European Super League: FIFA and UEFA caught offside by European Court of Justice decision
It was recently announced that FIFA and UEFA would appear before the Commercial Court of Madrid to discuss how to implement the ruling made on 21 December 2023 by the European Court of Justice (CJEU) in relation to the European Super League (ESL). That ruling held that FIFA and UEFA would breach competition law (by abusing their dominance) if they failed to ensure that their authorisation rules for rival tournaments were transparent, objective, non-discriminatory and proportionate.
Background
The background to this case will be familiar to readers of this blog. We have previously discussed the ESL and the associated backlash in a video discussion between Mark Daniels and Professor Richard Whish KC titled “Fair game? The European Super League, sport and competition law”,1 as well as in our July 2023 article titled “Antitrust and football: When competition meets competition law”.2
In short:
- In April 2021, 12 major European clubs (the Founding Members), including the likes of Real Madrid, Manchester United and Juventus, announced a breakaway league – the European Super League (ESL). A22 Sports Management (A22) was formed to sponsor and assist the Founding Members in the creation of the ESL.
- The ESL was intended to be a semi-closed league to the extent that there would be five positions for relegation and promotion, but none of the 12 Founding Members would ever be relegated. The ESL also intended to organise matches and tournaments that would have competed with those organised by FIFA and UEFA, the confederation governing European football.
- A major backlash against the ESL arose from across the footballing world. Fans, national football associations such as the Football Association (FA) in England, players and politicians expressed their opposition to the proposal, with the then-UK Prime Minister Boris Johnson describing the ESL as “very damaging for football”.3
- As a result of the backlash, a number of clubs revoked support for the ESL, with Manchester United, Liverpool, Manchester City, Chelsea, Tottenham Hotspur, Arsenal, AC Milan, Inter Milan and Atletico Madrid all pulling out of the project within 48 hours of the proposals being announced.
- However, as a consequence of founding the breakaway league, all 12 Founding Members associated with the ESL, as well as their players, faced expulsion from FIFA and UEFA competitions, including the World Cup and national leagues.
- In anticipation of these sanctions, the ESL Company filed a lawsuit in the Commercial Court of Madrid which sought relief against FIFA and UEFA on the basis that they had infringed EU competition law, acting contrary to Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) by:
- Relying on provisions in their respective statutes which require FIFA and UEFA’s prior approval for establishing international inter-club football competitions and the participation therein of professional football clubs and their players; and
- Relying on certain provisions in their respective statutes concerning the exploitation of commercial rights associated with competitions approved by both FIFA and UEFA.
- The case was referred to the CJEU for preliminary ruling.
- On 15 December 2022, one year prior to the CJEU’s preliminary ruling, Advocate General (AG) Rantos issued a non-binding opinion on the preliminary reference to the CJEU. In that opinion he sided with FIFA and UEFA, rather than the ESL Company4 and noted that FIFA and UEFA’s prior approval and sanctions regimes are not intrinsically incompatible with Articles 101 and 102 TFEU, as they uphold legitimate objectives related to the specific nature of the sport and competitions. As a result. AG Santos’s opinion concluded that:
- FIFA and UEFA may impose sanctions against clubs which participate in tournaments which are not approved by them, as this does not fall foul of EU competition law. The exclusion of players, however, is disproportionate and therefore not justified.
- EU law does not preclude the FIFA-UEFA Statutes that provide for prior approval of any European competition, as such measures are necessary for the proper running of the competitions.
The CJEU Preliminary Ruling
On 21 December 2023, the CJEU issued its preliminary ruling. In short, the CJEU disagreed with AG Santos, and found that FIFA and UEFA’s rules on prior approval of interclub football competitions, such as the ESL, were contrary to EU competition law.
The CJEU highlighted that FIFA and UEFA hold a dominant position in the market for the organisation and the commercial exploitation of international competitions between football clubs at European level, and that their rules enabled them to determine whether competing tournament organisers, including the ESL Company, could enter the market. Given this conflict of interest, it was an abuse of a dominant position under Article 102 TFEU for FIFA and UEFA to exercise their approval powers without ensuring that such powers were transparent, objective, non-discriminatory and proportionate.
The CJEU then went further, stating that, under Article 101 TFEU concerning the prohibition of anti-competitive agreements, the rules agreed between FIFA and UEFA in the present case were, by object, a breach of competition law due to the lack of any coherent framework for ensuring that they were transparent, objective, non-discriminatory and proportionate. The CJEU left the determination of whether the rules might benefit from an exemption under Article 101(3) TFEU to the Madrid Court. Nevertheless, the CJEU indicated to the Madrid Court that such an exemption would be difficult to justify in the circumstances.
