Transcript 2007 NSLI FALL CONFERENCE The Increasing Globalization of Sports:

2007 NSLI FALL CONFERENCE
The Increasing Globalization of Sports:
Olympic, International and Comparative Law &
Business Issues
Comparative Analysis of Sports
League Structure, Governance and
Player Restraints Conference Panel
Dr. Anastasios Kaburakis
A Comparative Analysis of Player Restraints
and Transfer Rules in European Union and
United States Professional and Amateur
Sports
Starting Point:
US and EU Competition and Labor Law
US Sport and Law Governing Competition
 Antitrust Law
 1890 Sherman Antitrust Act (SAA)
 15 U.S.C. §§ 1-7
 SAA §1: Agreements in restraint of trade
 (Per Se v. Rule of Reason analysis)
 SAA §2: Unlawful monopolization
 Willful exploitation of dominant market power or attempt to gain
monopoly power via unlawful means
US Sport and Law Governing Competition
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Relevant Case Law – Antitrust
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Federal Baseball Club of Baltimore v. National League of Professional Baseball
Clubs 259 U.S. 200 (1922)
Dept. of Justice v. NFL 116 F. Supp. 319 (1953)
US v. NFL 196 F. Supp. 445 (1961)
AFL v. NFL 323 F 2d 124 (4th Cir. 1963)
Philadelphia World Hockey v. Philadelphia Hockey Club 351 F. Supp. 462 (E.D. Pa.
1972)
San Francisco Seals v. NHL 379 F. Supp. 966 (1974)
Bowman v. NFL 402 F. Supp. (D. Minn. 1975)
Robertson v. NBA 389 F. Supp. 867 (S.D.N.Y. 1975)
NASL v. NFL 670 F. 2d 1249 (1982)
LA Memorial Coliseum Commission v. NFL 469 US 990 (1984)
Mid-South Grizzlies v. NFL 467 US 1225 (1984)
NCAA v. Board of Regents 468 U.S. 85 (1984)
NBA v. SDC 484 US 960 (1987)
USFL v. NFL 842 F. 2d. 1335 (1988)
Piazza v. MLB 831 F. Supp. 420 (E.D. Pa. 1993)
Sullivan v. NFL 115 S. Ct. 1252 (1995)
Law v. NCAA 902 F. Supp. 1394 (1998)
Fraser v. MLS 97 F. Supp. 2d 13 (2000)
Noted Exemptions from Antitrust Law
 1922 Federal Baseball ruling
 Justice Holmes in dictum ruled baseball
was “not interstate commerce” exempting
it from antitrust law
 1961 Sport Broadcasting Act
 Congress enacted the Sports Broadcasting
Act (15 USC Section 1291)
 Thus, the four major leagues were able to
sign agreements pooling broadcasting
rights (“sponsored telecasting”), being
exempt from antitrust scrutiny
US Sport and Labor Law
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Important Aspects of Labor Law
 National Labor Relations Act
 National Labor Relations Board
 Collective Bargaining Agreements
 League rules negotiated under CBA
 Statutory Labor Exemptions
 Clayton Act
(15 USC Sec. 12-27 & 29 USC Sec. 52)
 Norris-La Guardia Act (29 USC Sec. 101-115)
 National Labor Relations Act (NLRA)
(29 USC Sec. 141-187)
 Non-Statutory Labor Exemption
 Local Union # 189, Amalgamated Meatcutters &
Butchers Workmen of North America, AFL-CIO
v. Jewel Tea Company
381 US 676 (1965)
 United Mineworkers of America v. Pennington 381 US 657 (1965)
US Sport and Labor Law
 Labor exemption applications
 Mackey v. NFL,
543 F. 2d 606 (8th Cir. 1976)
8 union sponsored players challenged the
“Rozelle Rule” – The “Mackey test”
The Antitrust exemption could be invoked by
a league only when:
1. Restraint of trade primarily affected the CBA parties
2. Agreement fought to be exempted concerned a
mandatory subject of bargaining
3. Agreement was the product of arms length bargaining
The third element was lacking, hence no
league protection via the labor exemption
US Sport and Labor Law
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Relevant Case Law – Labor Relations
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Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs 259 U.S.
