The Collision of the EU Legal Framework and FIFA/UEFA Regulations A Sport Legislation and Fundamental Freedoms Perspective

Carlijn Boot (606972)

Tilburg University Faculty of Law Department International and European Law Master International and European Public Law Tilburg, August 2012 1st Supervisor: W.N.A van Lit LLM 2nd Supervisor: mr. dr. H. Oosterom-Staples The Collision of the EU Legal Framework and FIFA/UEFA Regulations: A Sport Legislation and Fundamental Freedoms Perspective

CHAPTER 1 INTRODUCTION ...... 3 CHAPTER 2 ESTABLISHED EU LEGISLATION CONCERNING SPORT AND FUNDAMENTAL FREEDOMS ...... 7

2.1 PERIOD 1957 - 1997 ...... 8 2.2 FREEDOM OF MOVEMENT ...... 9 2.3 WALRAVE AND KOCH ...... 10 2.4 THE BOSMAN CASE ...... 12 2.5 PERIOD 1997 – 2009 ...... 14 2.6 DECLARATION ON SPORT 1997 AND 2000 ...... 14 2.7 THE MECA-MEDINA CASE ...... 17 2.8 THE WHITE PAPER ON SPORT ...... 18 2.9 PERIOD 2009 ONWARDS ...... 20 2.10 THE BERNARD CASE ...... 23 2.11 CONCLUSION ...... 25 CHAPTER 3 THE ‘EUROPEAN FOOTBALL MODEL’ ...... 27

3.1 THE FIFA AND THE UEFA...... 27 3.2 FIFA AND UEFA REGULATIONS AND EU INTERACTION ...... 29 3.3 THE BOSMAN CASE ...... 30 3.4 FIFA REGULATION FOR THE STATUS AND TRANSFER OF PLAYERS 2001 ...... 31 3.5 COURT OF ARBITRATION FOR SPORT ...... 32 3.6 THE SIMUTENKOV CASE ...... 34 3.7 THE HOMEGROWN RULE AND 6+5 RULE ...... 35 3.8 FIFA REGULATION FOR THE STATUS AND TRANSFER OF PLAYERS 2010 ...... 36 2.9 CONCLUSION ...... 37 CHAPTER 4 THE COLLUSION AND FRICTIONS BETWEEN THE FIFA/UEFA REGULATIONS AND EU LEGISLATION ...... 39

4.1 ‘WHEELING AND DEALING’ OF MINORS ...... 39 4.2 LOOPHOLES IN THE FIFA REGULATIONS ...... 40 4.3 SOLUTIONS? ...... 42 4.4 THE HOMEGROWN RULE AND 6+5 RULE CRITICS ...... 43 4.5 JUSTIFICATIONS FOR THE 6+5 RULE ...... 46 CHAPTER 5 CONCLUSION AND RECOMMENDATIONS ...... 49

5.1 RECOMMENDATIONS ...... 50 BIBLIOGRAPHY ...... 55

BOOKS AND ARTICLES ...... 55 OTHER SOURCES ...... 59 JURISDICTION ...... 62 LIST OF ABBREVIATIONS ...... 63

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Chapter 1 Introduction Things are neither clear nor clean in the world of football right now and many people recognise this reality ∼ Diego Maradona

From the mid seventies there have been several cases concerning the legal position of sports players within the European Union (EU). In particular football players and their transfer and fundamental freedoms have been subject of discussion. In first instance, the position of these football players is regulated by the two most important bodies in the European football industry: the Fédération Internationale de Football Association (FIFA) and the Union of European Football Associations (UEFA). These bodies collaborate in establishing a framework of regulations applicable to the football players and clubs in Europe. Some judges argue, however, that these bodies establish regulations that restrict the free movement of football players and thereby infringe EU law. The EU is the second body controlling the football scene. When two powerful organisations as the FIFA and UEFA, on the one hand, and the EU, on the other, try to control the same field it seems inevitable, that this will collide. The case of Walrave and Koch, made clear that sports rules are subject to EU legislation as long as it constitutes an economic activity, (later confirmed in the Meca-Medina case1), and opened a Pandora’s box with potential conflicts between the EU and FIFA/UEFA legislation.2

The first important football case which made use of these earlier judgments is Bosman.3 The European Court of Justice’s judgement (further: The Court) in this case states that transfer fee rules, albeit non-discriminatory, ‘directly affect players’ access to the employment market in other member states and therefore constitute an unjustified obstacle to the freedom of movement of workers. UEFA and FIFA have been trying to get around EU antidiscrimination law ever since, with the ‘6+5 rule’ as FIFA’s most recent attempt.4 This rule implies that at the beginning of each match, each club must field at least six players eligible to play for the national team of the country of the club.5 Although FIFA has been careful to draft the 6+5 rule without reference to the nationality of the players, it is still an ongoing discussion

1 CFI 30 September 2004, case T-313/02, Meca-Medina v. Commission, [2004] ECR II-3291, paragraph 42; ECJ 18 July 2006, case C-519/04 Meca-Medina v. Commission, [2006] ECR I-6991, paragraph 31. 2 ECJ 12 December 1974, case 36/74, Walrave & Koch v. Association Union Cycliste Internationale, [1974] ECR 1405, paragraph 9. 3 ECJ 15 December 1995, case 415/93, Bosman, [1995] ECR I-4921, paragraph 103. 4 L.V. Briggs, ’UEFA v The European Community: Attempts of the governing body of European soccer to circumvent EU freedom of movement and antidiscrimination labour law’, Chicago Journal of international Law 2005-6, p.448. 5 FIFA, FIFA, Yes in principle to 6+5 rule, 5 February 2008, www.fifa.com/aboutfifa/organisation/bodies/news/newsid=684707/index.html. 3 whether or not it will be interpreted by the Court as being a form of indirect discrimination or obstacle hampering the exercise of free movement rights. Another aspect of the FIFA football regulations are the loopholes used by players, clubs and agents to achieve goals. These goals may include attracting and sign new players, conclude transfers and obtaining young players. The use of these loopholes is often at the expense of minors, as they are not included in the regulations provided by FIFA and UEFA.

The examples mentioned above indicate that there are infringements of EU law, or at least some tensions and problems between the regulations of the FIFA and UEFA and EU law. It is therefore, important to concretise and define these frictions and problems and investigate possible solutions. The position of the FIFA and UEFA towards the incorporation of sport into the EU legal framework also needs to be critically examined. The football organisations argue that sport should be given a special place within the EU legal order.6 Hence, they claim an autonomous position within that framework. This way they can establish their own rules without taking into account EU law, in particular the free movement rules. Since the ruling in Walrave and Koch and Meca-Medina, the EU is expanding its influence on sport by establishing a White Paper on Sport and their recent introduced article concerning sport in the Lisbon Treaty.7

The main research question of this thesis is; where do the EU legal framework and FIFA/UEFA collide, regarding sport legislation and fundamental freedoms? The aim is to investigate how the FIFA and UEFA incorporate EU legislation (with a special focus on sports law and fundamental freedoms) into their policy and define the current problems between the two fields of legislation. Recommendations which could diminish ongoing and potential frictions between the FIFA and UEFA and the EU will furthermore be formulated. Each chapter will lead a step closer to the conclusion in which the main research question will be answered. Eventually this thesis will give an insight of the degree of EU intervention in the regulations of the FIFA and UEFA and where the two legal orders collide. It will describe the key factors in the past and the recent developments and integration of sport into the framework of the EU. As it is not possible or relevant to investigate all the legislation produced by the EU and the football federations, a selection of regulations is made. This

6 FIFA, FIFA and UEFA stress the Vital Importance of Football Autonomy, 26 October 2006, www.fifa.com/aboutfifa/organisation/news/newsid=106979/index.html. 7 CFI 30 September 2004, case T-313/02, Meca-Medina v. Commission, [2004] ECR II-3291.; ECJ 18 July 2006, case C-519/04 Meca-Medina v. Commission, [2006] ECR I-6991.

4 selection is based on the impact they have had on each other’s regulations. A regulation can be valued as having an impact, when future regulations are adjusted in order to stay aligned with this regulation. A regulation is also selected, when it is the core of a dispute in the case law concerning a sports issue. This case law gives an illustration on how regulations are weighted against each other, in other words, how regulations impact on each other’s substance. When legislation has a value in its own right, however, it will also be discussed, for example the introduction of sport into the legal framework of the EU.

With a desk study relevant data will be collected, which is needed to give an overview of the current FIFA and UEFA regulations and relevant EU legislation. Examples of regulations on the part of the EU that should be taken into account are, for example, the White Paper on Sport introduced in 2007 and the new article on sport introduced by the Lisbon Treaty. 8 But also the 1997 Declaration on Sport is included as it was the first time sport was addressed within the legal framework of the EU. Other important articles of the Treaty on the Functioning of the European Union (further TFEU) are the free movement articles that contain the right to move and work freely through the EU, Articles 45-56 TFEU. Besides the laws of the EU also the rules governed by the FIFA and the UEFA will be taken into account. The regulation on the status and transfer of players is given special attention as it contains the policy and most important rules of the football world. Ideas developed by the FIFA an UEFA will also be looked into, because they can be relevant to discuss the potential problems they can create, such as the ‘the 6+5 rule’ designed by the FIFA. How these two worlds collide is best illustrated by case law. The focus will be on the football cases, but general sports cases, which have had great influence because of their important judgement, will also be discussed as it will provide a good illustration of the development of sport in general in the EU jurisdiction. The relevant case law will give an insight in how the rules established by the FIFA and UEFA work in practice and what kind of problems football players/clubs encounter. Besides discussing recent football cases, like Bernard, potential frictions between EU and FIFA/UEFA will also be given attention. Other relevant data will be extracted from the literature in which new ideas and perspectives are put forward by their authors which will provide the knowledge to develop an objective perspective on this field of law. All this information will be presented in chronological order.

8 European Commission, Commission of the European Communities White Paper on Sport, 11 July 2007 (COM(2007) 391), www.ec.europa.eu/sport/documents/wp_on_sport_en.pdf. 5

In the first part, the way in which sport has evolved under the European Treaty and its current position will be described. A general overview of the most important regulations introduced by the EU will be given, but, as mentioned earlier, recent developments will also be discussed. This historic overview will be divided in three parts, each featuring its own important developments. Besides this, it will be pointed out how the laws are reflected in the relevant case law and how, in turn, they influence the development of the European laws. In the next part the focus will be on the world of football and will, therefore, contain a description of its most important bodies. As the focus will be on Europe, only the UEFA and FIFA will be included, as they are the most important governing bodies of football in Europe. The regulations and ideas introduced by these bodies will be discussed and just as in the first part, this will be done in a chronologic order. In the third part I will point out the problems that occur between the two parties. The way in which the two frameworks collide will be revealed through practical examples. The focus will be on recent and potential problems, but important cases of the past will also be discussed

In the final section of this thesis a conclusion is formulated which is drawn from the foregoing chapters, answering the main research question. This last section will also consist of recommendations towards the UEFA and FIFA, as well as the EU. These recommendations may help to overcome the frictions and loopholes in the system established through this research. Though, based on the findings of the present thesis, they should not be taken as conclusive as the scope of this thesis was not to consider the implementation of these solutions in a broader framework. The recommendations should be viewed as suggestions and not as fully developed and devised solutions.

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Chapter 2 Established EU legislation concerning sport and fundamental freedoms A question frequently asked is whether sport should be exempted from the legal framework of the EU. 9 The EU pursues an economic common market, while sports organisations are pursuing more social and cultural goals.10 Until the recent Lisbon Treaty, the EU had no written legal basis in the treaties, to deal with sport issues. The European Court of Justice, however, did attempt to include sport into the legal framework of the EU. Therefore, the EU could only derive their competence, to deal with sport issues, from the established case law. For example, the Court ruled in Walrave and Koch that sports are only subject to EU laws if the rules are applied to situations in which sport is an economic activity.11 In other words, European law only applies to sport when it concerns an ‘economic activity’ within the meaning of Art. 2 TFEU. Another point the Court made in Walrave is that EU law does not apply to rules governing the composition of national sports teams. The Court has confirmed this position in other cases, for example Meca-Medina case. Although these cases do not concern football, they set standards and norms for sport in general, including football. Whenever a football case is pending before the courts, rulings of general sports cases can be held applicable on the football situation.

As mentioned, until recently sport has not been delegated to the EU, which illustrates the lack of competence at EU level regarding sport in the past. 12 Therefore, sport has been mostly regulated by the Member States themselves. National competition law, for example, applies to the national federation or league and national labour law applies when a contract is concluded between the professional football-player and the club as employer. When disputes emerge, national courts are – on the basis of national law – entitled to decide in a case between various stakeholders in the area of football. Football organisations are, to a large extent, free to

9 R. Siekmann, ‘Is sport “special” in EU law and policy’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 37-38. 10 R. Blanpain, ‘The future of sports in Europe’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 2. 11 ECJ 12 December 1974, case 36/74 Walrave & Koch v. Association Union Cycliste Internationale, [1974] ECR 1405, paragraph 9. 12 M. Whatelet, ‘Sport governance and EU legal order. Present and future’, The International Sports Law Journal 2007-3/4, p. 1. 7 organise themselves, but like every other citizen or company, they have to respect fundamental human rights, public order and mandatory law.13

The EU made some attempts in the past to include sport into their legal framework. In the next chapter, these attempts will be discussed. European regulation of sport can be roughly divided in three time periods, each of which illustrates a different regulatory tactic, from non- intervention to including a provision on sport in the Lisbon Treaty.14 Each period will be treated by discussing the most relevant regulations concerning sport introduced in that period at the EU level. The way in which the relevant EU regulations are reflected in the case law will also be included. Using this approach, an overview regarding the established laws and regulations regarding sport in the EU will be provided.

2.1 Period 1957 - 1997 There was a long period with little intervention that lasted until the famous Bosman judgement handed down by the Court in 1995.15 The first judicial decisions on sport (Walrave and Koch) pointed out that the Treaty of Rome was only applicable when the sports issue concerned, was an economic activity. This suggests that sports activities were not necessarily covered by EU law. The European Commission intervened very little in sport in this period; it only regulated the sale of package tours linked to the purchase of tickets for the 1990 FIFA World Cup in Italy.16 The Council adopted a European Sports Charter in 1976, which was revised twice. The first time was in 1992 and the second in 2001. The European Sports Charter, however, only contains vague aspirations about co-operative measures.17 In Article 1, for example, it declared that every individual shall have the right to participate in sport. It is, however, not mentioned how they want to bring this into practice. Overall, the EU regulated on a minimum basis with little desire to expand their powers into the field of sport.

