I. INTRODUCTION
EU sports law has conventionally been understood to involve the assembly of the several decisions of the Court of Justice and the Commission that apply free movement and competition law to the practices of governing bodies. These decisions reveal a common thematic core. Sporting practices are put to the test in so far as they collide with the demands of the EU's internal market, and they must be shown to be necessary for the organisation of sport to survive that scrutiny. The influence of these decisions has generated change in some aspects of sporting governance, in the EU, and beyond. But the EU does not set ex ante standards. It has no track record in legislating the terms according to which sport shall be organised. This article makes the case for the EU moving beyond its orthodox approach to sports law, which is rooted in the accidents of litigation, and also choosing to embrace a role as a regulator. This will diminish the autonomy that governing bodies in sport have long prized, but the article asserts first that the self-interested practices of such bodies should no longer be tolerated and should instead be corrected by intervention from outside sport and second that only the EU, rather than individual states, can achieve this. The primary concern is to address the conflict of interest to which governing bodies fall prey because they perform regulatory functions ‘for the good of the game’ while also making commercially significant choices. The article also claims that astute governing bodies should welcome EU intervention as a means to protect their legitimate regulatory role from the disruptive preferences of some club owners. It is, however, unclear whether the political will needed to propel EU sports law beyond the application of internal market law to embrace also the establishment of mandatory ex ante standards can be assembled.
II. THE VIRTUES AND VICES OF ARBITRATION
In practice relatively few sporting disputes reach courts of law. In some instances, most conspicuously where they arise on the field of play, this is because they are inapt for judicial examination. But many disputes with a commercial dimension are also resolved without litigation. This is in part because of the obvious mismatch between the rapid routine of the sporting calendar, often based on competitions that occur on an annual basis, and the relatively glacial pace of litigation. This tends to encourage some form of resolution rather commitment to pursue lengthy judicial process during which a career may be curtailed or even lost. Consider too the imbalance of power that often taints a sporting dispute—club or player against governing body, for example—which will often deter the weaker party from asserting his or her rights before a court. But in more recent times the principal reason why disputes in sport do not spill over to generate litigation before courts lies in the relatively well-developed forms of dispute resolution found within sport. Most disputes in sport are handled internally.
It is very common to find that the constitutions or statutes of governing bodies in sport commit those subject to the rules to pursue grievances through stipulated internal procedures and often also involve agreement not to bring matters before ordinary courts of law.Footnote 1 The aim is to resolve disputes internally, ultimately through arbitration. And consequently the Court of Arbitration for Sport (‘CAS’) has acquired a very high profile.Footnote 2 First established in 1984 and based in Switzerland, the CAS is not a court in the orthodox sense, it is an arbitral tribunal. But in practice the vast majority of disputes in sport are resolved within the sport in question. Some are the subject of appeal to the CAS. But very few go any further.
In principle they could. Decisions of the CAS may be the subject of challenge as a matter of Swiss law before the Swiss Federal Tribunal. However the grounds of review are very limited, and it is extremely rare for a CAS ruling to be set aside. The assumption in sports arbitration, as in arbitration generally, is that finality is desirable. The main points in favour of arbitration over judicial process are (quicker) speed, (lower) cost and (superior) subject-specific expertise and it follows that readily opening up an arbitral award to review by courts would rob the system of its appeal. Of course this is not a concern specific to sporting arbitration alone.
A similar concern to respect arbitral finality underpins the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly referred to as the New York Convention. An arbitral award made by the CAS is for the purposes of the New York Convention a Swiss arbitral award that should be enforced as such by courts of any state that is party to the New York Convention, without any inquiry into the substantive merits of the decision taken by CAS.Footnote 3 Again, this is to aim to uphold arbitral finality in order to protect the virtues of arbitration. It is in practice rarely necessary to address these issues because CAS rulings are normally faithfully followed by the parties without further challenge, not least because governing bodies possess sanctioning powers that they may use where a party refuses to abide by the CAS ruling. But it may on occasion fall to a court of a contracting party to the New York Convention to enforce a CAS award. They typically do so, following the Convention's strong preference to respect the finality of the arbitral award and to facilitate its enforcement. Like Swiss law, the Convention envisages circumstances where arbitral finality is not treated as sacred, most strikingly where an award threatens public policy, but as is true of Swiss law, this is treated as an exceptional basis for intervention.Footnote 4 The strong trend is to encourage commitment to arbitration by treating awards as normally final and to enforce them.
In practice the CAS's autonomy is in this way successfully protected. This is in important respects desirable. The benefits of arbitration generally are also benefits enjoyed in the particular context of sport—speed, cost, expertise—and sport also makes a claim to the value of autonomy from legal regulation by insisting on its need for globally applicable rules that are not fragmented by the need to comply with the peculiarities of local law. Focus on the CAS allows it to shape an understanding of a private system of governance that is universally applicable to sport wherever on the planet it is played. But there are serious objections to the grant of autonomy to governing bodies in sport, both in the particular matter of arbitration and also the more general matter of governance. How far should we trust the CAS in particular and governing bodies in sport generally to observe proper standards of procedure and to ensure adequate representation of all affected interests? Immunising private governance from judicial review in particular and from mandatory compliance with public law values in general may make generous assumptions about the quality of that governance that are unwarranted. The anxiety is that governing bodies are run by the powerful and rich for the benefit of the powerful and rich.
