The Legal Implications of the European Super League
Announced in the spring of 2021, the European Super League (ESL) — officially The Super League — was a proposed competition for the top twenty teams in European football. With the goal of replacing the current top-flight European competition, the Champions League, the founders of the ESL hoped to increase the overall quality and revenue of European matches.[1] There were twelve “Founding Clubs” — AC Milan, Arsenal FC, Atlético de Madrid, Chelsea FC, FC Barcelona, FC Internazionale Milano, Juventus FC, Liverpool FC, Manchester City, Manchester United, Real Madrid CF, and Tottenham Hotspur — each of which has immense financial backing and storied histories.[2] Three additional “Founding Clubs” were expected to join. Five additional spots would be allocated annually to teams based on achievements in the prior season to form the 20 team league. However, the announcement of the ESL was met with swift and severe backlash. Fans, seeing the ESL as a disruptive and greedy financial maneuver by wealthy owners, protested vehemently against the ESL. As a result, all but three clubs—Barcelona, Real Madrid, and Juventus—pulled out of the ESL within a few days of the original announcement.[3]
Nearly two years after the original announcement of the ESL, legal debates over the ESL are still raging. The three clubs remaining in the ESL still maintain that each of the twelve original “Founding Clubs” (except for FC Internazionale Milano due to a special clause in their contract) remains legally bound to the ESL. Those three clubs also oppose and have secured legal victories over the financial punishments on the original ESL “Founding Clubs” attempted by the Union of European Football Associations (UEFA), Europe’s primary football regulatory body.[4] Most importantly, they argue that UEFA has unparalleled power over European football that allows it to institute anti-competitive and monopolistic practices. Indeed, based on past rulings by the Court of Justice of the EU (CJEU) on the application of competition law to sport and the European Commission’s 2017 decision regarding the International Skating Union (ISU), they have a strong case. While the ESL in itself may not be the ideal future for football, it has exposed UEFA’s dangerously powerful monopoly and demonstrates the need to more tightly regulate UEFA to ensure transparent competition without comprising sporting interests.
UEFA operates as a regulator over the European football market in which it is the sole competitor, a unique scenario that allows it to impose monopolistic practices with impunity. UEFA controls all levels of European football competition for both club and country. Specifically, they govern the Champions League, Europa League, and Europa Conference League for clubs and the European Championship and Nations League for countries.[5] For clubs, while nations and domestic leagues retain control over their own competitions, UEFA has full control over any and all European competitions. For clubs, there is no alternative for participating in UEFA’s European competitions that is financially viable and at an elite sporting level.[6] As the sole overseer of European football, UEFA has a troubling conflict of interest. By opening the market up to new competitors, they directly hurt their own power and profits: “UEFA has an inherent conflict of interest. When it has to decide on new market operators, it will not allow new market entrants, of course, because it has a monopoly.”[7] And yet, UEFA actually points to its monopolistic nature as a source of strength. Stéphane Anselmo, UEFA’s head of competitions strategic development, argued that “centralization is the game changer for clubs.”[8] He emphasized that it allowed UEFA to negotiate TV rights, the largest source of revenue for its competitions, in a unified way. When taking the perspective of UEFA, Anselmo’s claim may actually not be so radical. Sports occupy a special place in modern business since it emphasizes the principles of parity, fairness, and connectedness. Having many different European football competitions and regulators would fracture the interconnectedness across the continent and hurt most, if not all, clubs, particularly those with less financial and social capital. However, UEFA’s current monopoly cannot continue, and the ESL’s recent advances have only further exposed the crumbling legal foundation on which UEFA’s monopoly rests.
