Football and the European Union

As a consequence of the rapid development of sport, especially at the professional level, and the important place occupied by sport in society, the provisions in the Treaty of the European Union (EU), secondary legislation, Community policies and decisions all have an increasing impact on sport practices and realities. While sport was not traditionally among the competences of the EU as neither the Rome Treaty, the Single Act nor the Maastricht Treaty even pronounce the word ‘sport’,⁴⁸ a real will has been demonstrated lately by the Commissioners to build a sports policy common to the entire Union. This trend was finalised in June 1997 at the EU Summit in Amsterdam where the Heads of state agreed on a common declaration for sport.⁴⁹

Since then, sport has continued to grow rapidly. In economic terms, it accounts for 3% of world trade.

The social impact of sport is amply illustrated by the fact that one European in three is actively involved in a sport and that there are around 545’000 sport clubs in the Community.⁵⁰ This rapid development, both at professional and at amateur level, increasingly involves the various Community policies. The institutions have already been called on to intervene in some cases, the most famous example being the European Court of Justice’s Bosman ruling.

Bosman is indeed the one legal case that every football player and fan knows. ⁵¹ The judgement of the European Court of Justice in 1995 ended the age of innocence when football blithely assumed that it was immune from the intervention of law. Post-Bosman footballers are now free to move at the end of their contracts. Restrictions that prevented this movement, such as a the obligation of payment of a

47 Interview with Jonathan HILL, UEFA Delegate to the European Union

48 ATANGNA Prosper, Le sport, nouvelle dimension européenne, Mémoire de DESS en Eurojournalisme, Université Robert Schuman, Strasbourg, 2000

49 In this declaration, Heads of State and governments: (1) Emphasize ‘the social significance of sport, in particular its role in forging identity and bringing people together, (2) call on ‘the bodies of the European Union to listen to sports associations when important questions affecting sport are at issue, and (3) recommend that ‘special consideration should be given to the particular character of amateur sport’

50 European Commission, The development of European Union action in the field of sport, Commission staff working papers, 29 September 1998.

51 Union Royale Belge des Sociétés de Football Association ASBL v. Bosman (Case C-415/93), 1996, All E R (EC) 189 ECJ.

transfer fee to the old club, even when the player was out of contract, were decreed an infringement of a worker’s right of free movement under Article 48 of the Treaty of Rome.

For Ken Foster, Bosman was undoubtedly a great changing point for European football but, on top of that, it “had a sting in its tail”.⁵² It indeed also lead the Court to consider the possibility that football was operating in an anti-competitive manner contrary to article 85 and 86 of the Treaty.⁵³ The final judgement in the Bosman case was not based on these grounds but, subsequently, the European Commission which has enforcement powers against anti-competitive practices, ordered UEFA to comply with the judgement by using these articles. In the future, professional football would, for legal purposes at least, be considered a business.

That response by the Commission – that European competition law would apply to football – opened a Pandora’s box. Indeed, a literal application of that law could make most aspects of the control and regulation of European football by UEFA subject to legal challenge, and this is exactly what happened.

A flood of complaints from all different sources and sorts reached the offices of the European Commission, ranging from the physical relocation of clubs to the arrangements for ticket sales at the World Cup 1998 in France. Governing bodies such as FIFA and UEFA became very alarmed by this growing trend and have therefore begun to argue and lobby for a kind of umbrella for sports governing bodies within European competition law, hoping to regain somehow the control of their affairs.

For the major conference on sport organised in Olympia in 1999, important discussion papers were prepared by the Commission and four principles emerged as guidelines for future EU legal interventions in the football industry: ⁵⁴

4. The fundamental freedom for players and clubs to move and operate anywhere within the European Union should not be limited. The only exception is when desirable ‘sporting’ objectives cannot be reached by any other route.

5. National Identity is a key element of sport and thus sporting federations can have a legitimate interest in preserving it. The Post-Bosman fear that national distinctions would be under threat has then proved unfounded. Some degree of national differences can still, legally, be recognised.