200 (1922)
Gardella v. Chandler, 79 F.Supp. 260 (S.D.N.Y. 1948)
Toolson v. New York Yankees, 346 US 356 (1953)
U.S. v. Schubert, 348 US 222 (1955)
U.S. v. International Boxing Club, 348 US 236 (1955)
Radovich v. NFL, 358 US 445 (1957)
International Boxing Club v. US, 358 US 242 (1959)
Haywood v. NBA, 401 US 1204 (1971)
Flood v. Kuhn, 407 US 258 (1972)
Philadelphia World Hockey Club v. Philadelphia Hockey Club, 351 F. Supp. 462 (E.D.P.A. 1972)
Robertson v. NBA, 389 F. Supp. 867 (S.D.N.Y. 1975)
Kansas City Royals v. MLBPA, 532 F. 2d 615 (8th Cir. 1976)
Mackey v. NFL, 543 F. 2d 606 (8th Cir. 1976)
McCourt v. California Sports, 600 F. 2d 1193 (6th Cir. 1979)
Zimmermann v. NFL, 632 F. Supp. 398 (D.D.C. 1986)
Bridgeman v. NBA, 675 F. Supp. 960 (D.N.J. 1987)
Wood v. NBA, 809 F. 2d 954 (2d Cir. 1987)
Powell v. NFL, 678 F. Supp. 777 (D. Minn. 1988), 930 F. 2d 1293 (8 th Cir. 1989)
McNeal v. NFL, 764 F. Supp. 1351 (D. Minn. 1991)
White v. NFL, 41 F 3d 402 (8th Cir. 1994)
Brown v. Pro Football, 116 S. Ct. 2116 (1996)
NBA v. Williams, 857 F. Supp. 1069 (S.D.N.Y. 1994), 116 S. Ct. 2546 (1996)
Curt Flood Act (1998) 15 USC Sec. 27 (a)
MLB v. Crist, 331 F 3d 1177 (11th Cir. 2003)
Clarett v. NFL, 369 F.3d 124 (2nd Cir. 2004)
US Competition & Labor Law
Summary
• In the “amateur” section of US sport, the NCAA
has enjoyed relief from antitrust scrutiny (w/ 2
noted exceptions)
• Congressional intervention
(e.g. SBA 1961, CFA 1998)
• Practices that would otherwise be declared
inherently anti-competitive find a sporting
rationale and pass antitrust muster (e.g.
broadcasting restrictions, draft systems, salary
caps, luxury tax)
US Competition & Labor Law
Summary
• Several major sports leagues’ practices have
been declared violations of antitrust law (i.e.
cross-ownership restrictions, relocation
restrictions, transfer windows, and acquisitions
deadlines) under SAA §1. SAA § 2 claims in
regard to monopolization and the misuse of a
dominant position have been harder to prove
• NLRA principles demand bona fide CBA
bargaining – Courts give employers the benefit of
the doubt
• “Mackey test” // NLRA employers’ obligations →
Players’ unions may still pursue the negation of a
restrictive practice; as a last resort they always
have the “nuclear option” of union decertification
European Union
Competition and Labor Law application in sport
EU Competition Law
application in sport
• EC Treaty [The Treaty establishing the
European Community (as amended by the Treaty
of Amsterdam)]
C 325/35, 12/24/02
• EC Treaty promotes competitive market economy and
prevents barriers to integration of the single European
market
• Article 3 (g): No competition distortion
• Article 81 (1 & 2): Anti-competitive agreements prevention
• Article 81 (3): Exceptions for promotion of technical and
economic progress—allowing consumers a fair price (EU–
“sui generis” Rule of Reason)
• Article 82: Abuse of dominant position w/i the common
market prevention, insofar as the abuse may affect intermember trade
• Article 86 et seq: Allow for State Aid to sport clubs via
socio-cultural approach
EU Competition Law
application in sport
•
•
The EC Competition Directorate Director General JF Pons (1999)
emphasized:
– Solidarity, equality, uncertainty of results
– Social expectation of top-bottom € distribution
– ISFs may regulate and govern € activity
– Distinction of EC Competition policy compliance and sport
policy requirements
– EC ≠ unjustified restrictive practices of sport orgs. with €
impact // EC accepts practices inherent to the nature of sport,
necessary for sport org. and justified
Pons (1999): Certain sport policies may fall outside the scope of
Article 81 (1)
– Game rules
– Nationality clauses for international competition v. national
teams
– National quotas (also see UEFA’s “Homegrown Rule” critique)
– Rules for selection based on objective, non-discriminatory
criteria
– Rules on fixed transfer periods
– Rules promoting uncertainty of results, barring other less
restrictive methods
EU Competition Law
application in sport
• EC v. UEFA (1999-2003) on Champions League
Exclusive TV rights bundling – UEFA (2003)
instituted new coverage plan and bidding
procedure
• EC v. UK Premier League on R. Murdoch’s
BSkyB exclusive package
• +Television-Sans-Frontier directive (Article
3A): “Important events for society” on free
TV
EU Competition Law
application in sport
• EC v. FIA (2001): A SGB/SINGO
needs to separate its regulatory
from its commercial promotions
function (FIA organizing Formula I
races “drove out” competing
