Sports law in the eu - perspective from the bosman rulings
From Advocatespedia, The Law Encyclopedia
The European Court’s decision at the end of 1995, which granted athletes the same freedom of movement as all other professionals within the European Union (EU), changed once and for all the face of sport in Europe. The EU, acting as a supranational organization, changed the rules of the market. The Bosman ruling – named after the Belgian footballer that brought the case to the Court – has since had an immense impact at every level of the industry.
|Sports law in the eu - perspective from the bosman rulings|
Not only have the players from all member states acquired the right to move freely and enjoy the same privileges of domestic citizens, but also the long established transfer process was seriously questioned. The Bosman ruling also declared that the transfer fee that clubs had to pay for out of contract players was against Community legislation, creating significant results for the financial planning of the clubs and raising questions for their future survival.
Apart from the economic consequences of the ruling, an important aspect of the case was the affection it had on the sporting/cultural side of the industry. For centuries sport has been a basic element of the European society and represents a great deal more than just a form of entertainment.
The Bosman ruling changed once and for all the face of professional sports inside the European Union. The case of the Belgian footballer that went to the European Court of Justice (ECJ), arguing his right to move from one club to another without the existence of a transfer fee, since his contract had already expired, altered the laws of transfer markets in professional sports.
EU sports law was born out of the post-Bosman political discussions on the future of sport in the EU. It is an essential component of modern EUsports policy. Accordingly, it is a very recent development. The argument that a distinct area of EU sports law has emerged therefore risks the challenge that this is a premature claim. Soft law is included within the definition of EU sports law. Soft law refers to rules of conduct which in principle have no legally binding force but which nevertheless may have a significant effect on policy and legal developments. Soft law refers to non-binding measures adopted by the EU institutions such as Treaty Declarations, Presidency Conclusions, political guidelines and Commission orientation papers, comfort letters and notices.
The use of soft law stems from the peculiarities of the EU’s system of lawand governance. The EU is obviously a multi-national organisation. The size, complexity and diversity of the EU results in protracted decision making at the best of times. In the absence of unanimity, member states often favour the use of soft law when they are unable to agree upon binding measures but nevertheless wish to place political pressure on the EU institutions for a change in policy direction. As such, soft law can be employed by the member states as an implied threat of taking further harder measures unless EU institutions change their approach. Soft law has therefore offered important guidance as to the interpretation and scope of the application of EU law. The Amsterdam Declaration is increasingly a frequently sourced reference in Commission competition law cases and ECJ cases. The Commission (in this context the Competition Policy Directorate) also favours the use of soft law.
Politically, the Commission must be sensitive not only to the interests of themember states, but also to the requirements of business operating in the Single Market. Soft law is therefore often used as the politically pragmatic option. The voluntary notification system used in competition law also lends itself to the use of soft law. Furthermore those seeking clearance often favour informal negotiated settlements. The Commission is also hampered by resource limitations which results in the use of administrative rather thanjudicial measures to resolve cases.
In addition, it is not uncommon for soft law to be used as quasi-legal justification by EU institutions for the development of policy initiatives. Again, the Amsterdam Declaration on Sport has informed much of the EU’s recent sports-related activity. Soft law has therefore characterised much of the development of EU sports law. The lack of a formal Treaty base to take ‘harder’ measures in sport clearly also necessitates the use of soft law.
The major impetus for sports eventual passage on to the institutional agenda for active EU consideration came with Bosman. Bosman destroyed the Commission’s negotiated settlement approach. The changed economic status of sport contributed to the ECJ’s forceful ruling and the Commission’s more energetic use of competition law to enforce Bosman. Despite the submissions of various governments in Bosman .
