Asser International Sports Law Blog

Editor's note: We (Ben Van Rompuy and Antoine Duval) are at the origin of today's decision by the European Commission finding that the International Skating Union's eligibility rules are contrary to EU competition law. In 2014, we were both struck by the news that ISU threatened lifetime ban against speed skaters wishing to participate in the then projected Icederby competitions and convinced that it was running against the most fundamental principles of EU competition law. We got in touch with Mark and Niels and lodged on their behalf a complaint with the European Commission. Three years after we are pleased to see that the European Commission, and Commissioner Vestager in particular, fully embraced our arguments and we believe this decision will shift the tectonic structure of sports governance in favour of athletes for years to come.

Here is our official statement:

Today is a great day for Mark Tuitert and Niels Kerstholt, but more importantly for all European athletes. The European Commission did not only consider the International Skating Union's eligibility rules contrary to European law, it sent out a strong message to all international sports federations that the interests of those who are at the centre of sports, the athletes, should not be disregarded. This case was always about giving those that dedicate their lives to excelling in a sport a chance to compete and to earn a decent living. The majority of athletes are no superstars and struggle to make ends meet and it is for them that this decision can be a game-changer.

However, we want to stress that this case was never about threatening the International Skating Union’s role in regulating its sport. And we very much welcome the exceptional decision taken by the European Commission to refrain from imposing a fine which could have threatened the financial stability of the International Skating Union. The International Skating Union, and other sports federations, are reminded however that they cannot abuse their legitimate regulatory power to protect their economic interests to the detriment of the athletes.

We urge the International Skating Union to enter into negotiations with representatives of the skaters to devise eligibility rules which are respectful of the interests of both the athletes and their sport.

Since the summer of 2014, it has been our honour to stand alongside Mark and Niels in a 'David versus Goliath' like challenge to what we always perceived as an extreme injustice. In this fight, we were also decisively supported by the team of EU Athletes and its Chance to Compete campaign.

Finally, we wish to extend a special thank you to Commissioner Vestager. This case is a small one for the European Commission, but Commissioner Vestager understood from the beginning that small cases do matter to European citizens and that European competition law is there to provide a level playing for all, and we are extremely grateful for her vision.

Dr. Ben Van Rompuy (Leiden University) and Dr. Antoine Duval (T.M.C. Asser Instituut)

Editor's Note: Ryan Gauthier is Assistant Professor at Thompson Rivers University in Canada. Ryan’s research addresses the governance of sports organisations, with a particular focus on international sports organisations. His PhD research examined the accountability of the International Olympic Committee for human rights violations caused by the organisation of the Olympic Games.

Publicly Financing a Stadium – Back in the Saddle(dome)

Calgary, Canada, held their municipal elections on October 16, 2017, re-electing Naheed Nenshi for a third term as mayor. What makes this local election an interesting issue for sports, and sports law, is the domination of the early days of the campaign by one issue – public funding for a new arena for the Calgary Flames. The Flames are Calgary’s National Hockey League (NHL) team, and they play in the Scotiabank Saddledome. More...

Editor’s Note: Oytun Azkanar holds an LLB degree from Anadolu University in Turkey and an LLM degree from the University of Melbourne. He is currently studying Sports Management at the Anadolu University.

Introduction

On 19 October 2017, the Turkish Professional Football Disciplinary Committee (Disciplinary Committee) rendered an extraordinary decision regarding the fixing of the game between Manisaspor and Şanlıurfaspor played on 14 May 2017. The case concerned an alleged match-fixing agreement between Elyasa Süme (former Gaziantepspor player), İsmail Haktan Odabaşı and Gökhan Sazdağı (Manisaspor players). The Disciplinary Committee acknowledged that the evidence relevant for proving the match-fixing allegations was obtained illegally and therefore inadmissible, and the remaining evidence was not sufficient to establish that the game was fixed. Before discussing the allegations, it is important to note that the decision is not only significant for Turkish football but is also crucial to the distinction between disciplinary and criminal proceedings in sports. More...