III. EU LAW'S TREATMENT OF ARBITRAL AWARDS
The notion of public policy as a basis for disrespecting arbitral finality offers a small window on the debate about how one should assess the relative advantages and disadvantages of sporting autonomy.
The limits of the CAS's autonomy under EU law are to be understood by reference to the Court of Justice's ruling in Eco Swiss China Time Ltd v Benetton International NV.Footnote 5 The ruling did not concern sport directly, but it did involve arbitration, and the principle established applies to the EU's attitude to arbitration in sport. In Eco Swiss the Court of Justice took the view that public policy within the meaning of the New York Convention includes EU competition law, with the consequence that courts in the EU are required to set aside an arbitral award that on its own terms is final and intervene in the event that the award is contaminated by a violation of Articles 101 or 102 of the Treaty on the Functioning of the European Union (‘TFEU’). One would readily assume that the same would apply in the event that an arbitral award sanctioned unlawful obstacles to free movement between EU Member States, although the Court has never been given the opportunity to say so explicitly. So although in practice the large majority of cases handled within the internal dispute resolution processes established by governing bodies in sport go no further, in principle the EU insists on a degree of oversight of the system of sporting dispute resolution that has the CAS at its apex. Public policy, in the shape of EU competition law and the need to protect the EU's internal market, is treated as a value that shall prevail over the interest in achieving arbitral finality. There is a visible dynamic relationship between the Court of Justice's approach and CAS practice. Some, though admittedly not all, CAS rulings include careful analysis of EU competition law, doubtless in part in order to ensure the arbitral decision is robust enough to withstand subsequent scrutiny to check for compliance with EU law.Footnote 6
Eco Swiss shows the limits of EU law's recognition of arbitral finality. The EU is relatively intolerant of sporting autonomy. It is a stance that has attracted disquiet from specialists in arbitrationFootnote 7 but the net result is that if a party refuses to accept the insulation of the arbitral process from litigation and chooses to pursue the matter before a national court of an EU Member State then EU law may provide help, notwithstanding the admitted virtues of arbitral finality. In such circumstances the lex sportiva must comply with EU law. And some disputes in sport, such as those involving broadcasters or sponsors, are beyond the jurisdiction of the CAS, so EU law applies in its normal way.
According to this model, the autonomy of dispute resolution in sport is qualified, and the door to review of sporting practices against the public policy standards of EU law is opened. Commitment to arbitrate is not treated with unconditional respect, and nor are choices about governance in sport and organisation of sport more generally. They must comply with EU free movement law—most of all, Article 45 TFEU (workers) and Article 56 TFEU (services). They must comply with EU competition law—Article 101 TFEU (bilateral and multilateral practices) and Article 102 TFEU (unilateral practices). They must comply with EU law's requirement of non-discrimination on grounds of nationality and with other horizontally applicable fundamental rights that the Court may develop over time in the light of the EU Charter of Fundamental Rights.
IV. THE CONVENTIONAL STORY OF EU SPORTS LAW—SUBJECTION OF THE LEX SPORTIVA TO FREE MOVEMENT LAW AND COMPETITION LAW
A. The EU's Approach to Sport in the Light of the Principle of Conferral
It is constitutionally fundamental that the EU operates according to the principle of conferral, which directs in Article 5 of the Treaty on European Union (‘TEU’) that it shall act only within the limits of the competences conferred upon it by the Member States in the Treaties. In understanding the EU's engagement with sport, the starting point might therefore be thought to be Article 165 TFEU, which is the only provision of EU primary law that makes any attempt to define a role for the EU in the regulation of sport.
Article 165 TFEU, cosmetically adjusted to remove references to education in order to bring into focus what it does for sport, reads:
1. … The Union shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function.
2. Union action shall be aimed at: … developing the European dimension in sport, by promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports, and by protecting the physical and moral integrity of sportsmen and sportswomen, especially the youngest sportsmen and sportswomen.
3. The Union and the Member States shall foster cooperation with third countries and the competent international organisations in the field of education and sport, in particular the Council of Europe.
4. In order to contribute to the achievement of the objectives referred to in this Article: the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt incentive measures, excluding any harmonisation of the laws and regulations of the Member States; the Council, on a proposal from the Commission, shall adopt recommendations.
EU law applies to sport only if the principle of conferral so dictates. Article 165 TFEU ensures that sport is recognised as part of the EU's conferred competences. It cautions that EU law shall be applied with a degree of sensitivity—that it shall absorb ‘the specific nature of sport’. However, Article 165 was inserted into the Treaty only with effect from 2009 and already the Court had for over thirty years been examining sporting practices despite the absence of any textual reference to sport in EU primary law. It had done so by insisting that sport, like any other economic activity, must comply with the demands of EU internal market law, most of all free movement and competition law and the prohibition against discrimination based on nationality. But that insistence that EU law applies to sport went hand-in-hand with recognition that a contextual assessment was required, so that sport would not be addressed by EU law without sensitivity to its special features. Article 165 is therefore in important respects a mere confirmation of the Court's long-standing approach. Indeed this was a point quickly stressed by the Court, as, when first asked to consider the provision, it explained that Article 165 TFEU serves as a corroboration of its case law.Footnote 8 In this it simply assumed that Article 165 shall inform the interpretation and application of internal market law, even though Article 165 does not explicitly assert such cross-cutting effect.
