All Quiet in the Western (European Football) Front - Regulation of Football in the European Continent

In a recent paper, I try to understand the rationale behind the observed equilibrium when it comes to regulating football on the European continent. The intuition from sports economics is that sports regulation should focus on competitive balance. Its regulation is at the heart of US regulation, and yet totally absent from the European regulatory landscape. Even though adjustments to the US model seem, prima facie at least, warranted in light of the idiosyncratic “promotion-regulation” regime reigning over Europe, the argument for addressing this issue seems robust. It is consistent with the very essence of sport markets, which are not zero-sum games, since the end product cannot be produced absent complicity from the opponent.

Which Way to the Wild West?

The US looks very “European” when it comes to sports regulation: rent-sharing, the draft system, and salary caps are institutions aiming to provide participants with equality of means. Europe on the other hand, and football in particular, is characterized by increased “heterogeneity” across participants. A few teams will almost consistently fight for the top trophies, and nothing has been put in place to redress this disequilibrium. To make matters worse, empirical papers (Szymanski among others) underscore the persistent correlation (if not causality) between large income and sporting success.

Various explanations can be offered, and some are currently being explored. One could explore, for example, whether the political economy of the European Clubs Association (ECA) is such that big clubs enjoy de facto “weighted” votes, and that they can influence regulation at the European level. The corporate governance of sporting institutions is also worth investigating. UEFA and FIFA do not include think tanks and expertise to seriously research the issue of competitive balance.

This paper starts from a more prosaic, almost formal point of departure: the allocation of competences between the EU institutions, its member states and UEFA.

Reluctant Regulator

Football in Europe is being regulated de facto by UEFA, which however, has a limited mandate, and must observe EU law. The mandate is limited, since it is circumscribed by the conferral of competences that national associations transfer to it. UEFA must also observe EU law, since the national associations, that is, the 31 of 55 associations belonging to EU member states (irrespective whether of “public” or “private” character) must observe EU law anyway.[1]

The EU is thus the hierarchically higher body of law. The EU nevertheless has no competence to regulate football, since sport is but a support competence as per Art. 165 of TFEU. This necessitates that the initiative to regulate lies with national associations. The latter have not attempted to coordinate their policies within the EU (the availability of mechanisms to this effect, notwithstanding). For reasons having to do with their idiosyncratic political economy, and the resulting heterogeneity among them, they consistently represent (if at all) “national” points of view at UEFA.

This situation increases of course the influence that UEFA itself (the common agent) can exercise in the regulation of football, since it does not have to face an EU view (which would represent anyway the majority of its membership, e.g., 31/55) in matters concerning regulation of football. One hurdle less for UEFA, that much is for sure. UEFA nevertheless knows, following the Meca-Medina judgment, that any one of its initiatives can, in principle, be scrutinized by EU authorities.

The EU thus has no competence to regulate football, although its law supersedes any UEFA initiative. Furthermore, EU member states’ football associations put on their national — as opposed to EU — hat, when convening in Nyon, the headquarters of UEFA. UEFA emerges as a “reluctant regulator”, since it knows that its actions will be scrutinized by an entity with no mandate to comprehensively regulate football. There is thus no EU statutory benchmark that will guide UEFA’s steps when deciding to intervene.

Furthermore, the test for consistency with EU law leaves some (considerable) discretion to the scrutinizing entity. “Sports specificity” amounts to deciding, at the end of the day, whether the means used to reach legitimate ends are proportional to the objective pursued. However, both the Commission, as well the CJEU, adopt a test of consistency that does not include any quantitative estimation of the burden imposed. Thus, except for extreme scenarios, proportionality is in the “eyes of the beholder”.

Under the circumstances, it should come as no surprise that UEFA has so far limited itself to peripheral issues (Licensing- and FFP statutes), and it has avoided addressing competitive balance.

Petros C. Mavroidis is the Edwin B. Parker Professor of Law at Columbia Law School, New York City.

[1] UEFA must also observe FIFA law, an entity where the EU carries less weight since FIFA comprises 211 members. This does not affect the findings of the paper, as it is clear that both UEFA- as well as FIFA law must observe EU law to the extent that they affect the free movements or the competition law of the EU.