Close to 100 participants from 37 different countries attended the first ISLJ Annual International Sports Law Conference that took place on 26-27 October 2017 in The Hague. The two-day programme featured panels on the FIFA transfer system, the labour rights and relations in sport, the protection of human rights in sport, EU law and sport, the Court of Arbitration for Sport, and the world anti-doping system. On top of that, a number of keynote speakers presented their views on contemporary topics and challenges in international sports law. This report provides a brief summary of the conference for both those who could not come and those who participated and would like to relive their time spent at the T.M.C. Asser Institute.More...

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. More...

Introduction

The first part of this two-part blog on multi-club ownership in European football outlined the circumstances leading to the adoption of the initial rule(s) aimed at ensuring the integrity of the UEFA club competitions (Original Rule) and retraced the early existence of such rule(s), focusing primarily on the complaints brought before the Court of Arbitration for Sport and the European Commission by the English company ENIC plc. This second part will, in turn, introduce the relevant rule as it is currently enshrined in Article 5 of the UCL Regulations 2015-18 Cycle, 2017/18 Season (Current Rule). It will then explore how the UEFA Club Financial Control Body (CFCB) interpreted and applied the Current Rule in the Red Bull case, before drawing some concluding remarks. More...

Editor’s note: Tomáš Grell holds an LL.M. in Public International Law from Leiden University. He contributes to the work of the ASSER International Sports Law Centre as a research intern.

Introduction

On 13 September 2017, more than 40,000 people witnessed the successful debut of the football club RasenBallsport Leipzig (RB Leipzig) in the UEFA Champions League (UCL) against AS Monaco. In the eyes of many supporters of the German club, the mere fact of being able to participate in the UEFA's flagship club competition was probably more important than the result of the game itself. This is because, on the pitch, RB Leipzig secured their place in the 2017/18 UCL group stage already on 6 May 2017 after an away win against Hertha Berlin. However, it was not until 16 June 2017 that the UEFA Club Financial Control Body (CFCB) officially allowed RB Leipzig to participate in the 2017/18 UCL alongside its sister club, Austrian giants FC Red Bull Salzburg (RB Salzburg).[1] As is well known, both clubs have (had) ownership links to the beverage company Red Bull GmbH (Red Bull), and therefore it came as no surprise that the idea of two commonly owned clubs participating in the same UCL season raised concerns with respect to the competition's integrity. More...

The Headlines

2024 and 2028 Olympic Games to be held in Paris and Los Angeles respectively

On 13 September 2017, the Session of the International Olympic Committee (IOC) held in Lima, Peru, elected Paris and Los Angeles as host cities of the 2024 and 2028 Olympic Games respectively. On this occasion, the IOC President Thomas Bach said that ''this historic double allocation is a 'win-win-win' situation for the city of Paris, the city of Los Angeles and the IOC''. The idea of a tripartite agreement whereby two editions of the Olympic Games would be awarded at the same time was presented by a working group of the IOC Vice-Presidents established in March 2017. Both Paris and Los Angeles have pledged to make the Olympic Games cost-efficient, in particular through the use of a record-breaking number of existing and temporary facilities. In addition to economic aspects, it will be worthwhile to keep an eye on how both cities will address human rights and other similar concerns that may arise in the run-up to the Olympic Games. More...

Editor’s note: Josep F. Vandellos Alamilla is an international sports lawyer and academic based in Valencia (Spain) and a member of the Editorial Board of the publication Football Legal. Since 2017 he is the Director of the Global Master in Sports Management and Legal Skills FC Barcelona – ISDE.

I think we would all agree that the reputation of players’ agents, nowadays called intermediaries, has never been a good one for plenty of reasons. But the truth is their presence in the football industry is much needed and probably most of the transfers would never take place if these outcast members of the self-proclaimed football family were not there to ensure a fluid and smooth communication between all parties involved.

