least, not afraid of fighting the windmills of sport’s private regulators. Yet, this time around he might have hit the limits of his stubbornness and legal ‘maestria’. As illustrated by the most recent decision of the saga, rendered in March by the Court of Arbitration for Sport (CAS) in a case opposing the Belgium club RFC Seraing (or Seraing) to FIFA. The arguments in favour of the ban might override those against it. At least this is the view espoused by the CAS, and until tested in front of another court (preferably the CJEU) it will remain an influential one. The French text of the CAS award has just been published and I will take the opportunity of having for once an award in my native language to offer a first assessment of the CAS’s reasoning in the case, especially with regard to its application of EU law.

I.               The facts and procedure of the case

To cut a relatively long story short, RFC Seraing [the variation of the name of the club remains a disturbing mystery in the various proceedings in Belgium and at FIFA] entered a TPO agreement with Doyen on 30 January 2015, stipulating that the club transfers the economic rights of three players to Doyen against a sum of €300.000. At that time the transitory phase of FIFA’s TPO ban enshrined in art. 18ter RSTP was already in force and the FIFA TMS, tasked with monitoring the enforcement of the RSTP, quickly jumped on the matter. The issue was referred to FIFA’s Disciplinary Committee, which opened on 2 July 2015 proceedings against RFC Seraing for breaching arts. 18bis and 18ter RSTP. Additionally, on 7 July 2015, Seraing introduced in the TMS a request to recruit a Portuguese player, to which it attached an ERPA (on Doyen’s ERPAs see our blog here) attributing 25% of the economic rights attached to the player to Doyen against a payment of €50 000. A few days after, the FIFA TMS started another investigation into the transfer and on 21 July 2015 the FIFA Disciplinary Committee extended the existing proceedings to also cover this matter.

On 4 September 2015, the Disciplinary Committee rendered its (unpublished) decision finding that ‘FC Seraing’ breached arts. 18bis and 18ter RSTP. Consequently, it banned the club from recruiting players (at national and international level) for the next four transfer windows and handed out a fine of CHF 150.000. Seraing challenged the decision with FIFA’s Appeal Committee, which decided on 7 January 2016 to reject the appeal and confirmed the original decision. Eventually, Seraing appealed this decision to the CAS, leading to the latest award. As a side note, it feels like the disputes involving RFC Seraing (or FC Seraing or Seraing United) are a set-up prompted by Doyen to be able to challenge the validity of art. 18ter RSTP in various jurisdictions. If it were true it should not affect the question of the legality of the ban, but it is probably not of great support to the credibility of some arguments raised by Doyen, or its alter ego Seraing, in these proceedings.

II.             The CAS’ assessment of the compatibility of FIFA’s TPO ban under EU law

As the competence of CAS in this matter was not contested, the key question was against which law(s) should the compatibility of FIFA’s TPO ban be assessed. Due to the history of RFC Seraing’s key lawyer, it is no surprise that much of the award is spent assessing the EU law compatibility of the ban. In the past, as I have argued elsewhere (my CAS and EU law article is accessible for free here, download it now!), the CAS has been rather reluctant to apply EU law rigorously. This case is therefore a great opportunity to assess whether it has raised its standards in this regard.

a.    The applicability of EU law

First, is EU law applicable to the case? The CAS has rarely applied EU law (the exception confirming the rule being the rather old CAS 98/200 case, which was later challenged in front of the EU Commission leading to the ENIC decision), an absurdity in light of the Bosman (and prior Walrave) case law of the CJEU, which made clear that EU law is applicable to the regulations of Sports Governing Bodies (SGBs), even when seated outside of the EU. Additionally, in light of the centrality of the free movement rights in EU integration, it is to be expected that like the EU competition rules they be considered part and parcel of a European public policy with which arbitral awards must comply to be recognized and enforced by national courts in the EU.

Thus, the less spectacular, but probably more important, aspect of the award is the clear affirmation that EU law is applicable because it constitutes a “mandatory provision of foreign law” in the sense of art. 19 of the Swiss Federal Act on Private International Law (PILA).[1] Mandatory provisions of foreign law must be taken into account when three cumulative conditions prevail:

1. Such rules belong to a special category of norms which need to be applied irrspective of the law applicable to the merits of the case;
2. there is a close connection between the subject matter of the dispute and teh territory where the mandatory rules are in force;
3. in view of Swiss legal theory and practice, the mandatory rules must aim to protect legitimate interest and crucial values and their application must lead to a decision which is appropriate.[2]

In this case, the Panel considers that the three cumulative conditions are fulfilled because:

1. EU competition law and EU provisions on fundamental freedoms are largely regarded as pertaining to the category of mandatory rules by courts and scholars within the EU;
2. the close connections between (a) the territory on which EU competition law  and EU provisions on fundamental freedoms are in force and (b) the subject matter of the dispute results from the fact that the challenge against the legality of the RSTP has an obvious impact on the EU territory. Indeed, the RSTP aims to regulate the activity of football clubs, many of which are European. Furthermore, the particular decision affects the participation of RFC Seraing to competitions taking place on the European soil.
3. Finally, the Swiss legal system shares the interests and values protected by EU law, specifically by the EU competition rules and EU fundamental freedoms.[3]

This is a strong confirmation that EU law (mainly EU free movement rights and EU competition law), which applies almost naturally to decisions and regulations of the SGBs[4], will always be deemed applicable if invoked in front of the CAS to challenge their legality. This, as Seraing has learned in the present instance, does not mean that the SGBs rules will be automatically found incompatible with EU law. Instead, it merely subjects them to a duty of justification and proportionality, which will be assessed on a case-by-case basis.[5] The message for sports lawyers appearing in front of the CAS is then: Work hard on your EU law! But don’t get your hopes up too high… 

b.    The compatibility of FIFA’s TPO ban with EU law

The rest of the CAS award is mainly dedicated to assessing the compatibility of the TPO ban with EU law.[6] In doing so, the CAS, rightly in my view, considered that the conditions regarding the compatibility, or not, of a private regulation of an SGB with the EU free movement rights and competition rules overlap with regard to the key question: the proportionality of the rule.

The legitimacy of the objectives of the TPO ban

The Panel’s assessment focuses firstly, and therefore mainly, on a possible disproportionate restriction of the free movement of capital guaranteed under art. 63 TFEU. The Panel decides to assume, without addressing it, that article 63 applies horizontally. This is still a widely uncharted territory and the CJEU has yet to take a clear stand on it. However, the CAS decided to be better safe than sorry and, thus, followed a maximalist interpretation of the scope of application of the article by applying it horizontally to the rules of FIFA. From the outset, it is uncontested that articles 18bis and 18ter RSTP constitute a restriction to the free movement of capital in the EU.[7] Yet, as emphasized by the Panel, a restriction does not entail an automatic incompatibility with EU law. Instead, the restrictive effect might be justified by a legitimate objective and compatible with EU law if the rule or measure is a proportionate mean to attain that objective. In the present case, FIFA invoked a number of potential legitimate objectives underlying the TPO ban:

• The preservation of the contractual stability;
• The preservation of the independence and autonomy of clubs in the management of their recruitment policy;
• The securing of the integrity of football and preservation of the loyalty and equity of competitions;
• The prevention of conflicts of interests and the securing of transparency in the transfer market.[8]

Those objectives remained uncontested by Seraing and the Panel concluded that they could be deemed legitimate in the sense of the CJEU’s jurisprudence.[9] Instead, Seraing tried to argue that the ‘real’ objective of FIFA in adopting the TPO ban was to ensure that the clubs monopolize the financial streams generated by the transfers of players.[10] Yet, it failed to provide the necessary evidence to convince the Panel, which insisted that “TPO has triggered amongst many commentators and inside the various instances and organisations of football intense worries to which the objectives invoked by FIFA are a response”[11]. Additionally, the Panel considers “that this practice gives way to numerous risks, in particular: risks linked to the opacity of investors escaping the control of football organizations and who are able to freely sell-on their investment; risks of a restriction of the economic freedom and rights of players, through the influencing with a speculative interest of their transfer; risks of conflicts of interests, or even of rigging or manipulation of games, contrary to the integrity of competitions, as the same investor can have TPO deals and multiples clubs involved in the same competition; risks linked to the ethics of sport because the objective pursued by investors is purely a financial and speculative one, to the detriment of sportive and moral considerations”.[12] Hence, the arbitrators buoyed the legitimacy of FIFA’s objectives in adopting the TPO ban.

