Challenges for the European Super League
At 11:15pm GMT on Sunday 18 April 2021 the European Super League (“ESL”) issued a press release stating that ‘Twelve of Europe’s leading football clubs today come together to announce they have agreed to establish a new mid-week competition, the Super League, governed by its Founding Clubs’. Those founding clubs are AC Milan, Arsenal FC, Atlético de Madrid, Chelsea FC, Barcelona FC, FC Internazionale Milano, Juventus FC, Liverpool FC, Manchester City FC, Manchester United FC, Real Madrid CF and Tottenham Hotspur FC (“the Founding Clubs”).
The ESL’s press release had been expected for most of 18 April 2021. While waiting for the ESL’s press release, football’s stakeholders issued condemnation of the ESL and its anticipated proposed new competition.
The Football Association (“FA”) stated that the ESL ‘would be damaging to English and European football at all levels and will attack the principles of open competition and sporting merit which are fundamental to competitive sport’. The FA Premier League (“FAPL”) stated that the ESL would ‘undermine the appeal of the whole game, and have a deeply damaging impact on the immediate and future prospects of the Premier League and it’s member clubs, and all those in football who rely on our funding and solidarity to prosper’.
UEFA issued perhaps the most threatening condemnation:
‘If [the ESL] were to happen we wish to reiterate that we – UEFA, the English FA, RFEF, FIGC, the Premier League, LaLiga, Lega Serie A, but also FIFA and all our member associations – will remain united in our efforts to stop this cynical project, a project that is founded on the self-interest of a few clubs at a time when society needs solidarity more than ever.
We will consider all measures available to us, at all levels, both judicial and sporting in order to prevent this happening. Football is based on open competitions and sporting merit; it cannot be any other way.
As previously announced by FIFA and the six Confederations, the clubs concerned will be banned from playing in any other competition at domestic, European or world level, and their players could be denied the opportunity to represent their national teams’.
This article will consider (i) the main difficulty the ESL faces in seeking to create its proposed ‘new mid-week competition’, including what sanctions FIFA, UEFA, the FA and/or the FAPL could impose on the Founding Clubs; and (ii) whether the ESL and/or Founding Clubs could oppose those challenges for being in breach of competition law.
Challenges for the ESL
The ESL’s press release provided some details of the format of its proposed ‘new mid-week competition’:
‘20 participating clubs with 15 Founding Clubs and a qualifying mechanism for a further five teams to qualify annually based on achievements in the prior season.
Midweeks fixtures with all participating clubs continuing to compete in their respective national leagues, preserving the traditional domestic match calendar which remains at the heart of the club game.
An August start with clubs participating in two groups of ten, playing home and away fixtures, with the top three in each group automatically qualifying for the quarter finals. Teams finishing fourth and fifth will then compete in a two-legged play-off for the remaining quarter-final positions. A two-leg knockout format will be used to reach the final at the end of May, which will be staged as a single fixture at a neutral venue
As soon as practicable after the start of the men’s competition, a corresponding women’s league will also be launched…’
The best way to describe ESL’s proposed competition is the UEFA Champions League (“UCL”) without the qualifying phase and fewer but larger groups at the group stage. While it is expressly stated that the ESL proposes to run alongside domestic leagues, it is not expressly stated that the ESL would run alongside the UCL or other UEFA club competitions. However, and notwithstanding sanctions that could be imposed on clubs for forming or participating in the ESL, ESL clubs’ participation in domestic leagues is subject to rules and regulations providing for qualification for UEFA club competitions. So the starting position would appear to be domestic leagues, UEFA club competitions, and the ESL running together each season.
Dr Katarina Pijetlovic, reader in sports law at Manchester Metropolitan University and author of ‘EU Sports Law and Breakaway Leagues in Football’ noted that if the ESL ‘wants to as much as get a chance to succeed, it will have to accept a regulatory control of UEFA/FIFA/[national associations]’. Indeed, the FIFA Statutes, article 72.1 states:
‘Players and teams affiliated to member associations or provisional members of the confederations may not play matches or make sporting contacts with players or teams that are not affiliated to member associations or provisional members of the confederations without the approval of FIFA’.
The FIFA Statutes, article 22(3)(e) also states:
‘Each confederation shall have the following rights and obligations:
…
e) to ensure that international leagues or any other such groups of clubs or leagues shall not be formed without its consent and the approval of FIFA’.