The ECJ’s ruling was also a response to a political impetus. Although a legal and bureaucratic exercise of immense proportions, the newly completed Single Market represented a triumph of political will. The ECJ’s extension of the scope of Article 39 was consistent with the broad thrust of the Single European Act/Single European Market project. As such, sports functional link to the Single Market was an unanticipated consequence of the wider Single Market project. Sport now operated within a EU regulatory environment. The legal consequence of Bosman was that the EU no longer had to justify why sport was subject to EU law, but rather sport would have to justify why it should be exempt from the Treaty. Even so, the acknowledgement by the ECJ that sport was different to other ‘normal’ industries may be interpreted as the genesis of EU sports law. Items on the EU’s systemic agenda are often transferred on to the institutional agenda with definitional bias. Sport, for instance, was transferred through a legal/regulatory venue involving a close relationship between the ECJ and the Commission. However, the EU’s institutional agenda is very open. As an item for active policy consideration, sport has proved a relatively malleable item. The rulings in Deliège and Lehtonen again reflect the political context of the day. The ECJ has confirmed that sport is subject to EU law but has given clearer guidelines on sporting justification arguments.
In this connection, the ECJ has been sensitive to the post-Bosman political debate on how to reconcile EU law with sports social status. Deliège and Lehtonen represent the ECJ’s contribution to the construction of the separate territories approach and, therefore, the development of EU sports law.
The member states, the European Parliament and the Education and Culture Directorate General have been active in promoting this message. Deliège and Lehtonen have also informed the activities of the Directorate General for Competition Policy. Whereas the ECJ has responded to the political debate by being sympathetic to ‘inherent sporting rule’ justification when deciding cases, the Commission has recently indicated that exemptions from competition law may be an appropriate way of reconciling EU law with sports social status. It is to this that the next chapter turns.
Prior to the Bosman ruling, professional clubs in some parts of Europe (but not, for example, in Spain and France) were able to prevent players from joining a club in another country even if their contracts had expired. In the United Kingdom, Transfer Tribunals had been in place since 1981 to resolve disputes over fees between clubs when transferring players at the end of their contracts. The Bosman ruling meant that players could move to a new club at the end of their contract without their old club receiving a fee. Players can now agree a pre-contract with another club for a free transfer if the players' contract with their existing club has six months or less remaining.
Bosman confirmed the "rule of reason" approach of the courts used in the important Cassis de Dijon case as not only suitable for issues relating to movement of goods within the EU, but also for cases concerning the free movement of workers.
If free movement is indistinctly applied (i.e. not just against foreign nationals) it could be justified if...
• The measures used were in pursuit of a legitimate aim
• That aim was justified by pressing reasons of public interest
The case also alludes to the fact that Alpine Investments v Minister van Financiën provides a similar test for services, and Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano for establishment.
The Bosman ruling also prohibited domestic football leagues in EU member states, and also UEFA, from imposing quotas on foreign players to the extent that they discriminated against nationals of EU states. At that time, many leagues placed quotas restricting the number of non-nationals allowed on member teams. Also, UEFA had a rule that prohibited teams in its competitions, namely the Champions League, Cup Winners' Cup and UEFA Cup, from naming more than three "foreign" players in their squads for any game. After the ruling, quotas could still be imposed, but could only be used to restrict the number of non-EU players on each team.
The Bosman ruling is not just another ruling of the Court of Justice of the EU (CJEU), it is by far the most well-known decision of the Court outside of the Euro-bubble. In the UK the phrase ‘a Bosman’ is commonly used to qualify the free move of a football player to a new club at the end of his contract. Beyond its anchoring in the English idiom, Bosman stands out as a shared European reference. However, it is often – misleadingly - credited for all the ills and wrongs of football. In any case, it is part and parcel of the European (even worldwide) public debate on football and its regulation. If a European public sphere is to emerge at some point, the heated public discussion that was triggered in Europe by Bosman is probably an avant-goût of it. Therefore, 20 years after the ruling, the least a European sports lawyer and academic can do, is to acknowledge ones indebtedness and, to some extent, gratitude for this ruling.
