Football’s European Super League
An International Sports Law student’s analysis
The recent announcement of the European Super League was a surprise to many, but to those up to date on the issue, it was not the biggest shock. Why I was aware is due to researching the area for a presentation for my University Law Degree, which in hindsight was the perfect area to discuss. Now, with the research I have conducted on the area, I will attempt to use my prepared speech to enlighten those to what is currently occurring to the beautiful game.
F.Y.I. — I am a law student, so the law may not be entirely accurate, as I am not a scholar or a lawyer, but the gist will be correct.
What is the current situation?
12 Major European giants have agreed to participate in a European Super League, funded by American bank JP Morgan, which would begin as soon as possible. The original idea was that there would be 15 permanent teams, with 5 teams qualifying each year domestically, and the competition would be split into two groups of 10, with the top 4 in each league entering a playoff-style system similar to the Champions League. However, the Champions League would be scrapped with this proposal, and replaced with the ESL as a midweek competition, with the clubs still competing in their domestic competitions.
The idea behind this system is for one reason — money. Currently, UEFA shares around £3 billion between all the teams in all European competitions, whereas the Super League would see £3.1 billion split between the 12 teams, with grants ranging from £310 million to £89 million to cover losses during COVID-19. The league was first mentioned in October 2020, but UEFA’s proposed Champions League revamp was supposed to quash this, by increasing broadcasting revenue to these teams and expanding the competition. However, whilst the clubs gave UEFA the green light to carry out these changes on Friday, they revealed the ESL agreement a day before the restructuring was announced on Monday.
Now, UEFA and FIFA have launched an attack on the Super League plans, and are looking at taking drastic measures in order to prevent it. UEFA and FIFA have stated that these clubs may be banned from their domestic competitions, and leaving the super league and attempting to rejoin domestic leagues in future would see them start at a league far down the pecking order. FIFA has also stated in January that they would not recognise such a competition, and any players playing for these clubs will be unable to compete in international competitions organised by FIFA or their subordinate federations, including the World Cup, European Championships or AFCON. The European Super League organisers are already looking at taking legal action against UEFA and FIFA if they attempt to block the plans, with the ‘dirty dozen’ sending a letter to the two Sport Governing Bodies stating these actions would be unlawful. Therefore, we shall analyse whether the actions of both parties are lawful in European Competition Law. But first, some definitions.
What is a Breakaway League and The European Model of Sport
The ESL would be a “breakaway league”, meaning members of an administration are involved in a separate competition not governed by the Sport Governing Body or SGB (so, UEFA and FIFA), and it is instead ran by an external operator (JP Morgan). Powerful clubs and sporting operators, as acknowledged by the European Commission’s Helsinki Report, have a temptation to leave the SGBs to make the maximum profit they can. However, this is contrary to the European Model of Sport.
The European Model of Sport is the sporting structure which is across all sports within Europe. It has key features which make it what it is, such as an open league system, restrictive geographical movement of clubs, youth development and solidarity across all levels of sport, whether it be national or continental competitions. There is also a pyramid structure which regulates the sport, with a global sport governing body (FIFA) at the top, then a continental sport governing body (UEFA), a national sport governing body (FA) and then the grassroots sport governing body. This differs from the American model, which has a closed league system, franchise mobility, draft system and no solidarity with lower levels of the pyramid.
However, the European Model of Sport is in jeopardy, due to the amount of money that sport is worth nowadays. Whilst the traditional roles of a SGB was to establish universal rules for competitors and organise events, the modern roles of a SGB involves commercial rights handling and maintaining the sport’s integrity across all levels of the SGB pyramid. To put it simply, the way this applies to the discussion is that academics and politicians are arguing that whilst money from domestic competitions can be put into grassroots football and spread fairly because they are regulated by a federation performing public functions, therefore maintaining competitive balance and ensuring the future of the sport, private companies do not have the same duties. They can promise the competing clubs all the review, but this means smaller clubs cannot catch up and creates imbalance.
History of Breakaway Leagues
Many seem to believe that a European Super League is a novel concept. However, it has been mooted before.
In 1998, the same clubs threatened to breakaway from UEFA and form a ESL backed by Italian marketing firm Media Partners International limited. To prevent this breakaway league, the Champions League format was changed and new stakeholder groups such as the European Club Association (ECA) and FIFPro became involved in decision making processes of UEFA.
In 2018, German media outlet Der Spiegel published leaked emails pertaining to a Super League. Again, this threat was eliminated by tweaking qualification requirements for the Champions League, and increasing revenue to the larger established clubs. This was more well known, as several managers spoke out about the issue, including Liverpool boss Jurgen Klopp.