Previous decisions made by the CJEU and European Commission dictate that UEFA’s practices are unlawful. First, UEFA’s restrictions on competition and its monopolistic practices make it eligible to be regulated by EU competition law. Prior to 2006, due to Walrave and Koch v. Association Union Cycliste Internationale (1974), the EU had a “sporting exception” that exempted sports regulatory bodies from EU laws governing the actual member states and other regulatory organizations.[9] In that case, the court ruled that, “having regard to the objectives of the community, the practice of sport is subject to [EU community law] only in so far as it constitutes an economic activity within the meaning of Article 2 of the [Treaty establishing the European Economic Community (EEC Treaty)].”[10] Practices of sport that did not constitute economic activities were considered to be “purely sporting” and thus outside the reach of EU law. This interpretation incentivized sports governing bodies to argue that their regulatory powers were outside the range of EU law due to their pure sporting interests, unless their rules were disproportionate (i.e., having a larger effect than just their actual objectives).[11] However, in the years after the Walrave and Koch case, the sporting exception was weakened by cases such as the Bosman ruling (1995), which allowed players to leave clubs after their contracts expired without an agreed transfer fee between the players’ old and new clubs.[12] However, it was Meca-Medina and Majcen v. Commission of the European Communities (2006) that finally ended the “sporting exception.”[13] This case demonstrated the EU’s willingness to more closely regulate and apply competition law to rules and restrictions that had previously been classified as “purely sporting interests.” Indeed, the court has demonstrated its hesitancy to immediately disqualify certain rules and restrictions from prosecution; “it is apparent that the mere fact that a rule is purely sporting in nature does not have the effect of removing from the scope of the Treaty the person engaging in the activity governed by that rule or the body which has laid it down.”[14] Thus, EU competition law can indeed be applied to UEFA since many, if not all, of UEFA’s rules and restrictions are primarily economic activities that stretch far beyond their facades of “purely sporting interests,” with UEFA’s revenues jumping from €659.2m in 2004/05 to €5,724.5m in 2020/21.[15]
Second, the European Commission’s 2017 ruling on the International Skating Union reveals that UEFA’s attempts to regulate its own market similarly violate competition law. The International Skating Union (ISU), recognized by the International Olympic Committee (IOC), is the sole regulator of figure skating and speed skating and is composed of individual national associations.[16] The ISU’s eligibility rules stated that athletes would be ineligible to participate in ISU competitions by joining non-ISU-authorized events, “even if the independent competitions [posed] no risk to legitimate sports objectives, such as the protection of the integrity and proper conduct of sport, or the health and safety of athletes.”[17] Mark Tuitert and Niels Kerstholt, both Dutch professional speed skaters, complained that these rules were anti-competitive and breaches of EU competition law. According to the commission report, “the ISU eligibility rules restrict competition and enable the ISU to pursue its own commercial interests to the detriment of athletes and organizers of competing events…[they] prevent independent organizers from putting together their own speed skating competitions…[and] the emergence of independent international speed skating competitions.”[18] UEFA has threatened and imposed similar penalties on teams that participate in non-UEFA events or competitions (e.g., ESL).[19] So far, these punishments have similarly been defeated in court, demonstrating the broader applicability of the ISU decision.[20] Furthermore, throughout the ESL saga, UEFA has outright rejected suggested alternatives to European football competitions such as the ESL without giving any suggestions or standards for what may be acceptable. This demonstrates that the overarching goal of UEFA is not to protect sporting interests but to protect its own commercial interests as well as the status quo.
