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Dr. Anastasios Kaburakis

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1 Dr. Anastasios Kaburakis
2007 NSLI FALL CONFERENCE The Increasing Globalization of Sports: Olympic, International and Comparative Law & Business Issues Comparative Analysis of Sports League Structure, Governance and Player Restraints Conference Panel Dr. Anastasios Kaburakis A Comparative Analysis of Player Restraints and Transfer Rules in European Union and United States Professional and Amateur Sports

2 US and EU Competition and Labor Law
Starting Point: US and EU Competition and Labor Law

3 US Sport and Law Governing Competition
Antitrust Law 1890 Sherman Antitrust Act (SAA) 15 U.S.C. §§ 1-7 SAA §1: Agreements in restraint of trade (Per Se v. Rule of Reason analysis) SAA §2: Unlawful monopolization Willful exploitation of dominant market power or attempt to gain monopoly power via unlawful means SAA §1: Restraint of Trade SAA §2: MonopolyPlaintiffDefense Restraint of Trade 3Cs (combination, concert, conspiracy) Unreasonably retrains trade Interstate Commerce Attack elements of claim Restraint of Trade defense: Single entity Non-statutory labor exemption Rule of Reason Monopoly Monopolization Not a monopoly Larger relevant market No power to control prices or exclude competition Natural monopoly Source: LPM

4 US Sport and Law Governing Competition
Relevant Case Law – Antitrust Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs 259 U.S. 200 (1922) Dept. of Justice v. NFL 116 F. Supp. 319 (1953) US v. NFL 196 F. Supp. 445 (1961) AFL v. NFL 323 F 2d 124 (4th Cir. 1963) Philadelphia World Hockey v. Philadelphia Hockey Club 351 F. Supp. 462 (E.D. Pa. 1972) San Francisco Seals v. NHL 379 F. Supp. 966 (1974) Bowman v. NFL 402 F. Supp. (D. Minn. 1975) Robertson v. NBA 389 F. Supp. 867 (S.D.N.Y. 1975) NASL v. NFL 670 F. 2d 1249 (1982) LA Memorial Coliseum Commission v. NFL 469 US 990 (1984) Mid-South Grizzlies v. NFL 467 US 1225 (1984) NCAA v. Board of Regents 468 U.S. 85 (1984) NBA v. SDC 484 US 960 (1987) USFL v. NFL 842 F. 2d (1988) Piazza v. MLB 831 F. Supp. 420 (E.D. Pa. 1993) Sullivan v. NFL 115 S. Ct (1995) Law v. NCAA 902 F. Supp (1998) Fraser v. MLS 97 F. Supp. 2d 13 (2000) Re: NCAA NOTE: Business practices v. internal regulations Every other case brought against the Association did not establish a SAA violation [i.e. Justice v. NCAA, 577 F. Supp. 356 (D. Ariz. 1983), AIAW v. NCAA, 236 U.S. App. D.C. 311 (D.C. Cir. 1984), Smith v. NCAA, F.3d 180 (3rd Cir. 1998), Adidas America, Inc. v. NCAA, 40 F. Supp. 2d 1275 (D. Kan. 1999), Pocono Invit. Sports Camp, Inc. v. NCAA, 317 F. Supp. 2d 569 (E.D.Pa.2000), Worldwide Basketball & Sports Tours v. NCAA, 388 F. 3d 955 (S.D. Oh. Columbus Division 2000), while in the most recent case, MIBA v. NCAA, 339 F. Supp. 2d 545 (S.D.N.Y. 2004), the parties settled out of court, with the NCAA purchasing the rights to organise the once prestigious and competing NIT tournament]. Per Se v. Rule of Reason (+ “Quick Board of Regents) Per Se: “a practice facially appears to be one that would…restrict competition and restrict output, in which event a restraint is presumed unreasonable without inquiring into the particular market context which it is found.”* * Broadcast Music, Inc. v. Columbia Broadcasting System, Inc. 441 U.S. 1, (1979) Rule of Reason: 1) Plaintiff bears initial burden to show that the alleged agreement causes adverse, anticompetitive effects in the relevant market May satisfy by demonstrating either actual anticompetitive effects or by offering proof of the defendant’s market power 2) Burden shifts to defendant to show the challenged conduct promotes a sufficiently pro-competitive objective 3) Burden then shifts back to plaintiff to show that the restraint is not reasonably necessary to accomplish the stated objective --- Federal baseball case – antitrust exemption for baseball because it is “not interstate commerce” ruling by Holmes in dictum NFL cases - Illegal restriction NFL imposed on members for any games being shown in the home territory of another member (the NFL could restrict other telecasts when there was a home game, but not when the team was away or was not playing) Pooling of broadcasting rights = horizontal restraint violating antitrust law …later allowed by SBA exemption… Fraser case – “Single Entity Defense” - Leagues can centrally contract players and not just individual franchises (former WNBA model)

5 Noted Exemptions from Antitrust Law
1922 Federal Baseball ruling Justice Holmes in dictum ruled baseball was “not interstate commerce” exempting it from antitrust law 1961 Sport Broadcasting Act Congress enacted the Sports Broadcasting Act (15 USC Section 1291) Thus, the four major leagues were able to sign agreements pooling broadcasting rights (“sponsored telecasting”), being exempt from antitrust scrutiny

6 US Sport and Labor Law Important Aspects of Labor Law
National Labor Relations Act National Labor Relations Board Collective Bargaining Agreements League rules negotiated under CBA Statutory Labor Exemptions Clayton Act (15 USC Sec & 29 USC Sec. 52) Norris-La Guardia Act (29 USC Sec ) National Labor Relations Act (NLRA) (29 USC Sec ) Non-Statutory Labor Exemption Local Union # 189, Amalgamated Meatcutters & Butchers Workmen of North America, AFL-CIO v. Jewel Tea Company 381 US 676 (1965) United Mineworkers of America v. Pennington 381 US 657 (1965)

7 US Sport and Labor Law Labor exemption applications Mackey v. NFL,
543 F. 2d 606 (8th Cir. 1976) 8 union sponsored players challenged the “Rozelle Rule” – The “Mackey test” The Antitrust exemption could be invoked by a league only when: Restraint of trade primarily affected the CBA parties Agreement fought to be exempted concerned a mandatory subject of bargaining Agreement was the product of arms length bargaining The third element was lacking, hence no league protection via the labor exemption

8 US Sport and Labor Law Relevant Case Law – Labor Relations
Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs 259 U.S. 200 (1922) Gardella v. Chandler, 79 F.Supp. 260 (S.D.N.Y. 1948) Toolson v. New York Yankees, 346 US 356 (1953) U.S. v. Schubert, 348 US 222 (1955) U.S. v. International Boxing Club, 348 US 236 (1955) Radovich v. NFL, 358 US 445 (1957) International Boxing Club v. US, 358 US 242 (1959) Haywood v. NBA, 401 US 1204 (1971) Flood v. Kuhn, 407 US 258 (1972) Philadelphia World Hockey Club v. Philadelphia Hockey Club, 351 F. Supp. 462 (E.D.P.A. 1972) Robertson v. NBA, 389 F. Supp. 867 (S.D.N.Y. 1975) Kansas City Royals v. MLBPA, 532 F. 2d 615 (8th Cir. 1976) Mackey v. NFL, 543 F. 2d 606 (8th Cir. 1976) McCourt v. California Sports, 600 F. 2d 1193 (6th Cir. 1979) Zimmermann v. NFL, 632 F. Supp. 398 (D.D.C. 1986) Bridgeman v. NBA, 675 F. Supp. 960 (D.N.J. 1987) Wood v. NBA, 809 F. 2d 954 (2d Cir. 1987) Powell v. NFL, 678 F. Supp. 777 (D. Minn. 1988), 930 F. 2d 1293 (8th Cir. 1989) McNeal v. NFL, 764 F. Supp (D. Minn. 1991) White v. NFL, 41 F 3d 402 (8th Cir. 1994) Brown v. Pro Football, 116 S. Ct (1996) NBA v. Williams, 857 F. Supp (S.D.N.Y. 1994), 116 S. Ct (1996) Curt Flood Act (1998) 15 USC Sec. 27 (a) MLB v. Crist, 331 F 3d 1177 (11th Cir. 2003) Clarett v. NFL, 369 F.3d 124 (2nd Cir. 2004)

9 US Competition & Labor Law Summary
In the “amateur” section of US sport, the NCAA has enjoyed relief from antitrust scrutiny (w/ 2 noted exceptions) Congressional intervention (e.g. SBA 1961, CFA 1998) Practices that would otherwise be declared inherently anti-competitive find a sporting rationale and pass antitrust muster (e.g. broadcasting restrictions, draft systems, salary caps, luxury tax) Frequently Congress has intervened attempting to resolve situations in sport that courts declined or were unable to provide remedy for (or in certain cases deciding to bypass or alter court decisions, satisfying either public demand or succumbing to major corporate interests), i.e. the SBA of 1961 allowing sports leagues to pool broadcasting rights and sign exclusive contracts, or the CFA of 1998, providing relief for a situation that evolved the 76 years following the “Federal Baseball” case that granted baseball its infamous --according to aforementioned legal scholars-- antitrust exemption. Such intervention arguably protected the interests of individual sport labourers, to that point treated unfairly and not enjoying privileges other employees in other business sectors normally enjoy. At the same time, such policy initiatives also allowed for the continuation of sports leagues development, rendering the operation of sports franchises feasible for investors

10 US Competition & Labor Law Summary
Several major sports leagues’ practices have been declared violations of antitrust law (i.e. cross-ownership restrictions, relocation restrictions, transfer windows, and acquisitions deadlines) under SAA §1. SAA § 2 claims in regard to monopolization and the misuse of a dominant position have been harder to prove NLRA principles demand bona fide CBA bargaining – Courts give employers the benefit of the doubt “Mackey test” // NLRA employers’ obligations → Players’ unions may still pursue the negation of a restrictive practice; as a last resort they always have the “nuclear option” of union decertification

11 European Union Competition and Labor Law application in sport

12 EU Competition Law application in sport
EC Treaty [The Treaty establishing the European Community (as amended by the Treaty of Amsterdam)] C 325/35, 12/24/02 EC Treaty promotes competitive market economy and prevents barriers to integration of the single European market Article 3 (g): No competition distortion Article 81 (1 & 2): Anti-competitive agreements prevention Article 81 (3): Exceptions for promotion of technical and economic progress—allowing consumers a fair price (EU–“sui generis” Rule of Reason) Article 82: Abuse of dominant position w/i the common market prevention, insofar as the abuse may affect inter-member trade Article 86 et seq: Allow for State Aid to sport clubs via socio-cultural approach The competition rules in the EC Treaty aim at promoting a competitive market economy and preventing barriers to integration of the single European market. Article 3 (g) ensures a system that does not distort competition. Article 81 (1) creates and sustains that system: “The following will be prohibited as incompatible with the Common Market: All agreements between undertakings, decisions by associations of undertakings, and concerted practices which may affect trade between member states, and which have as their object or effect the prevention, restriction, or distortion of competition within the Common Market…” Hence, the EC treaty provides for no cartel agreements leading to anti-competitive effects. Article 81 (2) renders all agreements or decisions under (1) void. Article 81 (3) provides “exceptions for practices which contribute to improving the production or distribution of goods or promoting technical or economic progress while allowing consumers at a fair price access to the resulting benefit and which (a) do not impose restrictions on the undertakings indispensable to the attainment of the objectives; (b) do not afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question”. In this way the EU assumes a “sui generis” community rule-of-reason (Halgreen, 2004). Article 82 declares: “Any abuse of one or more undertakings of a dominant position within the common market or in substantial part of it shall be prohibited as incompatible with the Common Market in so far as it may affect trade between Member States”. Such abuses include (Halgreen, 2004): Price-fixing or unfair trade conditions Limiting production or technical development Applying dissimilar conditions to equivalent transactions with other trading parties, placing them at competitive disadvantage Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts. There are no exemptions, provided the three elements to breach Article 82 are met: a dominant position abuse of that position effect on inter-member trade caused by the abuse. Article 86 et seq. of the EC Treaty governs state aid administered to sports clubs. This becomes very important, introducing policy in the EU member states that allows governmental debt relief via a socio-cultural approach. Recently clubs in France (Paris, Bordeaux), Spain (Halgreen, 2004), and Greece (AEK, Aris, PAOK, et al.) fell within such “special liquidation” policies (Dedes, 2005), as a “measure designed to assist education and initial training, and as such constituting an educational or comparable scheme” (Halgreen, 2004, p. 103, footnote 47). Thus, it becomes apparent that the “socio-cultural” approach differentiates the handling of certain sport activities from pure commercial enterprises. Especially in times of dire financial straits for historic European sporting clubs, the states have been able to intervene and provide special resolution (Dedes, 2005). This special resolution oftentimes is argued to be contradictory to state constitutions, state common and civil laws, even EU community mores and business laws (Dedes, 2005). But the socio-cultural norm as expressed by EC policy at this point appears to allow for such special legal and financial management of relevant cases. Needless to say, in a purely commercialised sporting world such as the one in the US pro leagues, no justification would be possible. When sporting organisations in the US have had financial hardship, there was no way to establish governmental intervention to save the struggling clubs or leagues. Unless there was an issue such as the ones rectified by the SBA of 1961 and the CFA of 1998, essentially providing remedy for both team owners and players to operate in a healthy and feasible business environment, congressional intervention would not step in and save e.g. the Women’s United Soccer Association (WUSA) or pro leagues’ competitors from economic extinction.