The proportionality of the ban

The key question is then whether the FIFA ban can be deemed a proportionate means to attain its legitimate objectives. It is at this most crucial stage of the evaluation of the compatibility with EU law that a number of academic commentators have denied the ban’s proportionality.[13] It is the most important part of the award, which will be most likely scrutinized and attacked in follow-up cases in front of national or European courts. It is important to note that SGB regulations have never failed in front of the CJEU because they were lacking a legitimate objective, but rather because they were not considered adequate or necessary to attain their objectives. This stage of the analysis entails political considerations and a comparative analysis of the policy alternatives (and their feasibility) available to tackle a specific problem. In other words, it is not sufficient to claim that you can think in the abstract of a less restrictive alternative, you need to factually demonstrate that this less restrictive alternative is a credible candidate to attain the objective. This is obviously a difficult task for a lawyer. Furthermore, procedural considerations connected to the rulemaking process will come into play. If a sporting rule has been devised via an inclusive legislative procedure and finds broad support amongst the affected actors, then it will in turn be more likely to be deemed proportionate. Instead, if a rule is the result of a secretive, exclusive and authoritarian procedure, then it will be easier to challenge its proportionality. Thus, both substantial (effects-based) and procedural (legitimacy-based) considerations are key to evaluate the proportionality of the TPO ban.

The Panel insists first that the TPO ban has limited effects on the freedom to invest in football. Indeed, it finds that investors are not barred from investing in clubs or to finance specific operations (such as transfers), the ban is devised only to exclude certain types or modalities of investing.[14] On the procedural/legislative side, the Panel notes that the ban has been introduced after a broad consultation and on the basis of numerous, though unpublished, expert reports.[15] This positive assessment of the adoption process could be contested, especially because FIFA did not release the expert reports to the public, which were therefore not subjected to the critical scrutiny of their peers.  Moreover, the Panel takes due note of the relatively long experimentation of a lighter measure (article 18bis RSTP), which has proven inefficient to control the widespread recourse to TPO.[16] The question was then whether Seraing would be able to come up with a credible less restrictive alternative to rein the anarchic use of TPO in football. The Belgian club claimed that FIFA’s legitimate objectives could have been attained through regulation and measures improving transparency (very similar to La Liga’s argument here).[17] Nonetheless, the arbitrators noted that Seraing failed to specify the alternative measures it envisaged.[18] Instead, the Panel sided with FIFA in finding that it lacks the capacity and legal competence to properly police investors which are not subjected contractually to its disciplinary power.[19] In such a context, the Panel finds that the risks of conflicts of interests stemming from TPO contracts cannot be properly controlled by FIFA and the national federations, and the alternative measures proposed by Seraing are bound to fail.[20] Finally, the Panel also referred to the previously existing bans in France, England and Poland, insisting that FIFA was also aiming at harmonizing the rules applicable to the transfer market in Europe to alleviate any potential discrimination.[21] Hence, the arbitrators conclude that the ban is a proportionate restriction to art. 63 TFEU and compatible with EU law. While the Panel doubts that the TPO ban has substantial restrictive effects on the free movement of players and on the freedom to provide services of agents,[22] in any case it refers to its findings under art. 63 TFEU to conclude that it must be held proportionate.[23]

Regarding the compatibility of the ban with EU competition law, Seraing argued that it constitutes an unlawful restriction to free competition under article 101 TFEU and an abuse of a dominant position under article 102 TFEU. The CAS deemed (uncontroversially) FIFA an association of undertaking for the purpose of article 101 TFEU and recognized that the TPO ban affects trade between the Member States.[24] However, the arbitrators emphasized that Seraing bears the burden of proving that the ban constitutes a restriction by object or effect of free competition in the internal market.[25] In that regard, the CAS referred to the CJEU’s analytical framework developed in its Wouters case.[26] It concluded, referring to its previous holdings, that the ban had legitimate objectives and was necessary to attain them, and therefore did not constitute a restriction in the sense of article 101 (1) TFEU. As far as the abuse of a dominant position is concerned, after criticizing the lack of serious economic analysis by the appellant,[27] the Panel simply reiterated its previous findings regarding the legitimate objectives and proportionality of the ban.[28] 

The CAS swiftly rejected all the other arguments raised by Seraing on the basis of the EU’s Fundamental Rights Charter,[29] the European Convention of Human Rights,[30] and Swiss law.[31] Nonetheless, it did held that the sanction imposed on Seraing by the FIFA Disciplinary Committee was too stringent in light of the proportionality principle and reduced Seraing’s transfer ban to three windows and a fine of CHF 150.000.[32]

III.           Conclusion

Doyen lost a new battle and, while the war is still raging on, the controversial company is slowly starting to run out of legal ammunitions to challenge FIFA’s TPO ban. I have explained elsewhere why I believe the ban to be compatible with EU law and many of the arguments of the CAS in this award resonate with my own views.  Yet, though I think banning TPO is a step in the right direction to a healthier transfer market, I also believe that FIFA is artificially sustaining a transfer market that leads to the shadowy financiarization of football brutally exposed in the recent football leaks. In other words, the fact that a challenge against articles 18bis or 18ter fails does not mean that the whole RSTP is compatible with EU law, and for various reasons I believe that the current article 17RSTP is likely to fall foul of the EU internal market rules.[33]

The broader lesson of this TPO saga is that EU law is (at last) becoming a potent tool to challenge SGBs and their rules at the CAS. However, EU law is not blind to the necessary regulatory function they exercised vis-à-vis transnational sporting activities. What EU law targets is the SGBs’ illegitimate, disproportionate, and abusive regulatory behaviour to the detriment of the affected actors. When invoking EU law, sports lawyers must be aware of the need to show concretely the disproportionate nature of the rule or decision challenged. This is a heavy evidentiary burden. In other words, one cannot be satisfied with simply pointing out a restrictive effect, instead an interdisciplinary engagement with the economic and social effects of a regulation as well as with its legislative process is in order.

On a final note, I am truly pleased to see that the CAS is finally taking EU law a bit more seriously. This is a giant step forward, which will protect its awards from challenges in front of national courts, foster its reputation in Europe’s legal communities, and empower it as a counter-power inside the system of the lex sportiva. I urge the CAS to fully embrace this change and to continue to thoroughly assess the EU law compatibility of the sporting rules challenged in front of it. In this regard, it should keep in mind that the more these rules are the result of a deliberative and inclusive (in a way democratic) transnational legislative process, the more they can be deemed legitimate in the eyes of EU law…and vice versa.

[1] TAS 2016/A/4490 RFC Seraing c. FIFA, 9 mars 2017, para. 73 : « La Formation arbitrale considère que le droit de l’Union Européenne (« droit de l’UE »), dont notamment les dispositions des traités en matière de liberté de circulation et de droit de la concurrence, doivent être prises en compte par la Formation arbitrale, dans la mesure où elles constituent des dispositions impératives du droit étranger au sens de l’article 19 de la Loi fédérale sur le droit international privé du 18 Décembre 1987 (« LDIP »).

[2] This English translation is taken from CAS 2016/A/4492 Galatasaray v. UEFA, 23 juin 2016, para. 43.