For us, sports lawyers, intermediaries are also important clients as they often need our advice to structure the deals in which they take part. One of the most recurrent situations faced by intermediaries and agents operating off-the-radar (i.e. not registered in any football association member of FIFA) is the risk of entering in a so-called multiparty or dual representation and the potential risks associated with such a situation.

The representation of the interests of multiple parties in football intermediation can take place for instance when the agent represents the selling club, the buying club and/or the player in the same transfer, or when the agent is remunerated by multiple parties, and in general when the agent incurs the risk of jeopardizing the trust deposited upon him/her by the principal. The situations are multiple and can manifest in different manners.

This article will briefly outline the regulatory framework regarding multiparty representation applicable to registered intermediaries. It will then focus on provisions of Swiss law and the identification of the limits of dual representation in the light of the CAS jurisprudence and some relevant decisions of the Swiss Federal Tribunal.More...

The first part of this series looked at the legal framework in which FFP sits, concluding that FFP occupied a ‘marginal’ legal position – perhaps legal, perhaps not. Given the significant financial interests in European football – UEFA’s figures suggest aggregate revenue of nearly €17 billion as at clubs’ 2015 accounts – and the close correlation between clubs’ spending on wages and their success on the field,^{^[1]} a legal challenge to the legality of FFP’s ‘break even’ requirement (the Break Even Requirement), which restricts a particular means of spending, was perhaps inevitable.

And so it followed.

Challenges to the legality of the Break Even Requirement have been brought by football agent Daniel Striani, through various organs of justice of the European Union and through the Belgian courts; and by Galatasaray in the Court of Arbitration for Sport. As an interesting footnote, both Striani and Galatasaray were advised by “avocat superstar” Jean-Louis Dupont, the lawyer who acted in several of sports law’s most famous cases, including the seminal Bosman case. Dupont has been a vocal critic of FFP’s legality since its inception. More...

The European Commission has published the “Study on Sports Organisers’ Rights in the EU”, which was carried out by the ASSER International Sports Law Centre (T.M.C. Asser Institute) and the Institute for Information Law (University of Amsterdam).

The study critically examines the legal protection of rights to sports events (sports organisers’ rights) and various issues regarding their commercial exploitation in the field of media and sports betting, both from a national and EU law perspective.

In a number of posts, we will highlight some of the key findings of the study.

“It was Hyde, after all, and Hyde alone, that was guilty.”

In recent years, numerous national and European sports organisers have called for the adoption of a specific right to consent to the organisation of bets (“right to consent to bets”), by virtue of which no betting operator could offer bets on a sports event without first entering into a contractual agreement with the organiser.

A sports organisers’ right to consent to bets was first introduced in Victoria (Australia) in 2007. Yet it was the recognition of a similar right in France that created the true momentum for sports organisers to advocate its adoption at the EU or EU-wide national level. The argument is twofold. First, a right to consent to bets would entitle sports organisers to demand a “fair financial return” for the commercial exploitation of theirs sports events by betting operators. Second, it would establish a statutory obligation for betting operators to work in partnership with sports organisers to preserve the integrity of sports events. According to the contractual provisions agreed upon by the involved parties, mutual obligations (for e.g. fraud detection) and conditions of information exchange can be identified.

A restriction to the freedom to provide services?

From an EU internal market law perspective, it is important to note that the conditions implementing a right to consent to bets are capable of constituting a restriction of the free movement of services within the Union (within the meaning of Article 56 TFEU). Indeed, the requirement for betting operators to obtain consent for the organisation of sports bets could impede or render less attractive the free provision of gambling services.[1]

The Court of Justice (CJ) has consistently held that restrictions on gambling activities are acceptable only if justified by an imperative requirement in the general interest and compliant with the principle of proportionality. The CJ has accepted the prevention of fraud as a legitimate objective justification. The financing of public interest activities through proceeds from gambling services, on the other hand, can only be accepted as a beneficial consequence that is incidental to the restrictive policy adopted.[2]

It follows that a strict regulatory framework that genuinely reflects a concern to prevent the manipulation of sports events must accompany the introduction of a right to consent to bets.