13 R. Blanpain, ‘The future of sports in Europe’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 8. 14 K. Foster, ‘Can sport be regulated by Europe. An analysis of alternative models’, in: A. Caiger & S. Gardiner (red.), Professional sport in the EU. Regulation and re-regulation, Den Haag: T.M.C. Asser Press 2000, p. 44. 15 K. Foster, ‘Can sport be regulated by Europe. An analysis of alternative models’, in: A. Caiger & S. Gardiner (red.), Professional sport in the EU. Regulation and re-regulation, Den Haag: T.M.C. Asser Press 2000, p. 44. 16 K. Foster, ‘Can sport be regulated by Europe. An analysis of alternative models’, in: A. Caiger & S. Gardiner (red.), Professional sport in the EU. Regulation and re-regulation, Den Haag: T.M.C. Asser Press 2000, p. 44 17 Council of Europe, European Sports Charter adopted by the Council on 24th September 1976 and revised in 1992 and 2001, www.wcd.coe.int/ViewDoc.jsp?Ref=Rec(92)13&Sector=secCM&Language=lanEnglish&Ver=rev&BackColorI nternet=9999CC&BackColorIntranet=FFBB55&BackColorLogged=FFAC75. 8

2.2 Freedom of movement This attitude towards regulating sport can be explained by EU’s focus in this first period. At the time of the signing of the EEC Treaty in 1957, the EU had to handle more significant issues than the regulation of sport.18 It wanted to create a single market and, therefore, the EU was focussed on achieving economic goals and competition law. To ensure that these goals were accomplished, the EEC-Treaty provided four fundamental freedoms, known as the ‘EU’s four freedoms’. One of these four freedoms is the free movement of workers, nowadays codified in Article 45 TFEU (ex Arts. 39 EC and 48 EEC). This article entails the ‘abolition of any discrimination based on nationality between workers of the member states as regards employment’. Article 45 TFEU does not only forbid direct discrimination on nationality, but also indirect discrimination and obstacles impeding the exercise of the right to free movement. Direct discrimination consists of a rule that explicitly makes nationality the relevant basis for the rule. Indirect discrimination means that it is a rule which disadvantages foreign nationals, but falls short of direct discrimination. Any rule that can be shown to likely have a greater impact on foreign nationals can constitute indirect discrimination e.g. nationality quotas.19 The only grounds for exceptions in cases of direct discrimination are those listed in article 45(3), public policy, public security and public health. Indirectly discriminatory measures must, in order to be compatible with EU law, be necessary and proportionate to the achievement of their legitimate objective. 20 In football, regulations including nationality quotas can be found directly or indirectly discriminating.

Provisions such as transfer rules which, even if applied without regard to nationality, restrict the freedom of movement of sportspeople who wish to pursue their activity in another Member State constitute obstacles to free movement.21 Such obstacles can be accepted if they pursue a legitimate aim compatible with the Treaty and is justified by overriding reasons in the public interest. Even if that were so, application of this obstacle has achieve the objective in question and not go beyond what is necessary for that purpose. Third country nationals, who are covered under Association or Cooperation Agreements with the EU, enjoy the same anti-discrimination protection as EU citizens, but only when they are legally employed in the territory of a Member State. However, national sport associations did not always adjust their

18 D. Schmidt, The effects of the Bosman-case on the professional football leagues with special regard to the top- five leagues (bachelor thesis University of Twente), 2007, p. 11. 19 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 279. 20 M. Colucci, ‘Freedom of Movement’, (Unpublished chapter), p. 21. 21 M. Colucci, ‘Freedom of Movement’, (Unpublished chapter), p. 22. 9 regulations accordingly. This point will be later on in this thesis discussed in detail as it was core of a dispute. Although, 55 years have passed since the freedom of movement has been created, the content stayed the same in all these years. Only the numbering of this article has often been changed. Sport, and in particular football, has collided with the freedom of movement in numerous cases. One can even say it has been the area of EU law which has had the most substantial impact on sport. It is this article, which draws sport eventually into the legal framework of the EU, as it was an article that often collided with sport regulations.22

2.3 Walrave and Koch The tension between the freedom of movement and sport is illustrated by the case Walrave and Koch, also known as Walrave v. Association Union Cycliste Internationale. It was the first case in which the ECJ had to rule on a sport issue. It had to establish whether and to what extent sporting activities are subject to EU law, in particular 45 TFEU.23 Walrave and Koch were two professional athletes in the sport of motor-paced racing, which stated that the rules of the sport they were practicing were infringing Article 48 EEC (Art. 45 TFEU).24 Motor- paced racing is performed by teams of two persons, ‘the biker’ and ‘the pacemaker’. The role of the pacemaker is to drive on a motorbike in front of the biker and adjust the speed to the need of the latter.25 The rules required that both the pacemaker and the biker had the same nationality. Walrave and Koch were exceptional pacemakers, but they complained that they could not find partners from their nations that were able to do the biking part. They argued that this sport provided there income and therefore they should be free to work with whomever they want. They took the case to the ECJ, which outlawed the rule prohibiting a working co-operation between partners of different nations.

In 1974, the ECJ ruled that when athletes’ activities have the character of gainful employment or are a remunerated service, they come within the scope of Articles 48 to 51 EEC (currently Articles 45 to 48 TFEU).26 The Court continued by stating that the practice of sport is subject to EU law ‘only in so far as it constitutes an economic activity within the meaning of art 2 of

22 R. Parrish, ‘Football’s place in the single European market’, Soccer and Society 2002, p.1. 23 M. Colucci, ‘Freedom of Movement’, (Unpublished chapter), p. 3. 24 D. Schmidt, The effects of the Bosman-case on the professional football leagues with special regard to the top- five leagues (bachelor thesis University of Twente), 2007, p. 11-12. 25 D. Schmidt, The effects of the Bosman-case on the professional football leagues with special regard to the top- five leagues (bachelor thesis University of Twente), 2007, p. 12. 26 ECJ 12 December 1974, case 36/74 Walrave & Koch v. Association Union Cycliste Internationale, [1974] ECR 1405, paragraph 5. 10 the Treaty’.27 Exemptions are acceptable to the extent that they are based on the particular nature and context of the relevant activities.28 Activities which are of sporting interest only, and therefore are not of an economic nature, are not subject to EU law.29 Such activities are, for example, the selection of athletes for a national team, the need to limit a number of participants in a competition, and the setting of deadlines for transfers of players in team sport.30 The case of Walrave and Koch was withdrawn at the last minute and the ECJ was not able to enforce a final judgement.31 Luckily for Walrave and Koch the rules were changed, and from that point on they were able to choose the biker they wanted without having to take into account the nationality. Even though the case was withdrawn, it still had a big impact in Europe as this partial ruling illustrates that sport might equate to an economic enterprise that falls under the umbrella of the EU legal framework.32 Furthermore, the judgement made clear that rules on the formation of sports teams can be considered as purely sporting rules and, therefore, not subject to the legal framework of the EU. It suggests that sport has some peculiarities and that pure sporting rules could be subject to a ‘sporting exception’.33 The precise scope of this ‘sporting exception’ was not, however, made clear, and so the Court left open the task to define the exact borders of this exception. On a case-by-case basis the ECJ tries to identify purely sporting rules, which are not subject to the EU legal framework.

The importance of Walrave and Koch is that it is the first case in history where the European Court of Justice decided on a sports matter.34 Hereafter, the social dialogue between the EU and sports organisations intensified. For example, the EU and UEFA began their dialogue in 1978 which culminated in the 1991 ‘gentleman’s agreement’.35 This document is only one

27 ECJ 12 December 1974, case 36/74 Walrave & Koch v. Association Union Cycliste Internationale, [1974] ECR 1405, paragraph 4. 28 D.G. Dmitrakopoulos, ‘More than a market. The regulation of sport in the European Union’, Government and Opposition 2006, p. 567. 29 ECJ 12 December 1974, case 36/74 Walrave & Koch v. Association Union Cycliste Internationale, [1974} ECR 1405, paragraph 4-7. 30 D.D. Orlando, ’6+5 = Discrimination? Why FIFA’s proposed quota rule doesn’t add up’, Penn State Law Review 2011-115, p.756. 31 D. Schmidt, The effects of the Bosman-case on the professional football leagues with special regard to the top- five leagues (bachelor thesis University of Twente), 2007, p. 12. 32 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 274. 33 A. Vermeersch, ‘All’s fair in sport and competition. The application of EC competition rules to sport’, Journal of Contemporary European Research 2007, p. 239. 34 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 274. 35 R. Parrish, ‘Reconciling conflicting approaches to sport in the European Union’, in: A. Caiger & S. Gardiner (red.), Professional sport in the EU. Regulation and re-regulation, Den Haag: T.M.C. Asser Press 2000, p. 28. 11 page long and introduced the ‘3+2 rule’. This rule requires national associations to limit the number of foreign players on a club during match to three.36 The gentlemen’s agreement contains also some guidelines on transfer compensation. Although it is a non-binding document between the European Commission and the UEFA, Bosman challenged it before the Court. This part of the Bosman case will be discussed in chapter 2. The gentlemen’s agreement was made and framed the position of the EU at a time when sport was barely practised as a significant economic activity, compared to the current economic relevance and practice. The rapid commercialisation of sport and the ruling in Bosman altered the EU’s position.

The Bosman case also marks the end of the first period. This case had different aspects, in this part the focus will be on the matter concerning the free movement of workers. This is another case illustrating how the freedom of movement article drove sport into the legal framework of the EU. Later on in this paper, the second aspect of the Bosman case will be discussed, which concerns the successful challenge of the 3+2 rule by Bosman.

2.4 The Bosman case The full name of the case is Union Royale Belge des Sociétés de Football Association ASBL v. Jean-Marc Bosman and was brought before the ECJ in the year 1995. Jean-Marc Bosman was a player at the Belgian football club RC Liège. His contract at Liège expired in June 1990 so he entered into an agreement with the French football club Dunkerque, to play for them after his contract ended in Liège. However, the transfer did not take effect because the Belgian football association, at the request of RC Liège, did not issue the mandatory transfer certificate necessary to complete the move. The result was that Bosman could not make his move to Dunkerque even though his contract expired in June 1990. In addition, the Belgian club suspended Bosman, thereby preventing him from playing for the entire season. Bosman took the Belgian club to the Belgian court, which subsequently asked the ECJ to interpret Article 48 of the Treaty of Rome (Article 45 TFEU) in relation to the regulations governing the transfer of professional footballers. The ECJ ruled that FIFA regulations on players’ transfers were in breach of Article 48 EEC, as they prevented players from joining another club even if their contracts had expired.

The judgement in the Bosman case marks the start of the second phase in which the EU got more involved in sport by introducing and referring several times to the social importance of

36 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 545. 12 sport. The Bosman case was a landmark ruling and had several effects in the world of football as players whose contracts ended at a club, could now make a free transfer to a new club. The case reaffirmed once more that sports related matters could fall under the European legal framework. Also on the side of football organisations, the judgement had its impact. After Bosman, the FIFA was forced to draft a new transfer system which was given informal support by the European Commission in 2001.37 The main adjustment of the new transfer system concern a limitation of only one move per season in two designated transfer windows, a between seasons and a mid season, to replace injured players or for technical reasons. The free transfer at the end of a season after the contract time has terminated, following Bosman, has also been incorporated into the 2001 transfer system.38 Although the FIFA accepted the decision of Bosman, the first reactions were not very positive. They stated that this decision ‘was taken by people that do not know anything about football’.39 They even accused the EU of ‘trying to destroy club football’.40 Critics saw in this ruling the destruction of football. They argued that the ruling would lead to an increase in salaries for players, since clubs could offer in salary what they no longer had to put into the transfer fee and it would remove any incentive to invest in the development of young players.41

Although there was a fear for the huge consequences this case could have, 17 years later it can be concluded that this was a little exaggerated. That players could now make a free transfer after their professional contract expired, off course, had its influence. But instead of a rise in the salary of transfer free players, the judgement has led to a dramatic rise in the transfer fees of those players to whom a fee can still be attached, and in the salaries of star players.42 Furthermore, nothing seems to indicate that the Bosman ruling has had a negative impact on the development of young players. Traditionally, smaller clubs are specialised in training young players as their financial survival depends on the transfer fees they receive for these players when they are sold to bigger clubs. After the Bosman judgment, one expected that

37 B. Garcia, ‘The 2001 Informal Agreement on the International Transfer System’, European Sports law and Policy Bulletin 2011, p. 17. 38 ECJ 15 December 1995, case 415/93, Bosman, [1995] ECR I-4921, paragraph 14. 39 Gerhard Aigner, then UEFA General Secretary quoted in El País, ‘La UE tomará los cuartos de final como prueba en la sentencia Bosman’, 19 January 1996. 40 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 207. 41 O. Croci, ‘Taking the field. The EU and the governance of European football’, In I. Tömmel & A. Verdun (red.), Innovative governance in the European Union: The politics of multilevel policymaking, Boulder: Lynne Rienner 2009, p. 147. 42 O. Croci, ‘Taking the field. The EU and the governance of European football’, In I. Tömmel & A. Verdun (red.), Innovative governance in the European Union: The politics of multilevel policymaking, Boulder: Lynne Rienner 2009, p. 148. 13 smaller clubs would stop investing in youth development if bigger clubs could cherry-pick their crop later without having to pay a transfer fee. This, however, did not happen. Though, when there are debates on these topics, in a negative context, the Bosman ruling will undoubtedly be an easy target.43

2.5 Period 1997 – 2009 The case of Jean-Marc Bosman made visible the tensions between the UEFA/FIFA regulations and the European legal framework regarding sport that was subsequently given a place on the European institutions’ agenda. For the first time Europe began to take the concept and ‘industry’ of sport serious by creating a Declaration on Sport and eventually even a White Paper on Sport.44 In this second period, the ECJ, was given a chance to define ‘purely sporting rules’ but unfortunately its judgement brought only more confusion. This period ended when the Lisbon Treaty came into force, which introduced an article on sport, and made any intervention of the EU in sport legally enforceable.

