The European Super League, Super Anti- Competitive? Whether European Competition Law Should Prohibit the New Closed Football League
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The European Super League, Super Anti- Competitive? Whether European Competition law should prohibit the new closed football league Jay Meliëzer [email protected] 10835202 International and European Law: European Competition Law and Regulation Date of submission: 26 July 2019 Supervisor: dr. L.J. Ankersmit TABLE OF CONTENTS CHAPTER 1. INTRODUCTION .......................................................................................................................... 5 1.1. GENERAL ................................................................................................................................................ 5 1.2. COMPETITION LAW ................................................................................................................................. 6 1.3. LEGAL PROBLEM ..................................................................................................................................... 7 1.4. METHODOLOGY & STRUCTURE .............................................................................................................. 7 CHAPTER 2. EU COMPETITION LAW IN THE CONTEXT OF SPORTS LEAGUES ............................. 9 2.1. INTRODUCTION ....................................................................................................................................... 9 2.2. SPORT GOVERNING BODIES OF FOOTBALL IN EUROPE ............................................................................. 9 2.2.1. Regulatory structure ......................................................................................................................... 9 2.2.2. League structure ............................................................................................................................. 10 2.2.3. New situation .................................................................................................................................. 11 2.3. CASELAW ............................................................................................................................................. 12 2.3.1. Walrave and Koch ........................................................................................................................... 12 2.3.2. Bosman ............................................................................................................................................ 12 2.3.3. Wouters ........................................................................................................................................... 12 2.3.4. Meca Medina .................................................................................................................................. 13 2.4. EU LEGISLATION AND SOFT LAW ......................................................................................................... 14 2.4.1. Helsinki Report ............................................................................................................................... 14 2.4.2. The 2007 White Paper on Sport ...................................................................................................... 15 2.5. CONCLUSION ........................................................................................................................................ 16 CHAPTER 3. THE SUPER LEAGUE: A RESTRICTION TO COMPETITION OR ABUSE OF A DOMINANT POSITION? ................................................................................................................................... 17 3.1. INTRODUCTION ..................................................................................................................................... 17 3.2. SPORT LEAGUES AND THEIR PRODUCTS ARE PECULIAR ......................................................................... 17 3.2.1. The product ..................................................................................................................................... 17 3.2.2. The relevant market ........................................................................................................................ 18 3.3. THE CLASSIFICATION OF THE EUROPEAN SUPER LEAGUE .................................................................... 24 3.4. RESTRICTION OF COMPETITION UNDER 101(1) TFEU? ........................................................................ 25 3.5. THE MECA MEDINA TEST ..................................................................................................................... 35 3.6. 101(3) TFEU ........................................................................................................................................ 35 3.7. CONCLUSION ........................................................................................................................................ 36 CHAPTER 4. THE DESIRABILITY OF THE SUPER LEAGUE ................................................................. 38 4.1. EUROPEAN MODEL OF SPORT VS AMERICAN FRANCHISE LEAGUES ...................................................... 38 4.2. TWO COMPETING LEAGUES ................................................................................................................... 39 4.3. A CLOSED LEAGUE OR AN OPEN LEAGUE .............................................................................................. 39 4.4. CONCLUSION ........................................................................................................................................ 41 CONCLUSION ..................................................................................................................................................... 42 BIBLIOGRAPHY ................................................................................................................................................. 43 APPENDIX ............................................................................................................................................................ 48 2 Abstract In 2018, a term sheet was disclosed which shows that eleven European football clubs explore the possibility to create the European Super League (ESL). This thesis explores and answers the question to what extent the ESL is a breach of European Union competition law. To answer this question the structure of sports Europe is explored and caselaw and EU competition law in the context of sport is examined. Then it is determined whether the ESL restricts competition within the meaning of 101 TFEU and constitutes an abuse of dominant position within 102 TFEU. Sports in Europe are organized in leagues. These leagues are monopolies as there is just one league in each country and continent. The leagues are open as clubs can be promoted and relegated; any club can become the champion of a league. As all activities with economic significance, sports need to comply to EU competition law: 101 TFEU and 102 TFEU. EU competition law should regulate sport governing bodies in Europe. Still, EU acknowledges the specificity of sports which should be taken into account when applying and interpreting EU law. Specific characteristics of sports are the open “grassroot structure”, the interdependence of teams, and the need for agreements to ensure fair competitions. For 101 TFEU to apply, coordination of market behaviour by undertakings in the form of an agreement or concerted practice or a decision of an association of undertakings is needed. This means that the commercial contracts between ESL, clubs and third parties concerning broadcasting rights, sponsors or advertisements fall under the scope of EU competition law. As do the sporting rules, applied by the ESL. Furthermore, the way the Super League is organized is a restriction of competition under 101 TFEU. The Meca Medina test and Article 101(3) TFEU do not provide an exemption. Moreover, the organization of the Super League does affect trade between MS. An analysis of the relevant geographic market and the relevant product markets shows the ESL restricts competition within the meaning of 101 TFEU and constitutes an abuse of dominant position within 102 TFEU. This is an effect of the closed nature of the ESL; the fact that the eleven Founders of the ESL are never relegated to a lower division, the fact that Founders manage which club participates in the ESL and which clubs are excluded. This is a restriction of competition under 101 TFEU. It will be the first time in football in Europe that two leagues compete for consumers and the first time that there is a closed league in European football. Closed leagues are a known concept in the US. Scholars agree that this is a detriment to competition and that an open league with promotion and relegation is far more beneficial for the consumer. 3 List of abbreviations CFI Court of First Instance CL UEFA Champions League Commission European Commission ECJ European Court of Justice EL UEFA European league ESL European Super League EU European Union EUMR European Union Merger Regulation FA The Football Association FIA Fédération Internationale de l'Automobile FIFA Fédération Internationale de Football Association GC General Court MS Member States of the European Union NCA National Competition Authority P&R Promotion and relegation TEU Treaty of the European Union TFEU Treaty on the Functioning of the European Union TS Term Sheet The Court European Court of Justice UEFA Union of European Football Associations USA United States of America 4 Chapter 1. Introduction 1.1. General Football Leaks, the website which is the football version of WikiLeaks, revealed