The legal implications of the aborted European Superleague project

“12 major European clubs announce the creation of a European Superleague by a press release on the evening of 18/04/2021. The principle: a closed league of 20 clubs, with 15 fixed clubs including the 12 founders and 5 variable clubs, chosen according to their performances of the previous season”, recalls Me Laurent Fellous, sports law lawyer and sports representative, in an analysis for News Tank on 07/05/2021.

“The Super League” is the name of the company whose creation was announced by the group of 12 (6 English clubs, 3 Spanish and 3 Italian) in order to organize “as soon as possible” a European Superleague managed by its founders:

• The English 6: Arsenal FC, Chelsea FC, Chelsea FC, Liverpool FC, Liverpool FC, Manchester City FC, Manchester United FC and Tottenham Hotspur FC

• The 3 Spaniards: Club Atlético de Madrid, FC Barcelona and Real Madrid CF

• The 3 Italians: AC Milan, FC Inter Milan and Juventus FC

Faced with the very negative reactions of fans in England in particular, authorities in the world of football and political leaders, the six English clubs announced their withdrawal on 20/04/2021, followed the next day by 4 other founding clubs (Atlético, Inter, AC Milan and AC Milan and Juventus which, since then, has nevertheless continued the fight with Real and Barça).

While the project has so far failed, legal questions remain. In particular with regard to the autonomy of sports law. Me Fellous analyzes the legal implications of this case.

“It seems unlikely that FIFA and UEFA could ban and punish the creators and participants of a European Superleague” (Me Fellous)

The main motivation for the European Superleague project was obviously financial insofar as, according to official information, each of the member clubs could claim an annual payment of nearly 350 million euros. For comparison, the 2019-20 Champions League only allowed three clubs to exceed the admittedly important threshold of 100 million euros:

• Paris Saint-Germain, runner-up (126.8 million euros)
• FC Bayern Munich, winner (€125.4 million)
• FC Barcelona, quarter-finalist (€100.2 million)

This Superleague concept is not new since such a project has already been initiated with varying degrees of success:

• In football: the Italian company Media Partners tried, unsuccessfully, to set up a private European “Superleague” in 1998.
• In basketball: the Union of European Basketball Leagues (ULEB) has launched a competition separate from the International Basketball Federation (FIBA): the Euroleague, officially created in 2000.

FIFA and UEFA quickly reacted by evoking sanctions against both clubs and participating players.The sanctions mentioned: the exclusion of participating clubs from the next editions of the Champions League or even from the current one where 2 of the 12 founders of “The Super League”, where 2 of the 12 founders of “The Super League”, Manchester City and Chelsea, will face off in the final in Istanbul on 29/05/2021 or the ban on players playing within these clubs from participating in the next international competitions., such as Euro 2020. Therefore, under the impetus of these threats as well as of an overwhelming majority of both actors and spectators of this sport, this project was very quickly abandoned, or at the very least, postponed.

Nevertheless, the legal questions raised by such a closed league, which is not recognized and not organized by a competent international body, remain:

• Does such a project comply with both European law and FIFA regulations?

• Can FIFA and/or UEFA therefore take sanctions against violating clubs?

These questions refer to a more general question: is sports law autonomous? In other words, are sports regulations subject to common law? It is therefore necessary to address the lack of genuine autonomy of sports law and the gradual submission of the sporting order to common law (A) before analysing the recent decision of the General Court of the European Union against the International Skating Union (UIP), which had prohibited its athletes from participating in competitions that it did not recognize (B), to draw the consequences in terms of the European Superleague project (C).

A. The lack of real autonomy of sports law: the gradual submission of the sporting order to ordinary law

Let us discuss the submission of the sporting order both to the national judge and to the judge of the European Union, acting as secondary law including regulations, directives and decisions before dealing with the consecration of this submission by its integration into the primary law of the European Union, including mainly the treaties, through its insertion into the Lisbon Treaty.

