Sport Meets Antitrust: Does the European Sport Model preclude Super League ambitions?

The “European Super League” is a project that was announced in April this year and then fell apart within a few days. The idea behind it, however, can change European club football, split football’s fan base and shake up the so-called European Sport Model. At the same time, it is definitely an interesting topic from the perspective of competition law. One may question whether the league itself, i.e. the cooperation of certain clubs, but also whether the opposing measures of the associations are in line with EU competition law. Fortunately, the Court of Justice of the EU (“CJEU”) is currently assessing a number of competition law aspects in connection with the latest Super League project. The CJEU case has encouraged European institutions to comment directly or indirectly on the Super League concept, including the Council of the EU (“Council”), which stressed the importance of the European Sport Model in its recent resolution. In light of this, it is time for a half time analysis: What does the Council’s resolution say, how can it be placed into the context of recent events and what is the current status of the European Super League dispute?

The Council’s recent resolution

From 29 to 30 November 2021, sport ministers from EU Member States came together for a meeting of the Council on Education, Youth, Culture and Sport. Among the Council meeting’s outcomes was a resolution detailing the key features of the European Sport Model. Therein, the Council and the representatives of the EU Member States’ governments promote European sport’s pyramidal structure, an open system of promotion and relegation, the grassroots approach and solidarity, sport’s role in national identity, structures based on voluntary activity and sport’s social as well as educational functions.

While each of these features alone warrants closer analysis, perhaps the most interesting aspect is the Council’s promotion of open competition characterised by a qualifying process that is based on sporting merit. The Council’s resolution comes at a time of vigorous debate over the proposal of a Super League in European football, featuring a nearly-closed system in which 15 of the 20 spots in the league would be permanently reserved for its founding teams. With its newly-adopted resolution, the Council joins opinions previously given by the European Commission (“Commission”) and several EU Member States in relation to the European Super League case of the CJEU.

EU competition law’s applicability to the economic sector of professional sports

Throughout recent decades, professional sport has turned into an economic force. Few other sports have experienced such professionalisation as European football. Due to increased popularity and viewership, broadcasting license fees and sponsorship deals (to name two major sources of revenue) have skyrocketed and economic interests started taking centre stage. This is quite obvious today, but it already became apparent a few decades ago.

With commercialization, the question of whether (EU) competition law is applicable to sport came into the spotlight. While the sports industry in Europe seemed to have largely escaped the attention of competition authorities and courts for a long time, it is now clear – based on the decisions in Meca-Medina (2006) and ISU (2017 and 2020) – that EU competition law is generally applicable in matters of sport.

Today, the economic sector of professional sports is firmly placed on the radar of competition authorities worldwide, and decision-makers within professional sports must pay attention to competition law and the risks entailed in limiting competition. Whether in the context of an application for membership in a sports association, the drafting of statutes, agreements on athletes’ salaries or the establishment of competing sports competitions: Competition law simply cannot be ignored.

The European Super League 

This was certainly also on the minds of the top European football clubs when they proposed the foundation of the European Super League. This was supposed to be a project independent from football’s European governing body UEFA and set up to rival that association’s own continent-wide club tournament, the UEFA Champions League. The idea of reforming or creating an alternative to UEFA’s tournaments is not new, with similar proposals dating back to the 1980s. Thus far, however, the advances usually resulted in UEFA making concessions to the clubs and the UEFA Champions League defending its position as the pinnacle of European football. 

The clubs’ proposal was not only strongly opposed by UEFA threatening to exclude the founding clubs from its own tournaments, but also met with heavy backlash from fans, who feared that the Super League’s nearly-closed competition would damage the spirit of the game by side-lining national competitions and the merit-based approach to qualification.

Although the European Super League collapsed just a few days after its announcement when the British clubs withdrew their support, the issue is still highly relevant, especially from a competition law point of view. A small consortium of clubs is still pursuing the project and remains in open dispute with UEFA about the future of European club football. Additionally, the European Super League conflict is currently being challenged before the CJEU after a Madrid court asked for a preliminary ruling in May 2021 on the question of whether FIFA’s and UEFA’s suppression of competing football leagues is in line with European competition law (see here for pleas in law and main arguments as well as questions referred).

The clubs argue that UEFA’s opposition to plans like the European Super League constitutes an abuse of market dominance, while FIFA and UEFA assert that the existence of a single governing body is necessary to guarantee a system of relegation and promotion based solely on team performance.

Commission, EU Member States and Council may side with associations

Although the CJEU’s ruling is not expected before next summer, the matter is already gaining more and more traction. In October, 16 of the 27 EU Member States reportedly declared their disapproval of the top clubs’ European Super League ambitions. Also the Commission has recently backed the associations: According to the opinion it submitted to the CJEU, the blocking of rival leagues by a sport’s governing body may be justified by legitimate objectives.

The Council has now – intentionally or unintentionally – underpinned the Commission’s position. Without directly addressing the CJEU case, the Council recapped the most important features of the European Sport Model, many of which appear contrary to the proposed Super League. According to the resolution, “sport in Europe is […] in principle organised by one federation per sport, allowing for a comprehensive approach to rules, regulations, and standards as well as […] qualifications for competitions.” The North American Sport Model, on the other hand, is characterised by closed leagues, without any possibility of promotion or relegation.

The EU Member States’ sport ministers drew the attention to the “consequences closed sport competitions could have on organised sport in Europe”, and warned of a “fundamental change in the sport qualifying processes usually based on sporting merit.” According to the resolution, an “open system of promotion and relegation” is among the “key features” of the European Sport Model envisioned by the Council.

To sum up, the Council, the Commission and the EU Member States seem to reinforce the football associations’ view that the protection of the European Sport Model justifies any potential restriction of competition that might result from the opposition to the creation of a new Super League.

Next Steps

These developments naturally do not pre-empt the CJEU’s decision, and the Commission is in no way paving a one-way street to the associations’ benefit: As part of its submission, the Commission warned that associations must set up clear and transparent rules in order to prohibit teams and players from participating in rival leagues – a requirement that UEFA may currently fall short of, and that at least life-long bans of athletes participating in rival leagues should be deemed disproportionate. At the same time, the European Super League consortium already suggested a potential change to the initial plan, moving away from the system of nearly-closed competition.

It remains to be seen what new twist the CJEU’s eagerly anticipated competition law ruling will bring to the Super League discussion, as well as to the very dynamic field of sports and competition law as a whole.

 

 

Authored by Christian Ritz, Dennis Cukurov and Frederik Junker.

 

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