[3] TAS 2016/A/4490 RFC Seraing c. FIFA, para. 76. The French version reads as follows :

i.       Les dispositions de droit européen, concernant notamment le droit de la concurrence et les libertés de circulation, sont communément considérées comme des règles impératives par les juridictions de l’Union et la doctrine ;

ii.     Les relations étroites entre (a) le territoire sur lequel le droit européen est en vigueur et (b) l’objet du litige, tiennent au fait que la mise en cause de la légalité du RSTJ a un impact évident sur le territoire européen. En effet, le RSTJ vise à réguler l’activité des clubs de football, dont de nombreux clubs européens. De plus, la Décision attaquée affecte notamment la participation du RFC Seraing à des compétitions se déroulant sur le sol européen.

iii.    Enfin, l’ordre juridique suisse partage les intérêts et valeurs protégées par le droit européen et notamment les dispositions de droit européen en matière de droit de la concurrence et de libertés de circulation.

[4] See B. van Rompuy, The role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations. In general, see S. Weatherill, European Sports Law, Asser Press, 2014. For my take on the centrality of EU law to exercise a ‘counter-democratic’ check on the lex sportiva, see my PhD thesis (in French) available here.

[5] See crucially CJEU, Meca Medina, 18 July 2006, ECLI:EU:C:2006:492, para.42.

[6] See TAS 2016/A/4490 RFC Seraing c. FIFA, paras 90-144

[7] Ibid., para.97.

[8] Ibid., para 101. En l'espèce la FIFA invoque plusieurs objectifs poursuivis par les mesures en cause, et qu’il convient de reprendre : la préservation de la stabilité des contrats de joueurs , la garantie de l'indépendance et l'autonomie des clubs et des joueurs en matière de recrutement et de transferts, la sauvegarde de l'intégrité dans le football et du caractère loyal et équitable des compétitions, la prévention de conflits d'intérêts et le maintien de la transparence dans les transactions liées aux transferts de joueurs.

[9] Ibid., paras 102-104.

[10] Ibid., paras 105-106.

[11] Ibid. para. 107.

[12] Ibid., para.108.

[13] See J. Lindholm, Can I please have a slice of Ronaldo? The legality of FIFA’s ban on third-party ownership under European union law and S. Egger, Third-party Ownership of Players’ Economic Rights und Kartellrecht, in K. Vieweg, Inspirationen des Sportrechts, Duncker & Humblot, Berlin, 2016, pp.307-331.  

[14] TAS 2016/A/4490 RFC Seraing c. FIFA, paras 109-112

[15] It refers to “une phase significative d’étude, de consultation, de travaux et discussions à laquelle ont participle de nombreux interlocuteurs”, at Ibid., para.113.

[16] Ibid., para.114.

[17] Ibid., para. 116.

[18] Ibid.

[19]“La FIFA ne peut pas contrôler les intérêts de personnes qui ne lui sont pas affiliées, ni les contrats qui sont conclus à l'occasion ou à la suite de transferts par d'autres personnes que les clubs, joueurs et agents et dont la déclaration est obligatoire via le TMS.” Ibid., para.117.

[20] Ibid., para.118.

[21] Ibid., para. 120.

[22] Ibid., paras 125-127.

[23] Ibid., para. 128.

[24] Ibid., para. 135.

[25] Ibid., para. 137.

[26] Ibid., para. 138.

[27] Ibid., para. 142.

[28] Ibid., para. 143.

[29] Ibid., paras 145-148.

[30] Ibid., paras 149-151.

[31] Ibid., paras 152-161.

[32] Ibid., paras 167-179.

[33] On this see R. Parrish, Article 17 of the Fifa Regulations on the Status and Transfer of Players : Compatibility with EU Law and G. Pearson, Sporting Justifications under EU Free Movement and Competition Law: The Case of the Football ‘Transfer System’.

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

1.     Introduction

The surge of e-sports has stimulated a lively discussion on the essential characteristics of sport and whether e-sports, in general, can be considered a sport. However, one should not overlook the fact that e-sports encompass a broad range of video games that fundamentally differ from one another. Thus, as one commentator recently underlined, “the position of video games and the e-sport competitions based on them should be analysed on a case-by-case basis.”[1] In this spirit, this blog aims to provide a concise analysis of one of these e-sports, League of Legends (LoL), and one of its main competitions, the League of Legends European Championship (LEC), to assess whether it could be considered a sport in the sense of EU law. The LEC offers a fascinating opportunity to examine this issue especially since the previous European League of Legends Championship Series (EU LCS) was rebranded and restructured this year into the LEC.

2.     What is League of Legends and the LEC?

At the time of writing, LoL released nearly a decade ago by Riot Games (a game developer based in the USA) and rapidly became one of the most played video games in the world due in part to its free to play business model. This means that anyone can download and play LoL on their computer without ever having to pay anything. In-game microtransactions exist but do not provide any competitive advantage. The game itself involves two teams of five players who each control a ‘champion’, which are characters in the game that each possess unique abilities. A team only wins when it has destroyed the enemy base (‘nexus’). The game is not only a popular video game, but it is a popular e-sport. The most recent world championships finals attracted 99.6 million unique viewers. While these numbers are greatly due to its popularity in China and South Korea, there is also a sizeable European viewership of LoL. For example, the LEC regular season matches have reached a record-breaking 355,000 concurrent viewers in its 2019 spring competition.

The LEC is LoL’s highest level of European competition and is owned and organised by Riot Games who establishes and enforces the rules which apply to the teams participating in the LEC. Consequently, Riot Games is truly at the apex of professional LoL in Europe by setting both the in-game parameters (the rules of the game) and the regulations that govern its competitive play. As explained earlier, Riot Games restructured and rebranded its previous European competition, EU LCS, into the LEC. While previously the EU LCS was characterised by a pyramid structure with a promotion and relegation system familiar to the European sports world, the LEC introduced a franchise model to follow its sibling competition in North America, the League Championship Series (LCS). The LEC itself is a limited liability company registered in the Republic of Ireland as League of Legends European Championship Limited.[2] The LEC buy-in fee for teams already in the EU LCS was reportedly set at 8 million euros and 10.5 million euros for those outside the EU LCS. Additionally, big brands such as KIA, Shell, Foot Locker and Red Bull sponsor the LEC and are featured during the broadcast. Besides being produced and diffused weekly by the official Riot Games English broadcast team in a professional studio in Berlin on Twitch (an online video game livestreaming service) and YouTube, the LEC partners with other official broadcasters who provide coverage of the matches in other languages (French, Spanish, Polish, German, Italian). Nevertheless, before examining the LEC’s position under EU law, a review of the broader arguments on the fundamental traits of sport will contextualise the Court of Justice of the European Union’s (CJEU) interpretation of the concept of sport.

3.     Is LoL played in the LEC a sport competition?

The academic discourse on the definition of sport has provided a plethora of elements and conditions for an aspiring sport to meet in order to be considered a ‘real’ sport. Needless to say, this blog will not be able to address all of them. However, the characteristics identified by Suits and elaborated by Jenny et al. and Abanazir are a good starting point for this brief review.[3] Suits explains that sports are in essence games that require skill, where the skill requires physicality, that the game have a wide following, and that this following have a certain level of stability. Abanazir delved into the concept of stability in the e-sports context by explaining institutionalisation’s central role in achieving permanence.

On the first requirement, there is very little room to argue that professional LoL does not require a great amount of skill. Suits explains that games of skill provide ‘unnecessary obstacles’ (in relation to daily life) “to realize capacities not otherwise realizable” that do not rely on pure chance.[4] Playing LoL is not in any way a necessary part of human life, yet many players practicing LoL play to refine and improve their mechanical skill (the physical element of the game, e.g. muscle memory and reflexes). Chance sometimes plays a role in LoL, but it is rarely a decisive factor in determining the outcome of a competitive match. Generally, Riot Games has taken steps over the years to limit the elements of pure luck in its game.