promoters) NOTE: FI v. Soccer
EU Competition Law
application in sport
• EU Commissioner Monti (2001):
EC does not care about sporting rules –
These are not subject to EU Law; if they are
objective, transparent, and
nondiscriminatory (OTND) ≠ AntiCompetitive
• ECJ ruled that SGB/SINGOs do not enjoy immunity
even over the rules of the game; they have to satisfy
OTND criteria
EU Labor Law
application in sport
• EC Treaty [The Treaty establishing the
European Community (as amended by the
Treaty of Amsterdam)]
C 325/35, 12/24/02:
– Article 2 on Community economic activity
– Article 3(c) on abolition of obstacles to
freedom of movement
– Article 39 (48) on freedom of movement
and prohibition of nationality-based
employment discrimination
Case Law
• Case 36/74 Walrave & Koch vs. Union
Cycliste International et al [1974] ECR 1405
(Walrave):
– “…the practice of sport is subject to Community
Law, only in so far as it constitutes an economic
activity…”
– “…the prohibition on discrimination based on
nationality…does not affect the composition of
sports teams, in particular national teams…which
has nothing to do with economic activity…”
Case Law
• Case 13/76 Dona vs. Mantero [1976] ECR 1333
(Dona):
– “…Rules or a national practice, even adopted by a sporting
organisation, which limit the right to take part in football
matches as professional or semi-professional players solely
to the nationals of the state in question, are incompatible
with Article 7, and as the case may be, with Article 48 to 51
or 59 to 66 of the Treaty, unless such rules or practice
exclude foreign players from participation in certain
matches for reasons which are not of an economic nature
and context of such matters are thus of sporting interest
only.”
• Imprecision in Walrave and Dona led the EC and
UEFA (1989) to adopt the “3+2” rule (3 non-nationals
and 2 assimilated players)
Case Law
•
Union Royale Belge des Societes de Football
Association, Royal Club Liegeois, UEFA vs.
Bosman, case C-415/93 [1996] ECR 5040
(Bosman):
–
–
Article 48 of the EEC Treaty precludes the application of
rules laid down by sporting associations, under which a
professional footballer who is a national of one member
state may not, on the expiry of his contract with a club, be
employed by a club of another member state unless the
latter club has paid the former club a transfer, training or
development fee
Article 48 of the EEC precludes the application of rules
laid down by sporting associations under which, in
matches, in competitions which they organize, football
clubs may field only a limited number of professional
players who are nationals of other member states
Case Law
•
ECJ (12/15/1995) in Bosman:
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–
Transfer rules = Obstruction of free movement
• Due to social importance of sport… teams’ balance,
equality, uncertainty of results… recruitment & training
of young players are legitimate
• Transfer rules ≠ adequate means for balance
• Same aims can be achieved via less restrictive means
(salary cap, redistribution of ticket sales, broadcasting
contracts, etc…)
Nationality clauses = Discriminatory under Article 39 (48)
• Render freedom of movement inapplicable
• Not pro-competitive (richest clubs + edge)
Case Law
•
Advocate General Lenz interpretation of Articles 81
& 82 (ECJ did not examine Competition Law
application):
–
–
–
Should be no exemptions on sporting grounds, as
nationality rules prevented free competition for players,
thus constituting an agreement sharing sources of supply
under Article 81 (1) c
Transfers were substituting supply and demand
principles, thus depriving of competitive opportunity
No reason for sport labor to fall outside the scope of
Article 81 – No CBAs but horizontal agreements between
clubs (Competition Law applies) though no abuse of
dominant position (Article 82) established
Case Law
•
Post-Bosman decisions, ECJ’s stare decisis,
verification of new age in EU sport and policy
initiatives to control it:
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Ballock case, OJC-99/23, Settled out of court
CE 30/12/2002, # 219646, FFBB affaire Malaja, Court
D’Appel for Malaja
C-162/00 Pokrzeptowicz-Meier [2002] ECR 1-1049
C-438/00, Deutscher Handballbund vs. Maros Kolpak, ECJ
8/5/2003
C-265/03, Igor Simutenkov v. Abogado del Estado and
others, ECJ 12-04-2005
http://www.curia.eu.int/en/
http://www.curia.eu.int/en/instit/presentationfr/inde
x_cje.htm
Case Law
•
C-176/96, Jyri Lehtonen and Castors Canada Dry
Namur-Braine ASBL vs. Fédération Royale Des
