A League of Their Own – What do the RFL’s new changes mean for Rugby League?

Rugby League in Great Britain is set to undergo a major shake-up. The sport’s governing body in England, the Rugby Football League (RFL), in partnership with its strategic partner, the global sports media company, IMG, is seeking to increase fan engagement with a raft of changes. The RFL Council, the sport’s UK decision-making body, comprising representatives from all three professional competitions and the community game, has voted by a large majority to axe automatic promotion from next season. Amid claims arising in other sports that interference with promotion and relegation mechanisms can distort competition (most notably in respect of football’s European Super League project), we explore the potential implications of this first measure of the RFL and IMG’s Reimaging Rugby League project.

Changes to the promotion structure

Under the new system proposed by IMG, British clubs will reportedly be graded Category A or B based on on- and off-field metrics that will be finalised over the coming year. The gradings will be introduced on an illustrative basis in 2024 before the system is rolled out in 2025. Category A clubs are assured of a place in the top flight while the remaining Super League places will then be taken by the highest-ranking Category B clubs.

The grading criteria for promotion is as follows:

At a special general meeting of the RFL Council on 19 April 2023, the proposal passed with an 86% majority across the eligible clubs from the Super League, Championship and League One (the Grading Criteria Decision).

The impact of the new structure

Of the £24 million per annum that Rugby League’s current Sky Sports broadcasting contract generates, around 80% of it reportedly goes to the Super League. Being part of the Super League also provides clubs with greater access to revenues from sponsorship, hospitality, and other associated revenues including a larger footfall for home games. The leagues below share the remainder of the funding with other stakeholders and receive comparatively less publicity and interest in their level of the sport.

Clearly, the certainty for a Category A club that it would not lose the benefits of Super League involvement after a poor season on-field brings greater security and makes for a more attractive investment proposition, meaning debt will be easier to source and growth is more achievable. Conversely, the Category B clubs will be more at risk of relegation from the Super League, making it more difficult to attract funding and grow sustainably.

Challenges to the new structure

Criticism has been levelled at the RFL and IMG’s plans from a small sub-set of clubs, most notably Championship side (and 2022 League One champions) Keighley Cougars, whose chief executive has branded the proposals “unfair…anti-competition”, “sport by spreadsheet”, and creating an “elite cartel”. Parallels have also been identified with the European Super League in football, begging the question of whether the Grading Criteria Decision would be open to any form of legal challenge.

Any challenge in the public law sphere would be unlikely to succeed, as the general position in England is that sports governing bodies (SGBs) (like the RFL) are not public bodies for the purposes of public law judicial review. It would be difficult to argue for an exception for the sake of challenging quasi-legislative rules, as opposed to decisions by the executive of a public body of the sort typically amenable to judicial review.

Instead, actions of SGBs should typically be brought in private law proceedings (in the courts or by arbitration) as the relationship between SGBs and their members is a private law one (whether contractual or in any event based on the SGB’s control of its sport otherwise). Here, a private claim against the RFL based on competition law, arguing that the Grading Criteria Decision gives rise to an anti-competitive agreement, is more likely.

Anti-competitive agreements

UK competition law prohibits agreements that may affect trade in the UK and have as their object or effect the prevention, restriction, or distortion of competition in the UK, unless an exemption applies. Clubs wishing to challenge the Grading Criteria Decision on competition law grounds may point to the major advantages that Category A status brings both on and off the field, and the corresponding impact this may have on the distortion of competition between clubs.

However, if the Grading Criteria Decision is in pursuit of legitimate objectives, and the measures in that Decision are inherent and proportionate to those objectives, the Decision may not necessarily be anti-competitive (see Meca-Medina) and such a claim may falter. For example, in Saracens’ appeal against its breaches of the salary cap in rugby union in 2019, the disciplinary panel found that the promotion of financial stability was a legitimate objective that could justify derogation from pure competition. Similarly, the RFL may well point to the stated aims of the Grading Criteria Decision being to secure “sustainable growth for the game as a whole” in defending a competition-law based challenge.

However, a more analogous case to the Grading Criteria Decision may be rugby union club London Welsh’s claim against the RFU after its promotion to the Premiership was denied on the ground that it failed to meet a non-sporting aspect of its minimum standards criteria (regarding stadia requirements). London Welsh challenged the application of the rule as being contrary to competition law. The Independent Appeals Tribunal ruled in the club’s favour, finding that promotion should primarily be determined by on-pitch performance and that a derogation from that would need to be necessary and proportionate. The RFL’s decision may similarly be vulnerable to challenge if its necessity is not carefully scrutinised and kept under review. This is particularly so when on-field performance constitutes only 25% of a club’s grade under the Grading Criteria Decision.

Comment

We’ll have to wait for more detail on the Grading Criteria Decision in the run-up to its initial introduction (on an illustrative basis) next year, but it’s already clear that the new rules themselves, and their application, are likely to be scrutinised closely by affected clubs, particularly those likely to be at the fringes of categories. To mitigate the risk of challenge, the RFL will need to be clear on the objectives of the rules (and the legitimacy of those objectives) and that the new rules are necessary and proportionate to achieving them. For example, it remains to be seen how regularly grading criteria are to be re-assessed, and increased regularity of re-grading may reduce the risk of clubs’ categorisation based on non-sporting criteria being deemed beyond what is necessary or proportionate. The criteria themselves will also need to be transparent and applied in a fair and non-discriminatory manner.

While time will tell whether the implementation of Rugby League’s new rules around promotion, and their subsequent application are vulnerable to challenge, they serve as the latest example of the nuances for SGBs that seek to reform their sports within the confines of competition law and under intensive scrutiny from diverse stakeholders.

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