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European Super League: What legal hurdles stand in the way of a breakaway competition?

As opposition to plans for a new European Super League intensifies, Darren Bailey, a consultant at law firm Charles Russell Speechlys, tells SportsPro how a legal battle over the proposed breakaway competition could play out and why the outcome is "50-50 under the current approach".

20 April 2021 Sam Carp

Concrete plans for a JP Morgan-funded European Super League (ESL) might have only just reached the surface, but a subsequent legal battle between the founding members and soccer’s outraged ruling authorities could run for several years if both parties stand their ground.

That is according to Darren Bailey, a consultant at law firm Charles Russell Speechlys and the former director of football governance and regulation at English soccer’s Football Association (FA), who believes that each side could argue that the other is breaching competition law.

Bailey points out that some of the grievances likely to be aired by the two parties should the fallout eventually make its way to court can already be seen in cases involving other sports. The ESL can take confidence from a recent ruling involving the International Skating Union (ISU), which in December last year was found by the European Union (EU) General Court to have breached the EU’s competition law by prohibiting athletes from taking part in competitions not sanctioned by the global governing body.

Sports are now all suffering from potential challenges and breakaways, so this is not all about football, it’s about the wider need for sports to understand what they can and can’t do.

The objections of soccer’s major powerbrokers, meanwhile, are similar to those that have been put forward by the Union of European Leagues of Basketball (ULEB) and the International Basketball Federation (Fiba) in their complaint against Euroleague Commercial Assets (ECA). ECA is the organiser of the EuroLeague, another breakaway that has become Europe’s most prestigious club basketball competition, but which the two dissenting parties have accused of ‘anti-competitive behaviour’ and ‘abusing a dominant position in the market’.

With the proposed 20-team ECL now posing a direct threat to the Uefa Champions League, European club soccer’s existing top level of competition, Bailey says cases that have not received as much publicity previously could play a part in what happens next.

“I think one of the things in the past that hasn’t been realised is the implications of cases involving ice skating or basketball or swimming,” he tells SportsPro. “They’ve actually created the legal framework, and people weren’t keeping an eye on it.

“This is where you end up, with the biggest sport in the world citing an ice skating case in order to create a Super League. You wouldn’t really have thought that, would you?”

What legal hurdles have to be cleared for the ESL to come to fruition?

Bailey explains that there are “three levels of issues” that the founding members of the ESL will have to overcome if they want their multibillion dollar dream to become a lucrative reality.

“There will be potentially a disciplinary situation,” he says. “There’s potentially a commercial contractual position. Then there’s also avoiding the sanctions that will be being imposed by the football authorities on their conduct.”

Bailey notes that there are “a whole series of approvals and requirements” that the ESL would need from the likes of Uefa, which has shown no appetite whatsoever to give the green light to the new competition in its current form. Indeed, European soccer’s governing body responded fiercely in the face of the breakaway plans, releasing a joint statement with various leading national leagues and associations saying they will ‘consider all measures available to us’ in order to ‘stop this cynical project’.

“What that really sets up is the real essence of this argument,” Bailey continues, “which is going to be: is this a competition law position insofar as its relates to a typical market, or can you find a persuasive argument that says sport should be treated differently and the monopoly structures should be allowed to continue?

“I think what the ESL will argue is that the prohibitions that are seeking to be applied on it and the sanctions that are seeking to be applied on it are abusive of a dominant position, because [the football bodies are] acting as regulator and commercial rival, and it’s wrong for them to be in a position to stop a new event being opened, because they have a commercial interest in stopping it, and it’s a misuse of their monopoly powers to do so.”

Bailey argues that competition law should not be applied to sport in the same way that it is to industries like shipping or steel, instead suggesting it requires a “more nuanced approach” that acknowledges that sport is designed to create a level playing field. However, because of the way the regulations are now, he believes the ESL “will feel quite emboldened” and says it could be “more difficult” for the soccer authorities because they have to “change the weather of the European courts”.

He continues: “The question is whether the sports bodies and football authorities could demonstrate that the overriding needs, the specificity of sport, the cultural and social significance of football, means that there should be a much more sporty approach to the application of competition law that allows them to say: ‘this is important, the European model of sport is predicated on an open pyramid, it’s predicated on social dimension, clubs, regions, history and heritage, it’s not the American model which is predicated on the basis of profit and entertainment.’