The origins of the French betting right

With the enactment of a new gambling law in 2010, the French legislator, following case law precedent recognizing sports bets as a form of commercial exploitation of sports events, introduced a right to consent to bets in the French Sports Code.

Interestingly, the concept of the right to consent to bets evolved considerably during the course of the legislative process.

When the draft law opening up online gambling and betting to competition and regulation was introduced in the French parliament, the rationale of the right to consent to bets was solely expressed in terms of generating a “fair financial return” to sport. Under Chapter IX (“Provisions concerning the exploitation of sports events”) of the original draft law, the following addition to Article L.334-1 of the Sports Code was proposed:

“The use, for commercial purposes, of any characteristic element of sporting events or competitions, notably names, calendars, data or results, requires the consent of the owners of the exploitation rights under conditions, in particular of a financial nature, defined by contract, subject to the provisions of articles L. 333-6 to L.333-9”.^{^[3]}

On 5 March 2009, the French authorities notified the draft law to the European Commission, in accordance with the provisions of Directive 98/34/EC of 22 June 1988.[4] In its detailed opinion, the Commission stressed that several provisions of the draft law would infringe Article 56 TFEU if they were to be adopted without due consideration of the Commission’s objections. Amongst other things, the Commission rightly observed that the financing of sport through gambling revenues could not justify an obstacle to free movement, in this case the requirement to obtain consent from the sports organiser. The Commission further noted that the characteristic elements that are already in the possession of sports organisers, such as calendars, data or results, could not qualify for sui generis database right protection.

It was only during the subsequent first reading of the draft law in the French National Assembly that the statutory recognition of the right to consent to bets was presented as a means of preserving sports integrity. On 21 July 2009, the French Minister for the Budget declared:

“in reality, the interest of this right for sport is not financial but ethical, by requiring commercial agreements between gambling operators and the organisers of sports competitions, this right finally will give professional sport the means to make the operators share their concerns in matters of competition ethics”.^{^[5]}

Accordingly, the relevant provision was substantially amended to address the concerns about its compliance with the EU internal market rules. First, it no longer mentioned that the consent to the organisation of bets was related to the use of fixtures and schedules. Second, the title of Chapter IX was changed to “Provisions concerning the exploitation of sports events and the fight against fraud and cheating in the context of these events” (emphasis added). Third, multiple paragraphs were added, so as to stipulate that (1) the betting right contracts should impose obligations on betting operators concerning fraud detection and prevention and (2) the financial contribution is intended to compensate for costs incurred by sports organisers for anti-fraud mechanisms.^{^[6]}

The proof of the pudding is in the eating

On the basis of an in-depth assessment of the exploitation of the French right to consent to bets, the study concludes that the rationale of safeguarding the integrity of sports events did not really override its economic rationale.

Decree No. 2010-614 requires the betting right marketing contracts to specify information and transparency obligations imposed on operators to detect fraud and prevent the risk of harm to the integrity of sports events.^{^[7]} Contrary to the relatively strong language about the stipulation of “information and transparency obligations” imposed on the operators, Decree No. 2010-614 merely requires the holder of the right to consent to bets to specify in the contracts the measures it “intends” to introduce for preventing the risk for the integrity of the events in question. However, the law does not mandate the effective implementation of these integrity measures. Furthermore, although the compensation paid for the right to organise bets must take account “in particular the costs incurred in detecting and preventing fraud”, there is no guarantee that the income is allocated to fraud prevention and detection.

