VOLUME 15 · ISSUE 1 · 2007 sport and the law journal ISSUE 1 VOLUME 15 SPORT AND THE LAW JOURNAL Editor British Association for Sport and Law Limited Simon Gardiner c/o The School of Law, King’s College London Strand, London WC2R 2LS Editorial Board Telephone: 020 7848 2278, Fax: 020 7848 2788 Dr Hazel Hartley Murrey Rosen QC www.britishsportslaw.org Dr Richard Parrish Jonathan Taylor Martin Matthews Registered Office Registered in England. Company No. 4947540. Directors Registered Office: 66 Lincoln’s Inn Fields Michael Beloff QC: President London WC2A 3LH. Mel Goldberg: Chairman VAT Reg No. 673 5989 73 Paul Harris: Deputy Chairman Gerry Boon: Hon. Treasurer ISSN 1353-0127 Serena Hedley-Dent: Hon. Secretary Darren Bailey Graphic design and layout Morris Bentata www.heliographic.co.uk Nick Bitel Stephen Boyd Nic Coward Sara Friend Edward Grayson Jane Mulcahy Walter Nichols Murray Rosen QC Sam Rush Jonathan Taylor Maurice Watkins VOLUME 15 · ISSUE 1 · 2007 Contents Editorial 2 Survey and Reports Sports Law Foreign Update 31 Walter Cairns Opinion and Practice West Ham and Third Party Transfers 4 – The Opening of the Premier League’s Sport and the Law Journal Reports 98 ‘Pandora’s Box’? Mel Goldberg and Simon Pentol Criminalistion of Drugs in Sport 9 – A Few Comments Simon Gardiner Analysis Competition Law at the Races: 12 Excessive Pricing or Value? Ed Franklin and Angus Murray Sports Participation and 19 Criminal Liability Simon Gardiner 1 ISSUE 1 VOLUME 15 SPORT AND THE LAW JOURNAL Editorial By Simon Gardiner, Editor This issue of the Sport and the Law Journal covers a number of on-going and current issues. The Opinion and Practice section firstly includes Mel Goldberg and Simon Pentol’s examination of the on-going dispute between a number of Premier League clubs, notably Sheffield United and the Premier league in light of the action against West Ham and the deduction of points for the illegal acquisition of players Carlos Tevez and Javier Mascherano. In addition Simon Gardiner evaluates the recent calls for criminalization of doping activities in sport. The Analysis section features two articles. Ed Franklin and Angus Murray’s ‘Competition Law at The Races: Excessive Pricing or Value?’ provides analysis of the recent litigation between Attheraces and the British Horseracing Board. Additionally Simon Gardiner’s ‘Sports Participation and Criminal Liability’ examines recent developments in both the substantive and procedural law concerning prosecutions for sportsfield participatory violence. As far as the rest of the Journal, the regular contributions of Walter Cairns’ ‘Sports Law Foreign Update’ and ‘Sport and the Law Journal Reports’ can also be found. Finally, it must be stressed that the Journal welcomes contributions from all BASL members and other readers in any of the sections of the Journal including reviews of future sports law related publications. Please contact the Editor with any suggested offerings. BASL Simon Gardiner [email protected] 2 VOLUME 15 · ISSUE 1 · 2007 Opinion and practice 3 ISSUE 1 VOLUME 15 SPORT AND THE LAW JOURNAL OPINION AND PRACTICE West Ham and Third Party Transfers – The Opening of the Premier League’s ‘Pandora’s Box’? By Mel Goldberg (solicitor) partner at Max Bitel Greene Simon Pentol (counsel) 25 Bedford Row, London The reaction of certain clubs to the decision of the Disciplinary Commission of the Premier League (PL) not to deduct points from West Ham over its acquisition of Carlos Tevez and Javier Mascherano has exposed the curious misalliance that exists between the member clubs and demonstrates the limitations of football to police itself when aggrieved parties seek to challenge the procedure and sanction of the very rules they themselves have implemented. The Facts In November 2006 a consortium led by Eggert (derived from the judgement of the FAPL commission Magnusson (and entirely unconnected with 27th April 2007) Joorabchian) bought the club and the previous chairman In the final days of August 2006 the (then) executive (Terence Brown) & managing director (Paul Aldridge) management of West Ham United (‘WHU’) was in stood down. Scott Duxbury the then legal director discussion over a possible takeover of the club with (a became the deputy chief executive. consortium led by) Kia Joorabchian whilst simultaneously negotiating the acquisition of the highly On 24th January 2007 having been informed by the rated Argentinian footballers Carlos Tevez & Javier FAPL of a proposed report into third party ownership of Mascherano on whose behalf Joorabchian was acting. footballers, Nick Igoe (the financial director of WHU) forwarded to the FAPL the contracts the club had Third parties owned (and continue to own) the entered into with ‘the companies’ (with approval of the economic rights of both players. Although both players new executive management of the club) and all matters signed FAPL contracts on 31st August 2006 (on the came to light, resulting in charges being brought on 2nd deadline of the summer transfer window), the March 2007. economic rights of both players (by agreement) remained