‍1. Submission of the sporting order to the national judge

‍French law does not contain any legislative guidelines favorable to sports law. Unlike Italian law, which enshrined the principle of the autonomy of sports law, French law, like the vast majority of national laws, does not contain any legislative directive favourable to sports law. It is therefore in this sense that national judges subject, in principle, the sporting order to respect for ordinary state law. We can cite the example of the Lyon Court of Appeal which, in a judgment of 26/02/2007, censored the provisions of the Professional Football Charter prohibiting young players from signing their first professional contract with a club other than their training club.

2. Submission of the sporting order to the European Union judge

‍With regard to the European Union, it is the Court of Justice of the European Communities (ECJ), which has since 2009 become the Court of Justice of the European Union (CJEU), which has subject the sporting order to Union law. By sporting order, we mean in particular all the regulations made by sports federations as a result of their regulatory power, this power giving them, for example, the ability to regulate the conditions of access to the various competitions. In the event of a breach of these provisions, the federations also have the power to impose sanctions. The CJEC quickly clarified that Community law applied only to “economic activities” only, with the exception of “sports rules” which fall outside the scope of Community law (see in particular the Walrave and Koch judgment cited below). In the case of such economic rules, the European Union judge checks the conformity of these rules with European Union law by determining whether:

• these rules are compatible with Union law,
• these rules pursue a legitimate objective,
• the restrictions they create are inherent and proportionate to the achievement of this objective.

Community law is intended to apply when sport is an economic activity” Among the first founding judgments on the subject:

• The Walrave and Koch v UCI judgment, case C36/74 (12/12/1974): the ECJ considered that Community law was intended to apply when sport was an economic activity. The CJCE therefore considered that the UCI regulations did not comply with the freedom of movement of workers, due to discrimination based on nationality (obligation for the coach and the cyclist to have the same nationality)

• The Gaetano Donà v Mario Mantero judgment, case C-13/76 (14/07/1976): the ECJ again considered that restrictive measures relating to nationality were incompatible with Community law.

These judgments led to an agreement, concluded in 1978, between the European Union and UEFA, including the abolition of discriminatory measures. In 1985, in view of the inactivity of UEFA in this field, the European Commission was forced to carry out a reform and order the abolition of quotas on 01/01/1985. UEFA then modified this rule and introduced a new system in 1991: the “3 + 2” rule, i.e. 3 foreign players and 2 others who had played at least 5 years in the Championship. Following these judgments which expressly recognized the subjection of the sporting order to European Union law, the ECJ delivered a resounding judgment on the subject: the Bosman judgment, dated 15/12/1995, case C-415/93.

As part of this famous judgment, Jean-Marc Bosman, a soccer player then playing at RFC Liège (BEL), contested before the ECJ in particular the quotas limiting the number of foreign players from the European Union on a club team to three, which constituted discrimination based on nationality. The Bosman ruling ruled that UEFA regulations were contrary to the Treaty of Rome. The ECJ then considered that the UEFA regulations were contrary to Article 48 of the Treaty of Rome, relating to the free movement of workers within the European Union.

In a Meca-Medina judgment dated 18/07/2006, case C-519/04, on the basis of competition law, the ECJ again considered that the IOC anti-doping rules must comply with Articles 101 and 102 of the Treaty on the Functioning of the European Union, providing in particular for the principle of free competition and therefore prohibiting any cartel and abuse of a dominant position.

Consequently, as soon as the sports authority carries out an economic activity, international sports regulations are subject to compliance with the provisions of European Union law, such as in particular non-discrimination, free movement or even compliance with competition law.‍

3. The integration of sport into the primary law of the European Union

‍In view of the growing involvement of the EU in sport, it was logical that it was integrated into the primary law of the European Union, through its inclusion in the Lisbon Treaty, signed on 13/12/2007. As a reminder, the Lisbon Treaty, which came into force on 01/12/2009, profoundly modified the “Treaty establishing the European Community” (signed in Rome on 25/03/1957) by renaming it, first of all, into the “Treaty on the Functioning of the European Union” (TFEU), then by integrating numerous provisions into it. Sport is now considered as an area in which the European Union can carry out support or coordination actions, despite the competence of the Member States in this area (Article 6 TFEU). “The European Union contributes to the promotion of European sports issues, while taking into account its specific characteristics” (Lisbon Treaty, which came into force on 01/12/2009)”