Further, the UEFA Statutes, article 49 states:
‘UEFA shall have the sole jurisdiction to organise or abolish international competitions in Europe in which Member Associations and/or their clubs participate. FIFA competitions shall not be affected by this provision’.
The UEFA Statutes, article 51 also states:
‘No combinations or alliances between UEFA Member Associations or between leagues or clubs affiliated, directly or indirectly, to different UEFA Member Associations may be formed without the permission of UEFA’.
The Founding Clubs are bound by the FIFA statutes and UEFA statutes pursuant to their national associations rules and/or their respective domestic leagues rules. For example, the FA Rules, rule A1 states:
‘All Clubs… shall play and or administer football in conformity with these Rules and also:
…
A1.2. the statutes and regulations of FIFA and UEFA which are in force from time to time’.
FA Rules, rule B1.1 also states:
‘Associations or Clubs in membership of or affiliated to The Association and/or an Affiliated Association shall not play against any association or club belonging to any association, competition or combination of clubs to which such consent has not been given’.
Similarly the FAPL Rules, rule B.14. states:
‘Membership of the League shall constitute an agreement between the League and Club… and between each Club to be bound by and comply with:
…
B.14.2. the Football Association Rules;
…
B.14.5. the statutes and regulations of FIFA;
B.14.6. the statutes and regulations of UEFA…’.
The FAPL Rules, rule L.9. also expressly prohibit FAPL clubs participating in competitions not specified in the FAPL Rules without the approval of the FAPL Board:
‘Except with the prior written approval of the Board, during the season a Club shall not enter or play its senior men’s first team in any competition other than:
L.9.1. the UEFA Champions League;
L.9.2. the UEFA Europa League;
L.9.3. the F.A. Cup;
L.9.4. the F.A. Community Shield;
L.9.5. the Football League Cup; or
L.9.6. competitions sanction by the County Association of which it is a member’.
Accordingly, for the ESL to have any chance of operating while also participating in the existing football pyramid structure, let alone success, it will have to obtain authorisation and permission from FIFA, UEFA, its national association and/or its domestic league. Further, if the ESL proceeds with its proposed ‘new mid-week competition’ without such authorisation and permission, then the Founding Clubs expose themselves to disciplinary measures being taken against them.
The FIFA Disciplinary Code, article 11 states that ‘Associations and clubs… must respect… the FIFA Statutes’. The UEFA Statutes, article 52 states:
‘Disciplinary measures may be imposed for unsportsmanlike conduct, violations of the Laws of the Game, and contravention of UEFA’s Statutes, regulations, decisions and directives as shall be in force from time to time’.
Similarly, the Founding Clubs expose themselves to disciplinary measures being taken against them by their national associations and/or their respective domestic league. The FA Rules, rule E1 states:
‘[The FA] may act against a Participant in respect of any Misconduct, which is defined as being a breach of the following:
…
E1.3 the statutes and regulations of UEFA…’.
Further, the FAPL Rules, rule W.3. states:
‘The Board shall have power to deal with any suspected or alleged breach of these Rules’.
It is also worth noting that even a mere attempt to breach the above-stated provisions can result in disciplinary procedures (FIFA Disciplinary Code, article 8; FA Rules, rule E9).
The disciplinary procedures and available sanctions of FIFA, UEFA, the FA and the FAPL are wide-ranging. It is beyond the scope of this article to explain the particular disciplinary procedures and available sanctions of each FIFA, UEFA, the FA and the FAPL. Nevertheless, the sanctions that can be imposed on clubs can include expulsions or disqualification from competitions (in the FAPL this would be subject to a vote pursuant to the FAPL Rules, rule B.6.), fines and the withdrawal of a title or award.
ESL and Founding Clubs opposing challenges
There is an important question arising from the ESL not obtaining permission or authorisation and the Founding Clubs’ exposure to disciplinary measures being taken against them: are the above-stated provisions and any disciplinary measures in breach of competition law?
Competition law: framework
The organisation and the business of football must comply with competition law.[1] European Union competition law is relevant, in particular the Treaty on the Functioning of the European Union (“TFEU”), articles 101 and 102. European competition law is largely replicated in the United Kingdom by the Competition Act 1998 (“CA 1998”) and the Enterprise Act 2002. Accordingly, EU judicial decisions concerning EU competition law remain important to the interpretation and application of competition law in the UK post-Brexit.