Sociétés De Basketball ASBL [2000] ECR 2681
(Lehtonen)
–
•
Discriminatory transfer windows (NOTE: Differentiation of
EU imports and outside-EU-zone players, i.e. NBA)
C-51/96 and C-191/97, Christelle Deliege vs. Ligue
francophone de judo et disciplines associées
ASBL, et al. [2000] ECR 2549 (Deliege)
–
–
EC Treaty applies to athletes engaging in commercial
activities, even if they are not per se “professional”
Selection criteria for ISFs and NGBs are inevitable, hence
no unrestricted open entry into international competitions
Policy
development
• UEFA’s “Homegrown rule”:
– 4 players shall be “locally trained”
– Reduced squad size (25)
– Local training = Registered w/ club
3 years/seasons while 15-21 year-old
Beginning 2006-2007 season
• As often the case with policy initiatives, reactions
have been split
• Legal scholarship argues that it would be found in
violation of the EC Treaty (Briggs, 2005; Parrish
2005; EurActiv, 2005; Asser Instituut & Lancaster
University, 2005)
Policy
development
• EC &FIFA/UEFA (2001) agreed on a new
elaborate transfer system ≠ FIFPro
participation (+club segmentation,
protection of youth training, solidarity
mechanism, alternative dispute resolution)
In CAS 2005/A/899 (Aris)
FC Aris Thessaloniki v
FIFA & New Panionios N.F.C.
FIFA acknowledged its
inability to unilaterally
Enforce its sanctions;
it recommends action to
Member federations (Aris, par. 45)
…in a nutshell
• EC Treaty Articles 3, 81, 82 are applied in sport settings,
in the cases sport is treated as a commercial activity;
otherwise there is no sport-specific exemption from EU
Competition Laws (v. US antitrust exemptions,
CBAs//NLRA, SBA 1961)
• Buttress for the “social, educational, and cultural
character and contribution of sport”, EC Treaty Articles
86 et seq. allow for states assuming the burden of clubs
in financial hardship
• EC policy, ECJ, or national courts or commissions’
decisions control horizontal restraints in sport,
promoting the socio-cultural model, i.e. against exclusive
licensing –unless it protects the weaker financially
clubs— separating the regulatory from the commercial
activity of sports organizations, yet allowing for
considerable regulatory autonomy, provided sport
purposes are served in OTND manner
…in a nutshell
• Bosman and Post-Bosman cases led to a free sport market
and free sport labor, forestalling transfer and
nationality rules in the EU, including labourers
originating from trade associations’ countries, according
to the recent ECJ decisions extending Article 39’s scope
• no collective bargaining exemptions in EU sport -- sport
labor is not treated differently
• Access to sport employment and international competition
participation opportunities may be controlled by
reasonable rules according to Lenz, Monti (2001), and
Deliege (2000)
• The conflict between EU law and SINGOs is resolved by
dialogue between the EC and the SINGO, as in the case of
the new FIFA transfer system (& UEFA Homegrown Rule).
As long as EU Law and EC criteria are met the EC will not
intervene
Conclusion
• The two often conflicting worlds have more in
common than what critics assume
• Recent policy intervention by the respective
legislative branch aimed at treating the same
problems in both worlds
• EU model is not a “purely” socio-cultural model,
as it features much commercialism force of its
own, to which policy evolution and the judicial
branch attend
Conclusion
• Ironically, considering the popular
European fiction of the “socio-cultural”
approach, the US sport model allows for
more specific exemptions from
competition laws at this point of
regulatory evolution
• EC Treaty Articles 86 et seq. allow for state
intervention practices [“special
liquidation” criticized by Dedes (2005)] ≠
US policy (NCAA tax exempt status and
public financing of professional sports
facilities?)
Conclusion
• Both US Congress and EC intervene
in sport matters
• Considering commercializing forces
existing in contemporary sport,
political intervention appears crucial
for preservation of important
principles and traditional sporting
values
• Political support has a place in sport;
the latter needs the former.
Discussion
• Global commercialization
of sport creating the need
for a new law and policy
reality in the sport
industry?
Discussion
• Antitrust – Competition
Law exemptions…
• Purpose?
• Need?
• Scope?
• Compromise (EU?)
Would the “socio-cultural” model be served better via
careful application of EU Law?
Should we segment the business side of sport (+ exemptions)
from the “socio-cultural” side?