The role of physical motor skills in e-sports has been explained in detail by van Hilvoorde and Pot, and this blog will not dive into the arguments on whether actions taken in a video game can be considered taking place in the ‘real’ world.[5] Assuming that it does, the skill required in LoL is intrinsically connected to its physicality. LoL is played on a computer with a mouse and a keyboard. High level play requires precise movement of the arm, wrist and/or hand to most effectively control one’s character with the mouse. Additionally, the clicks and inputs registered by one’s fingers on the mouse and keyboard must be timed precisely and with enough practice these movements become muscle memory. The classic example of a game that does not require this sort of physicality is chess because the manner in which one moves a chess piece from a to b does not affect the result of the game. On the other hand, LoL demands precise and timed movements of the player’s arms, wrists, and/or fingers to be played optimally. One can be a LoL strategic genius but without a sufficient level of mechanical skill, it is impossible to become a professional LoL player.

Next, a large following is probably the easiest criteria for LoL and the LEC to fulfil. Between the large viewership that watch the LoL events online and the thousands of spectators that come to watch the championships live, there is very little doubt that LoL and the LEC have a wide following at the moment. However, this point leads into the next element which arguably may be the hardest criteria for it to satisfy in the long term: stability.

Video games and consequently, e-sports, generally reach a point where they have achieved their max popularity and eventually begin to lose players and viewers. Often times, this is the result of newly released video games pushing older and ‘outdated’ games out of the spotlight. LoL has remained at the forefront of e-sports for nearly a decade and there is little suggestion that this will change in the near future. Part of this is Riot Games’ continued support of LoL by regularly updating the game. Updates are released nearly every other week and can range from graphical improvements, balancing the game to ensure the viability of new strategies, the introduction of new champions (currently 143 champions) and tweaks that improve the way the game runs on the computer. Abanazir describes that changes such as these “present a double-edged sword” because while they keep the game fresh for players, they can result in drastic changes to the best strategies (meta) to win the game.[6] Thus, professional teams and players must continually adapt their play to conform to the meta. Nevertheless, updates have never fundamentally changed the goal and overall ‘rules’ of the game. Professional LoL is always two teams of five players, each controlling one champion, aiming to destroy the enemy nexus.

From an outsider’s point of view, it may seem that the constant flux of the meta would truly damage any of LoL’s claim to stability. However, in this context, it is imperative to highlight the institutionalisation of the LEC. Institutionalisation describes the appearance of “standardisation of rules, the formalisation of learning of the games, the development of expertise and finally the emergence of coaches, trainers, officials and governing bodies.”[7] The very fact that the meta often changes have pushed professional teams to hire analysts that review the team’s play and are constantly searching for new and creative ways to play LoL. Additionally, all professional teams have at least one coach who not only define the team’s strategy before each game, but also ensure that players observe strict practice schedules. During LEC matches, referees (Riot Games employees) are always present in order to ensure that the LEC rules are observed, which greatly lends to the idea of a ‘standardisation’ of the rules.[8] In fact, Riot Games directly state that the creation of the LEC Rulebook is to help “unify and standardize the rules used in competitive play.”[9] From this outline, there are many indications that the LEC and LoL have many of the characteristics of a sport and currently have achieved a certain amount of stability and institutionalisation. The true test will be whether these structures continue to last as they have been developed and implemented over the past eight years.

4.     A Sport under EU Law?

Recently, the Court of Justice of the European Union (CJEU) ruled on whether the English Bridge Union could benefit from a sports exemption under the VAT Directive and in doing so examined the concept of sport under that Directive.[10] Furthermore, in this case, Advocate General (AG) Szpunar provided an enlightening opinion to the Court examining the concept of sport in the context of the VAT exemption.[11] Both provide a good opportunity to infer how the Court would perhaps go about determining whether the LEC is a sport competition under EU law. This being said, the sport exception in the current VAT Directive would not apply to the LEC since Article 132 (1) (m) applies only to services provided by non-profit organisations. Nonetheless, should League of Legends European Championship Limited eventually restructure into a non-profit, it would not be far-fetched to imagine a situation in which it would seek to have VAT reimbursed from authorities under a sports exception in the future. After all, Riot Games has repeatedly stated that it does not make a profit on its e-sport activities.[12]

The AG’s opinion began by explaining that the concept of sport in the exemption should be “interpreted in a narrow manner, while bearing in mind the purpose and objective of the exemption.”[13] From this it is clear that the analysis of the concept of sport differs depending on the applicable provision, which could mean that the LEC could be considered a sport competition under one provision and a purely economic activity in another context. The AG goes on to identifying elements which preclude an activity from being considered a sport and states that “where a physical element is not necessary, sport is defined by competition and the fact that equipment is provided by not just one supplier -  which excludes activities without a broad basis in civil society, such as commercial products in the market place, designed by firms for pure consumption (for instance video games).”[14] If this interpretation of the concept of sport had been endorsed by the CJEU, it would have constituted a tremendous obstacle for the LEC. Indeed, if the ‘equipment’ also encompasses the game itself, it is impossible to argue that Riot Games does not hold a monopoly over the supply of LoL. Moreover, Riot Games has made and continues to support LoL in order to make money. In analysing this opinion, Abanazir explains the core issue well: “e-sport competitions based on video games created for purely consumption purposes and organised by persons aimed to profit from these activities may find themselves out of the scope as they are perceived to be devoid of social function.”[15] Indeed, it can seem difficult for the LEC and LoL to argue that it has a deeper ‘social function’ but perhaps this requirement might not be completely insurmountable. An argument could be made that the e-sports aspect of LoL is not only a commercial product made for pure consumption especially because LoL is a free to play game, and Riot Games does not seem to be making any profit in its e-sport related activities. Riot Games and the LEC have also taken steps to enhance the social function of LoL by investing in regional leagues to develop local talent.

In its ruling on the Bridge case, the CJEU sidelined the AG’s approach and decided to focus on a physicality requirement. The Court, in examining the specific VAT provision, found that sport must be “characterised by a not negligible physical element,” and the fact that an activity has elements of competition, professionality and organisation were not deemed sufficient to argue that the activity is a sport for the VAT exemption.[16] Physicality was the central criteria in the CJEU’s interpretation of the concept of sport, but in doing so, it did not give any further clarity as to the threshold of physicality required for an activity to benefit from the VAT sport exemption. It has already been contended above that LoL does have a clear physical element which is intrinsically connected to the game’s skill, yet the question remains whether the physicality would be considered more than negligible by the CJEU.

In summary, if LoL and the LEC were to be examined under the VAT Directive sport exemption, it would be confronted with several challenges. The approach endorsed in the AG’s opinion would have been the most problematic since LoL is mainly a commercial product designed to attract consumers and ultimately profit a private company. However, the CJEU chose to focus its interpretation of the concept of sport on a physicality criterion. This decision may give the LEC a wide enough window to argue that the fine motor skills involved in LoL are enough to fulfil this condition.

5.     Conclusion

In its current form, the LEC would not be able to benefit from the sport exemption in the VAT Directive, but this is just one provision of EU law, and there could be other opportunities where it could attempt to claim to be a sport. In the meantime, this gives an opportunity to Riot Games to continue to develop and emphasise the social function of its e-sports competitions, which might entail building a not-for-profit entity to run the competition and to strengthen the redistribution of economic gains to the grassroots. In any case, LoL and the LEC share many characteristics with established sports, but it remains to be seen if this will be enough to boost its recognition as a ‘real’ sport in law and society.

[1] Cem Abanazir, ‘E-sport and the EU: the view from the English Bridge Union’ (2019) International Sports Law Journal 102.

[2] ‘LEC Rules’ (LoLEsports).