The TFEU, article 101 is reflected in the CA 1998, section 2, and prohibits:
‘agreements between undertakings, decisions by associations of undertakings or concerted practices which may affect trade… and which have as their object or effect the prevention, restriction or distortion of competition…’.
The TFEU, article 101(3) is reflected in the CA 1998, s. 9 and identifies that agreements et al will be exempt if it:
‘contributes to improving the production or distribution or promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and… does not… impose on the undertakings concerned restrictions which are not indispensable to the attainment of those objectives… [or] afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question’.
The TFEU, article 102 is reflected in the CA 1998, section 18, and prohibits any ‘abuse by one or more undertakings of a dominant position… insofar as it may affect trade’ and where the same cannot be objectively justified.[2]
Considering relevant case law dealing with similar situations in different sports and for reasons mentioned below, it is these authors’ opinions that the most relevant prohibition to be considered in respect of the above-stated provisions and any disciplinary measures to be taken against the Founding Clubs is TFEU, article 101/CA 1998, section 2.[3]
The position in respect of sports and its rules and decisions has been summarised as follows in Meca-Medina v Commission:
‘… whether the rules which govern that activity emanate from an undertaking, whether the latter restricts competition… and whether that restriction… affects trade…
… account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives… and are proportionate to them’.[4]
When considering whether the above-stated provisions and any disciplinary measures to be taken against the Founding Clubs would amount to a breach of the above-stated prohibitions, the first task is to identify the “relevant market”. The “relevant market” provides an objective conceptual framework for the competition analysis.[5] The relevant market combines the “product market” and the “geographic market”:
“Relevant product market” comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer by reason of the products' characteristics, their prices and their intended use.
“Relevant geographic market” comprises the area in which the bodies concerned are involved in the supply and demand of products or services and in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because the conditions of competition are appreciably different in those areas.
The relevant market is used as a yardstick to determine the effect which an agreement, decision et al or abusive conduct complained of has on competition. In the context of the above-stated provisions and any disciplinary measures to be taken against the Founding Clubs, and based upon the limited information available presently, the relevant product market is likely to be the organisation and commercial exploitation of European football competitions. Further, the relevant geographic market is likely to be Europe due to the geographical constraints of any European football competition, although it could be wider considering that European football competitions attract a global audience, FIFA’s overarching approval requirement and that ESL’s branding drops the ‘European’ from its name.
Secondly, and looking at the specifics of TFEU, article 101/CA 1998, s. 2 the following points require consideration:
Is there ‘an agreement between undertakings’, ‘decisions by associations of undertakings’ or concerted practices’ which may affect trade? UEFA’s Champions League Regulations and FIFA’s (then titled) Players’ Agent Regulations have previously been deemed to be a decision by an association of undertakings.[6] It is likely that the above-stated provisions and any disciplinary measures would also fall to be a decision by an association of undertakings.
Do such decisions by an association of undertakings affect trade and ‘have as their object or effect the prevention, restriction or distortion of competition’ (emphasis added)? It is these authors’ opinion that it is likely to be established that the above-stated provisions and any disciplinary measures do affect trade and have as their object, or at the least as their effect, the prevention, restriction or distortion of competition on the relevant market.
Where do the above-stated provisions and any disciplinary measures fall in the Meca-Medina v Commission methodology, taking into account (i) the overall context in which they were made or produce their effects and their objectives; (ii) whether the consequential effects restrictive of competition are inherent in the pursuit of the objectives; and (iii) whether they are proportionate? It is this third consideration which will be most contested.
Dr Katarina Pijetlovic comments as follows in respect of that third consideration:
The International Skating Union case has pretty much confirmed that sports’ governing bodies have the right to control the access to the organisational market. They can do that via a prior authorisation system. But governing bodies must have non-discriminatory, proportionate and transparent conditions for entry that are known in advance. UEFA did not have such conditions available but this probably did not give a right to [the Founding Clubs] to just pick up and leave. Regulatory authority must remain with the governing bodies as it is clearly not workable to leave the protection of important public interests goals in the hands of commercially-oriented private entities that do not have a mandate over the sport or those public interests.
