The Breakaway and the Ban: Will football become the next competition law case study?

Renewed proposals for the creation of a closed European “Super League” have led FIFA and football’s six continental confederations (AFC, CAF, Concacaf, CONMEBOL, OFC and UEFA) to issue a statement reiterating that such a competition would not be recognised, and that any club or player who participates would be banned from participating in FIFA or confederation events, including the World Cup and the Champions League. If plans for a breakaway league continue to be pursued and football’s governing bodies maintain their opposition, a competition law challenge, similar to those previously mounted in ice skating, swimming, and ice hockey, may be on the horizon.

Background

Media reports suggest that the planned breakaway European “Super League”, comprising 18 football teams from England, Spain, Italy, Germany and France could involve clubs being offered up to €350 million to join the competition, then earning as much as €240 million a season going forward. Income from broadcasting and sponsorship agreements would also be shared by the clubs.

On 21 January 2021, a joint statement by FIFA and the six continental confederations emphasised the governing bodies’ position that all competitions should be organised or recognised by the relevant body at their respective level (i.e. by FIFA at the global level and the confederations at the continental level). The statement made clear that any club or player involved in such a breakaway competition would not be allowed to participate in any competition organised by FIFA or their respective confederation.

Some European Commission officials have already weighed in on the debate, with Vice-President Schinas suggesting that the breakaway league would “distort the universal and diverse nature of European football”. However, any support expressed by individual members of the European Commission is not per se decisive. On matters of competition law, a legally binding position of the European Commission can only be adopted by the College of Commissioners at the initiative of the Commissioner for Competition. The two constituent courts of the Court of Justice of the EU may well also have their say.

Potential Challenges

There is emerging evidence that sport’s governing bodies, with the potential to simultaneously monetise their respective sport and organise club and country competitions, are susceptible to allegations that they have abused their dominant market position.

A Common Theme

We are in familiar territory. The sports world is well-acquainted with the contention that rules or actions preventing athlete participation in breakaway events are in breach of competition law.

In December 2020, the General Court of the EU ruled that eligibility rules imposed by the International Skating Union (ISU), the governing body of professional ice skating, which prevented athletes who participate in events not authorised by the ISU from participating in its events, were in breach of EU competition rules. The Court confirmed the European Commission’s decision that the ISU’s penalty system was disproportionate and its severity could dissuade athletes from taking part in competitions not authorised by the ISU. Likewise in swimming, FINA has faced US competition law claims by swimmers and the promoter of a privately run event by the ‘International Swimming League’ after preventing participation in Olympic Games qualifying events for those swimmers who had participated in non-FINA approved competitions. FINA’s interim motion to dismiss the complaints was denied in December 2019. The Court found the anti-competitive conduct complaints were plausible claims for relief which FINA would need to answer. A trial is scheduled to take place in 2022.

A similar outcome occurred in relation to ice hockey in 2019, when the Finnish Competition and Consumer Authority annulled an agreement between the country’s top professional hockey league and its member clubs to collectively boycott ex-member Jokerit. Jokerit, though still based in Finland, has been a member of a Russian-based multinational league since the 2014-2015 season. The authority considered that the boycott amounted to a hardcore restriction of competition and ordered the anticompetitive conduct to cease under the threat of a periodic fine.

However, facts and stakes are different in the case of the breakaway European “Super League” and it remains open if and how the above arguments would apply.

Key Legal Players

Parties to previous actions have included clubs, player unions, agents, individual athletes and coaches. However, broadcasters and sponsors could also potentially take an interest, and may become actively involved in, any legal challenges related to the European ‘Super League’ given the lucrative nature of potential agreements and the tangible effect they could have.

Broadcasters played a central role in the rugby league-related legal disputes in Australia in the mid-1990s, which stemmed from the creation of a News Corporation-backed ‘Super League’ tournament to rival the Optus Vision-backed Australian Rugby League’s (ARL) premiership competition. Court approval for the Super League to operate was ultimately provided, with the Full Federal Court finding contractual agreements which committed clubs to playing exclusively in the ARL’s competition were exclusionary in contravention of anti-competitive conduct provisions. The competitions ran in parallel for a single season in 1997, before agreement was reached.

No doubt potential claimants and football fans alike will be watching closely for the next move by the European “Super League” and FIFA and the six continental confederations.

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