The European Super League and the Autonomy of SGBs in Europe
By: Pedro F. Ramos, Staff Editor
In 2023, the European Court of Justice (ECJ) will decide the European Super League Case with implications for the autonomy of Sports Governing Bodies (SGBs) in Europe. Controversy embroiled the European Super League (ESL) from the moment A22 Sports Management—the League’s sponsor—unveiled it in April of 2021. It prompted near-unison fan and player outrage and the threat of sanctions from the Fédération Internationale de Football Association (FIFA). Within 48 hours, the plan unraveled. However, because of the resulting legal battle, the original ESL—now in its second iteration—will have a lasting impact on the autonomy of SGBs in Europe. In response to FIFA’s threatened action, the European Super League Company (ESLC) challenged FIFA’s jurisdictional autonomy before a Madrid court by asserting that the relevant FIFA Statutes violated EU law. In December of 2022—on referral from the Madrid court—the ECJ’s Advocate General issued a non-binding preliminary ruling with favorable implications for FIFA’s autonomy. In 2023, the ECJ will make a final determination that will affect the autonomy of European SGBs—and the future of European football.
Autonomy of Sport in Europe
At the end of the nineteenth century in Europe, sports bodies were generally non-profit organizations. Unlike in the United States, European sport traditionally was “not . . . practised as an overtly economic activity.” Instead, these bodies were responsible for organizing competitions and the rules of the game. During most of the twentieth century, sports bodies exercised considerable autonomy vis-à-vis European governments and grew in social, cultural, and economic importance. However, it took until the 1990s—“once sport had become an economic activity”—for European institutions to intervene.
The greatest challenge to the autonomy of European SGBs came in 1995, when the ECJ issued its Bosman judgment concerning FIFA’s transfer fee system. There, Belgian footballer, Jean-Marc Bosman challenged FIFA rules that prevented a player from joining another team—even after their contract expired—unless the destination team paid a transfer fee to compensate the player’s former team for their training and development. The ECJ found that EU law regulating freedom of movement proscribed FIFA’s post-contractual transfer fee. FIFA, after some attempt at circumvention, ultimately amended its transfer rules to comply with the Bosman judgment, thus acknowledging the EU’s regulatory primacy. After Bosman, governments, sports organizations, and athletes brought numerous cases before the national courts of European countries challenging decisions rendered by SGBs and thus, their jurisdictional autonomy.
The adverse Bosman judgment was interpreted by SGBs as an uncharacteristic governmental intrusion into their autonomy. In response, many sports bodies called for a “sports exception” acknowledging their special status and need for autonomy—or the “[t]he ability of a sports body, without undue. . . influence, to establish, amend and interpret sporting rules, to select sporting leaders and governance styles and to secure and use public funding without disproportionate obligations.” SGBs justified this by emphasizing their special function and distinct inherent characteristics: “sport is a social expression—not a business like any other—and fulfils a unique social, educational and cultural role which benefits society as a whole.” SGBs claimed that their institutional knowledge and subject-matter expertise better positioned them to foster this distinct social function—but that they required a certain degree of latitude in its execution. According to Michel Platini, former President of The Union des Associations Européennes de Football (UEFA), “laws need to be written and interpreted in a way that recognises the specificity of sport and the autonomy of its institutions” so that SGBs might protect the “essence and beauty of sport: its educational, social and civic values.”
The peculiar economics of sports leagues could also bolster the SGBs’ir autonomy justification. In contrast to typical zero-sum markets, teams depend on the continued viability of their rivals and thus require a certain degree of coordination. In other words, while Coke may seek to dominate the soda market to the exclusion of Pepsi, a sports team needs an opponent on match day. In short, a sports team “is metaphysically incapable of producing its product” alone. Thus, a special status—particularly regarding competition laws—was warranted. The ESL lawsuit represents the most recent and significant challenge to the autonomy of European SGBs.
The European Super League
Pioneered by Liverpool’s John Henry and Real Madrid’s Florentino Pérez, the ESL proposed a league in which a select number of top European clubs would compete while continuing to participate in competitions organized by FIFA/UEFA.
According to Pérez, the motivation was a simple question of evolution. Precipitated by the pandemic and social media, football was in danger of losing a younger generation of fans. The promise of guaranteed showdowns between the likes of Real Madrid and Manchester United was necessary to guarantee their retention. Yet, instant controversy threatened to upend thiseir vision.
The proposal had a rare unifying force. Players and fans were united in condemnation. For perhaps the first time, supporters of bitter rivals—Liverpool and Manchester United—agreed: the “dirty dozen’s” proposal was pure betrayal. Within 48 hours, nine of the original twelve clubs had withdrawn, and the project collapsed.
Football fans will note that conceptually, the ESL was nothing new. A competition pitting the continent’s biggest stars in direct conflict occurs each year during the UEFA Champions League. However, while qualification for the Champions is determined by a club’s domestic performance, the ESL would be composed of 15 fixed teams. The remaining five would rotate (based on a system not yet determined by the time public outrage halted the proposal’s development). Put differently, while the Champions League remains—in form—consistent with the open, merit-based, European Sports Model, the ESL resembled the closed, profit-maximizing U.S. leagues.
In response to the proposal, FIFA threatened sanctions and the European Super League Company (ESLC) responded by filing suit in Madrid alleging that the relevant FIFA provisions violated EU law. In so doing, both sides proclaimed to be the sport’s savior.
ESL’s Challenge to Football’s Private Transnational Order
At issue were several provisions of the FIFA Statutes requiring pre-authorization for third-party competitions and prescribing a sanctions regime for enforcement. First, it is worth understanding why the renegade clubs were subject to the rules of a private entity like FIFA.