Now, teams are again looking to breakaway. However, an interesting question — how many of these teams would have been a part of the 1998 discussion? I am sure Tottenham, Chelsea and Manchester City would not be, and in terms of honours won, Athletic Bilbao are a more successful club historically than Atletico Madrid, but I thought it was based on the histories of the clubs?
Rules designed to prevent breakaways (exclusivity clauses)
A method to prevent breakaway leagues forming is through exclusivity clauses. These stop athletes, clubs, staff and officials from participating in non-recognised events. An example would be the Premier League rules, which teams must agree to, which state that prior written approval must be gained from the Premier League Board to compete in external competitions not sanctioned by the Sport Governing Body in that jurisdiction (FA).
The rationale behind exclusivity clauses was explained in the case of Grieg v Insole:
“breakaway leagues presents an immediate threat to a national SGB’s finances, but long term, it can present further serious threats to all SGBs, such as player migration and further competitions being established”
The European Commission first outlined the problematic nature of exclusivity clauses in its European Model of Sport document, stating that excluding European clubs from national competitions for being members of a breakaway league conflicts with a key tenet of the European Model of Sport — the commitment to a national identity. Banning a team like Liverpool from the league goes against the model which they are trying to protect, so the SGB must decide which is less intrusive on the model.
Forms of Breakaway Leagues and European Model
There are two forms of leagues. Open Leagues include a system of multiple leagues varying in quality, which has a promotion and relegation system meaning any team has a chance. This is the model used in the English Football League, so a team like Norwich who were relegated from the Premier League last season and who have now been promoted straight away can do so.
The opposite is the closed league system. This means there is no promotion or relegation, and teams are able to build steady franchises without the worry they will be at risk of going into administration should they be relegated. Whilst this may seem to favour big teams, mechanisms such as salary caps and the draft system keep the league competitive. For example, whilst the New England Patriots dominated the NFL for years, there have been 5 different winners of the Super Bowl in the last 6 years.
There is a potential problem with closed leagues, however. Promotion and relegation is a key feature of the European Model of Sport. To have closed leagues would be americanising the model, and would be calling the European model into question. There are also some legal issues which result from this closed breakaway league system and exclusivity clauses.
Legal Issues of Breakaway Leagues
There are two key legal issues in this area. Firstly, are exclusivity clauses contrary to EU Competition Law? This question was discussed in the 2015 FEI case. Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) refer to restricting competition on the market, particularly if the abuser (FIFA/UEFA) is in a dominant position. The FEI stopped jockeys from competing in FEI-approved events if they had competed in a non FEI-approved event 6 months prior. The courts in the case held this was contrary to the TFEU, and to me this affirms the position that exclusivity clauses do restrict competition for other operators of leagues in an open market. FIFA stopping other operators from running their own leagues restricts competition on the market and creates a monopoly which they control, as no other operators can compete and therefore innovate the area.
The second legal issue concerns if the breakaway league is a closed format. As we have discussed, the fact up to 15 teams of the 20 proposed would be permanent members and only 5 would qualify annually across Europe shows it is a closed form. EU courts would be more passive if the league was open, however a closed league would be in conflict with Article 165(2) TFEU. This involves openness and fairness in sporting competitions, which would not be involved in a closed system that has only the best teams involved, as it is not fair for smaller clubs looking to progress. There is also the issue of whether it could risk market foreclosure to other teams attempting to be a part of the league, as it essentially stops teams joining, even if when they do qualify they finish higher than a permanent member. Therefore, closed leagues are against EU competition rules.
ISU case
A key case which addressed exclusivity clauses was last year’s ISU case. The ISU is the only federation which resides over figure and speed skating. The federation had a pre-authorisation system, containing an exclusivity clause which meant skaters may be suspended or banned for life for competing in non-ISU competitions. The Commission held this was contrary to Article 101 TFEU, and this was confirmed by the EU General Court on appeal. This case would appear to benefit the Super League, as this would seem to show the courts would not allow UEFA and FIFA to ban clubs from domestic leagues or players from international competitions should the ESL go ahead.
Conclusion
To conclude, the whole issue at present is unclear. Every day, there seems to be more information coming out, but a lot of this is fake news or rumoured. Clubs may use the threat of a breakaway league to continue to gain a growing portion of the revenue pie, as they have done for years. However, the words of Real Madrid President and Super League Chairman Florentino Perez are still fresh on the mind. In his recent interview on the issue, he has stated that the league is binding, as the clubs signed to it on Saturday, and it will go ahead, which would appear to show this is not an act to get more money from UEFA. Another interesting tidbit is the fact he has said the banning of teams from domestic or international competitions, and players from national team tournaments, will “100% not happen” and it is “impossible”. Therefore, if UEFA and FIFA go through with their drastic measures, the decision of the European Courts and the Commission could determine the fate of football.