2.6 Declaration on Sport 1997 and 2000 The second period had already begun to develop during the end of the first period. Throughout the 1990s, the European Commission received a significant number of complaints regarding the transfer system established by FIFA.45 At the same time the EU was seeking to give the socio-cultural and integrationist qualities of sport a higher priority.46 This was done by drafting a Declaration on Sport annexed to the Treaty of Amsterdam, signed in 1997. This Treaty launched the second regulatory environment in which sport has operated.47 What made this declaration special is that for the first time since the establishment of the EU, sport was mentioned in a document related to an EU Treaty as it is annexed to the Amsterdam Treaty. It emphasizes the social significance of sport, especially its capacity to bring people of different nationalities together. The EU institutions are therefore called on to listen to sporting

43 O. Croci, ‘Taking the field. The EU and the governance of European football’, In I. Tömmel & A. Verdun (red.), Innovative governance in the European Union: The politics of multilevel policymaking, Boulder: Lynne Rienner 2009, p. 148. 44Treaty of Nice: Declaration on Sport, December 2010, www.europarl.europa.eu/summits/nice2_en.htm#an4. And European Commission, Commission of the European Communities White Paper on Sport, 11 July 2007 (COM(2007) 391), www.ec.europa.eu/sport/documents/wp_on_sport_en.pdf. 45 D.G. Dmitrakopoulos, ‘More than a market. The regulation of sport in the European Union’, Government and Opposition 2006, p. 566. 46 R. Parrish, ‘The politics of sports regulation in the European Union’, Journal of European Public Policy 2003, p. 250. 47 R. Parrish, ‘Football’s place in the single European market’, Soccer and Society 2002, p.2. 14 associations when important questions affecting sport are at stake. 48 Also, through this declaration Member States were able to give the EU institutions some political guidance on how sports regulations should develop.49 Although this declaration had no legal force, it was a step forward in trying to introduce sport in the legal framework of the EU. The message the EU was trying to convene by drafting this declaration was that the EU institutions were expected to take into account the ‘social significance of sport when they deal with issues affecting sport’.50 The UEFA criticised the EU by pleading for a new, general protocol on sport after the introduction of the 1997 Declaration on Sport. They criticised its limited scope and legal nature. This criticism had no effect, because the Helsinki Report on Sport in 199951 furthered this ‘social role of sport’ approach together with a limited scope.52 The Helsinki Report on Sport was a Report from the European Commission to the European Council ‘with a view to safeguarding current sports structures and maintaining the social function of sport within the EU framework’. It tried to reconcile the preservation of sporting rules with the legal framework of the EU.53

Three years later, in Nice, a new Declaration on Sport was adopted, which was based on the above-mentioned Helsinki Report on Sport. This declaration aimed at supporting the preservation and promotion of the social functions of sport and noted the specific characteristics of sport. Although the EU had recognized the important function of sport, the problems at the border of the framework of the EU and football organisations had not been addressed. Both the EU and the football organisations maintained their opposing views on how these problems should be faced. There have been some initiatives by Member States to set up an ‘independent European Sport Review’ with a focus on European football, to investigate problems, faced by the EU and its Member States.54 Others state that the overall aim of the review was, ‘to produce a report, independent of the football authorities, but

48 R. Siekmann, ‘Is sport “special” in EU law and policy’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 38. 49 R. Parrish, ‘Football’s place in the single European market’, Soccer and Society 2002, p.2. 50 D.G. Dmitrakopoulos, ‘More than a market. The regulation of sport in the European Union’, Government and Opposition 2006, p. 567. 51European Commission, Report from the commission to the European council with a view to safeguarding current sports structures and maintaining the social function of sport within the Community framework, Brussels 12 December 1999: (COM(1999) 0644), www.eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:1999:0644:FIN:EN:PDF. 52 K. Foster, ‘Can sport be regulated by Europe. An analysis of alternative models’, in: A. Caiger & S. Gardiner (red.), Professional sport in the EU. Regulation and re-regulation, Den Haag: T.M.C. Asser Press 2000, p. 45. 53 T. Gabris, Behaviour clauses in sports: Basic rights of sportsmen (master thesis Tilburg University), 2010, p.14. 54 J.L. Arnout, Indepedent Sport Review 2006, p. 9, www.media2.pixelpoint.at/ppm_3dak_publicsport/~M0/241.3dak.pdf. 15 commissioned by UEFA, on how the European football authorities, EU institutions and Member States can best implement the Nice Declarations on European and national level’.55

The Nice Declaration, adopted by the European Council in 2000, set out a number of specific characteristics of sport that are considered to be of value and importance to the European society.56 As mentioned earlier, this declaration was based on the so-called Helsinki Report on Sport (1999), which concerned the safeguarding of current sports structures and maintaining the social function of sport within the EU framework.57 One very remarkable part in the declaration is where it states that ‘although the EC Treaty contains no specific provisions on sport, the EU must nevertheless ensure that the initiatives taken by the national authorities or sporting organisations comply with EU law, including competition law, and respect in particular the principles of the internal market (the four freedoms)’. In other words, as long as sport constitutes an economic activity, it is subjected to the rules of the EU. The EU has to take into account the specific characteristics of sport when applying these rules. This could imply that in principle exemptions from EU law are possible. There are certain rules without which a club cannot exist or rules that are necessary for the organisation of the sport which are beyond competition law.58 These rules could be exempted from applying EU law as long as they are objectively justified, non-discriminatory, necessary and proportionate. Just like the 1997 Declaration on Sport, the Nice Declaration is not legally binding and only offers indications on how to deal with certain issues.

By introducing the Declaration on Sport in 1997 and 2000, the EU tries to intervene in the sports sector. Both declarations are important policy statements made by the Heads of States and governments of the EU Member States, as they form the European Council which adopts these documents. This way the EU tries to ensure that football stakeholders respect the freedom of movement and workers are not crossing any other ‘border’ set by the EU. Interesting to observe is that the argument of the social significance of sport made by the Court has been codified by the EU in the Declarations on Sport. It looks like the declarations

55 B. Garcia, ‘The independent sport review: Half full or half empty’, Entertainment and Sports Law Journal 2007, p. 1. 56 Treaty of Nice: Declaration on Sport, December 2010, www.europarl.europa.eu/summits/nice2_en.htm#an4. 57European Commission, Report from the commission to the European council with a view to safeguarding current sports structures and maintaining the social function of sport within the Community framework, Brussels 12 December 1999: (COM(1999) 0644), www.eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:1999:0644:FIN:EN:PDF. 58 M. Colucci, ‘Sport in the EU Treaty: In the name of specificity and autonomy’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 41. 16 on this point have ‘codified’ the case law. The Court was not influenced by the declarations, but the declarations were ‘dictated’ by the Court’s case law. The social significance of sport was, for example, made by the Bosman case which took place before the entering into force of both declarations.59

2.7 The Meca-Medina case Another way to illustrate the growing number of interventions of the EU in the second period, are the numerous judgements and decisions, which will be discussed in the following part.60 The first noticeable case after both declarations were published is the Meca-Medina case in 2006. In this case the European Court of Justice recognized an exception applicable to rules that are ‘inherent’ to a sport.61 The Meca-Medina case offered the ECJ a good opportunity to further develop and describe the ‘specific sporting rules’ that fall outside the EC Treaty and, in doing so, give sports governing bodies a better understanding of the kind of rules and practices they could apply without fearing a successful challenge under EU law. The ECJ decided in this case that even if a rule is purely of a sporting nature, and has nothing to do with an economic activity, this does not mean that the activity governed by that rule or the body which issues them are not governed by the EC-Treaty. The Court ruled that ‘it is to be remembered that, having regard to the objectives of the EU, sport is subject to EU law in so far as it constitutes an economic activity within the meaning of Article 2 EC’ (Art. 2 TEU).62 The Court, however, did not take the opportunity to provide a better clarification of the scope of ‘specific sporting rules’. Some authors argue that by not clarifying the scope of ‘specific sporting rules‘ the Court has opened a ‘Pandora’s box’ of potential legal situations in the field of sport that can be considered as violating EU law.63 In Meca-Medina no explicit reference was made to the Declaration on Sport. A possible explanation offered by Colluci, is that in this case the Court rejected the traditional concept of the ‘sporting exception’. 64 If this analysis would be correct, the references to the Sport Declarations in the Court’s previous sports jurisprudence are now part of history. This may be a rash conclusion, as it is a natural

59 ECJ 15 December 1995, case 415/93, Bosman, [1995] ECR I-4921, paragraph 106. 60 M. Whatelet, ‘Sport governance and EU legal order. Present and future’, The International Sports Law Journal 2007-3/4, p. 2. 61 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 275. 62CFI 30 September 2004, case T-313/02, Meca-Medina v. Commission, [2004] ECR II-3291, paragraph 42; ECJ 18 July 2006, case C-519/04 Meca-Medina v. Commission, [2006] ECR I-6991, paragraph 31. 63 M. Colucci, ‘Freedom of Movement’, (Unpublished chapter), p. 3. 64 R. Siekmann, ‘Is sport “special” in EU law and policy’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 42. 17 occurring process that the Court redefines the concept of ‘sporting exception’. This does, however, not necessarily exclude future references to the traditional concept of the ’sporting exception’.

The Meca-Medina judgement can be seen as very interesting because the Court repeats its position established in Walrave and Koch.65 But the Court also holds that, ‘it is apparent that the mere fact that a rule is purely sporting in nature does not have the effect of removing from the scope of the Treaty the person engaging in the activity governed by that rule or the body which has laid it down’.66 This judgement makes it clear that even if a rule has a purely sporting interest, its operation can still be held subject to the EU Treaty. The traditional concept of ‘sporting exception’, in which EU law only applies to economic activities and not to rules of pure ‘sporting interest, has faded away. This judgement leaves a lot of room for interpretation about the Court’s view on sporting matters and as has been mentioned earlier, the Court did not clearly define the scope of ‘specific sporting rules’. Though, this case takes another step in defining and denominating the special character of sport and thereby creating a doctrine of specificity of sport.

2.8 The White Paper on Sport On 11 July 2007 the EU adopted a White Paper on Sport. 67 It was the result of numerous consultations with sport stakeholders and Member States on issues of common interest. This paper was a big step towards a comprehensive European sports policy.68 It emphasizes the societal and health-enhancing role of sport. Remarkable is that the White Paper contains an impact assessment that can be the basis on which the Commission would list the necessary conditions for the EU to take action in relation to sport. Other elements that can be found in the document are the reasons for drawing up the White Paper, the key problems sport is facing these days, and last but not least the present principle objectives.69 The first objective that can be found in the White Paper is to make the sport world more visible in the EU policy making,

65 F. Hendrickx, ‘Future directions of EU sports law’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 16. 66 CFI 30 September 2004, case T-313/02, Meca-Medina v. Commission, [2004] ECR II-3291; ECJ 18 July 2006, case C-519/04 Meca-Medina v. Commission, [2006] ECR I-6991, paragraph 27. 67 European Commission, Commission of the European Communities White Paper on Sport, 11 July 2007 (COM(2007) 391), www.ec.europa.eu/sport/documents/wp_on_sport_en.pdf. 68 P.V. Hernandez, ‘The European Commission’s White Paper on sport’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 78. 69 M. Colucci, ‘Sport in the EU Treaty: In the name of specificity and autonomy’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 26. 18 by illustrating the social and economic relevance of sport. A second objective is to better incorporate sport into existing and planned EU programmes and actions. Another objective is to investigate the possibility of financial support for sports-related projects (within EU financial instruments). Finally the Commission asks the Member States to intensify their cooperation on sport by establishing a common programme, common priorities, and transparent information for all European sports ministers. The European Commission also reaches out to the parties in the world of sport by encouraging them to create a social dialogue committee in the domain of sport.

This document voices the opinion of the European Commission that sport activities must comply with both fundamental rights guaranteed by the Treaty as well as EU competition laws. The European Commission, for the very first time, addresses and recognizes the specificity of sport by stating that ‘according to established ECJ case law, the specificity of sport will continue to be recognised, but it should not be interpreted in such a way that justifies a general derogation to the enforcement of EU law’.70 But according to this, it cannot be said that a purely sporting rule falls per definition outside the scope of the Treaty. Therefore, the FIFA and a lot of other sports organisations labelled it a ‘missed opportunity’ from the day it was published. This reaction could be taken as a consequence of the tense relation between the two.

The impact of the White Paper is that for the first time the European Commission addresses in depth the problems facing European sport. It was seen as an instrument to pave the way for the implementation of a future Treaty provision on sport. The Paper remained the basis for the European Commission’s involvement in the sports sector until the Lisbon Treaty was ratified.

As around up of this second period, it can be concluded that due to the fast development of sport and the commercialization that is inherent too it, it was inescapable that European law reached a bigger impact in the sport. First, with the Declarations on Sport in 1997 and 2000, and later with the White Paper on Sport. These documents recognise the social importance of sport and develop the dialogue with sports organisations. Furthermore, sports organisations should keep in mind that actions and practices performed under their legislation are subject to European Law, as long as it constitutes an economic activity. Although the case law and the Commission recognised this sporting exception, it does not mean that sport can be fully

70 European Commission, Commission of the European Communities White Paper on Sport, 11 July 2007 (COM(2007) 391), www.ec.europa.eu/sport/documents/wp_on_sport_en.pdf. 19 exempted from the enforcement of EU law. Both the Court of Justice, as well as the European Commission have emphasized this in the Courts verdict in Meca-Medina and the Commissions White Paper.

2.9 Period 2009 onwards The last phase started in 2009 when the Lisbon Treaty entered into force. Since the ratification of the Treaty of Lisbon, sport was, for the first time, part of the European Treaty.71 The inclusion of an article on sport, contributes to the idea that the EU is set to become more involved in other issues than only economic integration. It does not mean that sport is exempted from EU law, but rather that the uniqueness of sport will permit the continuing application of the analysis of sports rules as being either ‘purely sporting’ under EU law but with the potential to be objectively justified or prohibited by EU law.72 Article 165 is in Title XI of the TFEU, entitled Education, vocational training and youth and sport and the consolidated version of the article reads as it follows:

1. The Union shall contribute to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States for the content of teaching and the organisation of education systems and their cultural and linguistic diversity.