Discussion
• Thoughts on EC Treaty
Articles 86 et seq. and the
practice of special liquidation
(states “saving” clubs from
extinction)
• Thoughts on practice of
political intervention
Discussion
• Meca Medina, Piau, and
Oulmers (pending)
– Latest ECJ cases
– Application of Competition
Law, Articles 81 and 82
(+Art. 39/49)
Transfers
• 1891 – English Soccer clubs recouping
training cost, controlling player mobility,
promoting competitive balance
• Transfer windows – Competition aspect?
• Transfer fees U-23 (for training incurred
U-21)
Transfers
• UEFA report 1973:
“It will come a moment in which individuals will start to claim
their rights under EC law for free movement and employment.
The professional players will then have a tendency to invoke
free movement to attack the international structure of football”
(UEFA 1973: 5)
• After Bosman (1995) the nationality quotas were lifted
immediately, however the transfer system entered into
long series of negotiations b/t the EC and FIFA/UEFA
(frictions b/t the two)
• FIFA & FIFPro v UEFA
• 3/2001 FIFA/UEFA agreement w/ EC (w/o FIFPro)
• 7/2005 New FIFA Transfers and Status of Players rules
Players Restraints
• Rights of acquisition (option rights)
– Enable a club to acquire a player w/i set time by
paying stipulated transfer fee
• Rights of preference (preemption rights)
– Enable a club to acquire a player only if the club that
holds the rights decides to transfer the player. May
allow interested club to obtain a preference over
other clubs at point of decision by the transferring
club. The practice requires more than matching rival
offers; other conditions apply (see Real Madrid &
F.C. Barcelona supplemental transfer fee)
Players Restraints
• Non-EU nationals may benefit from nondiscrimination treaties
– Association and trade agreements (Kolpak
and Simutenkov)
– Cotonou agreement (ACP countries)
Players Restraints
• UEFA Homegrown Rule (off: “Locally Trained Players”)
• EC dismissed early post-Bosman idea (4/96)
• EC and EP sympathetic to the idea (2005)
• 8 players shall be “locally trained” (08-09; 6 for 07-08)
• 4 “Club trained” + 4 “Association trained” (3+3 for 07-08)
• “Club trained” = Registered w/ club for 3+ years/seasons
while 15-21
• “Association trained” = As above registration by club OR
by other clubs affiliated to the same Association
• Reduced squad size (25)
• No mention of nationality
Players Restraints
• Fixed-Term Contracts
• Bosman creating new transfer system
• ISFs decide on particular length
– FIBA (H3.4.3: 1-4 years)
• FIBA Europe (94.2.3: 1 year min.)
– FIFA (Transfer Rules Art. 18.2: 1-5 years)
• Under 18 (3 years max.)
– IIHF (11.3: spec. term)
• Termination for just (and sporting just) cause
Players Restraints… but
also benefits
• Tax exemptions (for national team and club
play)
• Preferential treatment for athletes U-18 with
participation on national teams and nationally
competitive clubs re: University entrance
examinations
• Civil service, government, sport administration
positions, and exclusive licenses to operate
sport betting offices
• Immigration Law exemptions
Greek Sport Law
ν. 2725/1999 (ΦΕΚ 121 Α΄)
• Pro sport contract duration: ½ - 5 years
• 18th birthday + obligation to sign with the current club a
1-3 years contract; the player can agree to extend the
duration to 5 years
• Agents can sign up to 20% of players on each team of
the particular league
• “National team service is the utmost obligation of the
athletes…”
– Sanctions involve competition ban for national team and club games, as well
as termination of various benefits received from the state.
• Compelling reasons for U-18 transfer:
– Club solvency, lack of BoD, lack of financial support for athlete, “mental and
psychological separation” b/t club and athlete, lack of monitoring athlete
progress, lack of medical insurance coverage and physical fitness
documentation
FIBA
• Minor (but key) differences b/t FIBA and FIBA
Europe rules (e.g. first pro contract duration)
• Noted restraints
– No international transfer U-18; exceptional cases
referred to Secretary General of FIBA
– Mandatory first pro contract procedure, favoring
development club
– Compensation system upon player refusal
– Redistribution of sum by Federation to development
club(s)
– Option of FIBA to decide on transfer fee amount
FIBA
• Noted restraints
– Licensing and Letter of Clearance restrictions
– National team – related restraints:
• Obligation of club to release the player “without any
financial indemnity” and cover player’s insurance
– FIBA Europe forecasts: Federations need to insure player
contracts with the club as the beneficiary
• Obligation of player to reply affirmatively
• Sanctions for club and player (FIBA H.3.6.3.4; FIBA Europe
102)
• FIBA Europe – ULEB entanglement
FIBA—NBA
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3/14/1997 FIBA—NBA agreement
FIBA Europe/ULEB calls for amendments
Annual renewal
Purposes:
– Honor valid contracts on both sides
– Ensure compensation for US players on
FIBA teams
– Introduce binding and final arbitration
FIBA—NBA
• Agreement specifics:
– “Player Contract = written agreement for a specified term
and for a specified salary or other compensation.”