One aspect that needs to be emphasized is that Bosman is not an instrument with the paramount objective to deregulate the football market or the world of sport in general. It is not, as many on the side of the Sports Governing Bodies (SGBs), and FIFA and UEFA in particular, have portrayed it, a decision aimed at destroying the transnational legal system (also known as lex sportiva) they had put in place to coordinate the organization and unfolding of transnational sporting competitions. On the contrary, SGBs have the possibility to justify their rules and regulations. As Stephen Weatherill rightly pointed out long ago, the only requirement SGBs have to fulfil to ensure that their regulations comply with EU law is to explain convincingly why they are needed. Thus, a constructive (and positive) perspective on Bosman stresses its constitutional over its deregulatory function. Private regulations adopted by private powers, which are not particularly renowned for the quality of their governance, need to be subject to checks and balances. After Bosman, the EU free movement rights and competition law have impersonated such a check on (or counter-power to) the rules privately adopted and enforced by SGBs. In fact, it is here that the true, long-lasting legacy of Bosman lies.
Bosman fundamentally shaped the application of EU law to sport and its transformative effects on sports governance
- 1 The pre-Bosman environment
- 2 THEORETICAL EFFECTS OF THE RULING
- 3 b. Effects for the clubs
- 4 HISTORY
- 5 Before The Bosman Ruling
- 6 Sport and the European
- 7 The Walrave, Donà and Heylens cases
- 8 Walrave v. Union Cycliste International 1974
- 9 RELEVANT CASES
- 10 UNECTEF v. Heylens 198720
- 11 URBSFA and others v. Bosman24
- 12 Reference
The pre-Bosman environment
Prior to the emergence of a post-Bosman sports policy subsystem in the EU,sporting issues were discussed in a range of other subsystems. A 1995 studyon ‘The Impact of European Union Activities on Sport’ conducted by Coopers and Lybrand for DG X of the European Commission, reviewed EU involvement in the sports sector (Coopers and Lybrand 1995). The study detailed the extensive involvement of the EU institutions in sport whilst also conveying the lack of a co-ordinated policy approach. The study did however reveal a growing institutional awareness of this problem and illustrated moves designed to confront this fragmentation through the growth of a range of sporting institutions (see below). The lack of a Treaty competence to develop a common sports policy did however act as an obstacle to a more co-ordinated approach to sports policy.
Prior to Bosman, sporting issues were discussed in connection with a widerange of policies. The first of these areas concerns the right of free movement for workers/the self-employed within the Single Market. Since the signing of the Treaty of Rome and the subsequent piecing together of secondary
legislation, players, coaches, instructors and even fans have rights of free movement guaranteed by EU law. Walrave, Donà, Heylens and various disputes concerning, for example, the operation of ski instructors, illustrate the relationship between sport and issues of free movement. Clearly EU provisions on the right of establishment and the right to provide services havesimilar consequences for sport. Beyond the issue of worker/self-employed mobility, the Commission has also sought to establish a free market in insurance, sponsorship, advertising and broadcasting services.
THEORETICAL EFFECTS OF THE RULING
The effects created through the Bosman ruling in theory can be divided into two main categories. On one hand there is the economic aspect of the case and on the other the sporting/cultural outcomes, resulting from this decision. Also, there are the sporting/cultural consequences of the Bosman ruling, which are more difficult to measure, but are none the less as important. Table 1 summarizes the effects and provides positive and negative arguments following the new development.
a. Effects for the players
In general, the economic results are not the same for athletes and professional clubs and have to be distinguished. The players benefit from the ruling, since their bargaining power increases (more options of employment, chance of moving to bigger markets, etc.). This results in their income increase, something that also occurred when the North America sport market deregulated back in 1981. In professional baseball, the average salary rose from $44,700 USD in 1975 (the last year before the deregulation) to $371,200 in 1985, while the same thing happened in professional basketball, ice hockey and American football leagues (5). In Europe as well, since 1998 Deloitte and Touche produced statistics that revealed a 40% increase in players’ salaries for the English Football Premier League, something that was attributed to the Bosman ruling and the influx of foreign players (4). Moreover, the clubs feel the need to sign their key players for more years than before, since the latter can go on a free transfer at the expiration of their contract. This allows the players to ask for increased wages in order to commit themselves for a longer period of time and obviously increases their sense of security under a long, unbreakable contract.
b. Effects for the clubs
The consequences for the clubs are very different, almost opposite to the ones of the players. The higher salaries have pushed the clubs’ financial conditions to their limits and there are quite a few alarming examples of traditional clubs that went almost bankrupt due to financial reasons in the recent years, with the example of football club Leeds United to be the most characteristic.