The Union shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures base on voluntary activity and its social and educational function.

2. Union Action shall be aimed at:

 Developing the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States,  Encouraging mobility of students and teachers, by encouraging inter alia, the academic recognition of diplomas and periods of study,  Promoting cooperation between education establishments,

71 F. Hendrickx, ‘Future directions of EU sports law’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 13. 72 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010 11(2), p. 292. 20

 Developing exchanges of information and experience on issues common to the education systems of the Member States,  Encouraging the development of youth exchanges and of exchanges of socio- educational instructors, and encouraging the participation of young people in democratic life in Europe,  Encouraging the development of distance education,  Developing the European dimension in sport, by promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports, and by protecting the physical and moral integrity of sportsmen and sportswomen, especially the youngest sportsmen and sportswomen.

3. The Community and the Member States shall foster cooperation with third countries and the competent international organisations in the field of education, in particular the Council of Europe.

4. In order to contribute to the achievement of the objectives referred to in this article:

 The European Parliament and the Council, acting accordance with the ordinary legislative procedure, after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt incentive measures, excluding any harmonisation of the laws and regulations of the Member States,  The Council, on a proposal from the Commission, shall adopt recommendations.

What impact this provision will have on the sports organisations and the Member States is best illustrated by explaining the nature, objective and scope of this article. Its nature is found in Article 6 TFEU.73 This article reads that ‘the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the member states’. One of the areas listed in this provision is sport. Though this wording indicates that the EU can regulate sport, for example football, the sports article itself excludes ‘any harmonisation’, so even partial harmonisation is prohibited.

Turning to the objectives and scope of the new article on sport, they can be found in the wording of the article itself. One objective that can be found is ‘the promotion of European sporting issues’. Under sub 2 you can find all the reasons of the EU to draft this article and

73 F. Hendrickx, ‘Future directions of EU sports law’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 14. 21 what action they aim at. There is one remarkable thing about the wording of the objective. When drafting the Lisbon Treaty, the legislator chose to use broad wording to describe its objectives, for instance ‘European sporting issues’ and ‘European Dimensions’.74 This way the EU is able to cover a wide range of actions under this article, because there is room to manoeuvre.

In order to contribute to the achievement of the objectives referred to in the sports article, the new article mentions two kinds of measures, incentive measures and recommendations.75 Though it is not exactly clear what is meant by ‘incentive measures’, as this concept refers to the purpose of measures to be taken rather than the legal instrument to be chosen, it is indicated that incentive measures cannot oblige Member States to harmonise their laws. But, in principle, these measures do not exclude certain forms of regulation and could, therefore, be restrained by legally binding acts. The article has been drafted in a very broad way which can cover a wide range of issues. It allows for a development of a direct supportive and complementary policy in the field of sport.76 The new competence of the EU on sport allows the EU to finance sport directly without having to justify this action by referring to other Treaty competencies. Overall, the inclusion of this article in the Lisbon Treaty can be seen as an attempt to clarify the relationship between the EU and sport.

Another innovation brought by the implementation of Article 165 TFEU in the EU legal framework is that Member States are competent to adopt a more formal and coherent approach to sport. Until the entry into force of Article 165 TFEU, Member States often cooperated in the field of sports at an informal level. This consisted of informal meetings of EU sports ministers and EU sports directors on certain themes. What has also been suggested, is that this new article on sport in the Lisbon Treaty would preserve the ‘autonomy of sport and the specific nature of sport’. However it remains to be seen how the European Court will apply this Treaty provision and if it will fundamentally change the Courts view on sports issues.

74 F. Hendrickx, ‘Future directions of EU sports law’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 15. 75 F. Hendrickx, ‘Future directions of EU sports law’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 15. 76 The Lisbon Treaty and EU sports Policy study European Parliament, September 2010, www.europarl.europa.eu/committees/en/CULT/studiesdownload.html?languageDocument=EN&file=32471. 22

2.10 The Bernard case An opportunity for the Court to give an insight in how it could make use of this article was the case Bernard on which it ruled on March 16, 2010. 77 This case concerned the training compensation calculation for young footballers and how it could become an obstacle for their right to free movement as a worker. It is the most recent football case in which article 45 TFEU plays a role. Olivier Bernard was a promising young French player (joueur espoir) of the French football club Olympique Lyonnais. The Professional Football Charter (Fédération Française de Football), applicable in France, obliged a joueur espoir to sign his first contract with the club that had trained him if the club required him to do so.78 On 1 July 2000, Olympique Lyonnais offered Bernard a professional contract for one year. Bernard refused to sign this professional contract and instead signed a contract with the British club Newcastle United not much later. Newcastle United and Bernard were sued by Olympique Lyonnais, to pay a training compensation calculated on the basis of the player’s salary, if he had signed a contract with the French club. The problem in this case was that the FIFA/UEFA as well as the French laws did not provide the rules to address this problem. Though, there were labour laws applicable to this case that prohibited the player from signing a contract with a club other than the one which had trained him. The French Court of Appeal turned to the ECJ with two preliminary questions:

1. Does the principle of freedom of movement for workers laid down in Article 45 TFEU preclude a provision of national law pursuant to which a ‘joueur espoir’ who at the end of his training period signs a professional player’s contract with a club of another Member State of the European Union may be ordered to pay damages?79 2. If so, does the need to encourage the recruitment and training of young professional players constitute a legitimate objective or an overriding reason in the general interest capable of justifying such a restriction?80

The ECJ ruled that sport constitutes an economic activity and Bernard’s gainful employment as a professional footballer fell within the scope of Article 45 TFEU. The Court referred to the well-known Bosman judgment and stated that national provisions which preclude or deter an

77 A. Carr, ‘Player Contracts. Training compensation. ECJ ruling in Olivier Bernard case’, World Sports Law Report 2010-8(4). 78 A. Carr, ‘Player Contracts. Training compensation. ECJ ruling in Olivier Bernard case’, World Sports Law Report 2010-8(4). 79 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 16. 80 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 16. 23

EU citizen form leaving his home country to work in another EU Member State constitute a restriction of this freedom, even if they are applied in a non-discriminatory way.81 The Court then argued that a rule which required a player to pay damages to the club that had trained him if he signed a professional contract with a different club was ‘likely to discourage that player from exercising his right of free movement’.82 The rule in question breached EU law. The ECJ, however, continued that a scheme providing for compensation to be paid where a player signs to play professionally for another team at the end of his training period ‘can, in principle, be justified by the objective of encouraging the recruitment and training young players. However, such a scheme must be actually capable of attaining that objective and be proportionate to it, taking due account of costs borne by the professional players and those who will never play professionally’.83 Because the damages were not related to the actual training costs, but rather the losses suffered by the club, the ECJ held that the FFF Charter rules were not necessary to attain the objective of encouraging the recruitment and training of young players, therefore Newcastle United was not liable to pay damages. Later, the FFF changed its charter to specify that compensation must be based on training costs.

The impact of this judgement on the FIFA and UEFA regulations is that the club with whom the player wants to sign up for the first time, after a player has completed a training programme, has to pay training compensation to every club with which the player has previously been registered and has contributed to his training starting from the season in which he celebrated his 12th birthday.84 This ruling encourages clubs to recruit and seek new talent and train young players. 85 The compensations are calculated on a pro rata basis according to how long he spent with each club, although guidance on this matter is not provided.86 The new FIFA rules protect the ability of players to move between clubs and ensure that there is no infringement of Article 45 TFEU, the freedom of movement for workers.

81 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 34. 82 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 35. 83 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 39 & 45. 84 FIFA, FIFA regulation on the status and transfer of players, training compensation, art 1: objective, 2010, www.fifa.com/mm/document/affederation/administration/01/27/64/30/regulationsstatusandtransfer2010_e.pdf. 85 M. Colucci, ‘The Bernard case: An opportunity for all sports stakeholders’, European Sports law and Policy Bulletin 2010, p. 143. 86 A. Carr, ‘Player Contracts. Training compensation. ECJ ruling in Olivier Bernard case’, World Sports Law Report 2010-8(4). 24

A disappointing thing is that the Court did not make use of the new article on sport in the Bernard case, but only corroborated its own case law.87 It slightly refers to Article 165(1) TFEU by mentioning that the social function of sport, and football in particular, is codified in this article. 88 When formulating a justification for the recruitment and training of young players, the Court refers to the social importance in Bosman.89 Although the Court can finally base their argument on the wording in the Treaty, concerning the social importance of sport, it keeps referring to former cases. There is some logic in why the Court refers to past case law instead of using the new article on sport, as the social importance codified in Article 165 TFEU is merely a confirmation of what the Court already said in Bosman.

2.11 Conclusion What has become clear, during the development of sports law over the years, is that both the European Court of Justice, as well as the other European institutions, the European Commission, the Council and the European Parliament, have recognised that sport is a European concern.90 It all began with the Walrave judgement in 1976, which made sports issues subject of EU law. However, until 1995 there was little intervention on the side of the EU on sporting matters. It was not until the Bosman case that EU gave sport a place on the European institutions’ agenda. For the first time Europe began to take the concept and ‘industry’ of sport serious by creating a Declaration on Sport and eventually adopting the White Paper on Sport. With these documents, the EU stimulated a debate on the specific problems which the world of sport faced and increased the attention paid to this sector in EU policy-making.

At the beginning of this chapter, it was mentioned that article 45 TFEU played a big role in the introduction of sport into the EU legal framework. As is showed by the case-law, almost all cases revolve around this article. Through the case law, the EU was made aware of the problems between sport regulations/situations and EU law. Therefore, this article can be considered as very important for the introduction of sport into the legal framework.

87 S. Weatherill, ‘EU Sports Law. The effect of the Lisbon Treaty’, Oxford Legal Studies Research Paper January 2011, 3, p. 15. 88 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 40. 89 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 39. 90 F. Hendrickx, ‘Future directions of EU sports law’, in: R. Blanpain, M. Colucci & F. Hendrickx (red.), The future of sports law in the European Union. Beyond the EU reform Treaty and the White Paper, Alphen aan de Rijn: Kluwer law International 2008, p. 19. 25

Another development to increase this attention was the inclusion of an article on sport in the Lisbon Treaty. From the entry into force of that Treaty, the EU has a legal basis to develop the social, educational and cultural aspects of sport. This sports article has been drafted in such a way that it leaves a lot of room to manoeuvre for the EU institutions and can cover a wide range of issues. With the new sports article, many sporting issues would not be able to escape the application of EU law. From now on, sport has its own place within the EU legal order. Meanwhile, politicians have the duty to protect the educational and social dimension of the most popular sport in the world, football.

26

Chapter 3 The ‘European Football Model’ In the first chapter, all significant regulations of the EU regarding sport have been discussed. As the EU is not the only body governing sport, the focus of this chapter will be the governing bodies of football in Europe, FIFA and UEFA. Traditionally football has been regulated by these autonomous organisations, with political actors or agencies hardly playing any role of significance. 91 Therefore, football authorities have been hostile to any sort of external regulation, be it by governments or by courts. The landscape of governing the world of football, however, has been changing gradually over the past 20 years. The developments in the EU concerning sport are reflected in the way football is governed by UEFA and FIFA, as they need to comply with the case law, regulations and other laws established by the EU. First a brief description of the two most important governing bodies in football within the EU will be given. Next, the regulations established by the FIFA and UEFA and the important case law established by the Court will be discussed. The impact of this case law on the regulations of the FIFA and UEFA will also be part of this chapter. Both recent as well as past case law and regulations will be discussed to provide an accurate and comprehensive picture of UEFA and FIFA. This will be done in a chronological order, ending with the current regulations. Furthermore, attention will be given to the dialogue between the FIFA and UEFA and the EU through meetings, cases, regulations and other events that increased this dialogue.

3.1 The FIFA and the UEFA To illustrate the structure of the world of football it is best to view it as a pyramid (figure 1). At the top of the Pyramid you will find the Fédération Internationale de Football Association, better known as FIFA. FIFA was established in Switzerland in 1904 to create an international structure for football. 92 FIFA exists of four general bodies: the Congress, the Executive Committee, the General Secretariat and standing Ad-hoc Committees. The current number of football associations that are a member of the FIFA is 208.93 Its current’s president is Joseph S. Blatter, a resident and national of Switzerland who was voted into office in 1998. Below FIFA there are six continental football organisations, for example AFC in Asia and CONCACAF in North America. In Europe, football is governed by The United European

91 O. Croci, ‘Taking the field. The EU and the governance of European football’, In I. Tömmel & A. Verdun (red.), Innovative governance in the European Union: The politics of multilevel policymaking, Boulder: Lynne Rienner 2009, p. 139. 92 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 541. 93 D.D. Orlando, ’6+5 = Discrimination? Why FIFA’s proposed quota rule doesn’t add up’, Penn State Law Review 2011-115, p. 751. 27

Football Association, also known as UEFA.94 UEFA was founded in 1954 by 28 European national football federations that felt that their interest was not served well enough by FIFA. At this moment 53 national football associations are a member of UEFA, that therefore has a bigger action radius than the EU, including countries such as Israel and Kazakhstan.95 The UEFA works closely with the more globally-oriented FIFA, but has the competence to set own rules and regulations regarding all aspects of the football within Europe. These rules are, however, always subject to FIFA’s approval. UEFA is, just as FIFA, based in Switzerland. The governing structure of UEFA is similar to that of FIFA, as it consists of four bodies: the Congress, the Executive Committee, the President and the Organs for the Administration of Justice. By dividing the powers over four different bodies, the UEFA creates its own system of checks and balances.96 The authority of the UEFA stretches itself to the European, national and club team levels. UEFA has regulatory powers in Europe and has the power to oblige and enforce compliance with FIFA as well as UEFA regulations at the national level.97 The person who controls this process is Michel Platini, who is at this moment the President of UEFA. He was elected for the first time in 2007 and re-elected in 2011 for a second four-year term. He is also vice-president of FIFA. To continue descending the pyramid, the national football associations, for example the Football Association (FA) and the Koninklijke Nederlandse Voetbal Bond (KNVB), are located at the next level. At the bottom there are the clubs and players. The pyramid representing the organisation of football is characterised by a hierarchical structure.98 Higher governing bodies have authority over the lower levels. This means, that when a decision is taken by FIFA it will be passed down the line to UEFA and from there down to the national level, and thus make professional clubs and players subject to the regulations of FIFA and UEFA.99

94 L.V. Briggs, ’UEFA v The European Community: Attempts of the governing body of European soccer to circumvent EU freedom of movement and antidiscrimination labour law’, Chicago Journal of international Law 2005-6, p. 439. 95 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 204. 96 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 541. 97 FIFA, FIFA regulations 2011, article 20, www.fifa.com/mm/document/affederation/generic/01/48/60/05/fifastatuten2011_e.pdf. 98 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 205. 99 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 205. 28

FIFA

UEFA National associations/leagues Clubs/Players

Figure 1: Structure of the world of football within Europe.