Article 165, 1°, 2° and 3° states, in addition, that: “(...) The Union contributes to the promotion of European sports challenges, while taking into account its specificities, its structures based on volunteering as well as its social and educational function. The Union's action aims [...] to develop the European dimension of sport, by promoting fairness and openness in sports competitions and cooperation between bodies responsible for sport, as well as by protecting the physical and moral integrity of athletes, in particular the youngest among them etc. The Union and the Member States promote cooperation with third countries and the international organizations responsible for education and sport, and in particular with the Council of Europe..” It is in this context that the CJEU was receiving a request for compliance of the regulations of the International Skating Union with the Community provisions of competition law.

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B. Analysis of the decision of 16/12/2020 of the General Court of the European Union against the IPU, which wanted to ban skaters from participating in competitions that it did not recognize

As a reminder, the International Skating Union (UIP), or International Skating Union (ISU), is the only international sports federation recognized by the International Olympic Committee in order to ensure the supervision and management of figure skating as well as speed skating. For example, the UIP carries out a commercial activity consisting in organizing various speed skating events as part of the most important international competitions, such as the European and World Championships or the Winter Olympic Games.

As part of its regulatory authority, the ISU had thus provided for the following eligibility rules: skaters could not take part in international speed skating events, such as the Olympic Games or the World Championships, “if they participate in international speed skating competitions that the ISU does not recognize”. Skaters violating these rules then risked lifelong exclusion from any competition organized by the IPU. In 2014, the Korean company Icederby International Co. Ltd planned to organize a speed skating competition in Dubai (United Arab Emirates) including events in a new format, as this competition was not authorized by the IPU.

• Two Dutch professional skaters sanctioned by the International Skating Union (UIP)

Two Dutch professional skaters, Mark Tuitert and Niels Kerstholt, who were deprived of participation in this competition due to ISU regulations, then filed a complaint with the European Commission. The basis of this complaint was as follows: the incompatibility of the IPU regulation with EU competition rules (Article 101 TFEU) in that it is intended to restrict the possibilities for professional speed skaters to participate freely in international events organized by third parties and therefore deprived these third parties of the services of the athletes that were necessary to organize these competitions. In a decision of 08/12/2007, the European Commission first of all recalled that “the sports rules established by sports federations are subject to the European Union's competition rules when the entity that sets these rules or the companies and the persons concerned by the rules carry out an economic activity.”

The European Commission then considered that the rules laid down by the ISU “unduly restricted the commercial freedom of athletes”. Newcomers to the market, such as organizers of private competitions, were in fact “unable to organize other international speed skating events because they are unable to attract the best athletes”, due to the rules set out by the IPU. The European Commission has therefore ordered the IPU to put an end to the infringement found, under penalty of penalty. The IPU contested the European Commission's decision before the General Court of the European Union. The decision of the General Court of the European Union was eagerly awaited insofar as it had never before been referred to it in order to rule on a European Commission decision finding the non-compliance, with European Union competition law, of a regulation adopted by a sports federation. The Court of the European Union considered the IPU sanctions system to be “disproportionate” and “ill-defined”.

In a decision issued on 16/12/2020, the General Court of the European Union confirmed the validity of the European executive's decision, arguing that the IPU sanctions system was “disproportionate” and “ill-defined” .The Tribunal indicated that “such severity may deter athletes from participating in competitions not authorized by the IPU, including when there is no legitimate reason to justify such refusal of authorization.””. The Tribunal also found that the situation in which the IPU found itself was likely to give rise to a conflict of interests: the exercise by the IPU of its regulatory power could, for example, prevent potential third-party organizers from creating their own events, which constitute a lucrative source of income: “The IPU is required to ensure, when considering applications for authorization, that third party organizers of speed skating competitions are not deprived of their own. unduly gaining access to the relevant market, to the point that the competition on this market is thereby distorted.” The Court finally recalled that while the protection of the integrity of sport was “a legitimate objective” under Article 165 TFEU, the “restrictions arising from the prior authorisation system cannot be justified by the objectives in question.”