There is also the MOTOE case that said that any refusal decision by governing bodies must be subject to reviews, obligations and restrictions. Competition law does not allow a rule which confers on a legal person the power to issue licenses via a prior authorisation system to organise competitions, without that power being made subject to restrictions, obligations and review.
So if the Founding Clubs had asked UEFA (UEFA Statues, article 49) to specify the conditions for permission or approval so the ESL can comply with them, they would be in much stronger legal position as the ball would be in UEFA’s side of the court.
Like this, UEFA can take measures to stop the clubs and defend their actions on the basis of legitimate objectives in public interest. The measures should be proportionate as per paragraph 42 of Meca-Medina decision. Because the core values of European football are at stake, banning clubs from domestic competitions might be perceived as not going beyond what is necessary to achieve the objective and suitable (is actually capable of achieving the objective) measure. However, UEFA/FIFA should think about dropping the threat to ban players as that could be argued as going beyond what is necessary.
Competition law: case law
Over the last couple of years as a potential football super league was being repeatedly reported and threatened with sanctions, there was increasing discussion as to whether comparisons could be drawn with the International Skating Union (“ISU”) case, as also noted above by Dr Katarina Pijetlovic.[7] The ISU case concerned two Dutch speed skaters who filed a complaint with the European Commission against the ISU for lifetime bans imposed following participation in unauthorised skating competitions that were held outside of the ISU calendar. The skaters argued that the bans were in direct violation of TFEU, article 101.
Ultimately, the European Commission ruled in favour of the skaters and made a number of findings against the ISU including that the sanctions it imposed on the skaters served only to protect its own commercial interests and not the good of the wider sport and its participants. In the ISU case, the unauthorised competitions in question were held during ISU’s “closed season” and did not conflict with ISU’s calendar. Further, the skaters needed exposure to wider competitions in order to keep up a living and should not be deprived of access from the relevant market. It was held that the ISU was imposing restrictions and sanctions regardless of any risk to the protection of integrity, the proper conduct of the sport or indeed the health and safety of athletes.
Readers will no doubt be able to draw some key distinctions between the ESL and the above-stated provisions, and the ISU case and what ultimately caused the ISU to be in breach of TFEU, article 101. For example, and significantly, the Founding Clubs and their players will still be able to play and earn significant sums without the ESL. The take-home point from the ISU case is that rules that restrict external competitions will generally be compatible with competition law if they pursue a legitimate objective in the first instance and if restrictions imposed thereafter are proportionate to the aim of that objective.
In respect of the ESL and the above-stated provisions, there are a variety of points which relevant stakeholders may rely upon to support a general legitimate objective. For instance, concerns have been raised about sporting integrity in terms of entry to the ESL and the lack of promotion/relegation or any competitive pyramid. Breakaway competitions usually have a common theme which centre around commercial interests rather than sporting values. Such competitions will usually dilute fan engagement, have a “closed shop” element to it with a lack of relegation/promotion for all (raising concerns around competitive balance) and in a bid to secure greater commercial investment, those involved will ultimately be willing to sacrifice sporting values and solidarity amongst the stakeholders for their own gain.
Further, concerns have been raised about a congested calendar and the risk for broadcasting clashes which could in turn reduce the value of broadcasting rights for those left behind. The reduction of solidarity payments cascading down the football pyramid to those clubs most vulnerable is also a concerning factor. For example, insofar as English football is concerned, Kieran Maguire, author of the Price Of Football books and co-host of the Price of Football podcast, explained:
‘English Football League (“EFL”) clubs receive a fixed percentage of the equally distributed FAPL revenues. These monies are then divided between EFL clubs in the 80%/12%/8% ratio between clubs in the EFL Championship, League 1 and League 2. This amounts to about £5 million for a club in the Championship and for some is their single largest revenue source’.
Should the ESL affect those FAPL revenues, the consequences for EFL clubs could be severe, and such examples could significantly support the objectives and proportionality of the above-stated provisions and any disciplinary measures.
History has taught us whichever way the stakeholders decide to proceed if they wish to stay on the right side of the law, any measures they impose must be reasonable, validly justified with a legitimate objective and any sanctions that flow thereafter, proportionate.