3.2 FIFA and UEFA regulations and EU interaction After the foundation of UEFA in 1954 the EU and UEFA coexisted in parallel without much interaction for a relatively long time. The dialogue between the EU and UEFA began in 1978 and culminated in the 1991 ‘gentleman’s agreement’ between the European Commission and UEFA.100 This agreement introduced the 1992 ‘3+2 rule’, permitting three foreign players to be fielded at the same time in any given game, plus tow assimilated players. With assimilated players they meant players who had played in the country in question for five years uninterruptedly, including three years in junior teams. Under this rule the clubs were allowed to have a maximum of 5 non-nationals in their squad. UEFA was convinced that this was a stable and durable rule that they believed was beneficial for football, 101 though it was surprising after the Donà case in 1976, that the UEFA was convinced that this rule would pass legal scrutiny under EU law. In the case of Gaetano Donà v. Mario Mantero the Court was asked the question whether nationality quota rules, preventing nationals from another Member State from playing in Italian club competitions, where legal under EU law.102 The Court ruled that such rules, established by the Italian Football Federation (FIGC), were discriminatory. The effect of this judgement seems negligible, at least in the eyes of the UEFA that continued to construct rules containing a nationality quota. The drafting of rules containing a nationality

100 R. Parrish, ‘Reconciling conflicting approaches to sport in the European Union’, in: A. Caiger & S. Gardiner (red.), Professional sport in the EU. Regulation and re-regulation, Den Haag: T.M.C. Asser Press 2000, p. 28. 101 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 207. 102 ECJ 14 July 1976, case 13/76 Gaetano Donà v. Mario Mantero, [1976] ECR 1333, paragraph 20. 29 quota which could be discriminatory could be seen as an underestimation of EU’s power by UEFA.

3.3 The Bosman case On August 6 1990, Bosman started a procedure before the ECJ to nullify the 1991 gentlemen’s agreement between the UEFA and the European Commission. 103 Bosman requested the ECJ to suspend the application of the European Commission’s ‘decision’, to require the European Commission to publish that suspension, and to correspond this with the Liege Court of Appeals where Bosman’s main action was pending, concerning the transfer fee and 3+2 rule.104 On June 27 1991 the ECJ rejected Bosman’s pleas. The ECJ accepted the arguments brought forward by the European Commission, stating that the ‘gentlemen’s agreement’ was not a European Commission decision but only an informal, transitory arrangement without legal effect, and Bosman had no standing to challenge them.

Bosman’s case to nullify the 1991 gentlemen’s agreement was unsuccessful, though its main proceeding continued, in which it attacked the 3+2 rule and the transfer fees. Although the 3+2 rule had been approved by the European Commission through the gentlemen’s agreement, this does not mean that other EU institutions, as the European Court of Justice, will go along with the European Commission’s position. Moreover, the position of the European Commission was framed in the gentlemen’s agreement at a time when sport was barely practised as a significant economic activity. The rapid commercialisation of sport in the 1990’s and the ruling of Bosman significantly altered the European Commission’s position. Bosman’s main proceeding ended up at the ECJ, after the case was referred by the Liege Court of Appeals. On 15 December 1995, the ECJ ruled on the legality of the 3+2 rule and the transfer system. His lawsuit was not only addressed to RC Liège and the Belgium football associations, but also to UEFA and FIFA, because the rules on regulating the international transfer system were adopted by FIFA and UEFA introduced the nationality quotas. In its final judgement on the 3+2 rule, the Court declared the limitation on the employment of foreign players from other Member States, due to the 3+2 rule, incompatible with Article 39 EC (Art 45 TFEU).105 Justification on the grounds of protecting the character

103 A.N. Wise & B.S. Meyer, International sports law and business, Den Haag: Kluwer Law International 1997, p. 1052. 104 ECJ 4 October 1991, case 117/91, Jean-Marc Bosman v Commission of the European Communities, [1991] ECR I-04837. 105 ECJ 16 March 2010, case 325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, [2010] ECR I-247, paragraph 15. 30 of the national professional leagues in the individual Member States, or as a basis to protect the national team was not accepted.

In the line of the Donà case, this judgement does not come as a surprise. The first direct consequence of the Bosman ruling was that nationality quotas disappeared in club competitions. On 19 February 1996, UEFA removed the 3+2 rule immediately and lifted all nationality quotas for European club competitions.106 Another effect was that the Bosman case made the tensions between the UEFA/FIFA regulations more visible and it unleashed a series of complaints by athletes against their organisation whose decisions were challenged before the national courts and affected the sports organisations and their regulations.

The other part of the Bosman judgment, concerning the transfer fee, has been discussed in the first chapter. There it was shown that such a transfer fee is unlawful and infringes Article 45 TFEU. This decision of the Court also has its consequences for the regulations of the FIFA and UEFA. After the Bosman judgement, the European Commission notified FIFA and UEFA that unless they adjusted their regulations concerning the transfer fee, it would have no other option but to start formal infringement proceedings.107 Despite this threatening statement of the European Commission, FIFA and UEFA kept their transfer system intact, at least where it concerned players who still had contracts.

3.4 FIFA regulation for the Status and Transfer of Players 2001 It was only in 2001 that the FIFA responded to this order by adopting the new regulation for the Status and Transfer of Players 2001. Five major changes were introduced in the new regulations. The first was that the regulations required that the term of players’ contracts be at least one year, but no more than five years.108 By doing so FIFA tried to prevent clubs from creating overly long terms for players’ contracts. The second modification was that FIFA only permitted international transfers during two designated transfer windows per season. Players can only make a transfer in one longer transfer window in the middle of each season and before the start of a new season. The third change was that FIFA created a registration system that enabled FIFA and the national associations to keep track of the transfers.109 Fourth, the

106 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 209. 107 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 209. 108 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 553. 109 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 554. 31 regulations included a section dedicated to enhancing the protection of minors, defined as players under the age of eighteen. The last important change was that FIFA created a Dispute Resolution Chamber to deal with disputes over compensation, sporting just cause and mid- contract breaches. FIFA provided no total liberalisation of the transfer market in the new regulations.110 This document can be seen as beneficial for FIFA and UEFA, as almost all of the proposals put forward by them in the Negotiation Document with the EU, have been included in the 2001 FIFA regulations, for example the transfer windows and contract modifications. 111 Perhaps, this can be explained by the reluctance of the European Commission to act as a regulator in an area where they do not have any direct competence under the Treaty. The FIFA regulations had a positive influence on the relationship between the FIFA and the EU. The European Commission responded to the 2001 regulations by declaring that the 2001 regulations ‘find a balance between the players’ fundamental right to free movement and stability of contracts together with the legitimate objective of integrity of the sport and the stability of championships. Football now has the legal stability it needs to go forward’.112 Following the entry into force of the new rules, complaints made by the European Commission addressed to the FIFA were withdrawn. One of the complaints focused on the ban of unilateral breaches of contract by players, an issue that is now settled in the 2001 FIFA rules. FIFA revised the rules and made minor changes in both 2005 and 2008.

3.5 Court of Arbitration for Sport Since 2002, the Court of Arbitration for Sport (CAS) has been recognized by FIFA to exercise jurisdiction of the Arbitration Tribunal for Football.113 FIFA included in its statutes that it empowers CAS ‘to resolve disputes between FIFA, members, confederations, leagues, clubs, players, officials and licensed match agents and players’ agents. 114 The notable football dispute of Adrian Mutu, is an example of a case dealt with at CAS. Adrian Mutu is a Romanian football player who played for AC Parma (an Italian football club) until 2003 when

110 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 211. 111 D. Nilsson, The revised FIFA regulations for the status and transfer of players’ compatibility with EC competition law: The transfer system revisited (master thesis University of Lund), 2006, p. 22. 112 Europa press release, ‘Commission closes investigations into FIFA regulations on international football transfers’ Brussels 5 June 2002, www.europa.eu/rapid/pressReleasesAction.do?reference=IP/02/824&format=HTML&aged=1&language=EN&g uiLanguage=en. 113 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 556. 114 FIFA, FIFA regulations 2011, article 62, www.fifa.com/mm/document/affederation/generic/01/48/60/05/fifastatuten2011_e.pdf. 32 he was transferred to Chelsea.115 Chelsea paid a £ 22.5 million transfer fee. Chelsea and Mutu concluded a five year contract with an annual salary of £ 2.35 million with a signing bonus and payment to Mutu’s agent. In the second year of the contract Mutu tested positive on cocaine and Chelsea terminated his contract. Mutu appealed this decision at the Premier League’s board of directors and CAS, which both dismissed Mutu’s appeal. The case ended up at the FIFA dispute resolution in 2006, when Chelsea applied for compensation, but the chamber held that it lacked jurisdiction.116 In 2007, Chelsea asked CAS to annul FIFA’s decision. CAS agreed with Chelsea and remanded the case to FIFA, which ultimately awarded Chelsea more than £ 17 million, the unamortized portion of the transfer fee Chelsea paid to AC Parma. Mutu appealed to the CAS and the Swiss Federal Court, but both rejected his motion.117 The fine was the highest ever levied by FIFA. By recognizing CAS to exercise jurisdiction of the Arbitration Tribunal for Football, FIFA has opened doors for players and clubs to bring the case to court even if the FIFA lacks jurisdiction. As CAS is based in Switzerland, questions have been raised in the literature regarding the intentions underlying the FIFA and UEFA’s recognition of the CAS, as rulings of CAS are only open to appeal before the Swiss Federal Court, when it comes to reviewing the legality of the case.118 This concept of arbitration could make it possible to escape EU law. As for the arbitration procedure at CAS, the Switzerland Federal Code on Private International Law states that ‘the arbitral tribunal shall rule according to the law chosen by the parties or, in the absence of such choice, according to the law with which the action is most closely connected’.119 When the parties fail to choose the law applicable to their dispute, Swiss law will most likely apply. This illustrates another way in which parties can circumvent EU law. Though, it is very likely that cases, concerning European clubs or players, are subject to EU law or their own national law, as it is more closely connected to their case. Another reason it is unlikely that CAS will escape EU law is the presence of bilateral treaties whereby Switzerland has adopted various provisions of EU law, for example the free movement of people provision.

115 T. Folkman, Case of the day: Chelsea football club v. Mutu, 27 February 2012, www.lettersblogatory.com/2012/02/27/chelsea-mutu/. 116 T. Folkman, Case of the day: Chelsea football club v. Mutu, 27 February 2012, www.lettersblogatory.com/2012/02/27/chelsea-mutu/. 117 CAS 31 July 2009 A/1644, Adrian Mutu v. Chelsea Football Club Limited. 118 M. Whatelet, ‘Sport governance and EU legal order. Present and future’, The International Sports Law Journal 2007-3/4, p. 8. 119 Switzerland’s Federal Code on Private International Law Article 187(1), 18 December 1987, www.umbricht.ch/pdf/SwissPIL.pdf. 33

UEFA is the football organisation that has clashed most often with European Law. 120 Therefore to increase the dialogue with the EU, the UEFA set up a representative office in Brussels in 2004. The office has been committed to the coordination and implementation of UEFA's day-to-day relations with the EU institutions by building bridges’ between both sides. It focuses on UEFA’s rules on contemporary developments in EU-UEFA relations.121 Thus it benefits from the expertise of all UEFA divisions and acts as an intermediary for the new European Team Sports (ETS) association.

3.6 The Simutenkov case Although in Donà and Bosman, the Court ruled on nationality quotas, they did not fully disappear out of the world of football. In 2005, the ECJ confirmed and expanded the Bosman judgment, in the case Simutenkov v. Ministerio de Educación y Cultura.122 Igor Simutenkov, a Russian national playing football for a Spanish club with a Spanish residence and a work permit. The Spanish Federation had a licensing system in place where players either held a non-EU or an EU license based on whether they were nationals of the EU/EEA. The number of non-EU licensed players allowed to play in national matches was limited. Simutenkov was not able to obtain an EU license and, therefore, he sued the team for violating an anti- discrimination provision in a partnership agreement between Russia and the EU, namely Article 23(1) of the European Communities-Russian Federation Partnership Agreement.123 The article establishes, for the benefit of lawfully employed Russian workers in the territory of a Member State, a right to equal treatment in working conditions. This article has the same scope as the right to equal treatment in working conditions which nationals of Member States have under the Functioning Treaty. The ECJ ruled that Article 23 PCA was fully applicable.124 Furthermore, the Court stated that ‘any athlete who is a national of a country that has a partnership agreement with the EU and is legally employed in the EU is given the same rights as EU nationals, including the fundamental free of movement for workers’.125 Therefore the Court stated that a limitation based on nationality could not find its justification on sporting grounds. The effect of this case is that it confirmed that Russian players, who are

120 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 206. 121 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 213. 122 ECJ 12 April 2005, case 265/03 Simuntenkov v. Ministerio de Educación y Cultura [2005] ECR I-2596. 123 PCA between EU and Russian Federation, article 23(1), www.eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:21997A1128(01):EN:NOT. 124 ECJ 12 April 2005, case 265/03 Simuntenkov v. Ministerio de Educación y Cultura [2005] ECR I-2596, paragraph 31. 125 ECJ 12 April 2005, case 265/03 Simuntenkov v. Ministerio de Educación y Cultura [2005] ECR I-2596, paragraph 11. 34 lawfully employed in the territory of a Member State, are equal to EU players. So it extended the Bosman judgement to citizens of associated countries.