The landmark cases of EU sports law are well known but vividly illuminating. They share the thematically consistent feature that if sporting disputes do spill over beyond the internal patterns of dispute resolution in sport to reach the Court in Luxembourg, usually though not always as a result of a preliminary reference made by a national court in an EU Member State, then EU law applies—but it does not insist on solving the dispute without embrace of its sporting context. Room is left to governing bodies in sport to show why their practices are required when they would not be found elsewhere, outside the world of sport.
B. Bosman
The justly famous ruling of the Court of Justice in Bosman vividly captures the essence of EU sports law.Footnote 9 The litigation involved sport, which was not at the time even mentioned in the EU Treaties, but at the same time it also involved economic activity within the EU's internal market, which is one of the heartlands of EU law. Therefore the matter could not be regarded as falling within an exclusive zone of sporting autonomy. It fell within the scope of EU law. The Court brusquely ruled that Union of European Football Associations (‘UEFA’) practices in club football that discriminated on the grounds of nationality were incompatible with EU law. It allowed no legal weight to attach to the Commission's previous readiness to provide UEFA with informal assurances that the rules were permitted under EU law. They were not, and so the face of club football in Europe changed immediately. Players holding the nationality of an EU Member State had to be treated equally across the entire territory of the EU, with the result that it is quite common to find teams with few players, and in the case of the richest English clubs no players, who hold the nationality of the State in which the club is based. But Bosman also involved review of the transfer system in football. And here the Court took a different view of the application of EU law. It found that the transfer system applied within football had the effect of impeding the cross-border movement of athletes-as-workers. Bosman himself had seen his planned transfer from a Belgian to a French club blocked because of failure to meet UEFA's requirements. The Court concluded that in the particular circumstances there was a violation of EU free movement law because UEFA's rules prevented a player freely choosing a new employer even when the contract of employment with the previous employer had come to its end. But the Court did not rule in principle against the compatibility of an adjusted transfer system with EU law, even though one would not find a transfer system, operating as an extra restraint on an employee's freedom beyond that imposed by contract law, in a normal industry. Instead the Court went out of its way to express the view that sport is different. In paragraph 106 of the ruling it declared that:
In view of the considerable social importance of sporting activities and in particular football in the Community, the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results and of encouraging the recruitment and training of young players must be accepted as legitimate.
Identifying exactly what this entails is as difficult as knowing what is the source of the Court's dicta. It has some similarity to the notion of ‘the specific nature of sport’ found in Article 165 TFEU, but Bosman pre-dates the insertion of Article 165 into the Treaty by over a decade and, as mentioned, at the time of the ruling sport was not mentioned at all in the Treaties. It is best understood as an insight into the Court's creative concern to embed the particular characteristics of sport in its application of the Treaty rules on free movement to that particular sector of economic activity. So paragraph 106 is a bold statement that EU internal market law, in casu free movement law, shall be infused by respect for the values and objectives pursued by impugned practices, involving an assessment that is contextually sensitive. It is not that EU law simply defers to sporting autonomy, but rather that EU law, in putting challenged practices to the test, accepts that sport may reveal particular regulatory peculiarities.
In the particular matter of the transfer system, paragraph 106 admits the possibility that in football the aims of maintaining a balance between clubs and inducing the development of young talent may justify regulatory practices that would not be tolerated elsewhere. The Court took a similar approach in its only other decision addressing the transfer systemFootnote 10 and, even though it has never been asked directly whether the very concept of a transfer system is compatible with EU law, the assumption underpinning these two rulings is that it is. After Bosman the transfer system was duly amended to eliminate the offending reach even into the freedom of movement of players whose contract has expired, and it lives on today in slimmed down form.Footnote 11
Bosman crafts a model of conditional autonomy at the heart of EU sports law. This entails that sporting autonomy is respected on condition that it is shown how and why chosen practices are needed to govern sport.Footnote 12
C. Meca-Medina and Majcen
Meca-Medina and Majcen v Commission is a case involving competition law, rather than free movement law, but its structure is comparable to Bosman.Footnote 13 Sporting practices that have economic effects are checked against the demands of EU law rather than placed beyond its reach, but EU law is interpreted and applied with recognition of the special features of sport. The case involved a complaint that a suspension imposed by Fédération Internationale de Natation (‘FINA’), the governing body of the sport of swimming, violated EU competition law. The applicants were swimmers who had been found to have committed doping offences. The suspension to which they were subject had been confirmed by a ruling of the CAS, but at no stage did the Court suggest that this deprived EU law of a role in reviewing the compatibility of the sanctions with EU law. This emphasises that although, as discussed above, the process of arbitration is formally separate from the EU legal order, it cannot be treated as wholly immune from its demands. However, having broken down the wall between the sport's internal governance and EU law, the Court was sensitive to the context in which it was being asked to apply EU law. It explained that the compatibility of rules with EU competition law cannot be assessed in the abstract. In applying Article 101(1) TFEU, ‘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’; and 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’.Footnote 14
This opened the door to a contextual assessment of the effect of sporting practices, informed by their objective and design. The legal assessment of practices that have the effect of restricting competition also includes examination of their objectives. This led the Court to explain that anti-doping rules did not necessarily constitute a prohibited restriction of competition within the meaning of (what is now) Article 101 TFEU, since they were ‘justified by a legitimate objective’.Footnote 15 This was not a concession to absolute sporting autonomy. An anti-doping procedure based on arbitrary criteria and/or unfair procedure and/or disproportionate sanctions would not survive scrutiny pursuant to EU competition law, but on the evidence before it the Court saw no reason to disturb the judgement of FINA that the suspension of the swimmers was necessary for the organisation of the sport.