Conclusion
The ESL’s proposed new mid-week competition is much more than the mere posturing it was initially considered to be. It has been reported that the ESL has written to FIFA and UEFA warning that ‘it has already filed motions in courts to prevent the footballing authorities imposing bans’. It is expected that such ‘motions’ would be quia timet injunctions (or similar if available and depending on jurisdiction) to prevent a threatened wrong. Any such motions would certainly need to grapple with the competition law issues considered in this article, and FIFA’s, UEFA’s, the FA’s and domestic leagues’ statutes and rules precluding recourse to courts, and if successful would only be an interim measure (it has been reported that an injunction has already been issued by a Spanish court to prevent UEFA and FIFA imposing disciplinary measures, but the specifics of this are currently unknown).
On the other side, UEFA’s president Aleksander Čeferin has been vocal about the strong stance UEFA is taking, and is reported to still be considering UEFA’s options and taking advice in respect of the same.
It will be interesting to see who moves first from here, but there appears to be two avenues: Firstly, the ESL and the relevant stakeholders reach an agreement either with the ESL proceeding or not. Alternatively, the ESL may wish to proceed in the absence of such agreement, which will result in an almighty legal – and political – dispute, including the competition law issues considered in this article, competition law issues against the ESL, employment law claims from the Founding Clubs’ players against their respective clubs (see this article by James Green, barrister at Littleton Chambers), and claims for damages against Founding Clubs from their national leagues for breach of contract (see this article by Grahame Anderson, barrister at Littleton Chambers).
This article was written jointly by Thomas Horton, barrister at 3 Hare Court and found of Football Law, and Laura McCallum, Head of Football Administration and Legal Affairs at Dundee United FC.
The authors are grateful for the contribution and review from Dr Katarina Pijetlovic, the contribution from Kieran Maguire, and the review from Christopher Flanagan.
Footnotes
[1] C-519/04 P Meca-Medina v Commission [2006] ECR I-6991 ECLI:EU:C:2006:492.
[2] 27/76 United Brands Co v Commission [1978] ECR 207; ECLI:EU:C:1978:22.
[3] Decision of 8 December 2017 in case AT.40208 – International Skating Union’s Eligibility rules; T-93/18 International Skating Union v European Commission ECLI:EU:T:2020:610.
[4] n1, [30] and [42]. See also Commission Staff Working Document on the EU and Sport: Background and Context (11 July 2017), Annex I.
[5] Commission Notice on the definition of the relevant market for the purposes of Community competition law[1997] OJ C372/5; Competition and Markets Authority, Market Definition: OFT403, 1 December 2004.
[6] Decision of 23 July 2003 in case COMP/C.2-37.398 – Joint selling of the commercial rights of the UEFA Champions League, recitals 105 to 110; T-193/02 Laurent Piau v Commission, ECLI:EU:T:2005:22, [75].
[7] n3.
20 April 2021
On 21 April 2021 the ESL released a statement confirming the departure of the Founding Clubs’ English clubs, and explaining that it is ‘convinced our proposal is fully aligned with European law and regulations… we shall reconsider the most appropriate steps to reshape the project’. So, while the ESL has failed this time, it does not mean that the issue has gone permanently. The issues raised in this article remain significant, and will need to be considered and addressed by any future, or any, “European Super League”.
On 7 May 2021 UEFA released a statement confirming that nine of the Founding Clubs had entered an agreement with UEFA, which included ‘various actions, measures and commitments… by the clubs’.
On 8 May 2021 the remaining three Founding Clubs, Barcelona FC, Juventus FC and Real Madrid CF, released a statement, which indicated:
‘The founding clubs have suffered, and continue to suffer, unacceptable third-party pressures, threats, and offenses to abandon the project... This is intolerable under the rule of law and Tribunals have already ruled in favour of the Super League proposal...
We regret to see that our friends and founding partners of the Super League project have now found themselves in such inconsistent and contradictory position when signing a number of commitments to UEFA yesterday. However, given that the material issues that led the 12 founding clubs to announce the Super League weeks ago have not gone away, we reiterate that, to honour our history, to comply with our obligations towards our stakeholders and fans, for the good of football and for the financial sustainability of the sector, we have the duty to act in a responsible manner and persevere in the pursuit of adequate solutions, despite the unacceptable and ongoing pressures and threats received from UEFA’ (sic).