Moreover, the Bosman case increased the difficulty observed in professional sports to redistribute the generated income. Under recent developments, the clubs are free to negotiate their broadcasting rights on their own, so instead of having a collective agreement that would distribute appropriately the amount of money to all clubs, now the “big boys” take the vast amount of the TV income, leaving the small clubs struggling to survive (3). Deprived from their two main sources of income (transfer fees and broadcasting rights), the long-term prospect of small, local clubs seems less than optimistic.
Another aspect of the Bosman ruling affects youth development projects of the clubs. They are obviously much more reluctant to invest in these programmes, since they know they have no means of holding on to their talents. The cost of developing a young player over the years is far greater than signing a Bosman player and clubs will tend more and more to seek this solution.
c. Cultural/sporting effects
Apart from the financial consequences, the Bosman ruling has had a tremendous impact on the cultural and sporting aspect of professional sports in Europe. The long-lasting relationship between the fans and the clubs, a bond that goes far beyond sports and expresses the socio-cultural elements of each society, is seriously endangered. The reasons behind this development are two. First of all, the fans (the customers in the sports market) find more and more difficult to associate themselves with huge-earning players, who often are seen as “mercenaries”. The people paying the tickets have a special bond with their club and expect nothing less from the players, no matter how well-known they are or not (6). Commitment in professional sports is really difficult to be found nowadays and this seriously affects the fan base.
More importantly, the clubs tend to lose their domestic identity by signing more foreign players than ever. FC Chelsea was the first club to field 11 non-English players in a domestic championship match, arising serious criticism about how well this team can express the fans’ feelings and the club’s traditions (6). The same effect was apparent in the Greek Basketball League at the end of the 90’s, when the uncontrollable invasion of Bosman players of medium quality caused a dramatic fall of interest for the sport (2).
Finally, Bosman ruling’s future results are not yet easily identified, as the enlargement of the European Union (which now constitutes of 25 countries, with many more walking the accession path) and the third country agreements that the EU has signed are bound to increase the number of countries that this ruling can be applied. Moreover, a possible application of this judgement to amateur sports can create further troubles for domestic/local sporting activities.
The bosman ruling
December 15th 1995 is a key date within the history of football and what the court decided on that day has had a major effect on how football has developed into the major money spinning sport it is today.
Jean- Marc Bosman was a born on October 30th 1964 and prior to the landmark trial was an average player, playing for Belgian clubs Standard de liege and RFC Liege and had won 20 caps for Belgium at youth level.
Before The Bosman Ruling
In England if a player wanted to transfer clubs they had to put in a written transfer request, however if the club refused this the player had no choice but to stay with them as long as they maintained paying the amount of wages they did in the previous contract. This meant if clubs didn't necessarily need you but didn't want you going to another club they would simply ‘keep hold of you' or if you signed your first professional contract as a eager youth player and then became a indispensible player the club could simply keep hold of you and pay you the wages you had before you became an established player. This was the point of the system; it stopped richer clubs claiming all the best players and kept players wages down.
This system was obviously a ticking time bomb and in 1960, George Eastham challenged the power which the clubs had. Eastham played for Newcastle United and made clear his desire to leave and put in several written requests all of which were declined by United. Eastham eventually left football as was his desire not to play in the north east, a year later Newcastle and Arsenal agreed a fee and Eastham moved to London, however Eastham pressed on with his case and took it to the High Court to test the ‘retain and transfer' policy in the eyes of law.