The consequence of the Court's approach in Meca-Medina is a need for a case-by-case examination of the compatibility of sporting practices with the Treaty under an overarching model of conditional autonomy: sporting practices survive review even where they collide with EU internal market law on condition that they are shown to be necessary to underpin the sport in question.
D. Governance: MOTOE, ISU, and SuperLeague
The model of conditional autonomy is visible too in a small group of decisions that address the structure of governance in sport. The thematic tension can be easily stated. The norm is market competition, the exception is market dominance, so in most economic sectors Article 101, governing bilateral and multilateral practices, is much more commonly relevant than Article 102. Sport is different. A prominent feature of the model according to which most sports are organised is the conferral of exclusive decision-making power on a single body, thereby to ensure that events are presented according to a coherent timetable and according to basic common standards of safety and quality. Sport assumes the existence of a ‘gatekeeping’ function that would not be found in most markets.Footnote 16 Therefore Article 102 readily comes into play as a basis to review choices made by governing bodies who by design hold a dominant power to regulate their sport. And problems are especially likely to arise where a governing body takes regulatory decisions that also have commercial implications. The thematic problem is that governing bodies in sport might once have been concerned purely with setting the rules of their game but today they commonly have a very real commercial self-interest in the way their sport is run.
Motosykletistiki Omospondia Ellados NPID v Elliniko Dimosio—commonly abbreviated to MOTOE—was another preliminary ruling delivered by the Court of Justice.Footnote 17 The sport was motorcycling, the country was Greece, and the dispute concerned the authorisation of events that, under Greek law, was handled exclusively by the governing body. The problem was that the governing body itself was engaged in staging and commercially exploiting events, so any decision it took about the authorisation of events planned by third party organisers had implications for its own position in the market for supply of sporting events. There was, as Advocate General Kokott put it in her Opinion in the case, a conflict of interest. The Court did not object to the basic principle that in sport a governing body may claim a legitimate role as a ‘gatekeeper’. One can understand the need to regulate access to sporting competitions in order to ensure the application of common standards. But Article 102 prohibits that function, which is based on a dominant position as a regulator, from being abused. The Court insisted that a ‘system of undistorted competition, such as that provided for by the Treaty, can be guaranteed only if equality of opportunity is secured as between the various economic operators’.Footnote 18 The problem was that in the circumstances that had arisen, the governing body had ‘an obvious advantage over its competitors’; its gatekeeping right allowed it to ‘distort competition by favouring events which it organises or those in whose organisation it participates’.Footnote 19 This, plainly, is capable of wider application to any sports governing body that operates according to a scheme that combines regulatory functions with commercially sensitive choices of direct relevance to the advancement of its own interests.
A structurally similar approach is visible in the decision of the General Court in International Skating Union v Commission, albeit that here Article 101 rather than Article 102 was at stake.Footnote 20 The core of the case pursued by the Commission against the International Skating Union (‘ISU’) was directed at its treatment of skaters who chose to take part in events that were not approved by the ISU. As the sole governing body in the sport recognized by the International Olympic Committee, the ISU had the power as a regulator to ban such skaters from the Olympic Games and the World Championship. The ISU was able to act, and did act, in a way that protected and promoted the events that it organized at the expense of competing suppliers. The General Court, like Advocate General Kokott in MOTOE, treated this as a conflict of interest.Footnote 21 It accepted that a governing body is entitled to act to protect the integrity and good functioning of its sportFootnote 22 but there are limits to the proper reach of its role that are imposed by EU law. The ISU had stretched its activities beyond the regulatory sphere into areas of commercially sensitive decision making in a way that prioritised its own commercial interests at the expense of third parties in the market. It was found to have acted in an anti-competitive manner contrary to Article 101 TFEU.
The central thematic point is clear. EU law does not call into question the ‘pyramid’ model of governance, according to which a single global rule-making authority is the norm in sport and there seems no reason to doubt that a governing body as gatekeeper could run a system of prior approval for events. But the way the system works is reviewed under EU law. EU law does not operate by directing precisely how sports shall regulate themselves, but it does intervene where anti-competitive practices contaminate the chosen model of governance. This is especially likely to be discovered where the governing body has a conflict of interest between its regulatory and its commercial role. Precisely when this tipping point is reached requires a close examination of each aspect of the system, not a generalised assessment.Footnote 23 This is fully in line with the Court's insistence in Meca-Medina on a case-by-case examination of practices. As a general observation, it seems likely that structural adjustment designed to separate out the overlap between regulatory and commercial activities should be considered by governing bodies operating in the shadow of EU law.