– Licensing system, Letters of Clearance, mutual requests re:
contract status
– “Any disputes… shall be resolved finally and conclusively
by an International Arbitrator”
– Mutual best efforts deterring interference w/ contract
– But for date conflicts, NBA shall permit participation on national
teams, and will not impede directly or indirectly such
participation. NBA will not request any fees from player or
Federation, except reasonable and adequate insurance
coverage
FIFA
• Recent change of national teams’
eligibility requirement for international
competition in favor of citizenship
• Obligation of clubs to release players for
national teams’ matches, w/o
compensation/insurance coverage
(Transfer Rules Annex 1, Art. 1-3)
• “As a general rule, every player… is
obliged to respond affirmatively” *
FIFA & Oulmers
• C-243/06 Charleroi & G-14 Group v FIFA
(Oulmers)
• Belgian Commercial Court referred Q to ECJ:
– Do obligations of clubs to release players w/o
compensation and the
– Unilateral and binding determination of international
matches calendar
– Constitute unlawful restrictions of competition
– Abuses of a dominant position or
– Obstacles to the exercise of fundamental freedoms
(per EC Treaty Art. 39, 49, 81, and 82)?
FIFA & Oulmers
• Charleroi lost the services of Oulmers after injuries
sustained during international competition with the
national team of Morocco
• G14 claiming €860mil. in various damages from FIFA
(rejected by the Belgian Court)
• A year and a week ago FIFA’s lead counsel, Heinz
Tännler, observed that FIFA might
consider establishing an insurance and compensation
fund for international players (criticized due to time
constraints and unilateral level of action by FIFA v
including clubs in the decision-making process)
• The matches calendar issue was not addressed
FIFA & Oulmers
• UEFA Strategy included FIFPro and
EPFL
• EC White Paper on Sport + concern
about financial flow during transfers;
posing the concept of an information and
verification system to control flow, leaving
the transactions portion to the parties;
could be run by ISFs or NGBs.
FIFA
• Contract duration: 1 season – 5 years,
except as permitted by national law
(Transfer Rules Art. 18.2)
– Under 18 (3 years max.)
– No “tapping up”
– No unilateral termination but for:
• Just Cause*
• Sporting Just Cause** (established
professional… appeared in less than 10% of
official matches… 15 days after end of season)
FIFA
• The validity of a contract may not be made
subject to a positive medical examination
and/or the granting of a work permit
(Transfer Rules Art. 18.4)
• “Protected Period” (PP) significance:
– Sporting sanctions for breach w/o cause w/i PP
– No sporting sanctions for breach w/o cause post-PP
• Breach w/o cause results in compensation
• DRC/CAS decide on compensation for breach,
covering all benefits, including additional
compensation… up to six monthly salaries
FIFA – The Transfer system
• International Transfers U-18 exceptions:
– Non-athletically related parental move
– Move w/i EU/EEA when 16-18, providing for
•
•
•
•
Highest quality athletic training
Academic and/or vocational education
“Best possible” living conditions
Documentation with National Federation
– Living close to foreign club (50-50-100 rule)
FIFA – The Transfer system
• Training Compensation payable:
– When player signs first pro contract
– On each transfer b/t different
Associations’ clubs until 23
– For training incurred U-21, unless:
• Training terminated before 21 in which case
– Amount payable calculated b/t 12-year of training
FIFA – The Transfer system
• Training compensation is not due upon:
– Unilateral club termination w/o just cause
– Transfer to Category 4 club
– Reacquisition of amateur status
• First pro contract involves training
compensation for all clubs since age 12
• Subsequent transfers compensate last
club for “total time effectively trained”
FIFA – The Transfer system
• Training costs are set for each
Association club category (up to 4)
• Costs correspond to amount needed to
train each player annually, multiplied by
an avg. player factor (amateurs/pros rate)
• Lists updated annually
• Costs involved “as if the New Club
trained the player itself”
• 12-15 training costs = Category 4 clubs
FIFA – The Transfer system
• Solidarity mechanism
• 5% of total compensation paid to
former club – excluding training
compensation – will be distributed by
new club to training and educating
club(s) (12-23)
– 12-15: each receiving 5% of total
– 16-23: each receiving 10% of total
• No age restriction for solidarity funds
IIHF—NHL
•
•
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2007 NHL Draft featured No1 and 2 US picks (1st)
Appx. 30% of NHL players = Euros
IIHF & NHL cooperation (-Russia) for 12 years
7/12/2007 New four-year transfers agreement
Deadlines for draftees and non-draftees
IIHF players w/o contract may sign as NHL free agents
NHL pays development fee of $9mil. for the first 45 IIHF players
drafted ($200K per add. Player – NHL Draft 7 rounds)
NHL + additional $100K late signing window fee
NHL + $ 50-100K compensation for IIHF players <30 games (funds
used for players outside per se scope, i.e. US and CAN Junior Clubs
 NHL)
Release for 2010 Olympics and World Champs.