6. European Competition Law applies to professional football but sport has unusual features that means it is not always possible to treat it as any other business. Football authorities can make decisions even if they restrict economic opportunities. However, when they do so they must justify them in sporting terms, such as the need to encourage competitive balance.

7. Sporting federations such as UEFA are monopolies and have as such a dominant position under Article 86 of the Treaty. Therefore their power can be controlled if abused.⁵⁵ Yet sport governing

52 FOSTER Ken, European Law and Football : Who’s in charge ?, in: GARLAND John, MALCOLM Dominic and ROWE Michael (Ed), The Future of Football. Challenges for the Twenty -First Century, Frank Cass, 2000, pp. 39-51.

53 Article 85 prohibits the restrictive agreements between enterprises including football clubs and federations. Article 86 deals with the ‘abuse of a dominant position’. UEFA, arguably, occupies such a position as the sole governing body of professional football in European football.

54 First European Conference on Sport 1999, Discussion papers on the European Model of Sport, European Commission DGX, Brussels, April 1999.

bodies are hybrid entities. They deal with amateur as well as professional clubs, as it has been recognised in the Amsterdam Declaration, but might have some of their activities being judged differently because they are acting for the greater good of the game even when the economic interests of professional clubs are damaged.⁵⁶

These guidelines leave room for great changes in the pyramidal structure of European football. Top clubs and UEFA took some time to understand it but treat nowadays the EU as a major partner in their work. It is no coincidence that G-14’s headquarters have been located from its very first day in Brussels, also headquarters of the EU, and that UEFA has recently delegated one representative to the EU. The importance of the European Commission power within the Football Industry is growing as attested the recent modifications of the selling process of TV rights.⁵⁷ Top clubs found in the EU a potential ally in the reforming process of the European structure of football while UEFA, its global counterpart FIFA, and other major governing bodies try to lobby the European commission to integrate within the European Treaty a specific reference for sport that would acknowledge the peculiarities of the sport industry and limit the possibilities of involvement of EU in the sporting world. This reference would recognise the specificity of sport, conceding that a different approach is needed, as confirms Lars-Christer Olsson, the Director of Marketing and Professional football at UEFA:

‘The most important thing is the recognition of sport specificity and recognition of sport governing bodies. There should be no political intervention before dialogue. I don’t think that sports should have general exemption from the law. But the interpretation of the law by the politicians should be made after the dialogue. ’ ⁵⁸

The Nice Declaration already made a step in this direction:

‘The European Council recognises that, with due regard for national and Community legislation and on the basis of a democratic and transparent method of operation, it is the task of sporting organisations to organise and promote their particular sport (…)’ ⁵⁹

This appears to be a clear indication that governing bodies may by and large be left to manage and regulate their internal affairs provided that they operate within certain basic parameters of democracy and transparency.⁶⁰

55 UEFA, FIFA and IOC are all associations under Swiss association law, which intrinsically allow for great autonomy of organisational structure and operations.

56 In 1999, UEFA has applied for exemption from the European Competition Law for its central marketing of the television and sponsorship rights to the Champions’ League.

57 The European commission had UEFA reform its process for marketing its television and new media rights for the UEFA Champions League. UEFA will continue to sell live TV rights and highlights but other rights and new media rights, will be jointly exploited by UEFA and the clubs.

58 Interview with Lars-Christer OLSSON, Director of Professional Football and Marketing of UEFA

59 Nice Declaration, paragraph 7.

60 KINSELLA Stephen and SMITH Herbert, EU and Sport : Legal Framework and Recent Developments’, Paper presented at Europe’s first conference on the Governance of Sport, Brussels, February 26 and 27 2001. www.governance-in-sport.com

2.

CHAPTER TWO: THE ACTORS

The objective of this chapter is to present the main actors directly involved in the production of elite professional football in Europe. By understanding their origins, nature, interests and motives we intend to prepare the background for the understanding of the current controversy in European football.