The next test will be provided by the Court's ruling in European SuperLeague Company v UEFA, FIFA, which is currently pending.Footnote 24 This concerns an accusation that UEFA has violated EU law by using its regulatory power to seek to suppress the emergence of a new competition in the market for supply of sports events, the SuperLeague. The SuperLeague claims that UEFA's aim is to protect its own commercial interests in existing competitions, most obviously the Champions League. UEFA claims it is intent on protecting the integrity of the sport and in particular the model that endorses open leagues and merit-based qualification. The thematically familiar problem is the conflict of interest that is involved. UEFA's position is probably stronger than that of the governing bodies in MOTOE and ISU since the capacity of the SuperLeague to damage the integrity of existing structures goes far beyond that of the third parties in MOTOE and ISU, but action taken by UEFA in defence of the integrity of the existing model of football is also action from which UEFA's commercial model directly benefits. The precise limits of UEFA's legitimate role require elucidation.
E. The Golden Thread in the Case Law
The Court has taken great care to interpret and apply EU internal market law in a way that is open to recognition of the legitimate concerns that arise in sport. This is the model whereby sport enjoys ‘conditional autonomy’ under EU law: its peculiarities are accepted on condition that they are shown to be necessary to sustain the sport in question.Footnote 25 It is when governing bodies trespass beyond the sphere of legitimate and necessary regulation that they tend to come into conflict with EU law—by applying the transfer rules to out-of-contract players (Bosman) or by leveraging their regulatory power to enhance their commercial strength in the market for supply of sporting events (MOTOE, ISU).
V. THE REACTIVE AND AD HOC NATURE OF THE EU'S ROLE
The principal objection to the EU's periodic interventions into sport is that its role is typically reactive and ad hoc. It rules only on what may not be done, not what shall be done, and it does so only when a particular dispute happens to spill over to generate litigation. Moreover it does so only within the scope of EU internal market law. It has no general competence to assess the quality of governance in sport. The EU's role is incremental and sometimes unpredictable.
True, the Commission has on occasion exploited the leverage provided by the obligation imposed on governing bodies to comply with EU law to play an active role in promoting reform. In March 2001, after the renovation of the transfer system provoked by Bosman, the Commission declared it had formalized the matter in an exchange of letters between Mario Monti, at the time the Commissioner for Competition, and Sepp Blatter, President of FIFA.Footnote 26 The Commission announced closure of its own investigation in June 2002, explaining that it considered that the revised transfer system was compatible with EU law.Footnote 27 Something similar occurred in the shaping of UEFA's Financial Fair Play Regulations (FFP), which were the subject of approval in a ‘Joint Statement’ issued in 2012 by the EU Commissioner then responsible for competition law, Joaquín Almunia, and Michel Platini, then the President of UEFA.Footnote 28 In this way, the Commission may play a creatively influential role as governing bodies reform their practices in the shadow of EU law. So one should not exaggerate the claim that EU sports law is merely reactive and ad hoc in character. The existence of these agreements demonstrates that the Commission and governing bodies in sport are developing a relationship marked by co-operation rather than antagonism.Footnote 29
However, the legal status of these exchanges is murky. They are not authoritative statements of EU law. Informal approval granted by the Commission can be contradicted by the Court of Justice. The EU sports law veteran will recall how the Court in Bosman swept aside the relevance of an informal arrangement struck between UEFA and the Commission that approved of nationality-based discriminatory practices in club football, treating it as incompatible with the foundations of EU law. ‘In no circumstances does [the Commission] have the power to authorize practices which are contrary to the Treaty’.Footnote 30
What is missing is ex ante regulatory standards that provide a basic platform of binding rules that guarantee good governance and underpin the organisational structure of sport in the EU. Even in advance of the Court's ruling, the European SuperLeague litigation is in this vein hugely instructive. The Court's ruling will indirectly involve an assessment of how far EU law protects the European Model of Sport. UEFA wants the Court to approve of its role as a sports regulator charged with the duty to protect the integrity of the existing model for the organisation of football in Europe. The SuperLeague wishes to rely on EU competition law to loosen UEFA's grip over the shape of the market for supply of football competitions. This is an extraordinarily difficult tension to mediate. It invites the question whether regulatory intervention driven by the EU to establish the ground rules for the organisation of sport in Europe would be superior—more predictable, more legitimate—to asking a Court to decide such high-profile issues in the constrained context of a particular dispute and able to apply only competition law.
VI. WHY AND HOW TO RE-MAKE EU SPORTS LAW
The question, then, is whether the EU should interrogate more aggressively the claims of governing bodies in sport as a matter of principle to autonomy, and in particular whether it should aspire to move beyond the model of conditional autonomy developed in the ad hoc application to sport over time of the rules of the EU's internal market and instead embrace a more active role as a regulator of sport in its own right. If the answer to the question ‘should it do so?’ is yes, then the next question is ‘may it?’—a constitutional question. And then the final question is ‘will it?’ —a political question.