The Court therefore affirms that it was “right that the Commission concluded that the eligibility rules present a sufficient degree of harmfulness, in particular with regard to their content, to be considered as restricting competition by object.” In other words, the eligibility rules imposed by the UIP on its members do not comply with the provisions of Articles 101, 102 and 106 of the TFEU in particular in so far as they unfairly punish athletes who participate in speed skating events.

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C. The consequences of the above case law on the European Superleague project

Before any development, it should be remembered that it is now a question of evoking the hypothetical case where the European Superleague project had actually come into being. In this hypothesis, it is, first of all, interesting to note that the FIFA and UEFA regulations do not seem to provide, to date, for an express ban on athletes and/or clubs from participating in competitions that they do not recognize. Groups or alliances (...) between clubs (...) cannot be formed without the authorization of UEFA (article 51 of the UEFA statutes)”. However, Article 51 of the UEFA Statutes states that:

” 1.- Groups or alliances between UEFA member associations or between Leagues or clubs directly or indirectly affiliated with different UEFA member associations cannot be formed without the authorization of UEFA.

2.- Members of UEFA or the Leagues and clubs affiliated to them may not play or organize matches outside their own territory without the authorization of the member associations concerned. ”

It is in this sense that FIFA and UEFA have threatened to take sanctions against rebellious clubs, thus using their sanctioning power, while at the same time having, in any event, their power to change their regulations. Thus, in view of the decision mentioned above, it is possible to consider that any regulation and/or sanction that would be taken against rebellious clubs and/or athletes would constitute an infringement of European Union competition law. It is, however, important to recall that this decision of the General Court of the European Union was taken within the framework of a regulation providing for the following penalty in the event of unauthorised participation: lifelong exclusion from any competition organized by the IPU. It was in consideration of this sanction that the General Court of the European Union affirmed that the IPU sanctions system was “disproportionate” and “ill-defined”: the eligibility rules provided by the IPU did not explain the legitimate objectives they pursued and provided for authorization criteria only since 2015.

In these circumstances, the Court considered that “the requirements applied since that date cannot all be considered as clearly defined, transparent, non-discriminatory and verifiable authorization criteria, which, as such, would be capable of guaranteeing competition organizers effective access to the relevant market.

Consequently, the Court found that the IPU had retained, even after the adoption of the authorization criteria in 2015, a wide margin of appreciation in refusing to authorize competitions offered by third parties: “Legitimacy, proportionality, proportionality, transparency and openness”. Reading these details, in addition to article 51 of the aforesaid statutes of the UEFA, it would seem, therefore, that FIFA and UEFA may adopt a regulation prohibiting the participation of its members in competitions that they do not organize and therefore do not recognize:

• That the regulation specify the legitimate objectives pursued,
• That the sanctions provided for in the event of non-compliance are inherent and proportionate to the achievement of the objective pursued,
• That an authorization system be provided according to clearly defined, transparent, non-discriminatory and verifiable criteria,
• That this system is capable of guaranteeing competition organizers effective access to the relevant market.

In view of the restrictive conditions referred to above, it seems, however, unlikely that FIFA and UEFA would be able to ban and sanction the creators and participants of a European Superleague, both on the basis of Article 51 mentioned above and on the basis of a new regulatory provision. Consequently, in view of the significant underlying economic and social challenges as well as the numerous legal consequences of such a project would be far-reaching, and which is highly likely to be relaunched in the short or medium term, it would appear preferable for all actors to reach a negotiated outcome, like basketball in 2000.