The Principles of EU Sports Law
The core concern of this book is to explore the extent to which sport deserves autonomy from legal supervision, in particular in the context of EU law. Sport is special, but how special? And how should the perception that sport is—to some contested extent—special affect the application of legal rules? This inquiry forms the intellectual heart of sports law and the need to pursue it is the reason why sports law deserves to be treated as a distinct discipline, and not simply as an instance of the application to sport of an accumulation of existing and diverse legal rules.
Three interconnected themes animate the narrative. First, sport enjoys a conditional autonomy from EU law; second, in shaping the terms of this conditional autonomy sporting bodies and the institutions of the EU, most of all the Commission, have been incrementally induced into a relationship of cooperation rather than one based on top-down command and control; and third, EU law secures its legitimacy in application to sport by adding value to the patterns according to which it is organized. These three themes combine to show the way in which the frictions caused by collision between the concern for cross-border competition in a market cleansed of nationality discrimination under EU law and the claims to autonomy made in the name of the lex sportiva have been mediated.
The first theme, that of conditional autonomy, is based on willing recognition that sport possesses features that distance it from ordinary economic activity. Chapter 1 of this book demonstrates proper acceptance that sport is special in important respects. Participants in sport operate under conditions of mutual interdependence: a single supplier in most markets enjoys the bounties of economically dominant power, a single club in a sports league produces only the sound of one hand clapping. Moreover, governing bodies in sport legitimately appeal to their aspiration to preside over a truly global pattern of rule-making and rule enforcement within which sporting expertise informs the operation of the system. Sport, they argue with some justice, should not be fragmented along national lines as a consequence of the intrusion of local jurisdiction-specific peculiarities which, moreover, may not be attuned to the particular features of sport.
Motivated by these anxieties, sporting bodies have devised important strategies to achieve an insulation of sporting autonomy from the law of states or of the EU. This is the subject matter of Chapter 2. The system over which the Court of Arbitration for Sport (the CAS) presides represents an increasingly dense and sophisticated terrain on which is developed the lex sportiva. It is a contractually based separation of a system that is sensitive to sport’s special character—and which claims uniform global application—from supervision by ‘normal’ law. It goes so far as to challenge what we mean by ‘law’, in the sense that it provokes reflection on the quality of norms that have come to exert powerful influence on the organization of sport without being subject to the type of democratic legitimation that is conventionally found at state level. Moreover, sport has an economic and political power that on occasion secures it a shield from the normal expectations of the legal order of states within which it operates. This ability to extract legislative concessions to the claim to sporting autonomy is peculiarly successful where the prize of hosting the top level of international sport, the Olympic Games and the World Cup, is at stake. However, neither the contractual nor the legislative route to securing sporting autonomy is watertight. The EU routinely displaces the claim of the CAS that its rulings should be treated as final both by equipping the Commission to investigate matters that offend against EU internal market law even if they have been the subject of a final CAS ruling and by requiring the national courts of EU Member States to apply EU internal market law as rules of public policy to supervise matters decided through the arbitral process. And since the EU has neither a sports team of its own nor an interest in bidding to host a major event in its own right it is immune to the blandishment of governing bodies seeking commercially attractive concessions from legal norms.
As is shown in the conclusion to Chapter 2, it is sometimes the case that sporting bodies must instead resort to the third of the three available strategies in order to protect the lex sportiva from legal supervision from ‘outside’ the world of sport. This is the interpretative or adjudicative solution, which involves claims before ordinary courts that sport is special enough to deserve a degree of tolerant and context- sensitive treatment in the application of legal rules to sporting activities. There is a contested zone within which it is necessary to determine whether practices pursued in sport which are not found in other sectors of economic activity are truly a reflection of the special character of sport or in truth simply anachronisms or, worse, commercially motivated arrangements dressed up as sporting specificity. In practical terms this route has long been regarded with scepticism or even downright hostility by sporting bodies, for it requires them to engage with and persuade institutions that are no part of the lex sportiva—normally judges but also sometimes administrative bodies, such as, in the EU, the Commission—that sport deserves a degree of insulation from orthodox legal rules. However, intellectually this is the very heart of sports law, for challenges of this type require a decision on how far sport is special, and what this should entail for the interpretation and application of legal rules. Moreover, in the EU practice has moved on, since Article 165 of the Treaty on the Functioning of the European Union (TFEU) represents a culmination of the process whereby sports governing bodies were made to realize that securing a constitutional exclusion from EU law was unavailable, and that instead they must accept inclusion but on terms that they could seek to mould in favour of a practical concordance between the assumptions of EU law and those of the lex sportiva. This is the second theme mentioned earlier which animates this book: the emergence of a relationship of cooperation (of sorts) between regulator and regulated. What really matters is the shaping of the conditions attached to sporting autonomy under
EU law, and to an extent this is developing as a joint enterprise engaging governing bodies in sport and the European Commission, albeit ultimately the authoritative voice is that of the Court of Justice.