A. Should It?
This embraces two issues—is there a problem in sport calling for intervention, and then is the EU the right body to intervene?
There are serious objections to the practice of autonomy in sport. There is no call here to itemise the unfortunately frequent scandals in which sporting bodies have been enmeshed in recent years, but there is a regrettably long list of practices to which one may readily make objection in the patterns of sporting governance. Governing bodies tend to operate in a relatively untransparent manner. There is commonly an absence of adequate representation for all affected parties, most conspicuously athletes and fans who belong in the lower reaches of the ‘pyramid’ of governance. Patterns of accountability are correspondingly inadequate. Equality and diversity are not noticeably respected values in the higher administrative reaches of most governing bodies.
There is a structural problem at the core of this debate. Governing bodies in sport were historically engaged with setting the rules of the game. But over time, sport has become ever more commercialised, and the function of governing bodies as regulators of their sport has become ever more intricately combined with their role in taking decisions that have high economic significance and from which governing bodies may directly benefit. The problem has developed incrementally over time, but today there is typically an endemic conflict of interest since the governing body as sports regulator also has commercial incentives in choosing how that regulation shall be designed and applied. Staging a World Cup every two rather than every four years may or may not be good for the game, but it is certainly good for FIFA's income streams.
Any expectation that governing bodies in sport are likely to reform themselves from within seems implausible in so far as the problem is that they are self-interested and operate in a closed manner. But they are also resistant to reform from outside. The argument for sporting autonomy based on the need for sport to be regulated by insiders who have the necessary expertise, allied to the argument that sport requires common global rules that shall not be fragmented by compliance with diverse local rules, has weight, yet it tends to operate as a powerful obstacle to reform. There is a more brutal pragmatic dimension too. Any state that sought unilaterally to impose rules on governing bodies in sport that operate within its jurisdiction would run the risk that its national association would be suspended from international competition. The gatekeeping function performed by governing bodies grants them a powerful means to exercise control.
Were the EU to act and to impose standards, its influence would inevitably be felt beyond the EU. Governing bodies are unlikely to be able to operate according to one set of rules and a quite different set elsewhere. So in practice, the EU might become a global regulator.Footnote 31 Anxiety about such regulatory imperialism needs to be taken seriously. But action by a transnational entity is needed: regulation by a single state will be ineffective in tackling a transnational problem. By some distance the strongest argument in favour of placing faith in the EU as a source of governance reform in sport is—if not the EU, then who? The long arm of criminal justice enforcement possessed by the United States exerts a degree of influence in re-shaping behaviour in governing bodies, but the only plausible source of a commitment to reform sporting governance that goes beyond particular instances of corruption is the EU. There is a geographical dimension. Most governing bodies are based in Europe, if not in the EU, and the economic heartland of many sports is Europe. But most of all the EU does not possess its own sports team, so it has a resistance to sanctioning that no single state enjoys.
B. May It?
The EU may legislate in order to set standards that must be met by bodies organising sporting events within its jurisdiction only provided its Treaty provides the necessary authorisation. The EU must show itself competent to act. Article 165 TFEU is too slender to support the adoption of generally applicable rules. Article 352 TFEU offers a much broader legal base but not least because it requires unanimous support in Council it has largely fallen into disuse. The most promising source of a legal base is found in the combination of Articles 53(1), 62, and 114 TFEU, all of which authorise the EU to harmonise laws in order to promote the functioning of its internal market. The argument would run that within the Member States there are disparities between patterns of regulation of sport, that this impedes cross-border economic activity, and that accordingly the EU may intervene by setting common standards that provide a foundation for economic activity within the EU internal market according to the harmonised rules addressing matters such as governance in sport that are selected by the EU.
One can readily identify objections. Are there really such disparities between national practices that harm cross-border trade, especially given that so much regulation of sport in Europe already operates according to a harmonised model set by UEFA? It is a question to which the EU would have to supply a satisfying answer if it is validly to adopt harmonised rules. However, it is important to appreciate that the bar that must be crossed to claim a competence to legislate pursuant to Articles 53(1), 62, and 114 TFEU is remarkably low.