[3] William Morgan, Ethics in Sport (3rd edn, Human Kinetics 2018) ch 1: Elements of Sport by Bernard Suits; Seth Jenny et al., ‘Virtual(ly) Athletes: Where eSports fit within the definition of “Sport”’(2016) Quest 1; Cem Abanazir, ‘Institutionalisation in E-Sports’ (2019) Sport, Ethics and Philosophy 117.

[4] Morgan (n 3) ch 1.

[5] Ivo van Hilvoorde and Niek Pot, ‘Embodiment and fundamental motor skills in eSports’ (2016) Sports, Ethics and Philosophy 14.

[6] Abanazir (n 3).

[7] Jenny et al. (n 3); Abanazir (n 3).

[8] See LEC Rulebook Art. 8.15.

[9] LEC Rules (n 2).

[10] Case C-90/16 The English Bridge Union Limited v Commissioners for Her Majesty’s Revenue & Customs ECLI:EU:C:2017:814.

[11] Case C-90/16 The English Bridge Union Limited v Commissioners for Her Majesty’s Revenue & Customs ECLI:EU:C:2017:814, Opinion of AG Szpunar.

[12] Steven Asarch, ‘“League of Legends” cuts esports budget, can Riot Games bounce back?’ (Newsweek, 28 August 2018); Derrick Asiedu head of Global Events at Riot Games confirmed this in a Reddit post: “We’re a long way from breaking even (revenue minus cost equalling 0)”.

[13] English Bridge Union Opinion (n 11) para 21.

[14] English Bridge Union Opinion (n 11) para 38.

[15] Abanazir (n 1).

[16] English Bridge Union (n 10) para 19, 25.

Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines 

Caster Semenya learns that it is not always easy for victims of discrimination to prevail in court

The world of sport held its breath as the Secretary General of the Court of Arbitration for Sport (CAS) Matthieu Reeb stood before the microphones on 1 May 2019 to announce the verdict reached by three arbitrators (one of them dissenting) in the landmark case involving the South African Olympic and world champion Caster Semenya. Somewhat surprisingly, the panel of arbitrators came to the conclusion that the IAAF’s regulations requiring female athletes with differences of sexual development to reduce their natural testosterone level below the limit of 5 nmol/L and maintain that reduced level for a continuous period of at least six months in order to be eligible to compete internationally at events between 400 metres and a mile, were necessary, reasonable and proportionate to attain the legitimate aim of ensuring fair competition in female athletics, even though the panel recognised that the regulations were clearly discriminatory. Ms Semenya’s legal team decided to file an appeal against the ruling at the Swiss Federal Tribunal. For the time being, this appears to be a good move since the tribunal ordered the IAAF at the beginning of June to suspend the application of the challenged regulations to Ms Semenya with immediate effect, which means that Ms Semenya for now continues to run medication-free.

Champions League ban looms on Manchester City

On 18 May 2019, Manchester City completed a historic domestic treble after defeating Watford 6-0 in the FA Cup Final. And yet there is a good reason to believe that the club’s executives did not celebrate as much as they would under normal circumstances. This is because only two days before the FA Cup Final the news broke that the chief investigator of the UEFA Club Financial Control Body (CFCB) had decided to refer Manchester City’s case concerning allegations of financial fair play irregularities to the CFCB adjudicatory chamber for a final decision. Thus, the chief investigator most likely found that Manchester City had indeed misled UEFA over the real value of its sponsorship income from the state-owned airline Etihad and other companies based in Abu Dhabi, as the leaked internal emails and other documents published by the German magazine Der Spiegel suggested. The chief investigator is also thought to have recommended that a ban on participation in the Champions League for at least one season be imposed on the English club. The club’s representatives responded to the news with fury and disbelief, insisting that the CFCB investigatory chamber had failed to take into account a comprehensive body of irrefutable evidence it had been provided with. They eventually decided not to wait for the decision of the CFCB adjudicatory chamber, which is yet to be adopted, and meanwhile took the case to the CAS, filing an appeal against the chief investigator’s referral.

The Brussels Court of Appeal dismisses Striani’s appeal on jurisdictional grounds

The player agent Daniele Striani failed to convince the Brussels Court of Appeal that it had jurisdiction to entertain his case targeting UEFA’s financial fair play regulations. On 11 April 2019, the respective court dismissed his appeal against the judgment of the first-instance court without pronouncing itself on the question of compatibility of UEFA’s financial fair play regulations with EU law. The court held that it was not competent to hear the case because the link between the regulations and their effect on Mr Striani as a player agent, as well as the link between the regulations and the role of the Royal Belgian Football Association in their adoption and enforcement, was too remote (for a more detailed analysis of the decision, see Antoine’s blog here). The Brussels Court of Appeal thus joined the European Court of Justice and the European Commission as both these institutions had likewise rejected to assess the case on its merits in the past.

Sports Law Related Decisions

• Court of Justice of the European Union (General Court) – Judgment in the case Real Madrid Club de Futbol v European Commission

Official Documents and Press Releases

CAS

• CAS – Caster Semenya, Athletics South Africa (ASA) and International Association of Athletics Federation (IAAF): Decision
• CAS – Caster Semenya, Athletics South Africa (ASA) and International Association of Athletics Federation (IAAF): Executive summary
• CAS – Decision in the arbitration procedure between Worawi Makudi and FIFA: Sanction reduced
• CAS – Elections of the Board Members of the International Council of Arbitration for Sport (ICAS)
• CAS – Weighlifters Mikalai Novikau and Ruslan Nurudinov found to have committed anti-doping rule violations at the London 2012 Olympic Games

FIFA

• FIFA – Adjudicatory Chamber of the independent Ethics Committee sanctions Jose Maria Marin
• FIFA – FIFA Appeal Committee confirms ban imposed on Marco Polo Del Nero
• FIFA – FIFA Appeal Committee passes decision on appeal lodged by Chelsea FC
• FIFA – FIFA World Cup Qatar 2022 to be played with 32 teams
• FIFA – Nine individuals sanctioned for match manipulation
• FIFA – RSC Anderlecht and Belgian Football Association sanctioned for international transfers of minors
• FIFA – Worldwide extension of suspension imposed on intermediaries Carmine and Vincenzo Raiola

IOC

• IOC – From food and uniforms to sponsorship deals: IOC guides to help the Olympic Games and the sports sector adopt sustainable sourcing practices
• IOC – Future Olympic Games elections to be more flexible
• IOC – Independent research conducted on behalf of the IOC demonstrates global strength of the Olympic values
• IOC – IOC Evaluation Commission 2026 begins working visit to Milan-Cortina
• IOC – IOC Evaluation Commission confirms passion and expertise of Milan-Cortina project shaped by Olympic Agenda 2020
• IOC – IOC Executive Board proposes 10 new members for election to the IOC Session
• IOC – IOC releases Evaluation Commission 2026 report
• IOC – IOC sanctions one athlete for failing anti-doping tests at London 2012
• IOC – IOC sanctions two athletes for failing anti-doping tests at London 2012
• IOC – Uncovered: The work and value of the IOC Athletes’ Commission

UEFA

• UEFA – AC Milan referred to CFCB Adjudicatory Chamber
• UEFA – CFCB update on 2018/19 monitoring of clubs under FFP settlements
• UEFA – FK Vardar and PFC Levski Sofia avoid potential exclusion from UEFA club competitions
• UEFA – Law changes to apply from 25 June in UEFA competitions
• UEFA – Manchester City referred to CFCB Adjudicatory Chamber
• UEFA – Three clubs exit FFP settlement agreement
• UEFA – Time for Action: First ever UEFA women’s football strategy launched