13 EU Competition Law application in sport
The EC Competition Directorate Director General JF Pons (1999) emphasized: Solidarity, equality, uncertainty of results Social expectation of top-bottom € distribution ISFs may regulate and govern € activity Distinction of EC Competition policy compliance and sport policy requirements EC ≠ unjustified restrictive practices of sport orgs. with € impact // EC accepts practices inherent to the nature of sport, necessary for sport org. and justified Pons (1999): Certain sport policies may fall outside the scope of Article 81 (1) Game rules Nationality clauses for international competition v. national teams National quotas (also see UEFA’s “Homegrown Rule” critique) Rules for selection based on objective, non-discriminatory criteria Rules on fixed transfer periods Rules promoting uncertainty of results, barring other less restrictive methods Deputy Director General of Competition Directorate of EU Commission JF Pons, on 14/10/1999 clarified the rationale and in a way defined the application of the “socio-cultural” model of sport in the new era of commercialisation. Pons (1999) emphasised the following points: There should be no premature drop out of teams, promoting solidarity and equality, as well as the uncertainty of results The social activity by millions of amateurs involves the expectation of top-bottom distribution of revenue ISFs regulate and may involve economic activities Commission distinguishes between compliance with Competition policy and requirements of sports policy Commission attempts to prevent restrictive practices of sports organisations with significant economic impact that are unjustified in the light of the goal of improving the competition and distribution of sports events, or in reference to the specific objectives of a sport. It will, however, accept practices that do not give rise to problems of competition, as being inherent in the nature of sport, necessary in the organisation of it, or justified Bearing in mind the difficulty of pinpointing the character of sporting activity, gradually and on a case-by-case basis the Commission and/or the ECJ will clarify rules inherent in sport or necessary for competition. Pons (1999) mentions he would not be surprised if in the future the following fall outside the scope of article 81 (1) of the Treaty: Rules of the Game Nationality clauses in competitions between teams representing nations National quotas governing the number of teams or individuals per country participating in European and international competition Rules for selection of individuals on the basis of objective and non-discriminatory criteria Rules setting fixed transfer periods for the transfer of players, provided the achieve some balance in the general structure Rules needed to ensure uncertainty as to results, where less restrictive methods are not available.

14 EU Competition Law application in sport
EC v. UEFA ( ) on Champions League Exclusive TV rights bundling – UEFA (2003) instituted new coverage plan and bidding procedure EC v. UK Premier League on R. Murdoch’s BSkyB exclusive package +Television-Sans-Frontier directive (Article 3A): “Important events for society” on free TV In 2003, UEFA assumed a new plan and on 24/7/2003 the EC reconsidered, bearing in mind the following justifications: Gold and Silver rights packages Exclusive right to sell remaining games (Bronze package) by cut-off date or individual clubs may use the right to negotiate themselves UEFA and clubs can exploit internet or cell phone avenues (UMTS technology) Maximum period of pool is 3 years via public tender procedure in open bidding. British Monopolies and Merchants Commission’s (MMC) decision refusing Rupert Murdoch’s £623 million bid for Man. U. as B-Sky-B owned the Premiership’s broadcasting rights and would have the other end of the table in broadcasting negotiations as well. MMC was not assured that the deal would not influence present and future broadcasting agreements (Halgreen, 2004, p. 123).

15 EU Competition Law application in sport
EC v. FIA (2001): A SGB/SINGO needs to separate its regulatory from its commercial promotions function (FIA organizing Formula I races “drove out” competing promoters) NOTE: FI v. Soccer In terms of monopolisation attempts and the misuse of a dominant position, the Formula 1 case provides useful insight, especially in regard to SINGOs/ISFs separation of regulation and promotion functions. In the International Automobile Federation (FIA) case the EC suggested that a governing body of sport needs to separate its regulation of the sport from its commercial activities in promoting events and in maximizing their commercial value; a governing body must not use its regulatory functions improperly to exclude its commercial rivals from the sport (COMP/35.163: COMP/36.638; COMP/ GTR/FIA & others. Official Journal 13/6/01). The history of the matter was that FIA prevented rival promoters from setting up events. It refused to license rival promoters, competitors, and events. It would ban drivers who competed in rival events. FIA insisted that circuit owners grant exclusive use of their tracks. It would penalize broadcasters if they showed rival events. The Commission convinced FIA to separate the regulatory from the commercial function, preventing conflicts of interest. As scholars note, there is a very different handling of motor sports (commercialized global sport) when compared to soccer (internationalized sport) (Foster, 2005; Halgreen, 2004).

16 EU Competition Law application in sport
EU Commissioner Monti (2001): EC does not care about sporting rules – These are not subject to EU Law; if they are objective, transparent, and nondiscriminatory (OTND) ≠ Anti-Competitive ECJ ruled that SGB/SINGOs do not enjoy immunity even over the rules of the game; they have to satisfy OTND criteria What is important to note at this point (self-regulation of sporting organisations) is that the Commission “does not care about sporting rules” (Monti, 2001). “Rules without which sport could not exist should not –in principle— be subject to EU Law application. Sporting rules applied in an objective, transparent, and non-discriminatory manner do not constitute restrictions of competition” (Monti, 2001). The elements emphasized by Commissioner Monti –objective, transparent, and non-discriminatory—are the main areas where EC intervention and ECJ decision-making may promote a “socio-cultural” approach. Promoting these elements may entail preempting certain acceptable business practices. At the same time, the operators of sport organisations attempt to find ways under which restrictive practices may be upheld, considering the unique nature of the sport industry. On the matter, the ECJ rejected that sporting bodies have a clear immunity even over the rules of the game, and they have to satisfy basic legal safeguards, such as non-discrimination and rational decision-making criteria. These issues have been deciding factors in sport labor related cases, with the most decisive one, shaping the world of modern EU sport, being “Bosman”.

17 EU Labor Law application in sport
EC Treaty [The Treaty establishing the European Community (as amended by the Treaty of Amsterdam)] C 325/35, 12/24/02: Article 2 on Community economic activity Article 3(c) on abolition of obstacles to freedom of movement Article 39 (48) on freedom of movement and prohibition of nationality-based employment discrimination

18 Case Law Case 36/74 Walrave & Koch vs. Union Cycliste International et al [1974] ECR 1405 (Walrave): “…the practice of sport is subject to Community Law, only in so far as it constitutes an economic activity…” “…the prohibition on discrimination based on nationality…does not affect the composition of sports teams, in particular national teams…which has nothing to do with economic activity…” …Dutch motorcycle pacemakers wanted to work for other than Dutch teams… Article 39 (48) extended to collective regulations of gainful employment services, supported by Article 7 (4) of Counsel Regulation 1612/68, prohibiting nationality discrimination in agreements and collective regulations concerning employment. The abolition of obstacles to freedom of movement [EC Treaty Article 3 c] would be meaningless if such barriers were replaced by obstacles imposed by Associations not subject to public law. The latter brought private sports organizations within the realm of community law (Halgreen, 2004).

19 Case Law Case 13/76 Dona vs. Mantero [1976] ECR 1333 (Dona):
“…Rules or a national practice, even adopted by a sporting organisation, which limit the right to take part in football matches as professional or semi-professional players solely to the nationals of the state in question, are incompatible with Article 7, and as the case may be, with Article 48 to 51 or 59 to 66 of the Treaty, unless such rules or practice exclude foreign players from participation in certain matches for reasons which are not of an economic nature and context of such matters are thus of sporting interest only.” Imprecision in Walrave and Dona led the EC and UEFA (1989) to adopt the “3+2” rule (3 non-nationals and 2 assimilated players) …agent wishing to recruit players abroad targeted restrictive nationality clauses… The imprecise language of “Walrave” and “Dona” may very well have been one of the reasons why very little was done to prevent continued discriminatory practices in European sport after 1976 (Halgreen, 2004, p. 51). 13 years after “Dona” (Halgreen, 2004), attempting to rectify such ambiguity and uncertainty governing the sport industry, and especially European soccer, the Commission and UEFA reached a “gentleman’s agreement”, introducing the “3+2 rule” (club teams could use 3 non-nationals and 2 assimilated players who had played in that country for 5 years without interruption, including 3 years in junior teams). Case 222/86 UNECTEF vs. Heylens [1987] ECR 4112 (“Heylens”) dealt with discrimination of a Belgian football trainer, holding a Belgian diploma, employed by Lille, in France. In order to practice the occupation of football trainer in France, a person must be the holder of a French license, or a foreign one which has been recognised by the state. Heylens’ application was rejected without cause. The ECJ recognised that in the absence of harmonisation of the conditions of access to a particular occupation, the member states were entitled to lay down the knowledge and qualifications needed in order to pursue it and to require the production of a diploma certifying that the holder had the relevant knowledge and qualifications. However, in order for the national state to exercise the right of rejection, the person concerned had to be given the opportunity to ascertain the reasons for the decision, which was not the Heylens case. Similar cases include: Thieffry [Case 71/76 (1977) ECR 765], Klopp [Case 107/83 (1984) ECR 2971], Ramath [Case 106/91 (1992) ECR 3351], Kraus [Case 19/92 (1993) ECR 1663].

20 Case Law Union Royale Belge des Societes de Football Association, Royal Club Liegeois, UEFA vs. Bosman, case C-415/93 [1996] ECR 5040 (Bosman): Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations, under which a professional footballer who is a national of one member state may not, on the expiry of his contract with a club, be employed by a club of another member state unless the latter club has paid the former club a transfer, training or development fee Article 48 of the EEC precludes the application of rules laid down by sporting associations under which, in matches, in competitions which they organize, football clubs may field only a limited number of professional players who are nationals of other member states …the “bombshell” in European sports law and policy Thus, “Bosman” killed two European “sacred cows” (Halgreen, 2004): the transfer system and nationality clauses. Pro players were considered workers governed by EC Treaty, upholding their fundamental rights. Per transfer rules the ECJ concluded that the old transfer system and nationality clauses violated Article 39 (then 48); it refrained from taking a stand on the competition law aspects of the case. Weatherill (2000) supports that the use of free movement law under Article 39 was a blip. He goes further saying that Competition Law is most applicable for sport. Thus, ECJ elegantly passed the baton to the Commission. ECJ reaffirmed “Walrave” and “Dona” per sport application of EC Law in so far as it constituted and economic activity. As an extension, the court did not preclude rules or practices justified for non-economic reasons (e.g. particular sport-specific regulations, in specific nature and context). These would have limited basis per proper objective, not excluding the whole of sporting activity from the scope of the Treaty (Halgreen, 2004).

21 Case Law ECJ (12/15/1995) in Bosman:
Transfer rules = Obstruction of free movement Due to social importance of sport… teams’ balance, equality, uncertainty of results… recruitment & training of young players are legitimate Transfer rules ≠ adequate means for balance Same aims can be achieved via less restrictive means (salary cap, redistribution of ticket sales, broadcasting contracts, etc…) Nationality clauses = Discriminatory under Article 39 (48) Render freedom of movement inapplicable Not pro-competitive (richest clubs + edge) Transfer rules were considered an obstruction of workers’ free movement, as “…such rules could only be justified if they pursued a legitimate aim compatible with the Treaty due to pressing reasons of public interest. Even so, application of such rules would still have to be such as to ensure achievement of the aim in question and not go beyond what is necessary for that purpose.” Further, the ECJ concluded in “Bosman”: 106. Due to social importance of sport… the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty per results and encouraging the recruitment and training of young players must be accepted as legitimate 107. The application of transfer rules… is not an adequate means of maintaining financial and competitive balance in the world of football… 108. It must be accepted that the prospect of receiving transfer, development, or training fees is indeed likely to encourage clubs to seek new talent and train young players 109. It is by nature difficult to predict future of young players… fees are contingent and uncertain, and are in any event unrelated to the actual cost borne by clubs of training both future pro players and those who will not play pro. The prospect of receiving such fees cannot, therefore, be either a decisive factor in encouraging recruitment and training of young players or an adequate means of financing such activities, particularly in the case of smaller clubs. 110. As the Advocate General pointed out in 226 et seq. of his Opinion, the same aims can be achieved at least as effectively by other means, which do not impede freedom of movement for workers. I.e. other means would be a salary cap via collective wage agreement, redistribution of income from ticket sales, radio and TV contracts, and other sources to achieve a balance. The ECJ dismissed claims that transfer fees were necessary for the continuation of the world of football or that clubs should be compensated because of the expenses they had incurred recruiting their players. On nationality clauses, the ECJ considered such practices discriminatory under Article 39 (48). The court disregarded arguments that rules were not per se restrictions on employment, but restrictions on participation, as participation was the essential purpose of a pro player’s activity. Advocate General Lenz’s interpretations – as important for the world of sport in Europe as were the opinions by Justice Holmes in “Federal Baseball” for US baseball— supported that limitations of the sort would render freedom of movement inapplicable. The ECJ also did not accept that they were pro-competitive rules. Nothing prevented the richest clubs securing the best national players.