3.7 The Homegrown rule and 6+5 rule In addition to the new transfer rules, professional football organisations came up with new rules to replace the struck-down nationality clauses.126 At a UEFA congress in Tallinn in April 2005 the UEFA introduced the so-called Homegrown player rule.127 The proposed Homegrown player rule will force clubs participating in UEFA competitions to set a minimum quota of locally-trained players on a sliding scale starting from the 2006-07 season. From then, clubs entering UEFA competitions will have to have four ‘locally-trained’ players, defined as players between the age of 15 and 21 who have been registered with the club for three seasons/years. The intention of this rule was to re-nationalize and re-localize club team football by enhancing the training and development options of young players. One of UEFA’s views is that clubs have a responsibility to provide sports training by stating that ‘Somebody with less money but a serious training programme has a better chance (in the future) than today to compete at the top level’.128 UEFA also believes that this rule keep the prices of the players low since there will be less competition for foreign transfers and less hoarding of players, enabling more clubs to afford quality transfer players.129 Others claim that a negative effect could be that clubs with the best financial resources are now favoured, because of the simple reason that they are able to buy the best players once they have been trained by their ‘home’ club. The possible illegality of this rule will be discussed later on in this paper.

Three years later, in May 2008, FIFA proposed a similar construction as the Homegrown proposed by the UEFA, the so-called ‘6+5 rule’. At a Congress in Sydney, Australia 155 out of the 200 possible votes were cast in favour of adopting the rule.130 Although this rule has a lot of support from the world of football itself, the EU saw some potential frictions. First, the 6+5 rule will be explained, which have some similarities with the Homegrown rule but also some noticeable differences. The proposed 6+5 rule requires that at the start of every

126 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 282. 127 R.B. Martins, ‘Freedom of movement in relation to sport’, International Sports Law Journal 2007-1/2, p. 103. 128 S. Hart, Call to ‘create level playing field’, 4 October 2004, www.uefa.com/uefa/footballfirst/protectingthegame/youngplayers/news/newsid=242608.html. 129 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 285. 130 D.D. Orlando, ’6+5 = Discrimination? Why FIFA’s proposed quota rule doesn’t add up’, Penn State Law Review 2011-115, p. 752. 35

European professional football match, which includes national competition matches as well as European competition matches, six out of the eleven players in the final selection must be eligible to play for the national team of the particular clubs team’s parent nation. For example, a team like AJAX, which is based in Amsterdam, The Netherlands, would need to start a UEFA Champions League or a UEFA European League match with at least six players who are eligible to play for the national football team of the Netherlands. The remaining players can be nationals of any foreign country.131 The loss of national identity of clubs, enhancing the education and training of young players, the increasing lack of parity in club competitions, and safeguarding the continued development of football are the rationales behind approving the 6+5 rule by the FIFA. This makes the rationale similar to the reasoning behind the Homegrown rule. Another similarity with the Homegrown rule, is that the 6+5 rule would also have a phase-in period, by beginning with a 4+7 requirement and, over two years, switching to the 6+5 requirement.132Although there are similarities, FIFA is convinced that the Homegrown rule does not have the impact on the clubs which it should have. FIFA considers their proposal more effective as it imposes the requirement to include national (local) and young players in the starting line-up and forces the clubs to actually let these players play. UEFA’s Homegrown rule does not require that these national and young players take the field, in other words, all the home grown players could be substitutes the whole match.133Another significant difference between the two proposals is that FIFA’s proposal explicitly makes nationality a requirement for eligibility.134 The 6+5 rule should have taken full effect by the 2012-13 season, however, due to many objections the implementation is suspended. These objections will be discussed in the next chapter.

3.8 FIFA regulation for the Status and Transfer of Players 2010 After revisions in 2005 and 2008, FIFA issued a new edition on the Regulation for the Status and Transfer of Players in 2010.135 This new regulation aimed to prevent rogue agents owning their clients and controlling their destiny, illegal payments between clubs and companies, and

131 D.D. Orlando, ’6+5 = Discrimination? Why FIFA’s proposed quota rule doesn’t add up’, Penn State Law Review 2011-115, p. 752. 132 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 274. 133 L. Freeburn, ‘European football’s Home-Grown Rules and nationality discrimination under the European Community Treaty’, Marquette Sports Law Review 2009-20, p. 216. 134 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 269. 135 N.L.S.C. Clarke, ‘The Beauty and the Beast. Taming the ugly side of the people’s game’, Columbia Journal of European Law 2011-17, p. 619-620. 36 money laundering through transfers of fictitious footballers. One of the amendments made to the regulations is that players transfers must now take place through online systems, which can be accessed by FIFA and national officials with a username and password, thus making oversight much simpler and more effective. This new transfer matching system (TMS) can be found in Annexe 3 of the regulations. 136 The 2010 regulations also introduced increased protection of minors, who cannot move from their country without their parents’ approval. An example of the increased protection of minors is Article 19bis, which introduced registration and reporting of minors at training academies.137 All minors, who attend a training academy for the purpose of training, must be reported to the association upon whose territory the academy operates. The association could be required to initiate an application of permission on behalf of the academy.138 A sub-committee could then verify and evaluate the application. Through this authorization procedure FIFA will be able to monitor, and have greater control over, any trafficking by ensuring all arrangements are in place for the player throughout trial period and his return home could be secured. This measure could also have a deterrent impact on the clubs and the agents by requiring them only to ‘trade’ minors that are registered at an academy and association. Overall, the 2010 regulation tries to address and tackle the current problems the FIFA/UEFA and the EU are facing, concerning fake agents and ‘trading’ of minors. This problem will be discussed in more detail in the next chapter. The Regulations for the Status and Transfer of Players 2010 is currently still used in practice.

2.9 Conclusion In the past decades the attitude of the FIFA and UEFA towards the EU has changed drastically. After Bosman, both football organisations realized the influence of the ECJ and the European Commission in the world of football. At first they viewed the judgements as an attack on their regulations and on football itself, but later both the FIFA and UEFA began to accept the regulatory powers of the EU. In reality, the institutions of the EU were just fulfilling their role in preserving the content of the Treaties.139 With time, UEFA and FIFA’s negative attitude towards the interference of the EU weakened and even turned into a more positive approach. The UEFA and FIFA have slowly accepted the role of the EU in terms of

136 FIFA, Regulations on the status and transfer of players 2010, annex 3, www.fifa.com/aboutfifa/officialdocuments/doclists/laws.html. 137 FIFA, Regulations on the status and transfer of players 2010, Article 19bis Registration and reporting of minors at academies, www.fifa.com/mm/document/affederation/administration/01/27/64/30/regulationsstatusandtransfer2010_e.pdf. 138 S. Yilmez, ‘The transfer matching system and minors’, EPFL Sports law Bulletin April 2011-March 2012 number 9, p. 49. 139 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 217. 37 the regulation of European football. They have come to terms that they have no other option but to bring their regulations into line with European law. The increased dialogue and the positive outcomes of the negotiations with the European Commission have contributed to this positive attitude.

Fact is that the supervised autonomy offered by the EU imposes a certain limit on FIFA and UEFA’s powers to formulate policies in the regulation of football. 140 If the football associations want to form a partnership with the European Institutions, they have to reach a compromise. This compromise may reduce the independence of both associations. In return, UEFA and FIFA are able to retain their central position as umbrella organisation in European football.141 UEFA and FIFA’s response to new policy changes in the EU will measure the real position of the governing body and define its relationship with the EU for the years to come.

140 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 218. 141 B. Garcia, ‘UEFA and the European Union. From confrontation to co-operation’, Journal of Contemporary European Research 2007, p. 219. 38

Chapter 4 The collusion and frictions between the FIFA/UEFA regulations and EU legislation Chapter 2 and 3 gave an overview of the regulations adopted by the EU and the football governing bodies. The case law in which these regulations featured have also been subject of this discussion. This chapter turns to the current problems FIFA, UEFA and the EU are facing at the fringes of their legal frameworks. Loopholes are often used by football players and clubs to circumvent the legal framework set by FIFA and UEFA. A loophole is defined as an ambiguity in a system, for example law. Put otherwise, the European clubs and players are not breaching any established FIFA or UEFA regulation but many of the actions to circumvent these regulations, might breach European law. These loopholes are often used at the expense of minors. Therefore, a part of this chapter is focussed on how minors are neglected by FIFA and UEFA’s regulations. The discussion on whether or not the Homegrown rule, drafted by the UEFA, and the 6+5 rule, drafted by the FIFA, are legal or discriminating on the basis of nationality will furthermore be portrayed. This will be done by discussing how these rules might infringe EU law.

4.1 ‘Wheeling and Dealing’ of minors One very topical friction between the world of football and the EU is what the morning paper Metro called the ‘wheeling and dealing’ of very young football players.142 The Homegrown player quota has increased the last few years to eight players. This means that at least four players have to be trained for a minimum of three years, between the age of 15 and 21, by the club and another four by clubs of the same national association.143 A player who is trained at another club in the same association is called an association player. An association player must have been registered for at least three seasons with the club or with other clubs affiliated to the same association of the said club between the age of 15 and 21. A consequence of this Homegrown rule is that clubs are eager to find young international talent which they can enrol in their local training academies and therefore, can be counted as a Homegrown player.144 Another reason to attract young football players is the low purchase price of these players. If the player becomes a ‘star’, his new club will make a significant profit. An example of this is the Spanish football player Cesc Fàbregas. When he was sixteen he was picked up by Arsenal on a free transfer from the Barcelona youth team. In 2011 Fàbregas was sold to Barcelona for

142 R. Eg, ‘Handel in voetballertjes wordt aan banden gelegd’, Metro 2 February 2012, p. 3. 143 UEFA, Homegrown player plans revealed, 3 February 2005, www.uefa.com/uefa/footballfirst/protectingthegame/youngplayers/news/newsid=276829.html. 144 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 561. 39

40 million Euros. The Bernard ruling is another motivation for clubs to sign young players, as they can seek compensation for young players they have trained after these players sign a professional contract with a club in another EU country. By signing young players to achieve the quota or make a profit, clubs often do not realise they are putting the well-being of the children involved at risk. The child is put in a different an unfamiliar environment with the risk of failing at professional level. With minors from Africa and South America it is often the case that the whole family is dependent on the success of this young player, which puts an immense pressure on him.145 Obviously this can be harmful for the child’s physical and mental health. Besides, it would not be the first time, when a minor fails to secure a contract with European clubs, and ends up living on the streets of Europe.146

4.2 Loopholes in the FIFA regulations Transfer regulations have been established to regulate the transfer market and prevent it become a ‘wheeling and dealing’ of persons. However, loopholes remain in these regulations. European football clubs have found three ways in which they can circumvent the transfer regulations, and obtain players, which are often minors.147 The first one relates to the content of Article 19(2)(a) of the Regulation on the Status and Transfer of Players. This article, created to protect minors in the football-industry, allows minors, to be transferred internationally if the child’s parents move to the country for “reasons not linked to football”.148 In this context a ‘minor’ is defined as a person who has not reached the age of 18.149 The solution for the condition enshrined in Article 19(2)(a) concerning the parents of the minor, is that clubs create local, mostly menial, jobs for the parents so that their children are able to sign up with the club according to the FIFA regulations. Some authors investigated how clubs offer jobs to the minors’ parents and revealed that in one case the father was offered a position as a gardener in the stadium.150 Another example is that one of the parents became the team bus driver.

145 R. Simons, Trafficking in football. Are current regulations sufficient in the protection of minors in football, (master thesis Tilburg University), 2010. 146 R-V. Van der Meij, ‘Players’ agents and the regulatory framework on corruption in international sports law’, The International Sports Law Journal 2009, p. 46. 147 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 562. 148 FIFA, FIFA Regulation on the Status and Transfer of Players, Protection of Minors, article 19, 2010, p. 17, www.fifa.com/mm/document/affederation/administration/01/27/64/30/regulationsstatusandtransfer2010_e.pdf. 149 FIFA, FIFA Regulation on the Status and Transfer of Players, Protection of Minors, article 19, 2010, p. 17, www.fifa.com/mm/document/affederation/administration/01/27/64/30/regulationsstatusandtransfer2010_e.pdf. 150 L.B. Madsen & J. M. Johansson, Den forsvunne diamanten (= The lost diamond), Oslo: Tiden Norsk Forlag 2008. 40

The second way in which the clubs circumvent the transfer regulations is by obtaining young players through exchange agreements with clubs in Africa and countries in the EU with flexible visa and immigration policies. According to the judgement in the case Midtjylland A/S v. Fédération Internationale de Football Association, the transfer of a minor is allowed as long as there is an exchange agreement between the current and the foreign club.151 The exchange agreement has, however, got to meet some requirements. The agreement must be “within the scope of a development program for young players” and the agreement must contain information on the academic education of the minor.152 Some football clubs in the Netherlands have an exchange agreement with foreign clubs. For example AFC Ajax operates a training academy in Cape Town.153 Another Dutch example concerns the club Feyenoord, which opened its own football academy in Ghana, Feyenoord Fetteh. Just like AFC Ajax they can train young African players at this club and when they are old enough they will make the transfer to Feyenoord in the Netherlands. To make the transfer even easier, Feyenoord entered into a partnership with KV Mechelen, based in Belgium. If there is trouble with transferring the player directly to the Netherlands, the flexible visa and immigration policies of Belgium can offer a solution. There are no restrictions on foreign players in Belgium football and the requirements to obtain a residence permit for a professional player from a country outside the EU are relatively easy to satisfy. This way of obtaining a residence permit in another country by entering the EU through a different Member States is called ‘the Belgium route’. The European clubs not only use this loophole only to obtain players from Africa, but also from South America or Asia.