However, it may not be in the best interest of governments, leagues, teams, and athletes to completely eradicate UEFA’s monopoly. Centralization is especially vital for maintaining consistency throughout Europe’s heterogenous nations and leagues, and as UEFA themselves argue, it can often be useful for things like negotiating TV rights (the most important source of revenue for the Champions League).[21] As such, despite the clear legal impropriety of UEFA’s current role in European football, it will be a worthwhile pursuit to consider the optimal way in which to regulate UEFA without drastically hurting European football. Indeed, the CJEU itself may decide to not break UEFA’s monopoly but instead ensure that UEFA provides “clear and non-discretionary criteria for how other European football competitions must be organized to get the UEFA approval and to introduce a better appeal process, with access to EU courts, that lets clubs fight a UEFA decision if they find it unreasonable.”[22]
The final decision from the CJEU is expected to come before the end of 2023.[23] Its decision holds enormous weight, as the legal implications of the ESL stretch even beyond football, UEFA, and Europe. Whether it be the recent controversy involving the Professional Golfers’ Association (PGA) and LIV golf, or the dominance of American domestic sports leagues such as the National Football League (NFL) and National Basketball Association (NBA), the CJEU’s ruling on UEFA’s monopoly has the potential to reshape the way officials, lawyers, and the public interpret sports. In terms of European football, the future is far from certain. There are already new proposals for another potential ESL, especially in light of the English Premier League’s recent financial dominance.[24] The CJEU’s decision may protect the historic monopolies of sports leagues and regulatory bodies, or, perhaps more drastically, it may usher in an era of unprecedented competition both on and off the field. Regardless, the ESL has exposed the vulnerabilities of the current model of European football, and its rise will have lasting implications for years to come.
References
[1] “The Super League - Press Release.”
[2] “The Super League - Press Release.”
[3] Sky News. “European Super League: What It Means for the Clubs and the Fans as Nine Teams Withdraw.”
[4] “Statement on the European Super League.”
[5] UEFA.com. “The Official Website for European Football.”
[6] “Distribution to Clubs from the 2022/23 UEFA Champions League, UEFA Europa League and UEFA Europa Conference League and the 2022 UEFA Super Cup.” UEFA, July 4, 2022.
[7] Allenbach-Ammann, János. “UEFA Doubles down on Monopoly Position in European Football.”
[8] Allenbach-Ammann, János. “UEFA Doubles down on Monopoly Position in European Football.”
[9] BNO Walrave and LJN Koch v Association Union cycliste internationale, Koninklijke Nederlandsche Wielren Unie and Federación Española Ciclismo, No. Case 36-74 (ECJ December 12, 1974).
[10] BNO Walrave and LJN Koch v Association Union cycliste internationale, Koninklijke Nederlandsche Wielren Unie and Federación Española Ciclismo, No. Case 36-74 (ECJ December 12, 1974).
[11] Miettinen, Samuli, and Richard Parrish. “Nationality Discrimination in Community Law: An Assessment of UEFA Regulations Governing Player Eligibility for European Club Competitions (The Home-Grown Player Rule).” Entertainment and Sports Law Journal (ESLJ) 5, no. 2 (October 14, 2012).
[12] Sky News. “European Super League: What It Means for the Clubs and the Fans as Nine Teams Withdraw.”
[13] David Meca-Medina and Igor Majcen v Commission of the European Communities, No. Case C-519/04 P (ECJ July 18, 2006).
[14] David Meca-Medina and Igor Majcen v Commission of the European Communities, No. Case C-519/04 P (ECJ July 18, 2006).
[15] Statista. “UEFA Revenue 2004-2021.”
[16] “About the ISU - International Skating Union.”
[17] European Commission. “Antitrust: International Skating Union’s Restrictive Penalties on Athletes Breach EU Competition Rules.”
[18] European Commission. “Antitrust: International Skating Union’s Restrictive Penalties on Athletes Breach EU Competition Rules.”
[19] AP NEWS. “Threats of Expulsion as UEFA Confronts Super League Rebel 12,” April 20, 2021.
[20] “A22 Sports Management Will Be Able to Continue Developing Its Project Free of Threats.” A22, January 31, 2023.
[21] Allenbach-Ammann, János. “UEFA Doubles down on Monopoly Position in European Football.” www.euractiv.com, November 8, 2022.
[22] Allenbach-Ammann, János. “UEFA Doubles down on Monopoly Position in European Football.” www.euractiv.com, November 8, 2022.
[23] CBSSports.com. “Super League: European Court of Justice Backs UEFA in Initial Ruling over Breakaway League,” December 15, 2022.
[24] ESPN.com. “What Would the New Super League Proposal Look Like?,” February 21, 2023.
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