22 Case Law Advocate General Lenz interpretation of Articles 81 & 82 (ECJ did not examine Competition Law application): Should be no exemptions on sporting grounds, as nationality rules prevented free competition for players, thus constituting an agreement sharing sources of supply under Article 81 (1) c Transfers were substituting supply and demand principles, thus depriving of competitive opportunity No reason for sport labor to fall outside the scope of Article 81 – No CBAs but horizontal agreements between clubs (Competition Law applies) though no abuse of dominant position (Article 82) established Advocate General Lenz and his interpretation of Article 81 and 82 (then 85 and 86) in the sports context is so far the best and most authoritative reading of the EC Treaty (Halgreen, 2004). The ECJ did not deem appropriate to examine Competition Law application under Articles 81 and 82 once found that rules were violations of Article 39… Lenz, however, did extend (Halgreen, 2004, p.194). There should be, he argues, no exemptions on “sporting grounds”. Nationality rules prevented free competition of clubs on recruiting players, thus constituting an agreement sharing sources of supply within the meaning of Article 81 (1) c. On transfers, the substitution of supply and demand by the traditional transfer system essentially was a deprivation of competitive opportunities. On a labor exemption, UEFA argued that it was a concealed labor/wage dispute. Employer-employee relations should not come under scrutiny of Competition Law (in the spirit of US antitrust labor exemptions). In Lenz’s opinion, there was no rule for employment relationships to fall outside the scope of Competition Law. He stated that restrictions of such sort might indeed exist under the scope of Article 81, but would be “limited in character”. Lenz went beyond that theoretical problem observing that there were no collective bargaining agreements in place but simple horizontal agreements between clubs. Hence, UEFA’s argument fell to the ground. Such agreements are within the scope of Article 81, though no abuse of a dominant position under Article 82 was established. Camatsos (2005): The current transfer system came as a result of the judicial failure to tackle important issues when they were ripe… Focusing on the restraints on free player movement might have been the correct path to take at that time, but with hindsight, a quick dip into the competitive realities of the game would have proven extremely useful. However, legislation mirroring the ECJ holding has not materialized and subsequent application of competition law to European football continues to be unpredictable… Top clubs currently profit by exploiting the talent pool of the smaller clubs… ECJ caused or significantly contributed to the problems football is facing today. The Bosman decision created a market where players salaries have increased tremendously, despite the drying up of new revenue sources, and the widening gap between the wealthier and poorer clubs. These are all conditions that competition law were created to prevent. In order to counter the financial downslide caused by the transfer system, the sporting federations will have to adopt new, financial restrictions, such as salary caps. However, restrictive regulations will forestall competition, which is prohibited under European competition law. Ultimately, European Union (EU) institutions may have to change how they view these restrictions because the policy goal of increasing consumer welfare should prevail in deciding whether these restrictions should be allowed to operate. If the industry is made more productive, in the sense that restrictions serve the consumer and help combat financial problems, then the industry should be permitted to adopt them.

23 Case Law Post-Bosman decisions, ECJ’s stare decisis, verification of new age in EU sport and policy initiatives to control it: Ballock case, OJC-99/23, Settled out of court CE 30/12/2002, # , FFBB affaire Malaja, Court D’Appel for Malaja C-162/00 Pokrzeptowicz-Meier [2002] ECR C-438/00, Deutscher Handballbund vs. Maros Kolpak, ECJ 8/5/2003 C-265/03, Igor Simutenkov v. Abogado del Estado and others, ECJ In the post-“Bosman” world of European sport, there was a consensus for new transfer rules (Halgreen, 2004). Sport migration patterns developed in Europe. Talented athletes would mainly swarm to the more lucrative sports markets. Participation by national athletes would deteriorate, and salaries would be controlled. Arguably the decision strengthened national leagues, and promoted competition in the lower level ones. The decision assumed a broader scope after the Copenhagen Summit in December 2002, by means of 10 member-states’ expansion. Furthermore, there were European trade agreements extending the coverage and application of Bosman (Halgreen, 2004; Martins, 2004). Kolpak: Handball player from Slovakia (extension of coverage to trade association countries) Simutenkov: Confirmation – Not covering access to employment (+Martins, 2004) Vassilios Skouris≈John Roberts – ECJ Chief Justice Grand Chamber (13 judges) – 6 Chambers of 3/5 judges Christine Stix-Hackl – 1st Advocate General 7 Advocate Generals The Court of First Instance The Civil Service Tribunal The Court of Justice is made up of 25 Judges and 8 Advocates-General. Should the Court so request, the Council may, acting unanimously, increase the number of Advocates-General.  The Judges and Advocates-General are appointed by common accord of the governments of the Member States and hold office for a renewable term of six years. They are chosen from legal experts whose independence is beyond doubt and who possess the qualifications required for appointment to the highest judicial offices in their respective countries or who are of recognised competence. The Judges select one of their number to be President of the Court for a renewable term of three years. The President directs the work of the Court and its staff and presides at hearings and deliberations of major formations of the Court.  The Advocates-General assist the Court in its task. They deliver, in open court and with complete impartiality and independence, opinions in all cases, save as otherwise decided by the Court where a case does not raise any new points of law. Their duties should not be confused with those of a public prosecutor or similar body.

24 Case Law C-176/96, Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL vs. Fédération Royale Des Sociétés De Basketball ASBL [2000] ECR 2681 (Lehtonen) Discriminatory transfer windows (NOTE: Differentiation of EU imports and outside-EU-zone players, i.e. NBA) C-51/96 and C-191/97, Christelle Deliege vs. Ligue francophone de judo et disciplines associées ASBL, et al. [2000] ECR 2549 (Deliege) EC Treaty applies to athletes engaging in commercial activities, even if they are not per se “professional” Selection criteria for ISFs and NGBs are inevitable, hence no unrestricted open entry into international competitions Finnish basketball player challenged acquisitions’ deadlines as violations of fundamental rights according to Article 39 of the EC Treaty. The court established that transfer windows were discriminatory, as for Belgian clubs they were 15/4/ /5/1995, for EU imports they extended to 18/2/1996, and for players from outside the EU zone (e.g. NBA players) they extended to 31/3/1996. …the issue challenged was the freedom of sporting federations to select individual athletes to participate on national teams for international competitions. Belgian judoka Deliege had not been selected by her federation, as the International Judo Federation (IJF) imposed nationality-based quotas on participation. She was not a “professional” athlete, but lived off grants, was engaged full time in her sport, and had no other job. The court stated that the EC Treaty applied to her as she was engaged in commercial activities. ECJ recognized that some selection criteria were inevitable for ISFs; totally unrestricted open entry was unworkable.

25 Policy development UEFA’s “Homegrown rule”:
4 players shall be “locally trained” Reduced squad size (25) Local training = Registered w/ club 3 years/seasons while year-old Beginning season As often the case with policy initiatives, reactions have been split Legal scholarship argues that it would be found in violation of the EC Treaty (Briggs, 2005; Parrish 2005; EurActiv, 2005; Asser Instituut & Lancaster University, 2005) In her recent critique of UEFA’s “Homegrown rule”, which as of would require four players on each team to be trained in the youth development program of the respective club as “locally trained” players, defined as players who have been registered for three seasons/years with the club between the ages of 15 and 21, Briggs (2005) shares Professor Parrish’s comments (EurActiv, 2005b) that such a rule may find its way before the ECJ. The authors argue that such an admittedly shrewd legal strategy on the part of UEFA may still not pass ECJ and EC muster, as in effect it would create nationality-based discriminatory criteria for sport participation in both European and national leagues. “Although the rule does not explicitly impose nationality requirements on club teams, the effect of the requirement will be to decrease the number of foreign youths being trained by each club development program and thereby increase the number of local players on any given team… UEFA can thus create de facto nationality quotas without ever using the word "nationality"” (Briggs, 2005). According to Parrish (quoted in EurActiv, 2005b), “even though UEFA claims the quota is neutral in terms of nationality, it is clear the intention and effect of the rule is to indirectly discriminate on the grounds of nationality.” These authors agree that as long as there is no clear exception of sport in the EC Treaty in reference to employment, freedom of movement, and competition, such rules will not be valid under ECJ scrutiny. Briggs (2005) concludes: “With the Homegrown Rule, UEFA is making an effort to comply with the letter of EU antidiscrimination law while still preserving the important local character of European league soccer. It recognizes the validity of antidiscrimination policy and imposes only minimal restrictions on free movement, but reaffirms private league soccer as more than purely economic activity.” Her comment that “sport is not a business like any other business” (Briggs, 2005) clearly embodies the aforementioned impact of a socio-cultural approach to sport policy. The author optimistically forecasts: “The Homegrown Rule is an attempt to evade current law, and if the rule is challenged, the challenge may provide a key opportunity for carving out a soccer exception to EU economic policy. Such an exception would be appropriate given the unique nature of the business of soccer. This is especially true where, as under the Homegrown Rule, the exception would have only minor affects on free movement of workers. A reexamination of application of antidiscrimination laws to soccer would be the EC's best option in resolving the current conflict” (Briggs, 2005). The 97-page report on 'Professional Sport in the Internal Market' was drafted by the Asser Instituut in The Hague and Lancaster University in the United Kingdom. It focuses mainly on football but raises general principles of EU law such as media rights, licence systems, state aid, transfer arrangements and rules on merchandising. It warns that some, but not all, of the rules governing the world of sport may constitute a breach of EU rules on fair competition and non-discrimination.

26 Policy development EC &FIFA/UEFA (2001) agreed on a new elaborate transfer system ≠ FIFPro participation (+club segmentation, protection of youth training, solidarity mechanism, alternative dispute resolution) In CAS 2005/A/899 (Aris) FC Aris Thessaloniki v FIFA & New Panionios N.F.C. FIFA acknowledged its inability to unilaterally Enforce its sanctions; it recommends action to Member federations (Aris, par. 45) After “Bosman” and the cases mentioned above, in March 2001 an agreement was framed between Commission and FIFA/UEFA, withdrawing complaints against a transfer system. Sadly, there was no FIFPro (FIFA players’ union) participation in the negotiations (Martens, 2004). FIFA and the EC adopted a new, very elaborate and complex transfer system on 5/7/2001 in Buenos Aires, effective from 1/9/2001. There were four categories of club segmentation, along with protection of youth training and clubs which invest in it. Lenz (above) disagreed with the legality of such regulations. Nonetheless, fees include a solidarity mechanism, as well as an alternative dispute resolution mechanism, usually referring matters to the Court of Arbitration for Sport (CAS). On this matter, the recent case CAS 2005/A/899 FC Aris Thessaloniki v/ FIFA & New Panionios N.F.C. (“Aris”) exposed FIFA and UEFA’s enforcement mechanisms. Aris Thessaloniki F.C. argued that a prior decision sanctioning Panionios N. F. C. by FIFA (due to participation of ineligible players) was not enforced by the member federation (the Greek soccer federation), thus costing the plaintiffs relegation. At time of print the case is still pending with the FIFA internal appeals committee deciding on the prior disciplinary committee sanction. It is noteworthy, though, to mention that FIFA acknowledged before the CAS its inability to unilaterally enforce its sanctions. It only recommends them to its member federations (“Aris”, par. 45). +Also note FIFA Circular 1080 (2/13/2007) to member federations re: enforcement… acknowledging FIFA’s authority (after Aris, CAS, and Swiss Federal Court decisions) to impose sanctions on direct and indirect members. Pronounces that FIFA shall impose such sanctions (fines, points deduction, relegation) in cases where FIFA Disciplinary Committee and CAS decisions are not complied with. Calls clubs and Federations to better respect FIFA’s jurisdiction and enforcement…

27 …in a nutshell EC Treaty Articles 3, 81, 82 are applied in sport settings, in the cases sport is treated as a commercial activity; otherwise there is no sport-specific exemption from EU Competition Laws (v. US antitrust exemptions, CBAs//NLRA, SBA 1961) Buttress for the “social, educational, and cultural character and contribution of sport”, EC Treaty Articles 86 et seq. allow for states assuming the burden of clubs in financial hardship EC policy, ECJ, or national courts or commissions’ decisions control horizontal restraints in sport, promoting the socio-cultural model, i.e. against exclusive licensing –unless it protects the weaker financially clubs— separating the regulatory from the commercial activity of sports organizations, yet allowing for considerable regulatory autonomy, provided sport purposes are served in OTND manner EC Treaty Articles 3, 81, and 82 are applied in sport settings, insofar sport is treated as a commercial activity in the particular case. Otherwise, there are no sport-specific exemptions from EU Competition laws (as opposed to several sport-related practices in the US being exempt from antitrust scrutiny, e.g. pooling of broadcasting rights under the SBA of 1961, the CBA labor exemptions under the NLRA, etc) Buttress for the “social, educational, and cultural character and contribution of sport”, EC Treaty Articles 86 et seq. allow for states assuming the burden of clubs in financial hardship (no such policy sample may be encountered in the US) Horizontal restraints in sport are attempted to be controlled, promoting the socio-cultural model, by means of EC policy, ECJ, or national courts or commissions’ decisions, i.e. against exclusive licensing –unless it protects the weaker financially clubs— separating the regulatory from the commercial activity of sports organisations, yet allowing for considerable regulatory autonomy, provided sport purposes are served in an objective, transparent, and non-discriminatory manner, according to Commissioner Monti (2001)