What comes next?
Even before the CJEU’s ruling, a number of steps had been taken by English clubs as a result of the ESL proposal:
- In June 2021, the English club Founding Members agreed to collectively contribute £22 million to “the good of the game” (including new investment in support for fans, grassroots football and community programmes), as well as agreeing to support a rule change that would mean any similar action would lead to a 30-point deduction and (if it is an English club Founding Member) a £25 million fine.5
- In June 2022, as a part of the fallout from the failed launch of the ESL, all Premier League club directors and owners signed up to the Premier League ‘Owners’ Charter’ pursuant to which they committed to, among other things, “not engage in the creation of new competition formats outside of the Premier League’s Rules.”6 Although lacking legal force, the Owner’s Charter reiterates the Premier League’s commitment to supporting the “football pyramid that rewards success on the pitch, upholds promotion and relegation and qualification for other competitions by current sporting merit.”7
Following the Preliminary Ruling, Manchester United, Manchester City, Chelsea, Tottenham, Arsenal and Liverpool all appear to have ruled out further involvement in the ESL, and each has published a press release to this effect.8 The Premier League also released a statement saying “[t]he ruling does not endorse the so-called ‘European Super League’ and the Premier League continues to reject any such concept.”9
There have also been developments regarding the other parties involved in the case:
- Even before the Preliminary Ruling, in 2022, UEFA amended its authorisation rules governing international club competitions (2022 UEFA Authorisation Rules)10 to try and bring them into line with EU competition law. The 2022 UEFA Authorisation Rules set out detailed criteria explaining how European clubs can request authorisation for a new competition outside of UEFA’s remit, as well as disciplinary measures which UEFA can impose for breaches of these rules.
- Shortly following the publication of the Preliminary Ruling, A22 announced its proposal for men’s and women’s midweek competitions with promotion and relegation included and all matches being free to watch. A22 stated that this competition would be based on sporting merit with no permanent members and with matches being played midweek so that clubs are able to remain in their domestic leagues. The proposal also includes plans to launch a sports streaming platform on which all Super League matches will be free to watch.11 The main difference with the previous proposals is that it introduces an updated system of relegation and promotion within multiple divisions. This appears to address a key criticism of the original proposals under which certain clubs would have been guaranteed participation. However, it is unclear what level of support the new competition will attract.
As we have previously discussed,12 the UK Government has committed to regulatory reform for men’s elite football, which will have implications for any “breakaway league”. To this end, in February 2023, the Department for Culture, Media and Sport (DCMS) published a white paper setting out a regulatory framework which would require the clubs in the top five tiers of the English football pyramid to obtain a license from an independent regulator to operate as professional men’s football clubs. One requirement for obtaining such a license would be agreeing to “only compete in leagues and competitions that are approved by the Regulator based on predetermined criteria.”13 This condition is intended to “ensure fans no longer face the prospect of seeing their clubs join competitions, like the European Super League … that do not meet their values”.14 Football authorities were joined by politicians in offering their endorsement. Rishi Sunak, the British prime minister, commented that “These bold new plans … will safeguard the beautiful game for future generations”, while the former shadow DCMS secretary, Lucy Powell, added that “Football reform has support across parliament, and across the country”.15 The regulator is likely to be installed for the start of the 2024/2025 season, which will begin in August this year.
Where do we go from here?
In March’s hearing, the Commercial Court of Madrid will now have to decide whether the relevant provisions of UEFA and FIFA’s rules are justified under the competition law exemptions available to it under Article 101(3) TFEU. Owing to UEFA having amended its rules in 2022, the Madrid Commercial Court will now only be able to rule on whether the old UEFA system complied with EU competition law.
Whatever the Madrid Commercial Court decides, in light of the intense backlash and the proposed UK regulatory reform, it appears highly unlikely that the ESL will return under its original guise. It remains to be seen what level of support there will be for A22’s proposed midweek competition proposal – which will not be considered by the Madrid Commercial Court.
1. Available here.
2. Available here.
4. AG Rantos’ opinion is available here.
5. https://www.premierleague.com/news/2167982.
7. ibid.
8. See press releases from Manchester United, Manchester City, Chelsea, Tottenham Hotspur, Arsenal, and Liverpool.
10. See here.
11. For more information about the A22 proposals see: https://a22sports.com/en/competition/.
13. Paragraph 4.3, A Sustainable Future – Reforming Club Football Governance (the White Paper), February 2023 (see https://assets.publishing.service.gov.uk/media/63f65d3de90e077bb0c92853/Reform_of_club_football_governance_-_White_Paper.pdf).
14. Para 4.11, the White Paper.