WADA

• WADA – Timor-Leste becomes 188^th country to ratify UNESCO Anti-Doping Convention
• WADA – WADA announces self-suspension of the Helsinki laboratory
• WADA – WADA congratulates Presidential nominee Witold Banka
• WADA – WADA Foundation Board moves forward with implementation of governance reforms
• WADA – WADA hails 30^th Anniversary of Council of Europe Anti-Doping Convention
• WADA – WADA publishes four new Technical Documents
• WADA – WADA publishes independent report into allegations of improper conduct
• WADA – WADA publishes revised International Standard for Laboratories
• WADA – WADA publishes Stakeholder Notice regarding meat contamination
• WADA – WADA reinstates Bucharest Laboratory
• WADA – WADA statement on refusal of Beckie Scott and Edwin Moses to cooperate with independent investigation
• WADA – WADA successfully retrieves samples from Moscow Laboratory
• WADA – WADA welcomes significant decision by Court of Arbitration for Sport

Other

• AIU (Athletics Integrity Unit) – After Ukraine sprinters’ ban, AIU to extend its blood profiling strategy ahead of the IAAF World Championships Doha 2019
• AIU (Athletics Integrity Unit) – Athletics Integrity Unit and Abbott World Marathon Majors announce new intelligence and testing programme in groundbreaking anti-doping initiative
• Centre for Sport and Human Rights – Mapping accountability and remedy mechanisms for sport
• CIES Football Observatory World football expatriates: Global study 2019
• CIES Sports Intelligence – Governance and financial landscape of top European football clubs
• Council of Europe Ground-breaking international treaty on match-fixing to enter into force in September
• Human Rights Watch – Belarus: Use European games to spur media freedom
• IAAF – IAAF letter to the World Medical Association
• IAAF – IAAF publishes briefing notes and Q&A on female eligibility regulations
• TIU (Tennis Integrity Unit) – Benjamin D’Hoe suspended and fined for betting on tennis
• TIU (Tennis Integrity Unit) – Brazilian tennis player Joao Souza provisionally suspended by independent Anti-corruption Hearing Officer
• TIU (Tennis Integirty Unit) – Independent Anti-corruption Hearing Officer suspends Osman Torski for breach of the Tennis Anti-corruption programme
• TIU (Tennis Integrity Unit) – Independent members appointed to the Supervisory Board for Tennis Integrity
• TIU (Tennis Integrity Unit) – Issam Taweel found guilty of match-fixing offences by independent Anti-corruption Hearing Officer
• TIU (Tennis Integrity Unit) – Lifetime ban and $20,000 fine for Helen Ploskina after being found guilty of match-fixing offences
• TIU (Tennis Integrity Unit) – Nigerian tennis player Henry Atseye provisionally suspended by independent Anti-corruption Hearing Officer
• TIU (Tennis Integrity Unit) – Suspended sentence and fine for Mohamed Safwat after failing to report corrupt approaches to the Tennis Integrity Unit
• TIU (Tennis Integrity Unit) – Tennis coach Miguel Tobon suspended and fined for selling wild cards
• TIU (Tennis Integrity Unit) – Tennis umpire Svetlana Teryaeva facing sanction after failing to report a corrupt approach to the Tennis Integrity Unit
• TIU (Tennis Integrity Unit) – The Tennis Integrity Unit and Marco Trungelliti
• UCI (Union Cycliste Internationale) – UCI declaration concerning E-mountain bike
• UCI (Union Cycliste Internationale) – UCI statement on Operation Aderlass
• UOKiK (Office of Competition and Consumer Protection in Poland) – UOKiK will inspect sports associations
• World Medical Association Physician leaders reaffirm opposition to IAAF rules

In the news

Doping

• ESPN Kenya’s Olympic track coach banned 10 years
• Sean Ingle World’s top marathon runners to face innovative anti-doping programme
• Duncan Mackay Critics of WADA decision to reinstate Russia care more about politics than clean sport, claims President Sir Craig Reedie
• Michael Pavitt Arrests made in France over alleged drug trafficking operation
• Michael Pavitt Biathlon Integrity Unit to be set up by IBU in response to doping, fraud and corruption allegations
• Eddie Pells Polish minister to lead WADA; outspoken candidate sidelined
• Dan Roan US proposes making WADA funding conditional on governance reforms and greater transparency
• Gabrielle Tetrault-Farber Russian anti-doping chief calls for dismissal of athletics federation head

Football

• Associated Press FIFA bans South Sudanese official for taking soccer money
• BBC Sport Mino Raiola: Paul Pogba’s agent banned for three months by FIFA
• Andy Brown Bulgaria relegates FC Vereya on receipt of UEFA match-fixing information
• David Conn 2022 World Cup in Qatar to remain as a 32-team tournament, FIFA announces
• David Conn Manchester City accuse UEFA of leaks amid Champions League ban threat
• David Conn Manchester City furious after UEFA investigation is sent for final judgment
• David Conn Premier League clubs’ record £4.8 billion revenues widens gap to rest of Europe
• David Conn Premier League finances: The full club-by-club breakdown and verdict
• David Conn Promotion and relegation part of explosive Champions League plans
• Marina Hyde UEFA’s ‘parking ticket’ fines will not rein in football’s maverick clubs
• Sean Ingle Manchester City and PSG should be thrown out of Europe, says La Liga president
• Amy Lawrence and Sean Ingle Arsenal’s Henrikh Mkhitaryan to miss Europa League final over safety fears
• Liam Morgan Sierra Leone could be welcomed back by FIFA after president and secretary general cleared of corruption
• Tariq Panja A trove of FIFA secrets, locked inside a New Jersey storage locker
• Tariq Panja Bundesliga’s chief executive isn’t keen to join Premier League
• Tariq Panja China’s soccer push takes a new tack: Naturalizing foreign players
• Tariq Panja FIFA drops plan for 48-team World Cup in 2022
• Tariq Panja For Europe’s soccer chief, the outrage arrives in waves
• Tariq Panja In Europe, a bitter battle between clubs and leagues is taking shape
• Tariq Panja In soccer’s biggest elections, accusations are common but challengers are not
• Tariq Panja Powerful Sheikh linked to bribe scheme is still a soccer power
• Tariq Panja Proposal to restructure Champions League leaves out most of Europe
• Tariq Panja Sepp Blatter, who departed FIFA in scandal, wants the watches he left at the office
• Tariq Panja She has friends at FIFA. At home, it’s mostly critics.
• Tariq Panja UEFA investigators set to seek Manchester City’s ban from Champions League
• Martyn Ziegler Europa League final: Azerbaijan, the host country where journalist Rasim Aliyev was killed for criticising Azerbaijan midfielder Javid Huseynov 

Other

• Eyewitness News Kenya drops two female sprinters over testosterone levels
• Nancy Gillen FIVB to refer human rights abuse allegations surrounding Cambodian Volleyball Federation President to ethics panel
• Mark Gleeson South African government instructs athletics body to appeal Semenya decision
• Gerald Imray Defiant Caster Semenya appeals testosterone ruling
• Sean Ingle AIBA threatens to sue IOC if stripped of right to run amateur boxing
• Sean Ingle AIBA stripped of right to run boxing tournament at Tokyo Olympics
• Sean Ingle BeIN Sports chief in World Athletics Championships corruption inquiry
• Sean Ingle Caster Semenya Q&A: The runner’s discrimination case explained
• Sean Ingle Semenya loses landmark legal case against IAAF over testosterone levels
• Sean Ingle Caster Semenya vs. IAAF: The inside story of sporting trial of the century
• Sean Ingle Caster Semenya to run in Doha as Sebastian Coe welcomes CAS ruling
• Duncan Mackay Italian government to sign IOC guarantees for Milan Cortina 2026, including EUR 415 million security budget
• Liam Morgan German athletes group steps up call for increased representation and bigger share of Olympic revenue
• Tariq Panja After Semenya ruling, sports federations ponder what’s next
• Tariq Panja Qatari executive is charged with corruption in IAAF scandal
• Michael Pavitt Bach tells athletes to begin negotiations with NOCs over Rule 40 restrictions
• Michael Pavitt GAISF considers establishing office to lobby European Union and create framework over third-party organisers
• Michael Pavitt UCI President fears ‘serious issue’ after arbitrators asked to choose between working exclusively for CAS or international federations
• Mike Rowbottom Message to the Olympic Movement in the face of new commercial threats – keep the athletes’ eyes on the golden prize
• Mike Rowbottom IOC maintains German athletes’ court decision over Rule 40 is ‘not generally applicable’
• Stephen Wade and Mari Yamaguchi IOC inspectors face report on tough Olympic work conditions
• Martyn Ziegler Sport won’t be overrun by intersex athletes, says Caster Semenya’s expert witness