So the principal strategy that must be pursued by sporting bodies intent on a mediation between their practices—the lex sportiva—and EU law is the adjudicative or interpretative route.
Chapter 3 shows how sport is in principle treated as subject to EU law wherever its organizing structures and practices fall within its scope, which is commonly and readily found to be the case given the sweeping application of EU law to economic activity exerting effects on the territory of the twenty-eight Member States. This draws in the law of the internal market—free movement, competition, and nondiscrimination on the basis of nationality—and, since 2009, it engages too the carefully constrained legislative competence found in Article 165 TFEU, which asserts the EU’s mandate to respect the specific nature of sport. So the assertion of constitutional principle that the EU operates within the limits set by its Treaties under Article 5 of the Treaty on European Union (TEU)—the so-called ‘principle of conferral’—is revealed in practice to entail a generous grant of competence to review practices with economic effects even in sectors where the EU is provided with no explicit competence by its Treaties (which was true of sport until 2009) or where that competence is of only limited scope (which is true of sport today). This is why sporting ambition to achieve absolute autonomy from the application of EU law is so commonly thwarted. Chapter 3 sets out the basic framework of EU law and the detail is elaborated in the chapters that follow.
This is the material on which to rely in order to make good the case that EU law secures its legitimacy in application to sport by adding value to the patterns according to which it is organized. This is the third of this book’s three themes mapped earlier. The argument throughout this book is that in the application of free movement and competition law, the EU only rarely displaces the choices made by sporting bodies. There is no absolute autonomy granted to sport, so sporting practices are routinely put to the test, but the conditional autonomy that is granted by EU law is openly sensitive to sport’s claimed special character, and sport’s preferences usually survive the test. For the long period prior to 2009, before the arrival in the Treaty of Article 165’s commitment to the specific character of sport, the Court and the Commission were vigorously determined to make sure that EU law did not treat sport as an economic activity like any other. The landmarks in the case law examined in this book all reveal receptivity to the argument that ‘sport is special’, even if the argument is not always made good in the particular circumstances that have generated litigation. Since 2009 the application of EU law explicitly entails taking into account the specific nature of sport recognized by Article 165 TFEU. This provides no general exception, but rather serves only to repackage the pre-existing orientation of the Court and Commission. Sport enjoys a ‘conditional autonomy’ under EU law: it enjoys an autonomy from the orthodox demands of non-discrimination, free movement, and competition law on condition that it is shown that its practices, which would otherwise offend against such EU values, are necessary for the pursuit of the relevant sporting activity. The model of
‘conditional autonomy’ first emerged in admittedly but necessarily ad hoc fashion as the Court grappled with the intersection of EU internal market law, first free movement and later competition, and sporting practices. From Walrave and Koch through Bosman to Meca-Medina andMajcen it found ways to articulate the notion that sport cannot in principle be immunized from the application of the rules of EU law but that its special features shall form part of the interpretation and application of those rules, even if the precise jurisprudential character of that concession was elusive. This was the subject matter of Chapter 4 in the context of free movement and Chapter 5 in application to competition law. Ultimately, in Meca-Medina and Majcen the Court settled on the necessity for a case-by-case analysis in order to determine whether sporting practices passed the test—that is, whether the conditions for autonomy were met. And in doing so it drew on the wider pattern of EU internal market law: it is not that sport alone is special, but rather that the assessment of restrictive effects must also be made in context, with assessment included of the objectives pursued to check whether they are legitimate and of the methods used to ensure they do not violate the demands imposed by the proportionality principle. The Commission too followed in this vein, first in its decision-making practice in the field of EU competition law (Chapter 5) and then more generally in the elaboration of policy orientation, most conspicuously in the highly successful and influential 2007 White Paper, examined in Chapter 6 and notable for the Commission’s sophisticated and thoughtful depiction of the specificity of sport.