Articles 53(1), 62, and 114 fail to spell out in any detail what conditions must exist before they may be relied upon as a basis for legislation, but the Court has amplified its understanding of where the threshold lies. When there are obstacles to trade, or it is likely that such obstacles will emerge in the future, because the Member States have taken, or are about to take, divergent measures that bring about different levels of protection and thereby prevent the products and/or services concerned from moving freely within the Union, these Treaty provisions authorise the Union legislature to intervene by adopting appropriate measures.Footnote 32
So, to claim an authorisation to replace legislative divergence at the national level with regulatory harmonisation at the EU level, the EU must find ‘obstacles to trade’ arising because the Member States have taken divergent measures that prevent free movement within the Union or at least if there are no such obstacles, finding out when is it ‘likely’ that such obstacles will emerge in the future because the Member States are about to take divergent measures that will prevent free movement within the Union. Absent such an adequate connection to the internal market, one would need to look elsewhere for an authorisation for legislative action but in the field of sport one would immediately find that Article 165 TFEU is far too feeble to provide an adequate legal base. So, if one aspires to set common rules regulating the organisation and governance of sporting activity in the EU, it is on harmonisation pursuant to Articles 53(1), 62, and 114 that one focuses. Crucially, however, when one looks beneath the surface of the case law, one discovers that the thresholds for reliance on these Treaty provisions are readily crossed. The Court has very rarely found they are not, not least because the legislature has developed a habit of reciting word-for-word the Court's vocabulary in the Preamble to measures of harmonisation in order to sustain its claim to be equipped with a legal competence to act under the Treaty. It is rarely difficult to identify some degree of regulatory diversity among the Member States that can be presented as harmful to the integration of markets within the EU, and the Court has no demonstrable appetite for requiring sophisticated economic analysis of the effects of such diversity when it is asked to check whether a measure of harmonisation is covered by the grant of legislative competence made under the Treaty to the EU. Moreover, although any exercise of a conferred competence to legislate in any area of shared competence must comply with the principle of subsidiarity, here too the Court has devised a formula that in practice permits a high level of legislative discretion. Where the EU is granted a competence to adopt common rules the Court routinely finds that the adoption of common rules satisfies the demands of the principle of subsidiarity—because only the EU, and never the individual Member States, may adopt common rules!Footnote 33 Much the same is true of the principle of proportionality. The Court consistently allows the EU legislature a broad discretion in an area that entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. This is the character of harmonisation pursuant to Article 114 and the Court will intervene only if a measure is manifestly inappropriate having regard to the objective that the competent institution is seeking to pursue.Footnote 34
Harmonisation may not be pursued for its own sake but rather it must serve the EU's internal market. The Court's case law respects the existence of that limiting requirement but allows it no sharp teeth. Legislative practice fully reflects this understanding of the breadth of harmonisation as a means to promote the effective functioning of the EU internal market. No one with any awareness of the promiscuity of the EU's approach to legislative harmonisation across fields as diverse as tobacco products,Footnote 35 package travel and linked travel,Footnote 36 accessibility requirements for products and services,Footnote 37 crowdfunding,Footnote 38 and whistleblowingFootnote 39 would be surprised at the recently proposed legal base for a Regulation on the transparency and targeting of political advertising.Footnote 40 Sport could join this long list of fields that have been subjected to the discipline of harmonisation. It would not be difficult to identify at least some degree of diversity among the Member States in patterns of regulation of sport, and this opens the door to EU harmonisation as a constitutional possibility. Whether there is a political appetite to seize that opportunity in regulating sport is a separate question.
C. Will It?
The EU has set aside sporting autonomy in its treatment of arbitration and in its application of the rules of its internal market, but the question now is whether it will choose to be a great deal more assertive in its general approach to the regulation of sporting activity within the EU. Will it open a new chapter in the story of EU sports law—one that moves beyond the reactive ad hoc application of competition law to particular flashpoints that have generated litigation and that instead is more assertive, proactive, and targeted. Even if a powerful intellectual and practical case to be made for such an advance and even if there is an adequate constitutional basis, is there adequate political will?
There are hints that there is an appetite. In 2019, in a document entitled ‘Conclusions of the Council and Representatives of the Member States on Combating Corruption in Sport’, it was stated that:
Sports governing bodies should be able to maintain a high degree of autonomy in fulfilling their role in all fields of sport. This comes with an implicit recognition that any such autonomy must be earned through good governance and upholding the highest standards of integrity in their sport.Footnote 41
Cases such as MOTOE Footnote 42 and ISU Footnote 43 already provide a nudge in this direction. Those rulings recognise the autonomy of governing bodies as regulators of their sport, but on condition that certain standards of good governance are observed. In this sense EU competition law indirectly promotes compliance with procedural obligations by requiring that arbitrary and self-interested practices be eliminated. However the document continues:
The basic principles of good governance in sport include, as a minimum requirement, democratic structures, regular and open electoral procedures, competent and ethical organisation and management, accountability and transparency in decision-making and financial operations as well as fairness in dealing with membership, including as regards gender equality and solidarity.
This will not be delivered by competition law. It needs instead ex ante sector-specific regulation. This could address some or all of these features associated with governance structures—electoral procedures, term limits, ethics and human rights, accountability, representation and transparency, fairness, equality, diversity, and solidarity. It could be bolder. It could even aim to put in place a framework to protect and promote a European sports model. In 2007, in the Staff Working Document that accompanied its White Paper on Sport, the European Commission conceded that ‘any attempt at precisely defining the “European Sport Model” quickly reaches its limits’.Footnote 44 However, in November 2021, a resolution of the Council and representatives of the Member States on the key features of a European Sports Model was much more ambitious. It identified features ‘such as freedom of association, pyramidal structure, open system of promotion and relegation, grassroots approach and solidarity, role in national identity, community building and structures based on voluntary activity as well as its social, educational, cultural and health functions’.Footnote 45 In the same month, November 2021, the European Parliament adopted a resolution on ‘EU sports policy: assessment and possible ways forward’.Footnote 46 In a similar vein, it embraces the principles of a European sports model ‘based on values, voluntary activity and solidarity’ and that recognises ‘the need for a strong commitment to integrating the principles of solidarity, sustainability, inclusiveness for all, open competition, sporting merit and fairness’. The impetus is joined by ‘Win it on the Pitch’, a European Citizens’ Initiative within the meaning of Article 11(4) TEU and Article 24(1) TFEU, registered in February 2022 and calling for the protection of a European model of sport based on values, solidarity, sustainability, and open competition.Footnote 47
None of this can be reliably delivered by the ad hoc application of competition law. Were the EU to move beyond rhetorical flourishes of this type to concrete action involving the adoption of legislative provisions requiring that sport in Europe shall embrace these features, then the European model of sport would be transformed from a broad but loose descriptor of how sport is organised in Europe into a mandatory framework. This would represent a significant shift in the source of authority in European sport, from governing bodies to public authorities.
