Desktop version

Home arrow Law

The settlement of the litigation

In the proceedings before the Tribunal de Commerce in Charleroi the might of football’s governance structure was ranged against Charleroi, a small Belgian football club. FIFA enjoyed the support of interventions from over fifty continental and national associations. But Charleroi was not on its own. The club was supported by the so-called ‘G-14’ group of eighteen (sic) major football clubs. Charleroi had a particular grievance over the loss of their injured player Oulmers, but the clubs of the G-14 had a much greater long-term interest in attacking the rules governing player release. These are the clubs with the highest number of employees who are also regulars in international representative squads and these are the clubs that pay the highest wages. Consequently they had, and still today retain, a strong incentive to seek adjustment of rules which favour FIFA’s commercial interests over their own. They backed Charleroi in the litigation on player release for very sound commercial reasons. And it was this background context that led to the abandonment of the litigation.

In short, a deal was done in early 2008. The threat to the established system of governance was clear and well advertised[1] [2] [3] [4] [5] and, in stark contrast to Bosman, the Court of Justice was prevented from taking a stance. The litigation in the case was terminated and the G-14 group of major clubs was wound up.75 In return for this outbreak of peace the governing bodies in football agreed, first, to allocate a portion of the funds raised from the marketing of major international championships to establish a scheme to compensate clubs which release players and, second, to allow the clubs a louder voice in governance matters at transnational level. This was to be directed through a newly instituted European Club Association (ECA)/6

The ECA was a successor to the G-14, but its membership is much broader. It currently has 220 member clubs from fifty-three national associations in Europe. Its place in football’s governance structure is formally recognized. In short, the G-14 group was on the outside, lobbying to promote its members’ interests, whereas by contrast the ECA is on the inside. A Memorandum of Association struck between UEFA and the ECA in 2012 provided a basis for cooperation until 20 1 8.77 In 2015 it was agreed to extend this until 2022.7® The Memorandum of Association is stated to be a binding agreement, governed by Swiss law. Disputes arising out of the agreement are to be exclusively decided by the CAS. It declares a shared recognition of the benefits of both national team and club football, and commits the parties to promote cooperation in the interests of European football and to ensure that the views of the clubs are ‘properly’ represented in the decision-making process in European football structures. Annex 1 deals with questions of insurance, and provides that UEFA will conclude an insurance policy to cover the risk of ‘Temporary Total Disablement’ of players registered for European clubs when released for defined international fixtures. The required scope and scale of the insurance cover is defined in some detail.

The clubs have been able to extract a share of the profits made from major events (in part) thanks to reliance on their players. Within Europe, the 2020 UEFA EURO will generate 8 per cent of income from broadcast, commercial, and ticket- ing/hospitality for clubs, with the minimum set at €200 million, which represents a €50 million increase on the clubs’ share of UEFA EURO 2016 revenues.[6] In the particular matter of release of players it was announced in early 2015 that all clubs which had released players to appear at the 2014 FIFA World Cup staged in Brazil would receive compensation.[7] A total pot of US$70 million was shared according to the number of appearances made. So Real Madrid received $1,297,800, Chelsea $1,253,233, Benfica $501,900, Hull City $91,933, and Mysterious Cape Coast Ebusua Dwarfs $7,000. It was, moreover, made known in 2015 that the sums payable would be elevated for the Russia World Cup of 2018 and the 2022 event in QatarU

Other matters of governance which have been addressed with the involvement of the ECA include the scheduling of the international match calendar. It is plain that FIFA and its continental associations including UEFA, as sports regulators, need to play a role in overseeing the international calendar in order to prevent unnecessary clashes between attractive competitions. But here, once again, there is a risk of a conflict of interest. Clubs have incentives to push for a reduction in the number of international matches or, at least, to press for the programme to be streamlined.82 The success of their input is reflected in the deletion, with effect from 2014, of the August date for friendly international matches and the rise of ‘double-headers’ in the international calendar, so that players’ absence from their clubs is reduced. Similarly clubs are eager to persuade the African Football Confederation to schedule its bi-annual Cup of Nations as early as possible in January, to maximize its overlap with the winter breaks found in many European leagues, when the clubs do not need access to their players. However, FIFA, in deciding the pattern of the calendar, has its own incentives which are not only regulatory but also commercial. Its income streams are heavily dependent on the success and on the size of its own tournaments. In recent years FIFA has created a Confederations Cup, which occurs every four years, and it has greatly enlarged the world club competition. It has lengthened the list of events on the calendar in a way that directly benefits its own commercial interests. The IOC too is involved in this congestion: it is not at all exclusively sporting considerations that have led to the much higher profile lately attached to football at the Olympic Games, to the detriment of clubs that must release their players.[8] [9]