Russian risk… NHL teams cannot acquire Russians under contract
but can sign free agents (Russian Federal Sports Law on Transfers v.
Labor Law + ADR problems)
IIHF—NHL
• Yashin, Ovechkin, Malkin cases
• Yashin lost in arbitration and returned to NHL
• Ovechkin and Malkin were allowed to compete
for their NHL teams
• Russian teams ≠ injunction (+antitrust, breach
of contract, arbitration agreement, tortuous
interference claims)
• NHL + Russian Labor Law (termination + 2
weeks’ notice) + Duress prior to signing
MLB—Puro Yakyu
The Posting System
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The Posting System in MLB developed as a result of the Hideo Nomo case (retired
from Japan and played for the LA Dodgers)
Since 1999 inception, 13 Japanese players were posted
Noted contracts signed:
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Ichiro Suzuki (SEA)
Kazuhisa Ishii (LAD)
Daisuke Matsuzaka (BOS)
Kei Igawa (NYY)
Akinori Iwamura (TB)
MLB club may discuss posting with agent (Nov-Mar)
Player requests and Japanese club posts on list
Commissioner notifies MLB clubs of posted players
MLB clubs submit sealed bids w/i 4 days
Commissioner notifies Japanese club of highest bid w/o source
Japanese club can accept or reject bid (player retained and can be re-posted next
season)
Upon acceptance by player (w/i posting period) Japanese club receives funds
Upon rejection by player rights are retained by Japanese club
Posting v. FIFA Transfers
• Arguably keeps MLB bids lower v. open
and public process
• Unilateral v. Multilateral
• Narrow v. broad scope
• US-JAP only v. EU/EEA/CAP
• Limited v. Extensive freedom of
movement
• $centric v. socio-cultural consideration
(infrastructure, youth training, solidarity)
US Amateur sector international transfers
ISAs – NCAA
• Not a lot of research (Ridinger, 1998; Ridinger & Pastore,
2000, 2001; Kaburakis, 2005; Popp, 2007)
• Transition to a different system of governance poses
problems, especially in the case of International StudentAthletes (ISAs) recruited by NCAA DI institutions
• NCAA DI Amateurism conflicting with federalized club-based
“pyramid” model
• Some litigation (Howard v. NCAA, 510 F. 2d 213, 1975;
Buckton v. NCAA, 366 F. Supp. 1152, 1973; NCAA v.
Lasege and University of Louisville, 53 S.W.3d 77, S. Ct. Ky.
2001; NCAA v. Yeo, 171 S.W.3d 863, 48 Tex. Sup. J. 1016,
2005)
• Significant policy progress in the last five years re: balance
of NCAA constitutional principles (Inst. Control, Comp.
Equity, SA Welfare)
• Amateurism Clearinghouse and SA Reinstatement
contribution
US Amateur sector international transfers
ISAs – HSAAs, Prep Schools
• ISAs in US HS, prep schools, and
Immigration/Administrative Law extensions have not
been covered in legal and policy scholarship
• Much like NCAA cases, most cases have not found a
right to participate (education not extending to
extracurricular activities) with some noted exceptions
• In exceptional cases ISAs will successfully challenge
HSAAs decisions that render them ineligible*
• Dept. of State, CSIET, DHS, USCIS policies directly
affecting ISAs transition to both public HS and private
prep schools (the latter distributing SEVIS docs for
visas to talented athletes)
Conclusion
• The EU is currently (12 years post-Bosman)
experiencing what the US did in the 50-75 years
following Federal Baseball…
• Trying to balance a traditionally conservative approach
to sport policy, allowing for self-regulation of sport by
ISFs, preserving the pyramid, etc. with a new liberal
economic and labor reality in the EU
• If an exemption for several aspects of the sport sector
were to occur, what would it mean?
