Background
The European Super League (ESL) was revealed in April of 2021 by A22 Sports Management. Led by Liverpool owner John Henry of FSG Sports and Real Madrid’s Chairman, Florentino Pérez, the ESL would see the biggest clubs in Europe compete in a near-exclusive closed competition, while continuing to participate in competitions organized by FIFA & UEFA. Its announcement was the catalyst of near-unison fan and player outrage and the threat of sanctions from the Fédération Internationale de Football Association (FIFA). Within 48 hours, this proposal was dead in the water, with 9 of the founding clubs issuing statements of their withdrawal, along with apologies to all stakeholders.
In response to the proposal, FIFA threatened the founding clubs with sanctions, in line with the UEFA's statutes. These sanctions included expulsion from domestic leagues, fines and restricting access to players.
The ESL aggressively responded by filing a claim in the courts of Madrid (Juzgado de lo Mercantil de Madrid) alleging that the relevant FIFA & UEFA statutes violated competition law principles and were incompatible with EU law.
In December of 2022, on referral from the Madrid court, the ECJ’s Advocate General issued a non-binding preliminary opinion which had implications for FIFA’s autonomy (the Opinion). In 2023, the ECJ will make a final determination that will affect the autonomy of sports governing bodies (SGBs) and the future of European football.
Context of the Bosman Ruling: Freedom of Movement
In 1995, the ECJ issued its Bosman judgment concerning FIFA’s transfer fee system. In this case, Jean-Marc Bosman challenged the FIFA rules that prevented a player from joining another team (even after their contract expired) unless the team that wanted the player paid a transfer fee to compensate the player’s parent team for their training and development.
The ECJ found that EU law, in particular the articles governing freedom of movement, trumped FIFA’s post-contractual transfer rules. FIFA, ultimately amended its regulations to comply with the Bosman judgment, thus acknowledging the EU’s regulatory dominance.
Context of the International Skating Union case: Anti-competitive Practices
The International Skating Union (ISU) regulates figure and speed skating and organises all international ice-skating events. All members of the ISU are subject to the ISU’s pre-authorisation system, including so-called "eligibility rules". The rules state that taking part in unauthorised competitions will lead to sanctions for these athletes.
In December 2017, the European Commission (EC) found that these rules had the object of restricting competition, a decision that was later upheld by EU General Court (GC) on appeal.
Matter Details and Statutory Principles
Several provisions of the FIFA Statutes, requiring pre-authorization for third-party competitions and prescribing a sanctions regime for enforcement, were scrutinised.
The Opinion mainly concerned the interpretation of Articles 101 & 102 Treaty on the Functioning of the European Union (TFEU) and whether they might prohibit the operation and implementation of FIFA and UEFA's statues, respectively. The Opinion made particular reference to the following:
- Articles 22 and 71 to 73 of the FIFA Statutes; and
- Articles 49 and 51 of the UEFA Statutes
The AG also considered Articles 45, 56 and 63 TFEU.
The ESL proposal was a direct violation of the FIFA Statutes, incorporated by UEFA as to the infringing clubs and a threat to the monopoly control held over men’s professional football. In response, FIFA threatened the participants with sanctions, including potential disqualification from FIFA competitions, which prompted a legal challenge by ESL.
The ESL organisers complained to a Madrid court that UEFA and FIFA were in breach of Articles 101 and 102 TFEU. In May 2021, the Madrid court referred the case to Luxembourg and asked the ECJ to give a ruling on whether the system of prior authorisation and the system of sanctions contained in the UEFA and FIFA Statutes are in breach of EU law.
Advocate General's Opinion on 15 December 2022
Athanasios Rantos (AG) at the Court of Justice of the European Union offered a non-binding argument for judges to consider before a final ruling.
The Advocate General took the view that the requirement, under the UEFA statutes for new football tournaments in Europe, to obtain prior approval from UEFA are reconcilable with Art. 101 and 102 of the TFEU as they are justified by legitimate objectives.
The opinion concludes that UEFA may impose sanctions against clubs which participate in tournaments which were not approved by UEFA. The exclusion of players, however, is deemed inappropriately disproportionate and is therefore not justified.
The AG stated:
“Whilst ESLC is free to set up its own independent football competition outside the Uefa and Fifa ecosystem, it cannot however, in parallel with the creation of such a competition, continue to participate in the football competitions organised by Fifa and Uefa without the prior authorisation of those federations.”
AG Rantos clarifies that although the rules laid down by SGB's are not exempt from competition law, they can fall outside of Article 101 (1) TFEU if the rules’ restrictive effects are inherent and proportionate to legitimate objectives sought.
However, Bernd Reichart, CEO of A22 Sports Management, which has been working to promote the ESL, saw the opinion as a preliminary win, after which he stated:
“The Advocate General made clear that Uefa has a monopolistic position which comes with important responsibilities for enabling third parties to act freely in the market. However, we believe the 15 judges of the Grand Chamber who are entrusted with the responsibility to examine this case, will go substantially further and provide the opportunity for clubs to manage their own destiny in Europe.”
The EU courts in most cases follow the legal assessment in the Advocate General’s Opinion. In the Super League case, however, the Opinion of the AG deviates in several aspects from core competition law principles. That is why the ECJ may take a different approach.
Key takeaways & Conclusion
- The legality of SGB rules will be judged based on whether they generate anti competitive effects. The rules at issue in the cases were not technically illegal under competition law.
- Whether third parties are denied access to the market.
- SGBs can adopt rules with potentially anti competitive effects without violating EU competition law, but those rules must pursue legitimate objectives in a proportionate manner.
- The legal economic context must be considered in determining whether any pre approval systems, implemented by SGBs, impose disproportionate restrictions on competition.
- The "European Sports Model" sets out legitimate objectives (pyramid structure open competitions financial solidarity) that can outweigh the anticompetitive effects of rules laid down by sports federations.
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