vested at all times in ‘the companies’ who WHU admitted that its actions in August/September inter alia retained the sole, exclusive & unilateral rights 2006 were in breach of rule B13. to terminate the players’ contracts “without any right of objection from the club or the player”. Javier Mascherano subsequently signed for Liverpool FC (February 2007) pursuant to a contract entirely WHU admitted that the agreements were in breach of different in form to that agreed by WHU that has been rule U18. approved by the PL. Carlos Tevez remained a West Ham player (although his status was questionable and Such clauses appear to be an obvious restraint of trade the PL were found to have the power to terminate his and accordingly, unenforceable in law against either the registration) and following the decision of the club or the players. West Ham nonetheless agreed to Disciplinary Commission, the offending side- the terms (by way of “side agreements”), apparently agreements were terminated by West Ham to the unaware of their deficiencies. satisfaction of the PL in order to allow the player to participate in their remaining three fixtures enabling the Discussions took place between representatives of the club to avoid relegation against all odds. PL & WHU (Aldridge & Duxbury) in August/September 2006 and upon assurances being given by the club that WHU were fined £2.5 M for breaching rule U18 & £3M it had not entered into any arrangements with third for breaching rule B13. parties both players were registered to play for West Ham. Significantly (and most controversially), no points were deducted. 4 OPINION AND PRACTICE SPORT AND THE LAW JOURNAL VOLUME 15 ISSUE 1 West Ham and Third Party Transfers – The Opening of the Premier League’s ‘Pandora’s Box’? The Charges enhance their prospects of success (especially in 1. Rule U18 – ‘no club shall enter into a contract which the short term) that expediency often overtakes enables any other party to that contract to acquire legality and with the ever-increasing globalization the ability materially to influence its policies or the of football, situations like those at West Ham performance of its team in league or (E10) cup occur. Until the FAPL formally prohibits such matches’. deals, they cannot be eradicated; · There is no specific rule that outlaws FAPL clubs · Interestingly, the ever-increasing use of the ‘loan acquiring the services of players owned by a third system’ among FAPL clubs would seem to party per se – the mischief to be caught by U18 is infringe rule U18 in circumstances where the a wide one with the clear objective of prohibiting player is forbidden from playing against his any member club from entering into an agreement permanent club (Ben Foster who was ‘on loan’ whereby a third party has the potential to from Man United to Watford being a case in point influence its policies or performance, the third when he was prevented from playing against the party not being a member of the FAPL and Manchester club not only in their league meetings accordingly, unaccountable to it – the type of but also in the FA Cup semi-final) because the contracts entered into by WHU plainly gave rise to rationale of the transfer system assumes that all the potential of the third parties to exert a material the player’s allegiances to his previous employer influence over the club; are ended. More acutely, Everton and Manchester United entered into a ‘gentleman’s agreement’ · Of note, U18 is entitled Club Contracts and is whereby their goalkeeper Tim Howard would not included in a section of the rules aimed at play against Everton having signed permanently prohibiting multiple ownership of clubs; after being on-loan from the Manchester giants – Everton’s replacement ‘keeper was at fault for the · The commission accepted that whatever the first goal, Man United went on to win and terms of the agreements, they did not in fact subsequently secured the Premiership. influence the club’s policies or performance – team selection at all times remained the province of the (then) manager Alan Pardew and the 2. Rule B13 – ‘in all matters and transactions relating to Joorabchian-led consortium did not buy the club: the FAPL, each club shall behave towards each other club and the FAPL with the utmost good faith’ · Third party ownership of footballers is widespread and authorised in overseas leagues, particularly in · The logic of the rule is transparent and commits all South America. Businessmen/investors agree to FAPL members to behave towards each other and meet the accommodation and or training fees of the FAPL in good faith – the Premier League is promising young players at clubs that cannot essentially a joint venture between its 20 member afford to pay them because they are insolvent or clubs that have each signed up to conducting in meltdown and in return, acquire the exclusive themselves in accordance with a set of rules economic rights in the players in order to recoup agreed by them both to the letter and spirit; their expenses through the provision of future transfer fees & exploitation of image rights.