If Member States would consider introducing a right to consent to bets, it appears critical from an EU law perspective that it is genuinely designed to protect a non-economic public interest objective in a proportional manner. The Victorian (Australia) regulatory regime is recommended as a best practice model. Here, the financial return is truly a compensation for the integrity assurances given by the sports bodies. Before a sports body is legally entitled to exercise the right to consent to bets, it must first invest time and resources into developing adequate integrity mechanisms. Furthermore, in case the sports body fails to fulfil its contractual obligations, the gambling regulator may revoke its ability to exercise the right to consent to bets. Indeed, the rights and obligations in the betting right agreements must work both ways: sports betting operators are also entitled to expect that the sports organisers truly implement the integrity policies.

For a detailed exploration of the virtues of a right to consent to bets and the challenges of adopting such a mechanism from a legal, institutional, and practical perspective, check out the full study available at http://ec.europa.eu/sport/news/2014/study-on-sport-organisers-rights_en.htm.

[1] All measures that prohibit, impede or render less attractive the exercise of the fundamental freedoms must be regarded as restrictions, see e.g. C-439/99 Commission v Italy [2002] ECR I-305, para. 22; Case C-205/99 Analir and Others v Administratión General del Estado [2001] ECR I-271, para. 21.

[2] See e.g. Joined Cases C 316/07, C 358/07 to C 360/07, C 409/07 and C 410/07 Markus Stoß and Others v Wetteraukreis and Others [2010] ECR I-8069, para. 104; C-67/98 Questore di Verona v Diego Zenatti [1999] ECR I-7289, para. 36; Judgment of the EFTA Court in Case 3/06 (Ladbrokes) para. 63.

[3] Unofficial translation by the research team (“L’utilisation, à des fins commerciales, de tout élément caractéristique des manifestations ou compétitions sportives, notamment leur dénomination, leur calendrier, leurs données ou leurs résultats, ne peut être effectuée sans le consentement des propriétaires des droits d’exploitation, dans des conditions, notamment financières, définies par contact, sous réserve des dispositions des articles L. 333-6 à L. 333-9”).

[4] Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (1998) OJ L 204/37. This “Transparency Directive” requires Member States to notify their rules on information society services in draft form, and generally observe a standstill period of at least three months before formal adoption, in order to allow other Member States and the European Commission to raise concern about potential trade barriers within the EU.

[5] Assemblée Nationale, Audition de M. Éric Woerth, ministre du budget, des comptes publics, de la fonction publique et de la réforme de l'État au cours de la réunion du 21 Juillet 2009.

[6] In the context of the second reading of the draft law in the French Senate, the rapporteur of the Finance Committee welcomed this solution to accommodate the European Commission’s concerns regarding Article 52. Sénate, Rapport n° 209 (2009-2010) de M. François Trucy, fait au nom de la commission des finances, déposé le 19 janvier 2010.

[7] Décret no. 2010-614 du 7 Juin 2010 relatif aux conditions de commercialisation de droits portant sur l’organisation de paris en relation avec une manifestation ou compétition sportives, Article 2.

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the

Statement on the European Commission's ISU Decision by Ben Van Rompuy and Antoine Duval

A Good Governance Approach to Stadium Subsidies in North America - By Ryan Gauthier

Illegally obtained evidence in match-fixing cases: The Turkish perspective - By Oytun Azkanar

Report from the first ISLJ Annual International Sports Law Conference - 26-27 October at the T.M.C. Asser Instituut

International and European Sports Law – Monthly Report – October 2017. By Tomáš Grell

Multi-Club Ownership in European Football – Part II: The Concept of Decisive Influence in the Red Bull Case – By Tomáš Grell

Multi-Club Ownership in European Football – Part I: General Introduction and the ENIC Saga – By Tomáš Grell

International and European Sports Law – Monthly Report – September 2017. By Tomáš Grell

The limits to multiple representation by football intermediaries under FIFA rules and Swiss Law - By Josep F. Vandellos Alamilla

The Evolution of UEFA’s Financial Fair Play Rules – Part 2: The Legal Challenges. By Christopher Flanagan

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the

The French “betting right”: a legislative Dr. Jekyll and Mr. Hyde. By Ben Van Rompuy

Related posts