“So I see this as being a challenge between those two interpretations of the European legal framework.”

Fans have been making their feelings known about the European Super League 

Who holds the upper hand?

As well as saying that they plan to block the formation of the ESL, soccer authorities have threatened the rebel teams and their top talent with several sanctions. The likes of Uefa and the Premier League have warned the breakaway clubs that they will be thrown out of domestic competitions, while players have been told that they face a ban from flagship national team tournaments such as the Fifa World Cup if they play in the ESL.

It was reported on 19th April, though, that the ESL has already taken ‘protective steps’ to prevent those sanctions from being handed down. A letter addressed to Fifa and Uefa, which was seen by the Press Association (PA), said that the ESL has ‘filed a motion before the relevant courts in order to ensure the seamless establishment and operation of the competition’. 

“The interesting thing for me is what you’re seeing now is a strategy from what I would say are those that are potentially being sanctioned in any sport setting to take preemptory action,” says Bailey. “So rather than wait for me to impose a sanction on you, you almost say, ‘well we think they’re going to do this and we want you to stop it happening.’

“So that’s the gameplan, and that’s potentially quite clever, because it draws it out and gets you an accelerated and potentially preemptive protection, so that you’re actually protective of yourself.”

How long could a potential legal battle drag on?

The ESL has said that its inaugural season ‘is intended to commence as soon as practicable’, which feels like it could be some way off given the level of immediate opposition and the various issues that need to be resolved.

The question is, though, precisely how long might that process take?

“The slight problem is here if you go through to the end of this process it’s going to take a long time,” Bailey says. “There’s a case in basketball at present where there’s a challenge by the league associations to say two things. One is that it’s not right that you’re not selecting teams on sporting merit, even when they’re doing well in their domestic competitions, but moreover they think that the franchises are all enjoying competitive and commercial advantages that they construe as being anti-competitive.

The slight problem is here if you go through to the end of this process it’s going to take a long time.

“That case hasn’t been heard yet, but you could foresee the football authorities swinging behind the basketball case, which is not yet decided, the ESL swinging behind the ISU case, which has been decided, and no party saying, ‘we can give up here’. If that goes long that will be five, six, seven years.”

Bailey adds that it is “unlikely” that soccer could deal with that period of disruption and it will more likely come down to whether the courts are prepared to deal with the case “on a highly expedited basis”. He also cites an “expedited mediation” and a “longer term transitional arrangement” as possibilities.

“For me, because of the significance of it, it could go fast,” Bailey continues. “The question of whether it can go fast enough, I think next year seems very ambitious. I think the legal arguments are reasonably straightforward. You might have a bit of an argument and some of these cases get bogged down in detailed economic reports, but my sense is because of the nature of the case and the impact that it has that they would seek to wrap an expedited process around it and they would seek to drive it through.”

Leeds United players wore t-shirts opposing the European Super League ahead of their game against Liverpool on Monday

So is a European Super League likely from a legal perspective?

European soccer has been shaken to its very foundations by the news that has emerged in recent days, with governing bodies, clubs and fan groups united in their anger at what many perceive as a betrayal by some of the richest teams in the game.

In terms of whether a legal battle will result in the ESL getting what it wants, Bailey believes the outcome is “50-50 under the current approach”.

“Mainly it’s quite finely balanced,” he adds, “but I think if the courts go to a more sports-specific approach, which I think they should, and they do start to raise questions over the commercial side of the deal, in terms of the founders taking a lot of private money out, then I think it goes 60-40 in favour of a football family victory.

“And all I would say is it’s a very, very big decision, a huge decision for any court to make.”

Indeed, whatever the outcome may be, Bailey expects that the case will have profound implications for sport as a whole. Soccer is not the only sport whose traditional decision makers have faced the threat of a breakaway in recent years, and Bailey believes the ESL ruling can be treated “a little bit like a test case”.

“It warrants that to happen,” he asserts. “More broadly, even beyond this narrower football setting, it’s something that all sports really need. They all need to get clarity of the scope of their powers, because if you don’t know the scope of your regulatory authority, you will continue to act in a defensive way, and you will start to see more and more breakaways.

“Sports are now all suffering from potential challenges and breakaways, so this is not all about football, it’s about the wider need for sports to understand what they can and can’t do.”

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