There is scope here for future friction and litigation. The continental championships—in Africa, in Europe, in South America, in Asia—are scattered across the year, which maximizes disruption for clubs forced to release players. There are naturally some reasons of climate for the selected dates, but this is not a total explanation. Part of the story is a desire to avoid competition between continental championships in order to maximize revenues from the sale of broadcasting rights and luring of sponsors. So, as with the player release system, the planning of the match calendar has embedded within it an identifiable commercial dimension, which reveals once again the endemic problem of a conflict of interest.84 The current pattern could readily be adjusted—in particular by aligning as many international tournaments as the weather will allow in the European summer—in order to rebalance a governance system currently loaded heavily against the clubs. The designation by FIFA of the 2022 World Cup in Qatar as a winter event shows where predominant power lies. The ECA allows the clubs a louder voice in governance design than they previously had, but litigation provoked that change and resort to litigation, inter alia, to challenge the design of the calendar, remains a potential strategy. Most of all, decisions about the calendar by a governing body which favour the competitions from which it stands to gain most are legally vulnerable.

The overall story behind the Charleroi case is that the clubs won concessions associated with governance by using litigation as a method to put pressure on governing bodies otherwise obstinately opposed to ceding clubs a stronger role. So, even without the need for a final formal ruling of the Court of Justice, the saga shows how EU law provides a lever with which to achieve change in the governance of sport—not to demolish the pyramid according to which football is regulated but instead to secure adaption in the application of the rules and to claim a right of participation in rule-making. In short, EU law’s notion of conditional autonomy provokes governance design to be sensitive to the crossover between the regulatory and commercial purposes of governing bodies.

  • [1] eg ‘Oulmers Test Case has FIFA Under-Siege’ The Irish Times (Dublin, 28 March 2006) accessed 29November 2016.
  • [2] This was reported on G-14’s website , but it is no longer available. On G- 14’s lifecycle, see W Grant, ‘The Representation of Football in the European Union: UEFAversus G-14’ in S Gardiner, R Parrish, and R Siekmann (eds), EU, Sport, Law and Policy (TMC Asser2009) ch 22.
  • [3] 76 accessed 29 November 2016. For media comment at the time, seeeg ‘G14 Disbands but Wins Wider Role’ The Guardian (London, 4 December 2007) Sports section, 4.
  • [4] Available via accessed 29 November 2016.
  • [5] accessed 29 November 2016.
  • [6] accessed 29 November 2016.
  • [7] ‘396 Clubs to Receive Share of 2014 World Cup Benefits’ accessed 29 November 2016. 81 ‘World Cup: Clubs to Receive ?142 Million for Releasing Players’ accessed 29 November 2016. 82 eg ‘Fifa Risks War with Clubs over International Friendlies’ The Guardian (London, 15 June2011) Sports section, 1; ‘Scudamore [chief executive of the English Premier League] Warns Fifa overFixture List’ The Daily Telegraph (London, 3 August 2011) Sports section, 10; ‘UEFA Plays Hardballwith European Football’s Elite Clubs over Demand for International Fixtures Reduction’, February2012 accessed 29November 2016.
  • [8] Schalke 04 (n 70). cf also Cases C-51/96 and C-191/97 Deliege v Ligue de Judo [2000] ECRI-2549, para 55, Opinion of Cosmas AG.
  • [9] 84 Football tends to dominate the debate but there are other examples of such conflict: see egA Cygan, ‘Competition and Free Movement Issues in the Regulation of Formula One Motor Racing’in B Bogusz, A Cygan, and E Szyszczak, The Regulation of Sport in the European Union (Edward Elgar 2007) ch 4.
 
Source
< Prev   CONTENTS   Source   Next >

Related topics