28 …in a nutshell Bosman and Post-Bosman cases led to a free sport market and free sport labor, forestalling transfer and nationality rules in the EU, including labourers originating from trade associations’ countries, according to the recent ECJ decisions extending Article 39’s scope no collective bargaining exemptions in EU sport -- sport labor is not treated differently Access to sport employment and international competition participation opportunities may be controlled by reasonable rules according to Lenz, Monti (2001), and Deliege (2000) The conflict between EU law and SINGOs is resolved by dialogue between the EC and the SINGO, as in the case of the new FIFA transfer system (& UEFA Homegrown Rule). As long as EU Law and EC criteria are met the EC will not intervene “Bosman” and the cases that followed brought forth a free sport market and free movement for sport labor, forestalling transfer and nationality rules in the EU, including labourers originating from trade associations’ countries Considering there are no collective bargaining exemptions in EU sport, SINGOs cannot argue that sport labor should be treated differently Access to sport employment and international competition participation opportunities may be controlled by reasonable rules according to Lenz, Monti (2001), and “Deliege” (2000) The inherent conflict between EU law and SINGOs is usually resolved by dialogue between the EC and the SINGO, as in the case of the new FIFA transfer system. As long as SINGOs rules meet the criteria set by the EC, complying by EU law, the EC will not intervene. Pass the EC Muster In the process of the proposed EU Constitution, there were amendments as constitutional proposals referring to sport: “The Union shall contribute to the promotion of European sporting issues, given the social and educational function of sport.” (Article 16) “Union action shall be aimed at developing the European dimension in sport, by promoting fairness in competitions and cooperation between sporting bodies and by protecting the physical and moral integrity of sportsmen and sportswomen, especially young sportsmen and sportswomen.” (Article 182) The ECJ is likely to be the one entity to decide per scope of non-intervention policy toward pro sports sector in absence of “hard” EC sports law (Mestrte, 2005; Halgreen, 2004). On 29/10/2004 the Treaty of Rome promoted the EU Constitution, with state legislatures and referendums to follow. Articles I-17 and III-282 were proposed coordinating, supplementing, and supporting action. Sport fell under the category of education, training, and youth. Emphasis was drawn on its social and educational function. Once more, it is recognised that “European construction based only on economic aspects is condemned to failure” (Robert Schuman quoted in Mestrte, 2005).

29 Conclusion The two often conflicting worlds have more in common than what critics assume Recent policy intervention by the respective legislative branch aimed at treating the same problems in both worlds EU model is not a “purely” socio-cultural model, as it features much commercialism force of its own, to which policy evolution and the judicial branch attend

30 Conclusion Ironically, considering the popular European fiction of the “socio-cultural” approach, the US sport model allows for more specific exemptions from competition laws at this point of regulatory evolution EC Treaty Articles 86 et seq. allow for state intervention practices [“special liquidation” criticized by Dedes (2005)] ≠ US policy (NCAA tax exempt status and public financing of professional sports facilities?) The US sport model (amateur and professional) allows for more specific exemptions from competition laws for sport. This finding appears ironic when one considers that the EU socio-cultural model attempts to promote exclusionary tactics (separate territories theory, segment commercial and regulatory functions of ENGSOs, distinguishing between the commercial activity and sport per se) and incorporate the social, educational, and cultural character and contribution of sport in EU policy. EC Treaty Articles 81 and 82 have no explicit exemptions from competition law scrutiny for sport entities On the other hand, Articles 86 et seq. allow for state intervention and European governments’ practices follow a method that may salvage sport clubs threatened with economic extinction. These practices have been briefly analysed (Halgreen, 2004, p. 103) and more elaborately criticised (Dedes, 2005) by European legal scholars. Such “special liquidation” salvation practices arguably would not have a place in US sport policy

31 Conclusion Both US Congress and EC intervene in sport matters
Considering commercializing forces existing in contemporary sport, political intervention appears crucial for preservation of important principles and traditional sporting values Political support has a place in sport; the latter needs the former.

32 Discussion Global commercialization of sport creating the need for a new law and policy reality in the sport industry?

33 Discussion Antitrust – Competition Law exemptions… Purpose? Need?
Scope? Compromise (EU?) Would the “socio-cultural” model be served better via careful application of EU Law? Should we segment the business side of sport (+ exemptions) from the “socio-cultural” side?

34 Discussion Thoughts on EC Treaty Articles 86 et seq. and the practice of special liquidation (states “saving” clubs from extinction) Thoughts on practice of political intervention

35 Discussion Meca Medina, Piau, and Oulmers (pending) Latest ECJ cases
Application of Competition Law, Articles 81 and 82 (+Art. 39/49) Meca Medina: Drug testing rules are not in violation of Competition rules as they have nothing to do with $ activity, even though the EC had other grounds: the Commission stated that anti-doping rules at issue may limit the athlete’s freedom of action but are ‘intimately linked to the proper conduct of sporting competition’ (sui generis RoR). The CFI in Meca Medina does not apply the Walrave test in a manner consistent with previous case-law. Indeed, the ECJ had always examined whether the ‘practice of sport’ at issue in a case can be qualified as an economic activity within the meaning of Article 2 EC and then considered that either Articles 39 or 49 EC were applicable. In Meca Medina, the CFI does not proceed in the same way, since it goes directly to examine whether the anti-doping rules adopted by the IOC are based on ‘purely sporting considerations’. Under this ‘new approach’, the Courts or the Commission would first of all examine whether or not the rule in question is of ‘purely sporting interest’ and, if so, whether it ‘remains limited to its proper objective’. Only after this first step would the Commission and the European Courts ascertain either whether the sporting activity in question is an ‘economic activity’ within the meaning of Article 2 EC, or whether the body adopting the rules can be classified as an undertaking or an association of undertakings within the meaning of Articles 81 and 82 EC. Piau: UEFA not in competition for player agency services… In what probably constitutes a controversial conclusion, the CFI considers in the judgment that football clubs hold a collective dominant position on the relevant market (Piau, paragraphs ). When examining the nature of the regulations on players’ agents, the Fourth Chamber of the CFI first asserts, contrary to what it said in Meca Medina, that national football associations that are members of FIFA may be considered as undertakings as well as associations of undertakings within the meaning of Article 81 EC. As a consequence, FIFA is classified as an association of undertakings. Regarding the services provided by players’ agents, the CFI considers in paragraph 73 that this activity is of an economic nature ‘involving the provision of services’ - something that does not ‘fall within the scope of the specific nature of sport’. As to the regulations adopted by the FIFA, the CFI holds in paragraph 74 that they do not ‘fall within the scope of the freedom of internal organisation enjoyed by sports associations’. Case C-519/04 David Meca Medina and Igor Majcen v Commission and Case C-171/05 Laurent Piau v Commission C-243/06 SA Sporting du Pays de Charleroi, G-14 Groupment des clubs de football européens v Fédération internationale de football association (FIFA) -- Oulmers analysis follows…

36 Transfers 1891 – English Soccer clubs recouping training cost, controlling player mobility, promoting competitive balance Transfer windows – Competition aspect? Transfer fees U-23 (for training incurred U-21) George Eastham, a football player for Newcastle United, successfully challenged in Court the English transfer system in 1963 (McArdle 2000: 25-27; Greenfield and Osborn 2001: 79-82). Wilberforce, J. in Eastham v. Newcastle United Football Club (1963) 3 All ER 139; (1964) 1 Ch.D. 413: Clubs in general don’t spend large sums in training professional soccer players compared to other apprentices; held that the transfer system was in restraint of trade. Marko Tervio (2003) stated that training cost is quite small compared to transfer fees and that players’ market value can increase by orders of magnitude over a course of a year or two, the largest increase taking place while players are already playing professionally, not while they train at youth academies or play for junior teams (Agbonjinmi 2004) . Critics argue that training compensation and the solidarity system employed by FIFA have already been dealt with by the European system of Juriprudence and were declared (via Bosman) to contravene competition rules, several human rights provisions, doctrine of restraint of trade and several member state statutes (Agbonjinmi 2004; Borer & Oschinski, 2003). Irving (2002): The system's main function was "to control player mobility and to prevent wealthier clubs from buying up all of the best players without compensating the original club." "This system required clubs to produce a list at the end of each season declaring which players they intended to retain for the following season and which players were available to transfer to another club." A player had no right to demand a transfer if his name was not on the transfer list. Additionally, selling teams set transfer fees for their available players, making a player's transfer even more difficult. Camatsos (2005): Under old EU transfer rules, players nearing the end of their contracts--which uniformly terminated on a fixed date--were entitled to be offered a new contract by their club before the relevant termination date. "If the player refused an offered contract, his club could place him on a 'compulsory' transfer list " Furthermore, "[a]n interested club could purchase the player from this list for a compensation fee for training." If no team expressed an interest in a particular player, then a period opened up where teams were free to negotiate an agreeable transfer fee. If no agreeable transfer fee was offered, then the player was reoffered his original contract. Players who refused these second offers were suspended. "Once suspended, the player had to either accept whatever offer his club might still make or sit out for two seasons, after which he could obtain a transfer without the club's consent (i.e., he could become a free agent)." Camatsos (2005) features some severe criticism of the present transfer system (“toothless tiger”), i.e. anti-competitive, age-discriminatory, leading to clubs declaring bankruptcy in an era only the strong financially survive. Further, Camatsos (2005) brings up the situation of dependency upon TV contracts and media outlets; when these do not prove economically stable themselves, the clubs that were not very prudent and were depending on the TV revenue for their operations budget were in the red. Thus, players would have to break their contracts searching for a team that could fulfill a similar contract, an effort which frequently is of no avail.

37 Transfers UEFA report 1973:
“It will come a moment in which individuals will start to claim their rights under EC law for free movement and employment. The professional players will then have a tendency to invoke free movement to attack the international structure of football” (UEFA 1973: 5) After Bosman (1995) the nationality quotas were lifted immediately, however the transfer system entered into long series of negotiations b/t the EC and FIFA/UEFA (frictions b/t the two) FIFA & FIFPro v UEFA 3/2001 FIFA/UEFA agreement w/ EC (w/o FIFPro) 7/2005 New FIFA Transfers and Status of Players rules Garcia (2007): The legality of the transfer system and the possible impact of European law on football regulations came to UEFA Executive Committee’s table in the early 1970s, when the European football confederation decided, in the view of the latest developments, to commission a report on the future of the transfer system to a panel of legal experts (UEFA 1973). The report, presented to the Executive Committee in December 1973, analysed the legal situation of the regulations relating to players’ contracts under the application of both national and European law. The report correctly identified nationality quotas and the transfer system as possible points of conflict with EC law (UEFA 1973: 29, 60) and it even warned, somehow prophetically, about possible threats to the status-quo in the future: It will come a moment in which individuals will start to claim their rights under EC law for free movement and employment. The professional players will then have a tendency to invoke free movement to attack the international structure of football (UEFA 1973: 5) However, the report went on to conclude that the transfer system was safe and it could resist challenges under European law (UEFA 1973: 70) and that national FAs from countries outside the EC had nothing to worry about the application of European law (UEFA 1973: 61). Only to be proven wrong in their legal analysis by the ECJ… Dona followed in 1976…. UEFA was able to get its way in the aftermath of Donà by convincing in 1978 commissioner D’Avignon that they were committed to lift progressively nationality quotas. However, it was not until 1991 that UEFA introduced the so-called 3+2 rules, allowing for a minimum of three non-selectable players to be fielded at the same time in any given game, plus two ‘assimilated players’. Garcia (2007) notes astonishing acquiescence by the EC and belief by UEFA that a gentleman’s agreement would resist EU Law scrutiny. Post Bosman (12/15/1995) …In a somehow naïve attempt to escape from the effects of the ruling, FIFA and UEFA published a joint statement on 22 December 1995 in which they declared their view that the Bosman ruling had no effect on European club competitions, as the clubs were representing their country; two days earlier UEFA had sent a letter to the European Commission requesting some time to study the consequences of the ruling (Hopquin 1995). The reluctance of UEFA and FIFA to accept the outcome of the judgment infuriated the Commission, which found in the ruling a new impetus to bring football into line with European law. The Commission took a proactive approach, with the Competition Policy DG and its commissioner, Karel van Miert, taking the leading role in the pursuit of football authorities. Van Miert warned that UEFA had to evolve ‘whether they like it or not’ (quoted in Hopquin 1995). …The international transfer system, which was regulated by FIFA rather than by UEFA, took longer to be transformed, though. It was in the negotiations between the Commission and FIFA to enforce the Bosman ruling in respect to the transfer system when UEFA emerged as a broker of the agreement. All UEFA officials interviewed in Garcia’s (2007) research, without exception, have heralded the negotiations on the reform of the international transfer system as one of the most important turning points in the organisation’s relationship with the EU.