It remains to be seen whether political will within the EU and its Member States is forthcoming, and it remains to be seen too whether UEFA might support such initiatives. The early years of EU sports law were marked by a typically resentful attitude adopted by governing bodies in sport. What business did the EU have in reviewing their practices? Bosman jolted those governing bodies who assumed they could shelter behind appeals to autonomy, and more thoughtful governing bodies began to grasp that a strategy of ignoring the EU had been consistently exposed as unsuccessful before the Court and the Commission.Footnote 48 This has accelerated in recent years. In fact the insertion of Article 165 TFEU into the Treaty with effect from 2009 is explained by the background that sporting bodies had concluded that it was politically impossible for them to extract a concession of absolute autonomy from the application of EU law, and so instead, forced to choose between a status quo whereby the Treaties, but not the Court or Commission, ignored sport or instead a solution whereby sport would be included explicitly within the EU Treaty system but on terms that highlight the claim of sport to deserve special treatment, they chose the latter.Footnote 49 And in this vein of engagement, since 2014 the Commission and UEFA have established a formal arrangement for co-operation.Footnote 50 Governance in sport has come to involve a complex network of public and private actors and stakeholders.Footnote 51 Part of this story is UEFA's realisation that it can usefully work with the Commission in particular and with the EU in general to achieve its objectives. This was considered above in connection with transfers and FFP, and the SuperLeague offers a new case study. There is no doubt that UEFA would be delighted were the Commission to express itself hostile to the pretensions of the SuperLeague clubs. It has even stronger incentives to press the EU to legislate to defend its model and its monopoly regulatory power.
VII. CONCLUSION
My suggestion is that the regulation of sport in and by the EU should continue to involve the application of EU free movement and competition law but that it should also involve the establishment of certain standards that must be met as a pre-condition to being active in the supply of sporting events on EU territory. That is, the ad hoc reactive application of internal market law to particular disputes that happen to arise from time to time should be supplemented by subjection of governing bodies to mandatory ex ante standards. Governing bodies in sport are too powerful, and their track record too poor, for their claim to enjoy autonomy as private actors to be respected unconditionally.Footnote 52 In short, sport needs to be regulated, not simply disciplined by competition law.
Precisely what form this regulation should take should be the subject of discussion. One of the several appeals of pursuing legislative action at EU level is that it would open up the debate about how sport should be structured in the EU to a range of affected actors, many of whom are denied an effective voice in the current ‘pyramid’ system of sports governance that suffers from inadequate patterns of representation and accountability and instead favours top-down control by sporting ‘insiders’.
There are two distinct issues on the agenda of legislative reform, and they may be usefully viewed as a package. First, improving governance in sport requires the EU to address questions such as electoral process, representation, accountability, equality and diversity, club ownership, and the separation of regulatory and commercial functions. Second, defending the European model of sport may plausibly involve legal protection of governing bodies’ monopoly regulatory power as well as features common in European sporting competitions such as open leagues based on promotion and relegation and merit-based qualification. UEFA, one may guess, would be a great deal more enthusiastic about the latter group of reforms than the former. But they should go hand-in-hand. The European Parliament Resolution of November 2021 already shows the way:Footnote 53 it ‘strongly opposes breakaway competitions’ that undermine the principles of a European sports model and endanger the stability of the ‘overall sports ecosystem’, while also insisting on the need for a renewal of good governance and integrity, and a balance between the commercial interests of professional sport and ‘much-needed social functions’. Similarly the November 2021 resolution of the Council and representatives of the Member States on the key features of a European Sports Model endorses features such as the pyramidal structure and an open system of promotion and relegation, but it does not neglect the importance of good governance.Footnote 54 UEFA welcomed both documents, and although what matters is what it does rather than what it says it is encouraging that in its initial response UEFA referred to both protection of the European Sports Model and the quest for improved governance and more stakeholder inclusion.Footnote 55 This is the package deal that should be pursued.
The aim is not to deprive governing bodies in sport of their primary role as autonomous regulators of their sport. The aim is, however, to seek to improve the way in which they operate and reach their decisions and in particular to address the tension that has grown over recent years between regulatory and commercial functions. The EU can add value by making politically legitimate legislative choices that improve the quality and the predictability of governance in sport. The EU can usefully promote dialogue, the exchange of best practices, and institutional co-operation in the governance of sport, but also it can move beyond competition law to regulation, and adopt a policy of targeted legislative proactivity.
