As the sports industry becomes ever-more commercialised, the role of competition law is increasingly coming under the spotlight.
In this article, Zachary Sananes and Kate Pollock highlight three sports-related competition issues that have recently garnered headlines.
FIFA Football Agent Regulation
In January 2023, FIFA introduced new ‘Football Agent Regulations’ designed to better regulate the role of agents and intermediaries. Most controversially (and no doubt due to sensational headlines reporting eye-watering agents’ fees), the new regulations impose a fixed cap on the compensation agents can earn when acting for their clients (whether players, coaches or clubs). This is likely to result in legal challenges by agents citing the alleged anti-competitive effect of the cap.
FIFA’s regulations govern the occupation of football agents within the international transfer system and apply only to representation agreements with an international dimension. National member associations, such as the Football Association in England, will be required to implement equivalent regulations, which could also come under domestic legal scrutiny.
European Super League (“ESL”)
Although the ESL was stopped in its tracks following the severe public and media backlash on its announcement in April 2021, legal proceedings have been afoot ever since to determine its legality.
Initially, the proponents of the ESL commenced pre-emptive proceedings before a Madrid court to avoid the effect of sanctions threatened by FIFA and UEFA, including expulsion from existing FIFA/UEFA competitions. The Madrid court subsequently referred the proceedings to the European Court of Justice (ECJ) to examine whether FIFA/UEFA’s rules and conduct (including the requirement for any new competition to receive their prior approval) should be regarded as anti-competitive.
Although the ECJ’s judgment is awaited, in December 2022, Advocate General Rantos delivered a non-binding opinion, which proposed the ECJ should find (among other things) that:
- The FIFA/UEFA rules under which any new competition is subject to prior approval are compatible with EU competition law, and
- EU competition law does not prohibit FIFA/UEFA from issuing threats of sanctions against clubs that participate in a project to set up a new competition.
Although this provisional analysis bodes well for FIFA/UEFA, whether the ECJ will reach the same view remains to be seen. Even if it does, there is speculation as to whether a reformulated version of the ESL remains a realistic (or inevitable) outcome in the future.
LIV Golf v PGA European Tour
This is another example of the emergence of a breakaway league, this time in the world of golf. Having recently joined the Saudi-backed LIV Golf tour, a group of golfers recently appealed against sanctions imposed on them by the PGA European Tour (of which they are also members).
Under the regulations of the DP World Tour (run by the PGA European Tour), the appellants were required to obtain ‘releases’ before being allowed to play in the financially lucrative LIV events. Although the appellants applied for such releases, the PGA European Tour refused to grant them due to LIV events conflicting with DP World Tour events and the wider competitive threat LIV posed. Despite not being granted the releases, the appellants played in LIV events, resulting in the sanctions under appeal.
Following a five-day hearing, an appeal panel appointed by Sports Resolutions dismissed the appellants’ case for the following reasons:
- although the regulations that prevented the appellants from playing in LIV events engaged the restraint of trade doctrine, the restraint was reasonable and justified bearing in mind the interests of the parties
- the relevant regulations did not constitute a restriction of competition by object or effect (on the basis that they fall within the ancillary restraint doctrine)
- the appellants suffered no procedural unfairness because their appeals were considered fully by an independent panel.
How similar competition law arguments will play out in the ongoing US legal proceedings between LIV Golf and the US PGA Tour will be closely watched.
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