By Harry Bambury, Associate, Mills & Reeve, LLP, Solicitors, UK
The ECJ ruling, which was released on 21 December 2023, highlights the importance of corporate governance in the modern sporting world.
FIFA and UEFA have been handed a damning judgment, stating that they have failed to ensure their powers are "transparent, objective, non-discriminatory and proportionate", and so came to the decision to block the European Super League (ESL) by abusing their dominant position. The ECJ concluded that "given their arbitrary nature, their [UEFA and FIFA] rules on approval, control and sanctions must be held to be unjustified restrictions on the freedom to provide services."
However, the ECJ stopped short of prohibiting any block on the formation of the ESL at all. The judgment stated that the decision “does not mean that a competition such as the Super League project must necessarily be approved. The Court does not rule on that specific project in its judgment." Therefore, we may yet see UEFA and FIFA redraw their battle lines and attempt another defensive manoeuvre.
The ESL ruling comes on the same day that the ECJ also ruled in the case of the International Skating Union and the challenge by Royal Antwerp regarding a minimum number of ‘home-grown players’ to be included in teams.
In both of those cases, the ECJ favoured the ‘pro-competition’ side of the argument, demonstrating the ECJ's 'pro-competition, anti-monopolisation' attitude.
Limitations on competition and other controls are not outlawed entirely, but what these rulings make clear is that it is imperative that sporting organisations of all sizes take their governance seriously. Proper policies and procedures, that are transparent and proportionate in nature, must be in place and followed in order to avoid embarrassments such as the one suffered by football’s two biggest governing bodies today.
Whilst no doubt a win for supporters of the ESL, this will not be the final twist in this tale, and we look forward to considering and observing the impact of these cases in more detail in the near future.
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Footnote:
Since this Post was written and published, the ESL has announced a revamped ESL Competition involving 64 men’s clubs and 32 women’s clubs.
For further information, log onto: https://www.bbc.co.uk/sport/football/67787981.