In common law parlance, participants in men’s international football are members of a transnational private order established and maintained by FIFA. FIFA’s internal system of football governance is distinctly law-like, both in form and substance. It is a system of formal governance that includes detailed rules of behavior, robust adjudicatory bodies, and a system of discipline and sanctions that ensures compliance at every level. As such, FIFA is the supreme private regulator of global football, empowered through its statutes to “control every type of association football by taking appropriate steps to prevent infringements of the Statutes, regulations or decisions of FIFA or the Laws of the Game.” Below FIFA sit six regional confederations—including UEFA—charged with football governance within their respective geographic sphere. Each confederation is composed of member associations that regulate football at the national level. Clubs, like the twelve founding members of the ESL, sit at the bottom. Each rung of the regulatory ladder must both comply with the actors above and ensure compliance from those below.
The ESL proposal was a direct violation of the FIFA Statutes—incorporated by UEFA as to the infringing clubs—and an affront to its monopoly control over men’s professional football. In response, FIFA threatened the participants with sanctions, including potential disqualification from FIFA competitions, which prompted a legal challenge by ESLC.
In April 2021, ESLC argued to a Madrid Court that FIFA/UEFA were in violation of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibit various anti-competitive practices and abuse of a dominant position, respectively. In May 2021, the Juzgado de lo Mercantil n.º 17 de Madrid, solicited a preliminary ruling from the ECJ on whether the various FIFA statutes—requiring pre-authorization for third-party competitions and prescribing a sanctions regime for enforcement—were compatible with EU competition law.
Opinion of Advocate General Athanasios Rantos
On December 15, 2022—exactly 27 years from the Bosman ruling—Advocate General Rantos issued a non-binding preliminary decision stating that FIFA’s pre-authorization statutes and sanctions regime were not a per se violation of EU competition law.
Although the opinion reserves determination of the proportionality of pre-authorization and sanctions for the referring Madrid Court, AG Rantos makes several conclusions. First, FIFA’s potential conflict of interest—as both a regulator and economic beneficiary of professional football—is not a per se violation of EU competition law. Thus, FIFA’s market restrictions may be justified if a legitimate policy is pursued proportionately. Second, while the opinion is generally favorable to FIFA/UEFA, AG Rantos notes that the analysis might differ were ESL a true breakaway league, in which the clubs did not seek to simultaneously retain their position within FIFA’s private order. Instead, the ESL clubs seek “dual membership,” by reaping the rewards of the “UEFA ecosystem” without complying with its rules. Finally, AG Rantos reasons that although sanctions against the defecting clubs are appropriate, their imposition on players “who were not parties to the decision to set up the ESL seems disproportionate.” For example, prohibiting a player from participating in their national team duties would be “a wrongful and excessive” sanction—a measure disproportionate both to the players and the affected national team.
However, the opinion’s framing is perhaps most important to the question of sporting autonomy. In presenting the issues, AG Rantos reaffirms the “special nature” of sport, which enjoys legitimacy from EU institutions. This institutional support is evinced through Article 165 TFEU, which provides that the EU “shall contribute to the promotion of European sporting issues while taking account of the specific nature of sport.” Moreover, the opinion emphasizes the centrality of SGBs, like UEFA, in preserving the European Sports Model, which Article 165 TFEU affords “constitutional recognition.” The Model—characterized by a pyramidal structure with professional athletes at the top and grass-roots, amateur competition at the bottom; merit-based competition; and a financial solidarity regime, where revenue generated by the top is redistributed throughout the pyramid—“is now being called into question” by the proposed Super League. AG Rantos reasons that the ECJ has also recognized the role of SGBs in safeguarding the Model through decisions “which [have] held that it falls to the sports federations to lay down appropriate rules for the organisation of sporting discipline.” In fact, this role is often exercised through geographic dominance, where a single SGB, like UEFA, exercises a “monopoly over the governance and the organisation of the sport” within their geographic sphere.
AG Rantos’ decision likely bolsters the autonomy of football’s private order and renders challenges to the rules of European SGBs more difficult. The opinion legitimizes the exclusive dominion of SGBs in governing their sport—a role that also supports the preservation of the European Sports Model. The opinion and ESL controversy also signal a departure from the acrimonious EU-FIFA relationship on display in Bosman, toward one of potential symbiosis. Shortly after the ESL proposal, the European Parliament took steps in defense of FIFA by voting to “oppose breakaway sports competitions,” which thwart EU values and “endanger the stability of the overall sports ecosystem.” Indeed, UEFA has embraced its mantle as defender of the Model, noting that it will collaborate with the EU to “to strengthen and protect the European sports model in European football.” Finally, while in Bosman, FIFA/UEFA defended itself from EU law, here, they assert it in defense.
While the preliminary ruling is favorable for FIFA/UEFA, the final ECJ judgment may be more so. If the ECJ follows the AG’s opinion—which it often does—it would be a dramatic departure from Bosman and signal a new relationship of cooperation between FIFA and the EU. Even if the ECJ ultimately reaches a different conclusion, the AG’s opinion generally plays an “important role” in the Court’s subsequent decision. Instead of an entity in need of regulation, the AG’s opinion frames FIFA and other SGBs as stewards of European sport—integral to safeguarding the European Sports Model that derives “constitutional recognition” from TFEU. Thus, if the ECJ affirms this reasoning, it will augment SGBs’ autonomy because the anticompetitive effects of their rules will be weighed against the legitimate objectives of the Model. This would legitimize their monopolies and further insulate their actions from external scrutiny.
While the ESL has since unveiled a new proposal, the ECJ will make a final determination in 2023—in what will be an important decision for the autonomy of SGBs in Europe.
Pedro Ramos is a second-year student at Columbia Law School and a Staff member of the Columbia Journal of Transnational Law. He graduated from the College of William & Mary in 2018.