Judge Wilberforce indicated five areas that needed inspection;
Are the rules of the Association and the regulations for the league a restraint of trade? If so, are the restraints no more than such as are reasonably necessary for the protection of the Association or of the league or of its members? Has the court any jurisdiction that the retention and transfer system is invalid against all or any of the defendants?
If so, should the court exercise that jurisdiction?
Has the plaintiff any right to damages?
The decision of the High Court was to rule the ‘retain and transfer' system an ‘unreasonable restraint of trade'. It was decided that at the end of a players' contract if the club did not renew the contract the player was allowed to leave however if a new one was offered the player did not have a right to refuse as long as the contract was not less than the previous, this still left players feeling somewhat limited.
In England 1978 the freedom of contract was introduced this allowed players the option to refuse the offer of another contract, however if a new club wanted your services they would have to compensate your previous club. Tribunals were set up to determine the amount payable if clubs could not agree a suitable fee. Players and their agents were still not permitted to approach possible clubs to instigate a transfer; they had to wait to be approached.
Sport and the European
Court of Justice
The ECJ is an important agenda setter. Court rulings play an important part in defining the content of the EU’s systemic agenda and the conditions under which an issue is transferred to the institutional agenda for active policy development. The ECJ’s line of reasoning in relation to sport has been developed within the context of a number of important institutional relationships.
As such, the ECJ’s role in establishing the boundaries of EU sports regulation is not deterministic.
In Walrave, Donà and Heylens, the ECJ established important principlesconcerning the relationship between sport and EU law.1 In the event, the lack of enforcement from the Commission limited the scope of these rulings. In Bosman, the principles established in previous case law were extended. As the Commission was more energetic in enforcing Bosman, so the ruling took on enormous legal significance for sport.2 The rulings in Deliège and Lehtonen, which placed some limit on the application of EU law to sport, took place in the context of an on-going political discussion within the EU on how to reconcile EU law with sports social significance.3 Whereas Walrave, Donà, Heylens and Bosman took place in an environment where the construction of the Single Market was seen as paramount, Deliège and Lehtonen reflected greater sensitivity to the socio-cultural dimension of European integration. Deliège and Lehtonen therefore represent the ECJ’s contribution to the construction of the separate territories.
This chapter examines the ECJ’s sports-related jurisprudence in six parts.
The first part reviews the role of the ECJ in the process of European integration. The second examines the Treaty provisions relating to the free movement of workers and the right of establishment and the freedom to provide services. The third section analyses the significance of the ECJ rulings in Walrave, Donà and Heylens. Section four examines the impact of the Bosman ruling and section five reviews the case law in Deliège and Lehtonen. The final section draws some conclusions.
The Walrave, Donà and Heylens cases
As the EU is not an omni-competent organisation, it must be established that sport falls within the scope of the above Treaty Articles. The case law of the ECJ has established that Articles 39, 43 and 49 apply to sport. The Commission has also established that Article 81 and 82 dealing with competition law also apply (considered in Chapter 5).
Walrave v. Union Cycliste International 1974
Bruno Walrave and Noppie Koch were two Dutch professional pacemakers in motor-paced cycle races. Participants in these races ride pedal powered cycles. Each participant has a pacemaker on a motorcycle whom he follows.
The pacemakers, who wear special clothing, aim to create a moving vacuum for the cyclist (stayer) to ride in. This enables the stayer to achieve speeds in excess of what a ‘normal’ cyclist could achieve. This can be as much as 100 kilometres per hour. The role of the pacemaker is therefore central to the sport, unlike the role of pacemakers in many other sports such as athletics.
The pacemaker enters into a contract with the stayer, a cycling association or a sponsor. Until 1973, the pacemaker did not have to be of the same nationality to that of the stayer.