Academic Materials

Books

•  Johan Lindholm The Court of Arbitration for Sport and its Jurisprudence: An Empirical Inquiry into Lex Sportiva

International Sports Law Journal

• H. Burak Gemalmaz Applicability of Human Rights Standards in Turkish Football Arbitration: The Contribution of the European Court of Human Rights
• Lloyd Freeburn The Fiction of Democracy in FIFA’s Governance of Football and the Case of Football Federation Australia
• Marlaina Lemmon Evening the Playing Field: Women’s Sport as a Vehicle for Human Rights
• Kendra Magraw Separation of Sport and State: Military Salutations at US Major League Soccer Events
• Daniel West Revitalising a Phantom Regime: The Adjudication of Human Rights Complaints in Sport

Other

• April Henning and Paul Dimeo Perceptions of Legitimacy, Attitudes and Buy-in Among Athlete Groups: A Cross-national Qualitative Investigation Providing Practical Solutions
• Seema Patel and Ian Varley Exploring the Regulation of Genetic Testing in Sport

Blog

Asser International Sports Law Blog

• Antoine Duval What Happens in Switzerland Stays in Switzerland: The Striani Judgment of the Brussels Court of Appeals
• Daniela Heerdt Will the World Cup 2022 Expansion Mark the Beginning of the End of FIFA’s Human Rights Journey?
• Thomas Terraz Can European Citizens Participate in National Championships? An Analysis of AG Tanchev’s Opinion in TopFit e.V. Daniele Biffi v Deutscher Leichtathletikverband e.V.
• Thomas Terraz League of Legends European Championships: Challenging the Boundaries of Sport in EU Law
• Marjolaine Viret How Data Protection Crystallises Key Legal Challenges in Anti-Doping

Law in Sport

• Jiri Janak Judicial oversight of sports associations in the Czech Republic – does the new Civil Code strike the right balance between autonomy and intervention?
• Lucio Mazzei The global development of women’s football – a review of the strategies being implemented by FIFA, UEFA and in Italy
• Adam Powell Stadium naming deals: Why clubs and sponsors should always consider their termination rights
• Andrew Reid Football kit supplier deals – lessons for clubs on ‘matching rights’ from the Sports Direct v Rangers FC case
• Celia Rooney Sex on a spectrum in the binary world of sport: The CAS’s decision in the case of Caster Semenya & Ors v the IAAF

Other

• Andy Brown Red herrings, dead cats, apples and oranges: The gender debate
• Steve Cornelius Caster Semenya: The legal and ethical issues that should concern us all
• Sam Knight How Football Leaks is exposing corruption in European soccer
• Steve Magness All of your questions answered on the Caster Semenya controversy
• Despina Mavromati FIM v. KMSC – Arbitration clause in the statutes of a sports federation and Article 75 Swiss Civil Code
• Michael McCann U.S. soccer, Relevent Sports and the legal battle over staging matches on USA soil
• Roger Pielke Jr Caster Semenya ruling: Sports federation is flouting ethics rules
• Roger Pielke Jr. Pielke comments on Semenya/ASA vs. IAAF

Upcoming Events

• 30 June -14 July – CLS Summer School 2019: Global Law of Sport, Patejdlova Bouda, Giant Mountains, Czech Republic
• 30-31 August – Third EU Sports Law and Policy Summer School, Edge Hill University, UK
• 12-13 September – Understand the Rules of the Game 2019: LawInSport Annual Conference, London, UK
• 27-28 September – 8^th International Congress on Football Law, Madrid, Spain
• 13-16 October – Play the Game 2019: Athlete Power on the Rise, Colorado Springs, USA
• 24-25 October – Third Annual International Sports Law Conference of the International Sports Law Journal, T.M.C. Asser Institute, The Hague, Netherlands

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.  

The Headlines

This month saw the conflict between FIBA Europe and the Euroleague (more precisely its private club-supported organizing body, Euroleague Commercial Assets or ‘ECA’) becoming further entrenched. This dispute commenced with FIBA creating a rival Basketball Champions League, starting from the 2016-2017 season with the hope to reinstate their hold over the organization of European championships. The ECA, a private body that oversees the Euroleague and Eurocup, not only decided to maintain its competitions but also announced it would reduce them to a closed, franchise-based league following a joint-venture with IMG. In retaliation, FIBA Europe suspended fourteen federations of its competition (with the support of FIBA) due to their support for the Euroleague project. More importantly, this suspension could concern the 2016 Rio Olympics and the Spanish title-holder whose federation backs up the ECA. In February 2016, the ECA announced it had filed a complaint before the European Commission against FIBA and FIBA Europe as a consequence of an alleged abuse of their dominant position in forcing national federations to rescind their participation in the Euroleague competitions. In response, FIBA filed a complaint in April against the ECA before the same European Commission for the same breach of EU competition law provisions. DG Competition is expected to decide on the opening of both cases unless the ongoing negotiations between both parties resolves these issues first.

Sport has placed a lot of emphasis on EU competition law in the past weeks. In a similar situation to basketball, the FEI is fighting the emergence of the successful Longines Global Champions League (‘LGCL’), a private worldwide horse jumping competition. The Belgian competition authority already granted interim measures to the LGCL in a dispute arising when the FEI tried to suspend riders and horses that were participating in the unsanctioned league from its own competitions. While still waiting for the final decision in the case, the FEI recently suspended two of its officials for six months following the first leg of the LGCL in Miami.

On the media selling rights front, the German competition authority has decided to impose the “no single buyer” obligation starting in 2017. This clause was first imposed by the European Commission as a remedy against the risk of monopolization in the Premier League selling media rights case. The rule is designed to ensure that more than one TV broadcaster will win all live broadcasting rights, changing the status quo in Germany which had previously awarded all broadcasting rights to Sky Deutschland. The decision was made in order to ensure that innovation on the Internet-based offering is not at risk.

The Greek government is involved in a bitter struggle with FIFA over its decision to cancel its national cup due to the crowd violence witnessed this season. FIFA provided the Greek authorities with a new deadline to change their decision, otherwise the national federation will face a suspension. An agreement between both parties seems to have been found.

Cases law

The very long awaited Hillsborough stadium disaster decision was delivered on the 26^th of April 2016. The jury in the inquest ruled that 96 persons were unlawfully killed 27 years ago and that the behaviour of Liverpool fans did not contribute to the disaster. The jury also said that the police’s planning for the match and actions on the day did contribute to the tragedy. The prosecutor now has to decide whether criminal charges should be brought against individuals or organizations.

The UK Information Tribunal ordered the London Legacy Development Corporation (‘LLDC’), which managed the London Olympic Stadium, to publish the deal it has with the West Ham football club concerning the use of the stadium. The LLDC was fighting a freedom of information campaign that argued there was not enough transparency concerning this contract. West Ham will move to the Olympic Stadium at the end of the season.