38 Players Restraints Rights of acquisition (option rights)
Enable a club to acquire a player w/i set time by paying stipulated transfer fee Rights of preference (preemption rights) Enable a club to acquire a player only if the club that holds the rights decides to transfer the player. May allow interested club to obtain a preference over other clubs at point of decision by the transferring club. The practice requires more than matching rival offers; other conditions apply (see Real Madrid & F.C. Barcelona supplemental transfer fee) Capdevilla (2004) notes that rights of acquisition (option rights) and rights of preference (preemption rights) are often exercised to acquire the services of professional sportsmen (sic). Option rights enable a club to acquire, within the period of time set, the services of a player by paying the previously stipulated transfer fee. Whether the option is exercised is generally determined by the development of the player and the finances of the purchasing club. Preemption rights, on the other hand, enable a club to acquire a player only if the club that holds the rights to that player decides to transfer him. Preemption rights therefore confer only a right of preference. There have been many cases in which a club, faced with the refusal of a rival club to sell a player in whose services it is interested, has succeeded in obtaining a preference over other clubs if and when the rival club eventually decides to sell. The legal framework governing option rights and preemption rights was drawn up to regulate the transfer of material objects such as flats. This legal framework therefore needs to be adapted if these rights are to be used to contract sportsmen. The two most important changes needed are: 1. The effectiveness of the right requires more than an agreement between the buying club and the selling club. It also requires the consent of the “object” of the contract i.e. the sportsman (sic). An option right or a preemption right will not be enforceable if it does not enjoy the consent of the sportsman concerned when it is constituted. 2. The exercise of a preemption right also requires more than simply equaling the financial offer of a third party: all the conditions offered by the third party should be equaled. This situation was highlighted this summer in the so-called “Eto’o case”. Real Madrid had a pre-emption right for the player and intended to exercise it simply by equaling the financial offer from FC Barcelona without offering the player the chance to play in their first team. The player disagreed and threatened to go to court if the preemption was exercised and he was not given a squad number. The conclusion to this exciting case from the legal point of view was a financial agreement between FC Barcelona and Real Madrid in accordance with which FC Barcelona paid Real Madrid a financial supplement in exchange for the “galactic” club’s agreement not to exercise their preemption right. These problems could be avoided if the requirements of the preemption right were clearly stipulated when it was constituted.

39 Players Restraints Non-EU nationals may benefit from non-discrimination treaties Association and trade agreements (Kolpak and Simutenkov) Cotonou agreement (ACP countries) TMC Asser Institute (2005); To determine whether such agreements can be relied on by non EU nationals the ECJ must establish whether the provision is directly effective. This requirement will be satisfied if the provision contains a clear and precise obligation which does not rely on the adoption of subsequent measures. In Kolpak, having established that Article 38(1) of the EU / Slovak Association Agreement does hold direct effect, the ECJ concluded that Article 38(1) precludes ‘the application to a professional sportsman of Slovak nationality, who is lawfully employed by a club established in a Member State, of a rule drawn up by a sports federation in that State under which clubs are authorised to field, during league or cup matches, only a limited number of players from non-member countries that are not parties to the Agreement on the European Economic Area’. In a similar ruling the Court found that a very similar provision contained within in the EU / Russia agreement (Article 23) allowed a Russian footballer not to be discriminated against in terms of working conditions, remuneration or dismissal when he is legally employed in the territory of Spain (Simutenkov v Ministerio de Educación y Cultura and Real Federación Espaňola de Futbol. Case-265/03, 2005.) The case law of the European Union clearly shows the current attitude of the European Union (ECJ / EC) towards the relation between “sporting rules” and EU law: EU law prevails over association law, a sports governing body is unable to restrict the participation of non-nationals of the specific members state whenever sports is an economic activity. EU nationals may not be discriminated and no limitations may apply to the eligibility of these players for professional football clubs. Whenever a third-country national has concluded a valid contract with a professional football club he may not be discriminated in the case that a partnership agreement or association agreement is in force between his country of origin and the EU that includes a non-discrimination clause. These type of agreements cover more than one-hundred countries because these clauses cannot only be found in the association and cooperation agreements with third countries but also in the Cotonou agreement between the EU and the Africa / Carribean / Pacific (ACP) countries. *The Work Permit issue* Impact on level playing field – Juxtaposing US DHL & USCIS policy re: H1B workers and actual wage determination

40 Players Restraints UEFA Homegrown Rule (off: “Locally Trained Players”) EC dismissed early post-Bosman idea (4/96) EC and EP sympathetic to the idea (2005) 8 players shall be “locally trained” (08-09; 6 for 07-08) 4 “Club trained” + 4 “Association trained” (3+3 for 07-08) “Club trained” = Registered w/ club for 3+ years/seasons while 15-21 “Association trained” = As above registration by club OR by other clubs affiliated to the same Association Reduced squad size (25) No mention of nationality TMC Asser Institute (2005); From the season on four “home grown players” must be included in squads for European club games – at least two trained by a club’s own academy with a further two developed by other clubs within the same association. Until the season 2008/2009 the minimum number of home grown players will be raised to eight. The term “home grown” does not refer to the players’ nationality but means all talents trained and educated between the ages of 15 and 21; UEFA believes that it avoids any conflict with EU law, in particular the freedom of movement. Besides the fact that there are practical concerns – some clubs and leagues fear that a “hunt” for (even) younger talents will break off in Europe – there are also legal implications. From an EU perspective the starting point for possible legal implications is the fact that the proposed rule would indirectly discriminate foreign nationals. Hence, it is quite obvious that most of the “home grown” players would be nationals of the specific state and not foreigners. The proposed rule would indirectly discriminate foreigners, making it more difficult for foreign players to transfer to a country where they were not trained and educated. On the matter, Martins (2007) holds that the rule may fall under ‘indirect discrimination’ of Art. 39 EC Treaty based on nationality criteria. He thinks it too will not be found compatible with EU Law. Less restrictive means would be applicable and regardless, such rules do not really create a level playing field. …It is therefore clear that it will be very difficult for UEFA to introduce the home grown player rule in the current legal framework in which professional football currently finds itself. Hence, professional football is an economic activity thus EU law is fully applicable. On the other hand, a possible justification is that UEFA intends to introduce the home grown player rule to preserve a “level playing field”. Because if clubs are not allowed to “buy” the best players because they cannot let them play under the new regulations, the starting point for the collective of clubs would be more “fair” due to the fact that the clubs could try to get the most out of their talents. The preservation of a level playing field is a legitimate goal, but in order to preserve a level playing field an assessment of the current situation is needed. + Work Permits… Garcia (2007): UEFA was smart enough not to close the door that opened with the negotiations on the international transfer system. UEFA has cultivated since then the contacts with different Commission’s DGs, the European Parliament and the national governments. UEFA has also evolved as an organisation, up to the point of being now happy to proactively engage with the European Union in policies other than football, such as fight against racism or programs against obesity (UEFA 2007: 2-3; Interview 29: Nyon (Switzerland), 8 February 2007). The EU is now increasingly seen as a ‘long-term strategic partner for UEFA’ (Interview 5: Brussels, 16 May 2006). In that frame of mind, UEFA senior officials started to think around late 2003/early 2004 on the possibility of making a strong political case for a rule that would encourage football clubs to actively train new young talents. …There is no total legal certainty about the legality of the rules vis-à-vis European law. Indeed, it has been argued that the rules could be considered an unjustified obstacle to the freedom of movement for workers, hence failing to comply with article 39 EC (Miettinen and Parrish 2007)… Political support does not buy, at least for the moment, exemption from EC law.

41 Players Restraints Fixed-Term Contracts
Bosman creating new transfer system ISFs decide on particular length FIBA (H3.4.3: 1-4 years) FIBA Europe (94.2.3: 1 year min.) FIFA (Transfer Rules Art. 18.2: 1-5 years) Under 18 (3 years max.) IIHF (11.3: spec. term) Termination for just (and sporting just) cause Terminating a Contract for Sporting Just Cause Transfer Rules Art See Commentary pp

42 Players Restraints… but also benefits
Tax exemptions (for national team and club play) Preferential treatment for athletes U-18 with participation on national teams and nationally competitive clubs re: University entrance examinations Civil service, government, sport administration positions, and exclusive licenses to operate sport betting offices Immigration Law exemptions Law Library of Congress, Global Legal Monitor, August 2006, Issue 3 LITHUANIA – New Possibilities for Acquisition of Citizenship On July 17, 2006, the Parliament of Lithuania amended the Citizenship Law, allowing the President of Lithuania to grant Lithuanian citizenship by way of derogation in cases affecting the public interest or in order to promote Lithuania in the international arena. The amendment substantially expands the possibilities for granting Lithuanian citizenship by this means; under the previous law, it could be given only “to persons who made a significant contribution to strengthening the Lithuanian state and to boosting Lithuania’s power and its image in the international community.” The amendment allowed the President to reconsider a previously declined request to grant Lithuanian citizenship to American basketball player Kathryn Douglas, the leader of the Vilnius basketball club Teo. Acquisition of Lithuanian citizenship will make her eligible to represent Lithuania at the World Women’s Basketball Championship in Brazil in August. Without Lithuanian citizenship, the basketball player cannot play for the Lithuanian national team. The amendment was initiated by a group of famous Lithuanian athletes, politicians, scientists, and actors, who urged the legislature to amend the law in behalf of Douglas. (President Reconsidered US Basketball Player’s Application for Lithuanian Citizenship, BNS [Baltic News Service], July 19, 2006.) (Peter Roudik)

43 Greek Sport Law Pro sport contract duration: ½ - 5 years
ν. 2725/1999 (ΦΕΚ 121 Α΄) Pro sport contract duration: ½ - 5 years 18th birthday + obligation to sign with the current club a 1-3 years contract; the player can agree to extend the duration to 5 years Agents can sign up to 20% of players on each team of the particular league “National team service is the utmost obligation of the athletes…” Sanctions involve competition ban for national team and club games, as well as termination of various benefits received from the state. Compelling reasons for U-18 transfer: Club solvency, lack of BoD, lack of financial support for athlete, “mental and psychological separation” b/t club and athlete, lack of monitoring athlete progress, lack of medical insurance coverage and physical fitness documentation Fek152_19_7_06 (8/9 updates/amendments) 5. Η προσφορά υπηρεσιών στις εθνικές ομάδες είναι ύψιστη υποχρέωση των αθλητών. Αθλητής που αρνείται αδικαιολόγητα να προσφέρει τις υπηρεσίες του στην αντίστοιχη εθνική ομάδα τιμωρείται, σύμφωνα με όσα ορίζονται στον ειδικό κανονισμό του άρθρου 27 του παρόντος νόμου, με ποινή αποκλεισμού από τους αγώνες της εθνικής ομάδας, των πρωταθλημάτων και του κυπέλλου και στερείται τις κάθε είδους παροχές της ομοσπονδίας. Αθλητής που τιμωρείται για άρνηση προσφοράς των υπηρεσιών του στην εθνική ομάδα, στερείται επίσης των κάθε είδους παροχών της Πολιτείας, των ευεργετημάτων που προβλέπονται από τις διατάξεις του παρόντος και των τυχόν ειδικών φορολογικών απαλλαγών. SECRETARIAT GENERAL OF SPORTS Sports Law Review Season 7, 1 (January – April 2006) Quarterly Sport Law review by the General Secretariat of Sport of Greece Α.Σ.Ε.Α.Δ. 1/2006 (Τμήμα Β) Α.Σ.Ε.Α.Δ. 142/2005 (Τμήμα Β)

44 FIBA Minor (but key) differences b/t FIBA and FIBA Europe rules (e.g. first pro contract duration) Noted restraints No international transfer U-18; exceptional cases referred to Secretary General of FIBA Mandatory first pro contract procedure, favoring development club Compensation system upon player refusal Redistribution of sum by Federation to development club(s) Option of FIBA to decide on transfer fee amount Noted recent exception for U18 intnl. transfers – African player’s transfer was not allowed. (DRM, 2007) DRM (2007) feels that FIBA was clever not to introduce fixed compensation plans modeled after FIFA. No litigation…

45 FIBA Noted restraints FIBA Europe – ULEB entanglement
Licensing and Letter of Clearance restrictions National team – related restraints: Obligation of club to release the player “without any financial indemnity” and cover player’s insurance FIBA Europe forecasts: Federations need to insure player contracts with the club as the beneficiary Obligation of player to reply affirmatively Sanctions for club and player (FIBA H ; FIBA Europe 102) FIBA Europe – ULEB entanglement FIBA Players’ Union: UBE (http://www.ubeplayers.com/) FIBA ADR: FAT (http://www.fibastore.com/pages/eng/fc/expe/fat/pres.asp) w/ Appeals to CAS *According to Pantelis Dedes (2000, updated 2007), ULEB players during times of split European Club Basketball Championships (FIBA v ULEB, , FIBA Europe & ULEB agreement on 11/3/2004) were not governed by the FIBA/NBA agreement but could be drafted and/or signed as free agents (Tsakalidis case +// contractual matter, no unilateral renewal).