Chapter 6 also explains the road to Article 165 TFEU and, the second theme mentioned earlier, coexistence between affected parties and an end to terse rejection by sporting bodies of the EU’s pretensions. Article 165 creates an EU legislative competence in matters of sport for the first time—albeit, as detailed in Chapter 6, a slender one. It puts an end to the protest advanced with wearying frequency in the past by sporting bodies that EU law in general and the EU’s institutions in particular have no business addressing sport. At the same time, as Chapter 6 shows, there is no hint (so far) that the EU aspires to assume a powerful role in directing sports policy. Article 165 (so far) is used to frame the EU’s contribution to the shape of sport alongside, not above, that of other relevant private and public, national and international, actors. The Commission’s attempts to promote, but not impose, improved patterns of governance in sport, examined in Chapter 10.12, provide a good example, even if they are considerably less high-profile than the raids on FIFA headquarters conducted in 2015 by officials of the US Department of Justice (Chapter 2.3.4). EU sports law and policy is now built constitutionally on Article 165 TFEU and the direction therein that the EU ‘shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function’ and that EU action shall be aimed at ‘developing the European dimension in sport, by promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports, and by protecting the physical and moral integrity of sportsmen and sportswomen, especially the youngest sportsmen and sportswomen’.
‘Fairness’ and ‘openness’ both have some potential to carry interpretative force as principles of EU sports law. Fairness might be invoked by sports bodies to argue that practices which restrain competition should nonetheless be treated as compatible with the Treaty in so far as they achieve a better balanced distribution of wealth within a sport. Chapter 11.7 explores this in connection with the promotion of solidarity through collective selling of broadcasting rights. Fairness may also be invoked in support of UEFA’s arrangements for Financial Fair Play, examined in Chapter 10.9. ‘Openness’ has similar interpretative potential. Chapter 8.12 considers whether EU law, interpreted in the light of Article 165(2) TFEU, tolerates rules that exclude non-nationals from competitions designed to crown a national champion. In Chapter 10.8 it was asked whether the organization of Leagues along national lines is compatible with ‘openness’ as enshrined in Article 165 in so far as it leads to the suppression of cross-border club mobility. The suggestion is that such an attack on sporting structures will fail but the point is that Article 165 offers a vocabulary apt to challenge the durability of sporting autonomy in the shadow of EU law.
However, the argument presented in this book is not that Article 165 TFEU possesses transformative force. The principal function of Article 165 is not to produce new solutions but rather to reinforce the pre-existing trajectory of EU law applied to sport. As Chapter 7 explains, the evolved pattern of internal market law is helpfully wrapped up in Article 165 s embrace of ‘the specific nature of sport’. It is not altered by it. Chapter 7’s main message is to show a route to understanding Article 165 as a basis for an integrated EU sports law which claims legitimacy through its capacity to add value to the lex sportiva. The application of EU law is structured around a sporting margin of appreciation which serves to mediate the tension between the assumptions of EU law and those associated with the defence of sporting autonomy. This summary brings together: (a) the Court’s famous paragraph 106 in Bosman, in which, as explained in Chapter 4.6, it acknowledged ‘the considerable social importance of sporting activities and in particular football’ and treated ‘the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and of encouraging the recruitment and training of young players’ as legitimate; (b) its identification in Deliege v Ligue de Judo of rules governing selection as ‘inherent’ in the organization of sport (Chapter 4.10); and (c) the contextually sensitive appreciation of sporting practices in the light of EU competition law pursued in Meca-Medina, where, as elucidated in Chapter 5.3.4, the Court, addressing a sanction imposed for violation of anti-doping rules, assessed effects restrictive of competition in the light of the objectives to maintain a clean sport pursued by the governing body. It is this package of judicial practice, supplemented by the Commission’s 2007 White Paper, which interrogates the ‘specificity’ of sport (Chapter 6.5), and endorsed by Article 165 s depiction of ‘the specific nature of sport’ (Chapters 3.5, 6.9), which leads to the argument presented in Chapter 7.3 for a convergent understanding of EU law applied to sport and to the presentation in Chapter 7.4 of a sporting margin of appreciation in the application of EU law to sport. This is the conditional autonomy granted to sport by EU law.