The Paris Court of Appeal decided that it was not necessary to refer for a preliminary ruling to the European Union Court of Justice and rejected the appeal relating to alleged violations of EU law by the now revoked FIFA Regulations on the Status and Transfer of Player concerning the players’ agents profession. This decision is probably the final point of the never-ending Piau case. FIFA first modified its provisions for players’ agents after the European Commission opened a case for an alleged breach of EU competition law. Mr. Piau contested the European Commission’s decision to close the investigation but both of its appeals at the European Court of Justice were rejected (see here and here).

The British Tax and Chancery Chamber of the Upper Tribunal referred a question for a preliminary ruling to the Court of Justice of the European Union relating to tax law. The CJEU will have to tackle the definition of sport in deciding whether bridge is a sport (Case C-90/16).

Official Documents and Press Releases

• “For the Game. For the World.” FIFA and Human Rights. John G. Ruggie

FCDnipro, InterBaku and Târgu Mureş decisions of Adjudicatory Chamber of UEFA's Club Financial Control Body for breaching FFP

Report of German FA on fees paid by German clubs to intermediaries in 2015

WADA suspends Beijing Laboratory for not meeting required standards

WADA notice on Meldonium

CAS award on the 8-year statute of limitations for re-analysing samples under the previous WADA code

The IOC's anti-doping rules for Rio2016

The UCI bans Femke Van den Driessche for 6 years in motor-doping case

 

In the news

Football

• Josu Alonso - El Sporting ¿puede recibir una sanción de la FIFA?

David Conn, Leicester City and the strange finances behind their rise to the Premier League pinnacle

Owen Gibson, Leaked documents raise the question: just how new is the new FIFA?

Christopher M. Matthews, Aruna Viswanatha and Joe Flint - U.S. Considers Role of Banks, Sponsors in Soccer Bribery Probe

Manuel Veth - Dinamo Moscow and GestiFute – A Deal with the Devil?

Sam Wallace - West Ham got a great deal with the Olympic Stadium, but other clubs have had it even sweeter

AFP - Fifa corruption scandal: US releases three guilty plea transcripts

AP - Uruguay: Former FIFA official ordered to house arrest

Reuters - Dozens of "trapped" players set to request release from Romanian clubs

Formula 1

• Alam Baldwin - Force India waiting on 2017 rules in EU complaint

Athletics

• Sean Ingle - Caster Semenya’s comeback puts her on course for Rio gold – and controversy

Tennis

• Reuters - Tennis-Australian Lindahl avoids jail for match-fixing

Olympics

• Stine Alvad - Olympic summer sports introduce new governance self-assessment tool

Robert Livingstone - Swiss Olympic Considers Agenda 2020, Sets Realistic Roadmap For Olympic Bidders

Caroline Stauffer - More Olympic projects under investigation for corruption - prosecutor

Others

• Margareta Baddeley - Important piece (in French) on need for (Swiss) court intervention in sport

Gerald Imray and Mutwiri Mutuota - WADA: Kenya has until May 2 or will be non-compliant

Kaypeem Mohan - The meldonium conundrum

Rebecca Ruiz - Swiss City Is ‘the Silicon Valley of Sports’

Michael Shields - Swiss crack down on bribery as 'Lex FIFA' set to take force

Academic materials

• Narelle Bedford and Greg Weeks, Doping in Sport: What Role for Administrative Law?

Girish Deepak, Compulsory consent in Sports Arbitration: Essential or Auxiliary

Antoine Duval, The FIFA Regulations on the Status and Transfer of Players: Transnational Law-Making in the Shadow of Bosman

Antoine Duval, Getting to the Games: Olympic Selection Drama(s) at the Court of Arbitration for Sport

Daniel Geey and Jonny Madill, What would Brexit really mean for the Premier League?

Tom Serby, The state of EU sports law: lessons from UEFA’s ‘Financial Fair Play’ regulations

Conor Talbot, The Role of Sport in the Recognition of Transgender and Intersex Rights

Anastasia Tsoukala, Geoff Pearson and Peter Coenen(Eds.), Legal Responses to Football Hooliganism in Europe

Oskar van Maren, EU State Aid Law and Professional Football: A Threat or a Blessing?

Ben Van Rompuy, The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations

Upcoming Events May and June

• 26 May – Asser International Sports Law Lecture: You’ve won before CAS, now how to make sure you get paid? By Fabrice Robert-Tissot. Asser Institute, The Hague, The Netherlands

• 9 June - Actualiteitencursus Internationaal Sportrecht. De Kempenaer Advocaten, Arnhem, The Netherlands

• 27 and 28 June - Sport & EU Conference 2016. Institute for European Studies, CEU-San Pablo University, Madrid, Spain

Last week, UEFA, presented its annual Club Licensing Benchmark Report, which analyses socio-economic trends in European club football. The report is relevant in regard to the FFP rules, as it has been hailed by UEFA as a vindication of the early (positive) impact of FFP. This blog post is a report on the report. We go back in time, analysing the last 5 UEFA Benchmarking Reports, to provide a dynamic account of the reports findings. Indeed, the 2012 Benchmarking Report, can be better grasped in this context and longer-lasting trends be identified.

For the footballing season 2013/14 seven clubs from five different countries had been excluded from European competition due to FFP (including Malaga, Rayo Vallecano and CSKA Sofia). Since 2004, 42 sanctions were handed out to 40 clubs (FC Irtysh from Kazakhstan and Bulgarian club CSKA Sofia have been sanctioned twice) spread over 21 different countries. Clubs from Kazakhstan have received most sanctions: seven in total.    

Over the last five years, €10.9 billion were spent on transfers by the European clubs. €8.4 billion were spend by clubs in the English, Italian, Spanish, German and Russian leagues.

The summer of 2013 saw a record of €3 billion being spend by European clubs on the transfers of players, 12% more than the previous record which was set in the summer of 2011.

In the last five years 166 players were transferred for €15 million or more, 63 were transferred to English clubs. Number two, Italy, bought 26, less than half.

The revenue for top division clubs was €14.1 billion in 2012, which is an increase of €800 million compared to 2011.

Total revenue has gone up for all six top divisions over the last five years. England had a total revenue of €2.44 billion in 2008 and a total revenue of €2.78 billion in 2012, an increase of 12.23%.

The biggest change is witnessed in Russia where revenue increased from €350 million in 2008 to €890 million in 2012. An increase of about 150%!

Compared to 2011, the domestic broadcasting revenue increased by 8% and the commercial & sponsor revenues increased by a combined 7% and is expected to continue. Nonetheless, gate receipts fell by 2%.

Player wages amounted to €9.2 billion in in 2012, an increase of €600 million compared to 2011, and €2.1 billion compared to 2008.

The last five years have seen a significant increase of wages namely 59% over the whole of Europe. In the top divisions a wage increase of 49% can be witnessed. The wage to revenue ratio is stabilised at 65%, the same percentage as in previous years, but differs from country to country

Out of the 50 clubs with the highest wage bills 15 were English, 8 German, 8 Italian, 6 Spanish, 6 Russian and 5 French.

Interestingly, in 56% of the time, the club with the highest wage bill in that particular division won the league. (In the 20 wealthiest leagues this percentage is 60%). The main exception is AC Milan, who has the highest wage bill in Italy, but has only won the league once in the last decade (2010/11). In 21% of the time, the club with the second highest wage bill in that particular division won the league.

The total top division club losses was found to be €1.1 billion in 2012, which is equivalent to an 8% loss margin. Even though the clubs still made losses, the final number is €600 million less compared to the €1.7 billion in 2011. 57% of all clubs reported losses, however, 58% of the clubs produced better numbers (higher profits or lower losses) than in 2011.

Do note that the net profit/loss after tax is not the same as the break-even result assessed for FFP purposes. For example, youth costs may be excluded for the break-even assessment but not for the net profit/loss assessment.

Only six of the 20 highest income leagues reported profits in 2012, namely the German, Dutch, Belgian, Austrian, Norwegian and Kazakh leagues. In total 38 out of 53 European leagues reported losses.