– The US provides us with valuable lessons
– Judicial and Legislative exemptions would defeat their purpose
of protecting sport development, w/o controls such as salary
caps, drafts, competitive balance mechanisms, redistribution of
funds, and important labor considerations ≈ NLRA//CBAs
– Particularly for EU sport, dialogue and compromise=imperative
Conclusion
• Sport per se regulations and restraints may still pass EC
and ECJ muster; the scope and means will determine
outcome
• ECJ will not need to “legislate from the bench”, provided
ISFs follow the path of compromise and flexibility; w/o club
participation there could be no (fair) EU sport policy
• Theoretically, in Oulmers the ECJ could side with the G-14
(≈ Piau, re: Application of Comp. Law, dominant position by
FIFA as an association of undertakings); the calendar may
change, but international comps. and representation will not;
the ECJ will not provide clubs with € and insurance
coverage, FIFA & G14 will
• There is a lot of work to be done by EU MS legislatures
(Piau, Oulmers, Placanica, Articles 86 et seq. state
interventions…)
Two Greek Cents
Changes that may be in order
• FIFA Transfer system
– “Protected Period” serving its purposes?
– FIFPro & UEFA (or the G14 if Oulmers leads to a
new model for the Champions’ League*) need to
pursue a CBA
– Considerations promoting national interests and
local talent arguably have no place in 21st century
integrated international sport; if the US pro leagues
do not impose nationality-based criteria, we should
not either… The better talent needs to be
supported. Local talent will always be cheaper. The
“Home-Grown” rule is an eloquent and intelligent
way to postpone the unavoidable… It’s one world of
sport.
Two Greek Cents
Changes that may be in order
• Age discrimination issues should be addressed
• Minimum and maximum length contracts are there for a
reason. 4-5 years max OK; w/o a CBA in place clubs
need to be kept at bay; minors’ contracts status (FIFA’s
3-year limit appears reasonable) should be monitored
and player benefits’ provisions enforced
• Termination due to lack of club solvency
• “Sporting just cause” termination… Impressive
deviation from labor norm…
• Other preferential benefits and exemptions may need
to be revisited (tax and immigration provisions, civil
service and governmental appointments, educational
exceptions)
Two Greek Cents
Changes that may be in order
• FIBA’s compensation and U-18 international
transfers’ system needs an objective
adjudicator
• FIBA-Europe and ULEB – Relationship needs
clarification
• FIBA-NBA agreement – Time to update (WNBA
season-FIBA Worlds conflict, arbitration switch
in favor of CAS, omit “other compensation”
etc.)
• FIBA’s and FIFA’s club release policies and
players obligations to respond in the affirmative
needn’t be posed herein for amendment…
Two Greek Cents
Changes that may be in order
• FIBA & FIFA need more staff, their
administrative review committees and dispute
resolution panels need a form of a
Clearinghouse
• Strictly enforce sanctions (sporting and
damages) and educate minor clubs’
administrators re: contractual obligations and
budgetary planning
• Distinguish b/t trades and unilateral breaches
(revisit legal fiction of signing club culpability,
i.e. reverse BoP); make trades conditional
Two Greek Cents
Changes that may be in order
• FIFA Transfer system
– U-18 international transfers provisions OK
– Compensation system unconvincing (subjective
clubs’ classification system, composition of annual
lists, 12-15 equated to level 4 clubs, age
discrimination (±23), defers to NFs for local
transfers)
– If kept in place, fair treatment of all clubs
(developing and ensuing purchasing clubs) OK
• Solidarity payments appear to be balanced and
EU Law abiding; need to extend to NFs
Two Greek Cents
Changes that may be in order
• NHL–IIHF agreement + Russian ratification (clubs’ and
players’ benefit; Russian labor law re: contracts
termination and Fed. Sports Law amendments)
• NHL may wish to re-negotiate paying less for later
rounds’ picks; NHL may further benefit from amending
portions referring to players <30 games
• MLB and UEFA clubs’ “sweat shops”? UN and EU
human and children’s rights accords need enforcement
• International sports academies, educational, cultural
and athletic programs exchange are outstanding
avenues promoting pluralism, respect of differences,
research of problems and feasible solutions.
Colleagues can achieve the same purposes through
collaborative efforts such as this Conference, so…
Thank you Marquette