It is compelling that the more slender the EU’s legislative competence, so the more lenient should be the review practised in the name of EU internal market law. The relatively rare occasions on which sporting practices have been condemned as violations of EU law are readily understood as corrections of choices that reflect severe imbalances in power and indefensibly anachronistic choices. This is visible in Chapter 8, concerning nationality rules in club football, Chapter 9 in relation to a transfer system that trapped even out-of-contract players, and in Chapter 10 where governance arrangements that allow sports bodies to leverage their regulatory power to achieve commercial advantage—the ‘conflict of interest’—are exposed as peculiarly vulnerable to attack driven by EU law in a number of different areas of rule-making and organizational practice in sport. In these areas, reform provoked by EU law has typically still permitted retention of a system that is reflective of sporting specificity—discrimination on the basis of nationality in international football, a sustained though narrowed transfer system, the prohibition of ownership of more than one football club, monopoly power for the governing body as regulator—only requiring that it be adjusted to take full account of the interests of all affected parties, including professional athletes. It is argued in Chapters 8, 9, and 10, in particular, that EU law contains an inexplicit but identifiable scepticism about the permissibility of restraints imposed in the labour market in circumstances where the objective in view may be secured through arrangements which burden only clubs. The net result is that employees in sport are not treated identically to those in ‘normal’ occupations—there is, for example, still a transfer system, albeit reduced in scope, and there are still restrictions on switching between international representative teams. However, their status has become a good deal less atypical as a result of the modification of the lex sportiva which has followed its interaction with the requirements of EU law. Not only players but also clubs have been able to rely on the leverage provided by EU law to induce change in patterns of governance: the system applicable to the release of players for international representative football examined in Chapter 10.7 provides a good example of this dynamic process, which involves both legal and extra-legal pressures and incentives.
The aggrieved squawking of governing bodies deserves to be treated as exaggeration. EU law puts sporting practices to the test when they collide with the demands of the internal market, but that test is flexible and context-specific and it is applied with a margin of appreciation. EU law takes the rough edges off sporting practices and it induces better governance, but it does not demand a retreat to the banality of sausage-making or the provision of financial services. Sport remains—to an extent—special. Moreover, recent developments, above all the embrace of inclusion rather than exclusion which lies at the heart of Article 165 TFEU, demonstrate that a more stable and cooperative relationship between all bodies with interests in sport is emerging in Europe.
It is increasingly apparent that sporting bodies and the institutions of the EU, most of all the Commission, are engaged in a joint enterprise in fleshing out the multiple interactions between EU law and the lex sportiva. Chapter 9’s treatment of the renovation of the transfer system is a clear example of this trend towards institutional cooperation; it is visible too in the development of UEFA’s Financial
Fair Play scheme, addressed in Chapter 10.9; and Chapter 11 provides another case study in its discussion of the relatively permissive attitude taken by the Commission to the collective selling of rights to broadcast sporting events, commonly on an exclusive basis.
EU law secures its legitimacy in application to sport by adding value to the patterns according to which sport is organized. Over forty years since Walrave and Koch and over twenty years since Bosman, EU sports law deserves to be treated as an intellectually distinct discipline. Its foundational concern is to interrogate the strength of the claim that sport deserves autonomy from legal supervision in consequence of its economic and cultural peculiarities—that in a sports league there is inter-dependence among participants that is absent from most markets and that sport is typically governed by global rule-making bodies which claim expertise in their field. EU law is sensitive to these claims that sport should be treated in its true context. Sport has, in the language of Article 165 TFEU, a specific nature. But the autonomy which EU law grants is conditional, not absolute. Sport enjoys a conditional autonomy from EU law, and the most intriguing issues in EU sports law concern the elucidation of those conditions. Their shape gives content to the specific nature of sport asserted by Article 165 TFEU. This is the heart of EU sports law, and exploration and critical evaluation of the conditions which EU law places on the autonomy of those engaged in sport-related activity provides most of the content of this book.