In November 1970, the Union Cycliste International (UCI, the international association for cycling sport) reviewed its rules on the conduct of motor-paced races for the forthcoming medium distance world cycling championships. From 1973, the pacemaker and the stayer had to be of the same nationality. UCI justified this action on the grounds that WorldChampionships are intended to be competitions between national teams. Believing there to be a paucity of good Dutch stayers, Mr Walrave and Mr Koch acted as pacemakers for non-Dutch stayers, including Belgians and Germans. Faced with a restriction on their livelihood, they regarded this rule change as being discriminatory and a breach of EU law. Having failed to secure the repeal of the rule change, the two pacemakers initiated proceedings against the UCI, the Dutch cycling association .
Donà v. Mantero 197618
The second occasion on which the ECJ dealt with a sports-related case concerned nationality rules in Italian football. The Italian Football Federation, the Federazione Italiana del Gioco del Calcio (FIGC) controls the game of football in Italy. Under its rules, players are required to hold a federation membership card. Only the FIGC can issue such a card. Article 28(g) of the federation’s rules stated that normally only players of Italian nationality, residing in Italy could be issued with the card. An exemption was made for foreign nationals who have never been members of a foreign federation who are resident in Italy and ask to be enrolled as youths, amateurs or for recreational purposes. For all other players the FIGC had total discretion as to whether a card was to be issued.19 The rules effectively placed a heavy restriction on non-Italian footballers playing professional football in Italy. A challenge to these rules was brought by an agent who had attempted to recruit players from abroad. The agent had been hired by the chairman of an Italian league football club who wanted to explore the possibilities of bringing foreign players to the club. The agent, Gaetano Donà placed an advert in a Belgian sports newspaper. When, however, he claimed the costs of this advert back on expenses, he was refused on the grounds that he had acted too soon and Italian league rules prevented the use of foreign players. Mr Donà sued for the amount of the advert before the Giudice Conciliatore di Rovigo.
UNECTEF v. Heylens 198720
Although players are the most important feature of the sporting contest, many other individuals are involved in its production. In this connection, sports clubs also employ physiotherapists, coaches, dieticians, psychologists and trainers. Member states impose restrictions on foreign nationals wishing to take up such posts. For example, the individual in question is normally expected to be suitably qualified. In instances whereby qualifications are not awarded by bodies within the member state, member states are under a EU obligation to recognise equivalent qualifications gained in other member states. For some professions the EU has established specific mutual recognition standards. However, in many instances no such standards exist.
Member states must therefore take appropriate measures to assess an individual’s suitability. This is achieved by comparing the candidate’s credentials with those required by national rules. The exercise of this judgement has however been called into question
URBSFA and others v. Bosman24
Despite the growing body of case law relating to discriminatory practices in sport, the European Commission appeared unwilling to fully enforce the Walrave and Donà rulings. Consultations between the Commission (Internal Market DG) and UEFA on the continued use of nationality restrictions in European football continued unsuccessfully until the Bosman judgement.
In 1978, an agreement between Commissioner Davignon and UEFA was concluded by which the federations had to modify their internal rules in order to abolish discrimination on the grounds of nationality. A temporary agreement was reached permitting first and second division clubs to restrict nonnationals to two per match. Despite objections from the Commission and the European Parliament, the restrictions remained in place. In December 1984, the Commission once again requested that discriminatory rules be amended to conform to EU law, this time by 1 July 1985. The response of UEFA and the national football associations was piecemeal. At the conference of the national Football Associations of EU member states held in July 1985, the associations approved a four-point plan proposed by UEFA.
1 Maximum of two non-nationals to be fielded per match.
2 ‘Sporting’ nationality to be granted after five years’ uninterrupted activity for a single association.
3 Qualifying period for applications for ‘sporting’ nationality to commence
1 July 1984.
4 Re-examination of the problem in 1989 to analyse the results obtained.
Case C-415/93 Union royale belge des sociétés de football association ASBL v. Jean-Marc Bosman, Royal club liégeois SA v. Jean-Marc Bosman and others and Union des associations européennes de football (UEFA) v. Jean-Marc Bosman, EU:C:1995:463.
The impact of the Bosman ruling on the market for native soccer players
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