Another result of the high demand of low-priced young players is the rise of unregistered training academies and unlicensed agents who take advantage of those young inexperienced children and their parents from, especially, Africa. These agents lure the children to Europe by telling them the successful stories of other African children who have become big stars and play in the highest football leagues, such as Samuel Etò and Didier Drogba.154 Their parents pay the fake agent with the little money they have just to make their child’s dream come true.155 More often than not the minor never reaches or even registers with an academy and

151 Case Midtjylland A/S v. Fédération Internationale de Football Association, CAS 2008 1485 7.3.3. 152 Case Midtjylland A/S v. Fédération Internationale de Football Association, CAS 2008 1485 7.3.3. 153 AJAX, Youth academy Ajax Capetown, www.ajaxct.com/youth_academy.htm. 154 C. Brown, ‘Football Chiefs to Tackle Hidden Trade in Africa’s Children’, The Independent 5 July 2008. 155 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 563. 41 are abandoned by their agent once they have arrived in Europe. In some cases the boys are left without legal papers and no way back home.

Some clubs take advantages of the fact that national associations have established different rules and contract law. Although the clubs do not circumvent any transfer rules, it does have its influence on transfers of minors. 156 National associations have drafted these rules on contract law so that it is easier for clubs to comply with the quota. There are, for example, differences concerning the age at which a minor can sign professional contracts and the length of this contract. The rule of the Dutch football association, KNVB, is that a person younger than 18 can sign a professional contract for a maximum duration of three years.157 Under the rules established by the Italian football association, however, a person younger than 18 is prohibited from signing a professional club contract.158 Under the regulation of the British football association ‘players from EU countries are able to move to Britain on academy or scholarship contracts at 16, and sign full professional contracts at 17’.159 Due to these rules many Dutch and Italian minors have joined British clubs. There seems to be still some work to be done by the FIFA or UEFA, regarding this topic. By drafting regulations, differences and disadvantages can be eliminated.

4.3 Solutions? FIFA had offered some solutions for the ‘wheeling and dealing’ of minors in the world of football. For example, in 2008 it added Article 19(4) to its Regulations for the Status of Transfer of Players. This article requires that a sub-committee established by the Players’ Status Committee inspects and approves or rejects all international transfers concerning a minor player. This inspection of minor players only concerns minors between 12 and 18. Concerns are now about the children younger than 12 who are not covered by this examination. Real Madrid, for example, contracted a seven year old French boy by enrolling him in their academy.160 Also the domestic transfers are not covered by this regulation and, therefore, not examined by a sub-committee. The registering of minors at academies will

156 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 564. 157 KNVB, KNVB Reglementen betaald voetbal 2011/’12, article 53(3), www.knvb.nl/watdoenwe/spelregelsenreglementen. 158 R. MacGrevy, The final word on Federico Macheda, Soccerlens 16 April 2009, www.soccerlens.com/the- final-word-on-federico-macheda/26785. 159 TheFA.com, Rules relating to players season 2011/2012, www.thefa.com/TheFA/RulesandRegulations/~/media/Files/PDF/TheFA/Rules_Regs/2011/FA%20Rule%20C% 20-%20Relating%20to%20Players.ashx/FA%20Rule%20C%20-%20Relating%20to%20Players.pdf. 160 BBC news, Real Madrid sign seven-year-old Argentine boy, 9 August 2011, www.bbc.co.uk/news/world- latin-america-14458102. 42 furthermore be examined by obliging the academies and national football association to report all minors to the association upon whose territory the academy operates. It will be questionable, however, how accurate African countries will be in keeping these lists of minors. For example, in Ghana there are at the moment 500 illegal academies in the city of Accra alone and thousands more across the country.161

The EU also began to interfere with the wheeling and dealing of minors. In February 2012 the European Parliament adopted a broad resolution covering various aspects of sport in Europe, including a call for the development of a system of licensing and registration for sports agents.162 This resolution prohibits players’ agents from receiving mediators’ fees for football transfers involving minors. This will make minors less attractive for agents. The resolution calls upon the European Commission to draw up a system with input from sports federations, unions, and agents’ associations. The European Commission had already addressed the exploitation of young players, in the White Paper on Sport.163 This shows that, as early as 2007, the European Commission acknowledged this problem. Now it is up to the European Commission to build on this adopted resolution.

4.4 The Homegrown rule and 6+5 rule critics A final critic concerns the 6+5 rule, introduced by FIFA, and the Homegrown rule introduced by the UEFA. As mentioned earlier, the two proposals have similar aspects, they are different when it comes to their interaction with EU law. The possible friction is with Article 45 TFEU, the free movement of workers. As mentioned in the beginning of this thesis, article 45 TFEU does not only forbid direct discrimination on nationality, but also indirect discrimination and obstacles impeding the exercise of the right to free movement. The Homegrown rule will require that a certain number of players on any team is trained in the club’s development programme or at another club in the national league.164 The rule, therefore, can be considered as indirectly discriminating under Article 45 TFEU as it disadvantages foreign nationals, but falls short of direct discrimination. The EU, however, ruled otherwise. According to the EU, the Homegrown rule cannot be seen as an indirectly discriminating measure as it does not by

161 D. McDougall, ‘The scandal of Africa’s trafficked players’, The Guardian 6 January 2008. 162 European Parliament, European Parliament resolution of 2 February 2012 on the European dimension in sport, www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2012- 0025+0+DOC+XML+V0//EN&language=EN. 163 European Commission, Commission of the European Communities White Paper on Sport, 11 July 2007 (COM(2007) 391), paragraph 4.5, www.ec.europa.eu/sport/documents/wp_on_sport_en.pdf.. 164 L.V. Briggs, ’UEFA v The European Community: Attempts of the governing body of European soccer to circumvent EU freedom of movement and antidiscrimination labour law’, Chicago Journal of international Law 2005-6, p.449. 43 its terms impose a restriction on the employment of non-nationals.165 Therefore, it can be considered as a legal proposal as it is acceptable under Article 45 TFEU. The European Commission has stated that the home-grown rule promotes objectives of general interest such as the training of young players and the rebalancing of sports competitions.166 They consider the Homegrown rule objectively justified, proportionate and non-discriminatory. The reasoning behind the Commission’s approach is found in Action 9 of the Pierre de Coubertin Action Plan, part of the White Paper on Sport: ‘Rules requiring that teams include a certain quota of ‘Homegrown players’ could be accepted as being compatible with the Treaty provisions on free movement of persons if they do not lead to any direct discrimination based on nationality and if possible indirect discrimination effects resulting from them can be justified as being proportionate to a legitimate objective pursued, such as enhancing and protecting the training and development of talented young players’. 167 The European Parliament supported this approach in its Resolution on the White Paper on Sport.168 The European Parliament ‘affirms the basic applicability of EU non-discrimination legislation to the field of sports in Europe and calls on the Commission to ensure that any derogations due to the specificity of sports are both legal and limited in scope; considers that there are certain instances, in view of the specific characteristics of sport, where limited and proportionate restrictions on free movement may be appropriate, useful and necessary in order to promote sport in Member States."). The European Commission, in line with their approach, joined the reasoning of UEFA in how this rule could enhance training and development of young players. However, they announced a study to assess the consequences of rules on Homegrown players in team sport in 2012, as the rule tends to discriminate.169 The European Commission confirmed their position in a report in 2008. This time they based their position on an independent study carried out in the first half of 2008.170

Although the European Commission and European Parliament have a positive view towards the Homegrown rule, some authors have pointed out that the Homegrown rule cannot be

165 M. Colucci, ‘Freedom of Movement’, (Unpublished chapter), p. 21. 166 European Commission , UEFA’s rules on home-grown players receive green light from the Commission (IP/08/807) www.ec.europa.eu/sport/news/20080528-action-pierre-de-courbertin_en.htm. 167 European Commission, Commission of the European Communities White Paper on Sport, 11 July 2007 (COM(2007) 391), www.ec.europa.eu/sport/documents/wp_on_sport_en.pdf. 168 European Parliament, Resolution on the White Paper on Sport Resolution on the White Paper on Sport 2008, www.eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:271E:0051:0067:EN:PDF. 169 M. Colucci, ‘Freedom of Movement’, (Unpublished chapter), p. 22. 170 European Commission, Report of the Commission 2008, www.ec.europa.eu/sport/documents/doc272_en.pdf and www.ec.europa.eu/sport/documents/doc276_en.pdf. 44 considered as objectively justified, proportionate and non-discriminatory.171 These authors based their arguments on the fact that the Homegrown rule reduces the work opportunities for non-nationals, compared with those of nationals because the training requirements of the rule are more likely to be fulfilled by nationals than non-nationals. The overall access of foreign players, in to employment on club teams, will therefore be reduced.172 As it is not explicitly based on nationality, the rule can therefore be considered as indirectly discriminatory.173 It can be argued that there are also alternative, less discriminatory methods (e.g. adjusting the current Homegrown rule), that can achieve the same result. Besides, as long as the ECJ has not ruled on the legality of the Homegrown rule, alternatives should not be ruled out. Therefore it could be a good thing to have an alternative and adaptations up one’s sleeve. Alternative methods and adaptations will be discussed in chapter 5.

Although fundamental rights are beyond the scope of this paper, a note can be made how the Homegrown rule tends to violate these rights, in particular Article 24 of the Charter on Fundamental rights (further: the Charter).174 Article 24 of the Charter state: ‘In all actions relating to children, whether taken by public authorities or private institutions, the child’s best interest must be a primary consideration’. This specific article could cause friction with the Homegrown rule established by UEFA.175 It could be questioned if the child’s interests were a primary consideration when UEFA drafted the Homegrown rule. The rule has led to clubs recruiting young players from all over the world and this could have its effect on the child’s life, for example on his education and health.

According to the EU, the Homegrown rule can be considered as a legally justified rule as it is acceptable under Article 45 TFEU. However, the proposed 6+5 rule of the FIFA is having more trouble to establish its legality under EU law. While FIFA is a worldwide football

171 L. Freeburn, ‘European football’s Home-Grown Rules and nationality discrimination under the European Community Treaty’, Marquette Sports Law Review 2009-20, p. 177-220 and L.V. Briggs, ’UEFA v The European Community: Attempts of the governing body of European soccer to circumvent EU freedom of movement and antidiscrimination labour law’, Chicago Journal of international Law 2005-6, p. 439-454. 172 L.V. Briggs, ’UEFA v The European Community: Attempts of the governing body of European soccer to circumvent EU freedom of movement and antidiscrimination labour law’, Chicago Journal of international Law 2005-6, p.453. 173 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 286. 174 Charter of fundamental rights of the European Union, article 24, available at www.europarl.europa.eu/charter/pdf/text_en.pdf. 175 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 572-573. 45 organisation and its rules apply equally to all six confederations, Europe remains the centre of worldwide football and if a rule is not legally enforceable under European law it is unlikely that FIFA will pursue the wish to implement it.176 This rule seems to violate EU law by discriminating workers on the basis of their nationality. Again Article 45 TFEU is applicable because football players will not be able to play at certain clubs when the quota of foreign players has been reached. FIFA president Blatter argues that the 6+5 rule is of paramount importance to maintaining the health of professional football and necessary to strengthen the sport’s continued popularity as the ‘world’s game’ in the future.177 In ‘signing more and more foreign players, clubs have gradually lost their identities’ and ‘in some cases all players hail from abroad or from a different continent’. 178

4.5 Justifications for the 6+5 rule There are justifications under Article 45(3) TFEU which the FIFA can perhaps rely on to pass the legality test under EU law. Those justifications are public policy, public security and public health. The only one possible for argumentations is the public health justification, the other two dropped out of the argumentation due to the fact that they do not apply to this situation. The argument for public health could be that the 6+5 rule could enhance the exercising of children and could have a positive role in the promotion of public health. Also this public health justification however fails, as it is used only in cases of immediate public health issues that might arise from foreign nationals and not for measures that in the long run, might have an impact on the physical fitness, according to article 29 of Directive 38/2004/EG.179 No justification can be found under Article 45 TFEU and because the 6+5 rule is considered to be a directly discriminatory rule this provision was the only option to legitimize it. Even UEFA stated that the 6+5 rule might illegal under EU law.180 Nevertheless, UEFA supports the objectives and will work with FIFA to try to make it palatable for the EU.

176 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 289. 177 FIFA, Yes in principle to 6+5 rule, 5 February 2008, www.fifa.com/aboutfifa/organisation/bodies/news/newsid=684707/index.html. 178 FIFA, Yes in principle to 6+5 rule, 5 February 2008, www.fifa.com/aboutfifa/organisation/bodies/news/newsid=684707/index.html. 179 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 290. 180 N. Harris, ‘UEFA: “FIFA’s 6+5 quotas will never happen in Europe”’, The Independent 10 June 2009. 46

INEA (the Institute for European Affairs) has, on behalf of FIFA, conducted a research on the illegality of the 6+5 rule.181 On 26 February 2009 it presented its conclusion. 182 The study confirmed that FIFA was not breaching European Law. In its argument INEA describes the 6+5 proposal as an in nature good for football and a response to the detrimental impact of the Bosman ruling in the years following by it. 183 Later on in this report, the 6+5 proposal is presented as a purely sporting rule which falls outside the ‘soft law’ involvement of the EU in sport and a ‘sporting response’ to the perceived current ills within football and thus not discriminating under Article 45 TFEU. The EU, however, reacted to this report by dismissing its findings and warned the FIFA that ‘pursuing the law would result in a spate of court cases’.184 The EU backed their dismissal by stating: ‘Our position is well known, FIFA's 6+5 rule is based on direct discrimination on the grounds of nationality and is thus against one of the fundamental principles of EU law’. The EU diminished FIFA’s hope even further by asking FIFA to abolish the 6+5 rule and instead asked them to back the Homegrown player rule of the UEFA.185 In the summer of 2010, FIFA president Sepp Blatter announced that the 6+5 rule, that was expected to be implemented by 2012, had been abandoned.186 He also stated that FIFA will now look at ‘other eligibility’ options. However, there is still a chance that FIFA will try to introduce the 6+5 rule in the future, as there is still some support for its introduction in the world of football.187

As shown by this chapter, there are still unresolved issues at the fringes of the Framework of the EU and the football associations. It remains to be seen how the European Courts will continue to apply EU law to the arena of sport, as legal issues continue to arise in EU amateur and professional level. However, when the freedom of movement, anti-discrimination and other fundamental rights are challenged by sporting federations and players, these inherent

181 FIFA, According to legal experts, 6+5 is compatible with European law, 26 February 2009, www.fifa.com/aboutfifa/organisation/news/newsid=1032676/index.html. 182 Expert Opinion on the Compatibility of the ‘6+5 Rule’ with European Community Law, Düsseldorf: Institute for European Affairs 2008, p. 9. 183 S. Gardiner & R. Welch, ‘Nationality and protectionism in football: Why are FIFA’s ‘6+5 rule’ and UEFA’s ‘home-grown player rule’ on the agenda’, Soccer and Society 2011, p. 778. 184 Soccernet Staff, EU and FIFA clash over 6+5 rule, 26 February 2009, www.soccernet.espn.go.com/news/story?id=622632&sec=global&cc=5739. 185 I. Belet, White paper on sports. The European Parliament asks FIFA to abolish ‘6+5’ rule, EPP Group in the European Parliament 2008. www.eppgroup.eu/press/showpr.asp?PRControlDocTypeID=1&PRControlID=7374&PRContentID=12128&PR ContentLG=en. 186 BBC news, FIFA scraps plans for ‘home-grown’ player rule, 10 June 2010, www.news.bbc.co.uk/sport2/hi/football/8733164.stm. 187 E. Binks, Jol backing for FIFA’s ‘6+5’ rule, FourFourTwo, 5 October 2011, www.fourfourtwo.com/news/england/87257/default.aspx. 47 rights, bestowed upon the nationals of all Member States will probably triumph.188 The 6+5 rule and the Homegrown rule are examples of a case that flies in the face of these basic rights and protections that the EU institutions are charged with upholding. Another topic discussed in this chapter is the effects that a Homegrown rule and FIFA transfer rules can have on minors. To circumvent these FIFA and UEFA rules clubs attracted young players to the detriment of minors. Having said this, it must be noted that FIFA has made an effort to protect minors by introducing an article protecting minors into the FIFA Regulations. The best results will be achieved through intensive collaboration between the football organisations and the EU.