46 FIBA—NBA 3/14/1997 FIBA—NBA agreement
FIBA Europe/ULEB calls for amendments Annual renewal Purposes: Honor valid contracts on both sides Ensure compensation for US players on FIBA teams Introduce binding and final arbitration ARTICLE X: PLAYER ELIGIBILITY AND NBA DRAFT Yi Jianlian – Milwaukee Bucks case… The Bucks signed Yi, the No. 6 pick of the NBA draft, on Wednesday in Hong Kong to a rookie scale contract. The club also gave his former team, the Guangdong Tigers, money in the deal, but declined to discuss details. WNBA twist: Could be argued that Euros have the advantage over US players according to Art. XII, § 1 (c), eligible to be drafted if they have a contract for two years and are 20+, as opposed to 22 and/or graduated from US College/Uni.

47 FIBA—NBA Agreement specifics:
“Player Contract = written agreement for a specified term and for a specified salary or other compensation.” Licensing system, Letters of Clearance, mutual requests re: contract status “Any disputes… shall be resolved finally and conclusively by an International Arbitrator” Mutual best efforts deterring interference w/ contract But for date conflicts, NBA shall permit participation on national teams, and will not impede directly or indirectly such participation. NBA will not request any fees from player or Federation, except reasonable and adequate insurance coverage Arbitration on: Radojevic, Tsakalidis, Parker 7.2 The NBA and its member teams undertake not to erect any barriers, directly or indirectly, financial or otherwise, which are intended to work as a disincentive for the players to take advantage of the regulations under 7.1 above The NBA and its member teams will not request any fees or the like from the player or the Federation in question, provided, however, that the NBA and its member teams are entitled to request that reasonable and adequate insurance coverage is provided and paid for by the Federation in question. On the above matter also refer to: Selected notes from Dirk-Reiner Martens (2007) personal communication: Extraordinary conference to amend amateur status and allow pros to participate in international competition in Confirmed and became practice with the 92 Olympics. Prior to that there was a reinstatement policy by FIBA, as well as a policy to disallow a 2nd reinstatement. The case was involving Ron Behagen, who transferred to Rome, went back and signed a short-term contract with the NBA and then came back to Europe not being allowed to play. He took the case to US courts thereafter and they found in favor of him and against FIBA, problematic as they found jurisdiction of US courts over FIBA… Hence the seeds for the agreement. No mention of desire or intention by FIBA to amend the “commitment to participate” (…is obliged to answer in the affirmative…) portion in the call of national teams FIBA policy; enforceability was questioned… Jeffrey A. Mishkin & Gary Bettman collaborated with Dirk-Reiner Martens to draft the final agreement. Described as fruitful cooperation, friendly, a good chemistry. 3 targets for the agreement: Contracts stability and mutual recognition, Arbitration – ADR, Release for national teams comps FIBA has not officially received any complaints in re: NBA execs encouraging players to skip natnl teams competitions, however recognized practice is real. On insurance issues FIBA is working with member Federations for insurance purposes. Oulmers extensions. Discussing “…specified salary or other compensation”, comment was that it is always a factual problem and not just procedural. For European standards it should no longer be the case that this should come up as there should be defined compensation, however the acknowledgement is that it may be far from real in many cases. WNBA problematic relationship – Season conflicts with FIBA Worlds… Lengthy contracts are a real problem; defer to national law. Arbitration is Fair, Fast, Final, though not Free (see CAS)… FIBA/DRM believe that they should have won at least one of the arbitration proceedings. Closing remarks: The biggest accomplishment is that is was indeed signed. Deflects Vassilakopoulos’ points on age limits for Euros joining the NBA, as it would be a NBPA matter. +// NBA owners “do not care” about such concerns…

48 FIFA Recent change of national teams’ eligibility requirement for international competition in favor of citizenship Obligation of clubs to release players for national teams’ matches, w/o compensation/insurance coverage (Transfer Rules Annex 1, Art. 1-3) “As a general rule, every player… is obliged to respond affirmatively” * In 2006, 1,530 cases re: payment of salary and player transfers dealt before the FIFA Players Status Committee and the Dispute Resolution Chamber. UEFA & FIFA for citizenship v nationality criteria… *Also see Commentary 1 under Art. 3, Annex 1 of Status and Transfer of Players Rules: “Once a player has been called up to play for his national team, he basically has to comply with this summons. Should he wish not to be called up for a certain match or matches or for a certain period of time, he must inform the association of which he is a national, in writing, of his intention before being called up. Furthermore, only the player himself is entitled to renounce representing his national team. This declaration shall be submitted by the player to the association concerned in writing.”

49 FIFA & Oulmers C-243/06 Charleroi & G-14 Group v FIFA (Oulmers)
Belgian Commercial Court referred Q to ECJ: Do obligations of clubs to release players w/o compensation and the Unilateral and binding determination of international matches calendar Constitute unlawful restrictions of competition Abuses of a dominant position or Obstacles to the exercise of fundamental freedoms (per EC Treaty Art. 39, 49, 81, and 82)? C-243/06 SA Sporting du Pays de Charleroi, G-14 Groupment des clubs de football européens v Fédération internationale de football association (FIFA) – (Oulmers) Weatherill (2005) and Parrish (2006) lean toward a position that would see EC Competition Law applicable in the present situation w/o clubs consultation and representation, let alone compensation. According to Parrish (2005) in correspondence, “a rule imposed on participants without the opportunity for genuine participation from the stakeholders is more likely to be considered an abuse of a dominant position.” Further, Weatherill points out in his 2005 contribution that “the pyramid is currently too big - that too many decisions with direct and substantial commercial implications are taken by sports federations who disallow input from the clubs who are intimately affected by those decisions. Litigation is an unpredictable art, and there are plenty of subtle tactics that may be employed by both federations and clubs to get what they want without formal change or challenge, but there is in principle rich potential for EC law to be used to provoke a fresh process of change if not revolution in European sport and, in particular, to reduce the size of the pyramid.” The past two years this subject has received a lot of coverage among academic circles. A vast majority believes that such FIFA/UEFA policy and intransigence truly goes beyond what is necessary to achieve the goals pursued. The study at hand sides with the arguments of Weatherill (2005), Parrish (2006), and Martins (2007) in regard to the necessity and significance of dialogue and some flexible negotiations, a fundamental form of lawyering in a sense, to preserve the classic pyramid structure in the EU, at the same time giving clubs a voice, via democratic and lawful means respecting bedrock EU principles. Thus, one may presume that with even a minor concession on the part of FIFA/UEFA per compensation and insurance coverage with the national team players’ clubs as the beneficiaries, the Pyramid will be conserved. Admittedly, for some Federations the burden will be formidable due to their financial hardship; however, as with current solidarity fees and transfer funds, there are ways to boost their prowess and ability to deal with such a reasonable, in contemporary law and policy terms, obligation. Otherwise, the rapidly expanding, gaining political next to its financial power, G14 may wish to take the obvious next step of organising a break-away league, the new form of the Champions’ League, after the example of ULEB in European Basketball. Even a few months/weeks from the decision of the Oulmers case by the ECJ, the outcome appears unknown. There may have been tremendous progress in the relations b/t UEFA/FIFA and the EC; nonetheless, there is more work to be done, to revamp a somewhat outdated system of governance respecting contemporary EU Law.

50 FIFA & Oulmers Charleroi lost the services of Oulmers after injuries sustained during international competition with the national team of Morocco G14 claiming €860mil. in various damages from FIFA (rejected by the Belgian Court) A year and a week ago FIFA’s lead counsel, Heinz Tännler, observed that FIFA might consider establishing an insurance and compensation fund for international players (criticized due to time constraints and unilateral level of action by FIFA v including clubs in the decision-making process) The matches calendar issue was not addressed

51 FIFA & Oulmers UEFA Strategy included FIFPro and EPFL
EC White Paper on Sport + concern about financial flow during transfers; posing the concept of an information and verification system to control flow, leaving the transactions portion to the parties; could be run by ISFs or NGBs. EC (2007) WP p 15: The transfer of players also gives rise to concerns about the legality of the financial flows involved. To increase transparency in money flows related to transfers, an information and verification system for transfers could be an effective solution. The Commission considers that such a system should only have a control function; financial transactions should be conducted directly between the parties involved. Depending on the sport, the system could be run by the relevant European sport organisation, or by national information and verification. Parrish (2007): The EC Treaty facilitate(s) sectoral social dialogue on issues pertaining to the employment relationship between clubs and players. This could include contractual terms, transfer windows, the transfer system, salary capping, image rights, pension funds and doping rules. Social dialogue can be conceptualised not only as a tool for improving labour relations, but also as a new form of international governance and it is in this context that UEFA wish to take control of the process by establishing the Professional Football Strategy Council as an alternative to a formal sectoral social dialogue committee… Employment relations issues should not be confused with wider issues of sports governance in which only a governing body is able to take a holistic approach. This concern reveals a deeper strategic objection based on a suspicion of the motives of the social partners. The implication is that the social partners are not so concerned with improving the employment conditions of an already cosseted category of worker, but are motivated by a desire to exercise greater influence within football in order to control the wealth generated from it. This contrasts with the role of a governing body who exercise commercial functions in order to redistribute wealth for ‘the good of the game’. In this connection, the European model of sport invests considerable regulatory authority in governing bodies. If social partners are able to assume a legislative competence within this model, this will substantially alter the vertical channels of authority which have traditionally been a feature of the European model.

52 FIFA Contract duration: 1 season – 5 years, except as permitted by national law (Transfer Rules Art. 18.2) Under 18 (3 years max.) No “tapping up” No unilateral termination but for: Just Cause* Sporting Just Cause** (established professional… appeared in less than 10% of official matches… 15 days after end of season) For the calculation of compensation due in the event of termination without just cause, art. 17 par. 1 states that the maximum period to take into account is five years. In other words, if the parties have agreed to sign a contract exceeding five years, in the event of a termination without just cause, only the period up to the fifth year would be relevant when establishing the compensation due. In order to safeguard the interests of young players and not hinder their progress through an excessive tie to a club, players who have not reached their eighteenth birthday may not sign a contract for a term longer than three years. Any clauses signed for a longer period are not recognised by the football authorities. If a contract is signed for longer than three years, only the first three years of the contract are to be considered. After the end of the third year, the player is free to leave the club unless he explicitly or de facto accepts the extension. + no “Tapping up” (Art. 17 & 18.3 Transfer Rules and Art. 14C FIFA Agents’ Rules); also see Parrish (2007) p. 39 *Under normal circumstances, only a few weeks’ delay in paying a salary would not justify the termination of an employment contract. (cf on Art. 14, pt. 3, fn 62, p 39) ** Being entitled to claim sporting just cause in accordance with the above conditions does not automatically mean that sporting just cause has been established. Sporting just cause must always be established by the Dispute Resolution Chamber (DRC). (cf on art. 15, pt. 1. fn 65, p 41) “Established” is a player who has terminated and completed his training period. Furthermore, his level of footballing skill is at least equal to or even superior to those of his team-mates who appear regularly. “Appearance” is to be understood as being fielded and thus actively taking part in a game. In this respect, it is not the number of appearances in games but the minutes effectively played therein that is relevant. (cf on art. 15, pts. 2 & 3. fn 66, p 42) Case by Case evaluation… The DRC as the first-instance body and the Court of Arbitration for Sport (CAS) as the body of appeal. So far, there is no jurisprudence related to sporting just cause.

53 FIFA The validity of a contract may not be made subject to a positive medical examination and/or the granting of a work permit (Transfer Rules Art. 18.4) “Protected Period” (PP) significance: Sporting sanctions for breach w/o cause w/i PP No sporting sanctions for breach w/o cause post-PP Breach w/o cause results in compensation DRC/CAS decide on compensation for breach, covering all benefits, including additional compensation… up to six monthly salaries Any such conditions that are included in a contract are not recognised and the contract is still valid without this clause. In other words, this means that the new club’s failure to respect the contract represents an unconditional breach of contract without just cause. The player’s prospective club is therefore required to undertake all necessary research and to take all appropriate steps before concluding a contract. Once a contract has been signed, all parties involved can rely in good faith on it being respected and enforced. Protected Period: a period of three entire Seasons or three years, whichever comes first, following the entry into force of a contract, if such contract was concluded prior to the 28th birthday of the Professional, or to a period of two entire Seasons or two years, whichever comes first, following the entry into force of a contract, if such contract was concluded after the 28th birthday of the Professional. Unilateral breach without just cause or sporting just cause after the Protected Period will not result in sporting sanctions. Disciplinary measures may, however, be imposed outside of the Protected Period for failure to give due notice of termination (i.e. within fifteen days following the last match of the Season). Transfer Rules Art. 17.4: In addition to the obligation to pay compensation, sporting sanctions shall be imposed on any club found to be in breach of contract or found to be inducing a breach of contract during the Protected Period. It shall be presumed, unless established to the contrary, that any club signing a Professional who has terminated his contract without just cause has induced that Professional to commit a breach. The club shall be banned from registering any new players, either nationally or internationally, for two Registration Periods.

