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How would the litigation have been resolved, had the Court been allowed the opportunity to rule on it?

The issues raised by the ‘lost ruling’ in Charleroi are worth attention. They provide a convenient context in which to explore how and why choices about models of governance in sport may be affected by EU law. It will be argued here that the player release model challenged in Charleroi had much in common with the transfer system at issue in Bosman and the prior authorization system attacked in MOTOE: that is, sport is special enough to justify in principle a system that would not be visible in a ‘normal’ industry, but the particular system addressed in the case went beyond the limits of what could be considered legitimate. The player release rules exhibit the conflict of interest which is the classic problem found in governance systems that seek to insulate the autonomy of rule-makers from legal control even where the choices involved are of direct commercial interest to that rule-maker. The arrangements are based on an unbalanced representation of affected interests.

It is obvious that the player release rules, which have immediate consequences for clubs (in a prejudicial way) and for national associations and governing bodies (in a positive way), have economic effects within the internal market.85 They fall for examination in the light of EU law and, in particular, its framework, which grants conditional autonomy to sports governance. So, following Meca-Medina as a platform for reviewing the player release rules, account must be taken of:

... the overall context in which the decision of the association of undertakings was taken or produces its effects. More particularly, account must be taken of its objectives ... It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives.86

The essence of the inquiry asks whether the objectives pursued by the sporting practice can be achieved by measures which exert a less prejudicial impact on affected parties. If so, the practice is unlawful. In the terms used in association with Article 102 TFEU, it would not be proportionate, nor could it be held to be objectively justified. It would be an abuse of a dominant position.

The best way to show that a rule requiring player release is a necessary element in sports governance is, first, to show that nothing in EU law calls into question the legitimacy of international representative football, which exists alongside and connected to club football. This was made clear in the Court’s first ever excursion into EU sports law, Walrave and Koch, examined in Chapter 377 Were clubs free to choose whether to release players, international football would be reduced to a competition dependent for its quality and intensity on the diverse attitudes of clubs. It would be uneven and unpredictable. Mandatory player release seems indispensable if international football is to survive as a credible activity. But despite this insight [1] [2] [3]

the system that operated at the time of Charleroi is highly unlikely to have survived legal scrutiny, had the Court not had the chance whisked away by the out-of-court settlement of the dispute.

As explained previously, it is a fair summary of the prevailing system of player release that it requires clubs to subsidize competing undertakings. Clubs were obliged on pain of sanction to continue to pay wages to their players while those players adorned international tournaments from which other entities—FIFA, UEFA, national associations—made lucrative profits. Any advantage to clubs was received only indirectly, via proceeds transferred to the national association of which they are a member, and as a hard-to-quantify potential increase in the value of the player to the club as a consequence of exposure to a wider audience watching international representative football. In any event, with those often intangible benefits to clubs came countervailing costs: after international games and especially after major summer tournaments clubs often found that they had to nurse injured and tired players back to health. A player release system is needed to underpin the international game’s viability, but the argument runs that this player release system goes too far in protecting one set of commercial interests—those of the regulator— at the expense of another.

The system in place at the time of Charleroi offered no compensation to the clubs. This seems unjustifiably unbalanced in favour of governing bodies and national associations. Admittedly a player release scheme that forced national associations to cover the wages of players in full while they are on international duty would mean that some poorer national associations would simply be unable to call up their very best players: consider the financial impossibility faced by some African associations were they expected to pay wages of English- or Spanish-based players for even a short period. But this argues against a system according to which released players’ wages are paid in full: it does not defeat the argument that an uncompensated system of release could and should be replaced by one in which clubs are compensated in part by national associations or, probably even better as a device to sustain the competitive vitality of international football, that part of the income from international football should be diverted into a pool from which clubs shall be compensated on a fair basis tied to the contribution made by a player equally and without reference to the depth of the pockets of a particular national association. Rich associations would subsidize poorer associations, whereas under the system as it applied at the time of Charleroi it was clubs that subsidized all associations (and FIFA).

Moreover, the rules in force at the time of Charleroi had been shaped with no formal input provided by directly affected parties, the clubs. Football’s ‘pyramid’ structure of governance ruled out any direct formal contact between clubs and international governing bodies, instead routing the representation of club interests through national associations.

It is therefore submitted that the system of which Charleroi and Oulmers fell foul would have been condemned by the Court of Justice as an abuse of a dominant position had the litigation not been cut short. The system of governance was indefensibly unbalanced in favour of the commercial interests of the bodies which set the applicable rules. It follows from this analysis that the current version of the system is much more likely to survive attack rooted in Article 102 TFEU. The provision of some compensation to clubs that release players, combined with the louder voice permitted to clubs through the formal integration of the ECA as representative of the clubs into the ‘pyramid’, alters the governance structure towards a model that is less aggressively concerned to leverage the long-established power of the governing bodies to commercial advantage.88 A mandatory player release system is necessary to sustain international football and it is therefore justifiable, but it needs to be and has been remodelled since that attacked in Charleroi went too far. The current system probably complies with EU law—it meets the demands of conditional autonomy and falls within the sporting margin of appreciation explained in Chapter 7.4—but it should be borne in mind that it exists in its current form only because of the indirect transformative influence of EU law.

  • [1] The Arnaut Report, examined critically in Ch 5.5, argues at paras 3.42—3.48 that they are motivated by purely sporting considerations: this offers a perfect example of an intellectually baseless pleafor absolute sporting autonomy from EU law.
  • [2] Meca-Medina (n 3) para 42. See Ch 5.
  • [3] Case 36/74 Walrave and Koch v Union Cycliste Internationale [1974] ECR 1405.
 
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