188 D.D. Orlando, ’6+5 = Discrimination? Why FIFA’s proposed quota rule doesn’t add up’, Penn State Law Review 2011-115, p. 771. 48

Chapter 5 Conclusion and recommendations Between 1974 and 1995 football attracted only fleeting interest from the institutions of the EU.189 In this period the EU merely sought to establish that football was subject to EU law without fully enforcing the implications of this link. There was no active regulatory environment concerning sports matters. The Bosman ruling of 1995 changed the environment to one of active regulation. The economic importance and significance began to increase and in a short time period the FIFA and UEFA regulations were tested against the EU legal framework. The answer to the main research question - where do the EU legal framework and FIFA/UEFA collide, regarding sport legislation and fundamental freedoms? - begins here, as this is the first major collision between the EU and the FIFA/UEFA.

The new environment and the impact of the judgements resulted in the Member States seeking a new approach to sports regulation in the 1997 Amsterdam Treaty.190 In particular in the Nice Declaration on Sport, the Member States stressed the need for the economic regulation of sport, but stressed that when regulating sport, the social and cultural importance had to guaranteed and balanced. This new active approach also had its impact on the FIFA and the UEFA. The development of the football regulations by these institutions is greatly influenced by the judgements on sports related cases. Subsequently, FIFA and UEFA adapted their own transfer regulations in line with these judgements. However, there still remain some loopholes in the regulations which clubs use to benefit themselves. Frictions between the FIFA and UEFA, on the one side, and the EU, on the other side, also remain present.

The FIFA and UEFA introduced some proposals and regulations, for example the Homegrown rule, the ‘3+2 rule’ and the ‘6+5 rule’. By introducing these rules the FIFA and UEFA tried to stop the stagnation in club competitions, where the same clubs dominate every single year, with a few notable exceptions. Therefore they can be seen as very noble and necessary rules for today’s football industry. At this moment, big clubs with money tend to buy only talents from overseas and often in big numbers so that they are sure they buy at least one talent. Local teams turn in to a multi-cultural team, sometimes with only one or two national football players. The effect of this is that national youth is being neglected and the proper flow of national talent will diminish. This effect becomes apparent at the world cup for national football teams where these countries are eliminated in the group stage. Rules to

189 R. Parrish, ‘Football’s place in the single European market’, Soccer and Society 2002, p.14. 190 R. Parrish, ‘Football’s place in the single European market’, Soccer and Society 2002, p.14. 49 diminish these effects are necessary to give club team football its local and national character back and give national youth a chance.

By introducing the Homegrown rule and the 6+5 rule, the emphasis is placed on the own youth and football education programmes and the development of football in the own country. Though, these new introduced rules have their side effects, as they enhance the sale of very young players, these young players are seen as homegrown after three years of sports education at one club. The 6+5 rule, however, has a significant downside, as the rule violates EU law by directly discriminating players on the basis of their nationality. Football players will not be able to play at clubs which have filled their quota of foreign players. Bosman was the first case to make clear that direct discrimination based on nationality is in violation with Article 45 TFEU. This makes the new proposal of FIFA, 6+5 rule, incompatible with EU law, since it cannot be justified under Article 45(3) TFEU. Meanwhile, the FIFA has become aware of the discriminating effect of the 6+5 rule and suspended its implementation. It could still be possible, however, that at a given moment the FIFA will revert to this proposal.

The Homegrown rule introduced by the UEFA also tends towards discrimination under Article 45 TFEU. However, this rule has been approved by the EU. Both rules have resulted in the abuse of loopholes and, although the FIFA have tried to adapt their regulations and to cover them, clubs still try to circumvent the rules.191 Although the starting point in which the two frameworks collide may be clear, the Bosman case, this thesis shows that obstacles remained (e.g. the Homegrown rule) and the end is still nowhere in sight. Therefore, in the next part, some solutions will be put forward how the FIFA/UEFA and the EU could adapt their regulations to diminish the tensions between the two legal frameworks. The following suggestions, recommendations and possible solutions cannot be seen as fully tested and examined proposals to adapt EU law or the FIFA/UEFA regulations. Additional adjustments or side effects have not been taken into account when developing these solutions, as this goes beyond the scope of this thesis. However, these recommendations are a starting point for discussions and the further development of investigation into their side effects.

5.1 Recommendations The first recommendation is addressed to UEFA which concerns the Homegrown rule. As mentioned in the chapter four, the aim of the Homegrown rule is that clubs invest in their own youth by establishing a quota of players which have been trained for at least three years by a

191 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 578. 50 particular club. This way they re-nationalize and re-localize the club teams. Clubs now invest in very young football players, which they can turn into a Homegrown player. Besides the problem concerning minors, the Homegrown rule tends to violate Article 45 TFEU. There are other ways to achieve the same goals that the Homegrown rule pursues. For example by requiring clubs to invest in local training academies and facilities.192 This way there is a guarantee that the money is spent on local youth instead of a minor lured from a foreign country. Moreover, investing in the future would benefit the clubs over time by creating a large pool of local talent and by a focussing on the local youth the clubs will be better equipped to discover local talents.

If disposing the Homegrown rule is perceived as to radical, adapting the rule can be a solution. UEFA could adapt their rule by extending the age range during which the three years must be completed.193 The range is now 15 - 21. During this period they must be trained at least three years at one club to be considered as a Homegrown player. The upper limit could be extended to 22 or 23. Players in this broader age range can still be considered to be in their developmental stage (e.g. a stage where physical and mental football skills still improve). By raising the upper limit problems associated with minors who have to move to another country to meet the Homegrown player requirement could be diminished as players could make this decision later in life. This decreases the interference with their educational and social development during adolescence which is associated with a transfer to another club.

Another adaptation made to the Homegrown rule could be the inclusion a period of time in which a player can become a Homegrown player even if he has passed the age limit of 21. This would diminish the discriminating effect it has on foreign players after they have passed the upper age limit and reduces the need for clubs to buy very young (foreign) players. For example, if a player has played from the age of 23 till the age of 28, he should be considered as a Homegrown player, because he has played for five years continuously at this particular club. By extending the age range or allowing long-term membership in a national association players can be qualified as a Homegrown player even beyond the proffered age range.194 Then, foreign players will be able to meet the requirements of a Homegrown player much

192 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 580. 193 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 289. 194 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 293. 51 easier, as they can become a Homegrown player later on in their football career.195 It will lessen the discriminatory effect as more players will be included under the homegrown banner. Clubs, however, could still see more potential in signing up younger players not only to ensure that they are a Homegrown player, but also because they are much cheaper.

Although the 6+5 has been abandoned, there are possible steps FIFA could take to achieve the goal they wanted to achieve with the 6+5 rule, nationalisation of club teams. A good alternative offered by the EU, is backing up the Homegrown rule developed by the UEFA. This suggestion has already been offered to UEFA and by involving FIFA in a youth development program, it could make its significance more stringent and effective, due to the fact that there will be two influential bodies interfering in this process. National players will develop and become interesting for clubs of their nationality to invest in.

Turning to the problem concerning visa applications, the following can be said. Clubs try to circumvent stringent visa requirements in their country and transfer rules established by the FIFA by entering into an exchange agreement with football clubs located in a country with light visa requirements, for example Belgium. At this moment countries in the EU do not have a unified long stay visa-system. Therefore it is for the European Union to provide a solution for the so called ‘Belgium route’ where football players from outside Europe enter the EU territory by choosing the country where they can obtain their residence permit and long-stay visa the easiest. Once a player obtains his/her residence permit, he or she can apply for citizenship through naturalisation. Though, this can only be done after five years of legal residence in the same country and after fulfilment of other naturalisation requirements, for example an integration exam.196 As a solution for this problem, the EU could create an ‘athletic visa’, with a residence permit application system for football players, or professional athletes in general. The EU can follow the United States on this matter, which offers different kinds of visa for various kinds of athletes and their family. One office processes all sports- related visa applications. Through this solution third country nationals will only have to send a request to the office appointed to receive and review all sports related applications.197 Football players, particularly from outside Europe, can obtain an EU athletic visa, with each

195 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 289. 196 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 581-582. 197 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 581-582. 52

Member State imposing the same requirements for this athletic visa. Member States will, however, have to retain competence to process its own normal visas and resident permits, for not sports-related applications.198 This way, the EU will not corrode the Member States’ sovereignty. This will also facilitate the registering of professional football players.

Another part of law which could be updated to overcome frictions is the established regulations concerning football contracts by the national football associations. There is a lack of uniformity which causes problems for some clubs when they are not able to sign up a (young) football player. Some national associations do not allow minors or persons under 18 to sign a professional contract or put a limit on the number of years that can be signed for. To solve this problem FIFA/UEFA and the national associations could establish a unified contract law, which should be maintained in all countries that are a member of an international football association. National associations, however, will not be eager to change their contract law and, therefore, the success of this solution depends on the cooperation of the associations.

The EU could, with a view to solve these frictions, also make some adaptations to their current philosophy on sport. It is necessary to define which rules are of ‘pure sporting interests’ and therefore automatically compatible with EU law.199 Besides, they should also define the ‘sports related rules’ so that the institutions can take the specificity of sport into account when considering the legality of the rule. An independent sport review proposed that the following rules could be covered by the principle ‘purely sporting interest’: rules relating to the regularity, proper functioning and integrity of competition, such as: the ‘rules of the game’, the structure of championships and calendars; the composition of natural teams; the national organisation of sport in Europe, like ‘home and away rules’; the organisation of competitions within the European sports ‘pyramid’ structure; rules relating to transfer ‘deadlines’; rules concerning the release of players for national teams; rules concerning the transfer of players; rules to encourage the attendance of spectators at sporting events; rules on the good governance of clubs, such as the club licensing system; rules relating to the ownership/control/influence of clubs; rules concerning layers agents; and rules concerning

198 C. Lembo, ‘FIFA transfer regulations and UEFA player eligibility: Major changes in European football and the negative effect on minors’, Emory International Law Review 2011, p. 581-582. 199 J.L. Arnout, Indepedent Sport Review 2006, p. 3, www.media2.pixelpoint.at/ppm_3dak_publicsport/~M0/241.3dak.pdf. 53 doping.200 ‘Sports related rules’ could be defined as rules relating to the competitive balance, for example the Homegrown rule, the central marketing of commercial rights, and salary caps. The EU could also improve legal certainty in the world of football by using the most appropriate legal instruments.

The FIFA and UEFA have placed their organisations on a collision course with the EU and they are getting themselves into a fight that they cannot win without significant changes or adaptations to either EU law or their own regulations.201 The parties should cooperate in all matters relating to the safety and security for the maximum protection of the world of football and further develop the partnership between EU institutions, Member States and football authorities in the process.202 Hopefully the problems concerning the transfer of minors and the tensions with Article 45 TFEU will be solved through this partnership. They might be able to draft a non-discriminating but well-working quota system, without loopholes. Would it not be great to see AJAX FC win the Champions League with 6 Dutch nationals in their squad and stop seeing England struggle at big tournaments, but finally see it winning a trophy?

200 J.L. Arnout, Indepedent Sport Review 2006, p. 3, www.media2.pixelpoint.at/ppm_3dak_publicsport/~M0/241.3dak.pdf. 201 J.J. McDermott, ‘Direct v. indirect discrimination in European football. The legal differences between UEFA’s Homegrown player rule and FIFA’s “6+5” proposal’, Texas Review of Entertainment and Sports Law 2010-11, p. 294. 202 J.L. Arnout, Indepedent Sport Review 2006, www.media2.pixelpoint.at/ppm_3dak_publicsport/~M0/241.3dak.pdf. 54

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List of abbreviations

AC Associazione Calcio AFC Amsterdamsche Football Club Art(s). Article(s) CAS Court of Arbitration for Sport e.g. exempli gratia (for example) EC European Community EEC European Economic Community ECJ European Court of Justice ETS European Team Sports Association EU European Union FA Football Association FC Football Club FFF Fédération Française de Football FIFA Féderation Internationale de Football Association FIGC Federazione Italiana Giuoco Calcio INEA Institute for European Affairs KNVB Koninklijke Nederlandse Voetbal Bond (Royal Dutch Football Association) KV Koninklijke Voetbalclub p. page PCA Partnership and Cooperation Agreement TEU Treaty of the European Union TFEU Treaty on the Functioning of the European Union TMS Transfer Matching System UEFA Union of European Football Associations

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