54 FIFA – The Transfer system
International Transfers U-18 exceptions: Non-athletically related parental move Move w/i EU/EEA when 16-18, providing for Highest quality athletic training Academic and/or vocational education “Best possible” living conditions Documentation with National Federation Living close to foreign club ( rule) Players below the age of 18 who move to a country of which they are not nationals can only apply for their first registration if one of the above three exceptions applies, otherwise they need to wait until they reach the age of 18. Youngsters born in a foreign country or those who have lived there for a significant part of their life should be excluded from this rule and should be considered as nationals from a sporting point of view. The Players’ Status Committee decides on disputes related to the transfer of minors and imposes appropriate sanctions if the provisions of this article are violated.

55 FIFA – The Transfer system
Training Compensation payable: When player signs first pro contract On each transfer b/t different Associations’ clubs until 23 For training incurred U-21, unless: Training terminated before 21 in which case Amount payable calculated b/t 12-year of training Training Compensation shall be paid to a player’s training club(s): (1) when a player signs his first contract as a Professional, and (2) on each transfer of a Professional until the end of the Season of his 23rd birthday. The obligation to pay Training Compensation arises whether the transfer takes place during or at the end of the player’s contract. The provisions concerning Training Compensation are set out in annex 4 of these Regulations. 1. A player’s training and education takes place between the ages of 12 and 23. Training Compensation shall be payable, as a general rule, up to the age of 23 for training incurred up to the age of 21, unless it is evident that a player has already terminated his training period before the age of 21. In the latter case, Training Compensation shall be payable until the end of the Season in which the player reaches the age of 23, but the calculation of the amount payable shall be based on the years between 12 and the age when it is established that the player actually completed his training. 2. The obligation to pay Training Compensation is without prejudice to any obligation to pay compensation for breach of contract. Training compensation in accordance with the FIFA regulations applies only in the event of an international transfer. For national transfers, the system enforced by the relevant association applies in accordance with art. 1 par. 2.

56 FIFA – The Transfer system
Training compensation is not due upon: Unilateral club termination w/o just cause Transfer to Category 4 club Reacquisition of amateur status First pro contract involves training compensation for all clubs since age 12 Subsequent transfers compensate last club for “total time effectively trained” Training Compensation is due: i) when a player is registered for the first time as a Professional; or, ii) when a Professional is transferred between clubs of two different Associations (whether during or at the end of his contract) before the end of the Season of his 23rd birthday. Training Compensation is not due: i) if the Former Club terminates the player’s contract without just cause (without prejudice to the rights of the previous clubs); or ii) if the player is transferred to a Category 4 club; or iii) if a Professional reacquires Amateur status on being transferred. CAS 2004/A/560: only the precise period during which a player was effectively trained by a club must be taken into consideration. In other words, this means that to calculate training compensation, it is not only entire seasons that are to be taken into account. CAS 2004/A/560: the panel agreed with the opinion of the DRC, according to which a club that has trained a player as an amateur for a certain period of time before concluding an employment contract with him shall be compensated for the entire time that it trained the player and not only for the time it trained him as a professional.

57 FIFA – The Transfer system
Training costs are set for each Association club category (up to 4) Costs correspond to amount needed to train each player annually, multiplied by an avg. player factor (amateurs/pros rate) Lists updated annually Costs involved “as if the New Club trained the player itself” 12-15 training costs = Category 4 clubs (ANNEX 4) Article 5 Calculation of Training Compensation 1. As a general rule, to calculate the Training Compensation due to a player’s Former Club(s), it is necessary to take the costs that would have been incurred by the New Club if it had trained the player itself. 2. Accordingly, the first time a player registers as a Professional, the Training Compensation payable is calculated by taking the training costs of the New Club multiplied by the number of years of training in principle from the Season of the player‘s 12th birthday to the Season of his 21st birthday. In the case of subsequent transfers, Training Compensation is calculated based on the training costs of the New Club multiplied by the number of years of training with the Former Club. 3. To ensure that Training Compensation for very young players is not set at unreasonably high levels, the training costs for players for the Seasons between their 12th and 15th birthday (i.e. four Seasons) shall be based on the training and education costs for category 4 clubs. 4. The Dispute Resolution Chamber may review disputes concerning the amount of Training Compensation payable and shall have discretion to adjust this amount if it is clearly disproportionate to the case under review. ANNEX 4 Article 6 Special EU/EEA Provisions 1. For players moving from one Association to another inside the territory of the EU/EEA, the amount of Training Compensation payable shall be established based on the following: a) If the player moves from a lower to a higher category club, the calculation shall be based on the average of the training costs of the two clubs. b) If the player moves from a higher to a lower category, the calculation shall be based on the training costs of the lower category club.

58 FIFA – The Transfer system
Solidarity mechanism 5% of total compensation paid to former club – excluding training compensation – will be distributed by new club to training and educating club(s) (12-23) 12-15: each receiving 5% of total 16-23: each receiving 10% of total No age restriction for solidarity funds The provisions on solidarity contribution apply only in the event of a player transferring from a club affiliated to one association to another club affiliated to another association (i.e. international transfers). If the player transfers between two clubs affiliated to the same association, the solidarity contribution is not applicable unless the association concerned has included a clear clause in its own regulations, acknowledging the obligation to pay a solidarity contribution as a consequence of domestic transfers. If a player who is younger than 23 transfers during the validity of his employment contract and a solidarity contribution is payable to his former training clubs, the total deduction from the transfer compensation will be less than 5%. For every year that the player is younger than 23, 0.5% shall be deducted from 5% e.g.: for a player who is in the season of his 21st birthday, the relevant percentage will be 80% of 5%, i.e. 4% of the compensation paid for the transfer of the player. A solidarity contribution is payable throughout the entire career of the professional as long as transfer compensation is paid by the new club to the former club of the player. Martins (2007): On Solidarity Payments, the most striking difference (v. TC) is that payment is due only upon transfer during a running contract (i.e. where there is a ‘profit’). Appears as it would be most abiding with EU Law, however these payments are due no matter the age of the player… Also, it appears that the price of the player will be always raised by 5%. Additionally, both SP and TC payments can coincide… RBM believes that such a double restriction would not survive ECJ scrutiny. In conclusion, RBM identifies three grounds for free movement infringement: a) Issues connected to termination (SP and TC, registration rights) and transfer. b) third-country nationals (even EU nationals in Holland) and EU nationals (no level-playing field) c) employees’ interests (i.e. amateur sample, exploitation). RBM believes in Social Dialogue (and CBA).

59 IIHF—NHL 2007 NHL Draft featured No1 and 2 US picks (1st)
Appx. 30% of NHL players = Euros IIHF & NHL cooperation (-Russia) for 12 years 7/12/2007 New four-year transfers agreement Deadlines for draftees and non-draftees IIHF players w/o contract may sign as NHL free agents NHL pays development fee of $9mil. for the first 45 IIHF players drafted ($200K per add. Player – NHL Draft 7 rounds) NHL + additional $100K late signing window fee NHL + $ K compensation for IIHF players <30 games (funds used for players outside per se scope, i.e. US and CAN Junior Clubs  NHL) Release for 2010 Olympics and World Champs. Russian risk… NHL teams cannot acquire Russians under contract but can sign free agents (Russian Federal Sports Law on Transfers v. Labor Law + ADR problems) 6 Nations Ratify Hockey Transfer Deal July 13th, 4:55am ZURICH, Switzerland (AP) - The Czech Republic, Sweden, Finland, Germany, Slovakia, and Switzerland ratified a four-year transfer agreement between the International Ice Hockey Federation member associations and the NHL on Thursday. As with the last four-year agreement, Russia refused to sign. Highlights of the new agreement include: _The deadline for signing players under contract is June 15, for each of the four years. IIHF players subject to NHL draft-related rights who have not yet signed an NHL contract must be signed by the NHL team by June 1 in any year of the current agreement. _Players not under contract to an IIHF team may sign with an NHL team at any time. _The NHL pays a basic development fee of $9 million for the first 45 players, $200,000 per player. If more than 45 IIHF players are signed, the NHL pays an additional $200,000 for each extra player. _Players selected in the NHL draft can be signed until July 15 or until Aug. 15 in the year they are drafted. The NHL pays an additional fee of $100,000 for signing players in the later window between July 16 and Aug. 15. _The IIHF is compensated for players who sign with NHL clubs but who are not on the team's roster for at least 30 games _ including playoffs _ in their first season. Those funds _ between $50,000 and $100,000 depending on draft round _ will be used for IIHF player transfers to the NHL that are outside the agreement, such as when European players are signed from North American junior clubs to the NHL. _The agreement also regulates the release of NHL players to the 2010 Olympics in Vancouver and the world championships. In the NHL-season, 259 players _ 27.4 percent _ were from IIHF affiliated national associations outside of North America, according to the IIHF. The IIHF and the NHL have had agreements in place for the last 12 years. By refusing to sign, the Russian federation risks losing its players for nothing. NHL clubs are forbidden from acquiring players already under contract in Russia, but can take free agents without paying compensation. Current labor laws in Russia allow players such as Pittsburgh Penguins center Evgeni Malkin to give their club little notice before terminating a contract, freeing them to sign with an NHL team. But a new amendment to the law is expected to be implemented soon, preventing players from escaping so quickly.

60 IIHF—NHL Yashin, Ovechkin, Malkin cases
Yashin lost in arbitration and returned to NHL Ovechkin and Malkin were allowed to compete for their NHL teams Russian teams ≠ injunction (+antitrust, breach of contract, arbitration agreement, tortuous interference claims) NHL + Russian Labor Law (termination + 2 weeks’ notice) + Duress prior to signing NHL arbitration-International relations: Alexei Yashin, under contract with the Ottawa Senators, no longer wished to play for the club, and in October 1995 signed and played four games for CSKA Moscow. At the NHL’s insistence, the IHF imposed a suspension on CSKA (for signing him and using his services, while under contract to the Senators). IHF also banned Yashin’s international competition participation. NHLPA commenced arbitration under the NHL CBA seeking to declare him a free agent under the restrictive free agency policies of the NHL. Yashin lost and arbitrator George Nicolau gave him two options: “Play for the Senators or not play at all”. As he did not even have the option of sitting out the remaining three years due to a reserve clause in his contract, he signed a new 5-year contract, for $820,000 for the rest of the season, and 12 million for the next four years… Dynamo Moscow v Ovechkin 412 F. Supp. 2d 24 (D.D.C. Cir. 2006): PROCEDURAL POSTURE: Respondent, a professional ice hockey player, filed a motion to dismiss for lack of subject matter jurisdiction petitioner Russian sports club's petition pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38, reprinted in 9 U.S.C.S. § 201 (Convention), which sought enforcement of a foreign arbitral award against the player. OVERVIEW: The player signed a contract to play hockey for the club during the season in Russia's Professional Hockey League (PHL). After the contract expired, the club offered the player a new contract for the season. The player signed a one-year PHL contract with a second Russian hockey club. That contract provided that it would become void if the player signed a contract offered by a National Hockey League (NHL) team prior to a certain date. The player signed with an NHL team for the season. The club took the position that it had exclusive rights to the player's services for the season under PHL regulations because it had the right to match the term and the financial aspects of the player's contract with the second Russian club. A Russian arbitrator agreed. In dismissing the club's petition, the court held it lacked subject matter jurisdiction under Article II of the Convention because the contract with the club, the letter offering a new contract, and the contract with the second Russian club did not constitute an exchange of letters that contained an agreement to arbitrate. The court held that it would not imply a written consent to arbitrate. OUTCOME: The court granted the player's motion to dismiss and dismissed the club's petition with prejudice. Metallurg Magnitogorsk v Malkin, Penguins, and NHL claiming an injunction for breach of contract lost the case Metallurg Magnitogorsk and Locomotive-Yaroslavl suing the NHL, the Penguins, Calgary Flames and Edmonton Oilers on the basis that the league and teams were interfering with the contracts with Malkin and two other players (Taratukhin and Mikhnov). In rejecting Metallurg’s request for an injunction to prevent Malkin from continuing to play for the Pittsburgh Penguins, U.S. District Court Judge Loretta Preska offered several reasons why "it appears that plaintiffs are unlikely to prevail on the merits of the claim." The lawsuit also claimed that there was a violation of antitrust law between the NHL and its clubs. According to a court transcript of the Wednesday proceedings, the judge said she believed that the league "would be able to demonstrate" that the league's transfer fee policy was collectively bargained with players, which makes it "immune" from antitrust scrutiny. She also said that the Russian teams "are unlikely to be able to prove that they cannot be compensated by money damages." One revelation in the proceedings is that on June 29, NHL Deputy Commissioner Bill Daly received an from Sergey Arutyunyan, general director of the Russian Ice Hockey Federation, demanding $1 million as compensation for Malkin playing for the Penguins. In response, Daly said he ed Arutyunyan and noted that under the IIHF transfer — which was signed by every country except Russia — if the transferred player signs with a NHL and ends up with a minor league team, the NHL would also have to pay what is termed "minor league assignment fees" in addition to the $200,000 standard player transfer fee. "These cases are always about money, the only question is how much," Preska said during the proceedings + + Duberstein (2007) UNC Law Note…

61 MLB—Puro Yakyu The Posting System
The Posting System in MLB developed as a result of the Hideo Nomo case (retired from Japan and played for the LA Dodgers) Since 1999 inception, 13 Japanese players were posted Noted contracts signed: Ichiro Suzuki (SEA) Kazuhisa Ishii (LAD) Daisuke Matsuzaka (BOS) Kei Igawa (NYY) Akinori Iwamura (TB) MLB club may discuss posting with agent (Nov-Mar) Player requests and Japanese club posts on list Commissioner notifies MLB clubs of posted players MLB clubs submit sealed bids w/i 4 days Commissioner notifies Japanese club of highest bid w/o source Japanese club can accept or reject bid (player retained and can be re-posted next season) Upon acceptance by player (w/i posting period) Japanese club receives funds Upon rejection by player rights are retained by Japanese club Duberstein (2007)

62 Posting v. FIFA Transfers
Arguably keeps MLB bids lower v. open and public process Unilateral v. Multilateral Narrow v. broad scope US-JAP only v. EU/EEA/CAP Limited v. Extensive freedom of movement $centric v. socio-cultural consideration (infrastructure, youth training, solidarity) Rockerbie (2006) Duberstein (2007)

63 US Amateur sector international transfers ISAs – NCAA
Not a lot of research (Ridinger, 1998; Ridinger & Pastore, 2000, 2001; Kaburakis, 2005; Popp, 2007) Transition to a different system of governance poses problems, especially in the case of International Student-Athletes (ISAs) recruited by NCAA DI institutions NCAA DI Amateurism conflicting with federalized club-based “pyramid” model Some litigation (Howard v. NCAA, 510 F. 2d 213, 1975; Buckton v. NCAA, 366 F. Supp. 1152, 1973; NCAA v. Lasege and University of Louisville, 53 S.W.3d 77, S. Ct. Ky. 2001; NCAA v. Yeo, 171 S.W.3d 863, 48 Tex. Sup. J. 1016, 2005) Significant policy progress in the last five years re: balance of NCAA constitutional principles (Inst. Control, Comp. Equity, SA Welfare) Amateurism Clearinghouse and SA Reinstatement contribution Howard v. NCAA, 367 F. Supp. 926, 1973; 510 F. 2d 213, 1975; Buckton v. NCAA, 366 F. Supp. 1152, 1973; NCAA v. Lasege and University of Louisville, 53 S.W.3d 77, S. Ct. Ky. 2001; NCAA v. Yeo, 114 S.W.3d 584, 3rd Ct. App. TX, 2003; 171 S.W.3d 863, 48 Tex. Sup. J. 1016, 2005

64 US Amateur sector international transfers ISAs – HSAAs, Prep Schools
ISAs in US HS, prep schools, and Immigration/Administrative Law extensions have not been covered in legal and policy scholarship Much like NCAA cases, most cases have not found a right to participate (education not extending to extracurricular activities) with some noted exceptions In exceptional cases ISAs will successfully challenge HSAAs decisions that render them ineligible* Dept. of State, CSIET, DHS, USCIS policies directly affecting ISAs transition to both public HS and private prep schools (the latter distributing SEVIS docs for visas to talented athletes) Equal Protection Constitutional analysis… The exceptions (education and any rights extending to extracurricular activities, sports being included): Fusato v. Washington Interscholastic Activities Association, 970 P.2d 774 (Wash. Ct. App. 1999) Duffley v. New Hampshire Interscholastic Athletic Association, 446 A.2d 462 (Sup. Ct. N.H. 1982), Stone v. Kansas State High School Activities Association, 761 P.2d 1255 (Kan. App. 1988), and Moran v. School District #7, Yellowstone County, 350 F. Supp (D. Mont. 1972). The norm (Privilege, no right found + no extension of any right to extracurricular activities and sports): Ryan v. California Interscholastic Federation, 94 Cal. App. 4th 1048 (Cal. Ct. App. 2001); Jordan v. O’Fallon Township High School, 706 N.E.2d 137 (Ill. App. Ct. 1999); Indiana High School Athletic Association v. Carlsberg, 694 N.E.2d 222 (Ind. Ct. App. 1997); Mississippi High School Activities Association v. Coleman, 631 So. 2d 768 (Miss. 1994); Palmer v. Merluzzi, 868 F.2d 90 (3rd Cir. 1989); Stock v. Texas Catholic Interscholastic League, 364 F. Supp. 362 (N.D. Tex. 1973); Taylor v. Alabama High School Athletic Association, 336 F.Supp. 54, (M.D. Ala. 1972); Robinson v. Illinois High School Association, 195 N.E. 2d 38 (Ill. App. Ct. 1963) + Indiana High School Athletic Association v. Carlsberg, 694 N.E. 2d 222 (Ind. 1997), Scott v. Kilpatrick, 237 So.2d 652 (Ala. 1970). *For more: Indiana High School Athletic Association v. Vasario, 735 N.E.2d 238 (S. Ct. Ind. 2000); 726 N.E.2d 325 (Ind. Ct. App. 3rd Dist. 2000) and especially For more on State and Federal policies: and especially § 5 at

65 Conclusion The EU is currently (12 years post-Bosman) experiencing what the US did in the years following Federal Baseball… Trying to balance a traditionally conservative approach to sport policy, allowing for self-regulation of sport by ISFs, preserving the pyramid, etc. with a new liberal economic and labor reality in the EU If an exemption for several aspects of the sport sector were to occur, what would it mean? The US provides us with valuable lessons Judicial and Legislative exemptions would defeat their purpose of protecting sport development, w/o controls such as salary caps, drafts, competitive balance mechanisms, redistribution of funds, and important labor considerations ≈ NLRA//CBAs Particularly for EU sport, dialogue and compromise=imperative Much like the advent of Chinese economy in the 21st Century, EU Sport Law in the last 12 years (since Bosman) is witnessing a crash course in ‘industrial revolutionism…’ What took the US more than 75 years to develop (Federal Baseball to free agency to Curt Flood Act to antitrust law labor exemptions) is now challenging EU policy-makers, practitioners, lawyers, and scholars in re: contemporary sport policy, balancing the pyramid and the socio-cultural principles of EU sport with the needs of investors for self-regulation and operations in a financially prudent business sense.

66 Conclusion Sport per se regulations and restraints may still pass EC and ECJ muster; the scope and means will determine outcome ECJ will not need to “legislate from the bench”, provided ISFs follow the path of compromise and flexibility; w/o club participation there could be no (fair) EU sport policy Theoretically, in Oulmers the ECJ could side with the G-14 (≈ Piau, re: Application of Comp. Law, dominant position by FIFA as an association of undertakings); the calendar may change, but international comps. and representation will not; the ECJ will not provide clubs with € and insurance coverage, FIFA & G14 will There is a lot of work to be done by EU MS legislatures (Piau, Oulmers, Placanica, Articles 86 et seq. state interventions…)

67 Two Greek Cents FIFA Transfer system
Changes that may be in order FIFA Transfer system “Protected Period” serving its purposes? FIFPro & UEFA (or the G14 if Oulmers leads to a new model for the Champions’ League*) need to pursue a CBA Considerations promoting national interests and local talent arguably have no place in 21st century integrated international sport; if the US pro leagues do not impose nationality-based criteria, we should not either… The better talent needs to be supported. Local talent will always be cheaper. The “Home-Grown” rule is an eloquent and intelligent way to postpone the unavoidable… It’s one world of sport. *If that was the case, perhaps it would not be feasible to reach a salary cap, a draft, or a US-type control; what may be possible for the G14 would be to adopt less restrictive means of grassroots development and funding than the ones employed by FIFA at present. It would be in the best clubs’ best interest to invest in the cultivation of youth and young talent skill development through funding to minor clubs supplying the players from their Academies. Coaches’ associations and even the local federations could assist with providing top young players lists, in order to determine somewhat objectively the extent of the transfer fee and the solidarity contributions (// EC’s WP concerns and recommendations).

68 Two Greek Cents Age discrimination issues should be addressed
Changes that may be in order Age discrimination issues should be addressed Minimum and maximum length contracts are there for a reason. 4-5 years max OK; w/o a CBA in place clubs need to be kept at bay; minors’ contracts status (FIFA’s 3-year limit appears reasonable) should be monitored and player benefits’ provisions enforced Termination due to lack of club solvency “Sporting just cause” termination… Impressive deviation from labor norm… Other preferential benefits and exemptions may need to be revisited (tax and immigration provisions, civil service and governmental appointments, educational exceptions) No Jurisprudence on matter of sporting just cause Many other industry sectors’ labor unions would love to have a skill-specific “just cause” for termination… “Greece shows the way” for termination due to lack of club solvency

69 Two Greek Cents Changes that may be in order FIBA’s compensation and U-18 international transfers’ system needs an objective adjudicator FIBA-Europe and ULEB – Relationship needs clarification FIBA-NBA agreement – Time to update (WNBA season-FIBA Worlds conflict, arbitration switch in favor of CAS, omit “other compensation” etc.) FIBA’s and FIFA’s club release policies and players obligations to respond in the affirmative needn’t be posed herein for amendment… ULEB – Euroleague FIBA Europe – FIBA Cup, Women’s Euroleague and Cup, National Teams’ Competitions, Junior club tourneys (?) FIBA Europe + preemptively foresees re: federations insurance contracts and clubs’ benefits

70 Two Greek Cents Changes that may be in order FIBA & FIFA need more staff, their administrative review committees and dispute resolution panels need a form of a Clearinghouse Strictly enforce sanctions (sporting and damages) and educate minor clubs’ administrators re: contractual obligations and budgetary planning Distinguish b/t trades and unilateral breaches (revisit legal fiction of signing club culpability, i.e. reverse BoP); make trades conditional *Under normal circumstances, only a few weeks’ delay in paying a salary would not justify the termination of an employment contract. (cf on Art. 14, pt. 3, fn 62, p 39) The presumption means that the BoP is borne by the new club signing the player, attempting to prove there was no (possibility of) knowledge of unilateral breach w/i “protected period”… or outside the PP w/o just cause… Allow for precedent conditions such as passing a successful physical and/or receiving work permits…

71 Two Greek Cents FIFA Transfer system
Changes that may be in order FIFA Transfer system U-18 international transfers provisions OK Compensation system unconvincing (subjective clubs’ classification system, composition of annual lists, equated to level 4 clubs, age discrimination (±23), defers to NFs for local transfers) If kept in place, fair treatment of all clubs (developing and ensuing purchasing clubs) OK Solidarity payments appear to be balanced and EU Law abiding; need to extend to NFs Thus, regional transfers may be treated much differently than international ones and may lead to players purposefully foregoing their local systems’ treatment, opting for an international transfer instead. Hence, the impact is exactly the opposite of what e.g. the “home-grown” rule attempts to promote…

72 Two Greek Cents Changes that may be in order NHL–IIHF agreement + Russian ratification (clubs’ and players’ benefit; Russian labor law re: contracts termination and Fed. Sports Law amendments) NHL may wish to re-negotiate paying less for later rounds’ picks; NHL may further benefit from amending portions referring to players <30 games MLB and UEFA clubs’ “sweat shops”? UN and EU human and children’s rights accords need enforcement International sports academies, educational, cultural and athletic programs exchange are outstanding avenues promoting pluralism, respect of differences, research of problems and feasible solutions. Colleagues can achieve the same purposes through collaborative efforts such as this Conference, so… 1948 Universal Declaration of Human Rights, the 1950 European Convention on Human Rights, the 1990 Convention on the Rights of the Child and the 2006 Convention on Persons with Disabilities.  NHL–IIHF agreement needs to be ratified by Russia (avoiding losing players for 0; concurrently Russia needs to close labor loophole re: contracts termination, possibly by amending Fed. Sports Law) NHL may wish to re-negotiate (in four years, upon expiration of present agreement) so as to pay less for later rounds’ picks; if bargaining power allows for it, NHL may further benefit from amending portions referring to players outside the present scope and the ones who play <30 games MLB and UEFA clubs’ “sweat shops” and sport pipelines? UN and EU accords re: human and children’s rights need to be upheld and enforced Final thought: International interactions among youth in sport may allow for pluralism, respect of differences, and by the time participants and sports aficionados become administrators they will have a better understanding of problems and possible solutions; cross-continent educational, cultural and athletic programs exchange, international sports academies, and increased participation by all interested parties, may be good starting points. Lawyers, scholars, and policy-makers may pursue the same goals via collaborative efforts such as this Conference. Thank you Marquette


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