The European Super League Project and Its Legal Context

On April 18, 2021, twelve powerful clubs in Europe gathered and declared a new league that could compete with the most prestigious football competition in Europe, the UEFA Champions League. These clubs were Real Madrid, Barcelona, and Atlético Madrid from Spain; Juventus, AC Milan, and Inter Milan from Italy; Arsenal, Liverpool, Chelsea, Manchester City, Manchester United, and Tottenham from England. There were no clubs from Germany, the Netherlands, France, Portugal, or other European countries (Van Den Bogaert, 2022). The new league, called "European Super League" (ESL), should have been a competition between 20 clubs: There would be those twelve founding clubs and an additional three invitees acting as permanent members (It was expected that these three teams would be Bayern Munich, Borussia Dortmund, and Paris Saint Germain). To compete, each year five more clubs would be selected for the league as guests on a season-long basis. This round-robin format competition was to be integrated into the existing European and domestic competitions (Official Webpage of the European Super League, 2022). The European Super League was conceived as a self-sufficient league; it would be directed by founding clubs and its financial survivability was to be guaranteed through various mechanisms which, above all, were to enable the league's economic autonomy. In other words, neither states nor international organizations such as UEFA or FIFA would have a role in this league, administrations of founder clubs would directly govern the competition (Van Den Bogaert, 2022). Not least because of this, these twelve football clubs faced several restrictions and sanctions from UEFA as well as their own football federations (Omnes and Darcis, 2021).

Figure 1: Logo of the European Super League (SeekLogo, 2021)

Additionally, the suitability of this league to the European Union competition law, the sports law in Europe, and the local legal systems of the founding member's home countries remains a big question mark. Although, at first, the ESL was largely restrained by the collective pressures of UEFA, FIFA, domestic football federations, and fans of football at large. Rather than national and supranational institutions the legal basis of the European Super League's functioning now would also need to be adapted to the interregional network of European Union competition law, domestic contract law and national sports law, to ensure it may still be established. Nonetheless, it cannot be said that the Super League has shown signs of disappearing completely (Omnes and Darcis, 2021). As a matter of fact, the statement of the president of Real Madrid CF and the chairman of the European Super League, Florentino Pérez, to ensure legal recognition of the Super League in Europe increases concerns about a second attempt to inaugurate this league (Dalwai, 2021).

Reasons Behind the Creation of the European Super League

The idea of the European Super League emerged more than two decades ago, amongst the leading football elite (Entzminger, 2020). Most of these football elites also represent the largest football communities in Europe. These "Super Clubs", as Real Madrid, Barcelona, Juventus, AC Milan, Liverpool, Manchester City, and their founding cohort are also referred to, effectively dominate European football competitively and culturally, as such they demand wider rights of control over the sports industry. Indeed, "Super Clubs" in Europe are different from other clubs because they also produce more complex and higher-value products. For instance, 14 of the 20 English Premier League teams produced only 20% of the total revenue of the league in 2012; however, Manchester United by itself produced nearly 40% (Andrews, 2015). Similarly, the total commercial revenue of Real Madrid is five times higher than that of its neighbor, Atlético Madrid (Andrews, 2015). In spite of its remote position from the Super League project, in Germany, Bayern Munich takes 60% of the total revenue of the Bundesliga which categorically also makes it a "Super Club" within the country (Andrews, 2015). As a result of these cleavages, it is natural to expect that these "Super Clubs" desire to not only remain dominant but increase their footprint in European football.

Figure 2: Badges of the ESL Founding Football Clubs (SkySport, 2022)

The first objective behind the creation of the ESL was, thus, the desire to grow revenue. Today's existing centrally organized broadcasting system, which is governed by both UEFA and FIFA, limits the financial disparity between "Super Clubs" and average clubs. Indeed, despite having the highest number of fans, this centrally organized broadcasting system, which uses redistribution mechanisms, reduces the financial dominance over average clubs. Primarily, therefore, the Super League project represents new income streams for the "Super Clubs" to revitalize and safeguard this dominant position. An especially important role is played by broadcasting revenues and the economic sizes of the sponsorship agreements that this league is envisioned to attract.

Another crucial accelerator of the ESL movement was COVID-19. Due to the pandemic, most football clubs around Europe were negatively affected. Broadcasters decreased their discounts on existing contracts, competitions had to be played without an audience, and advertisement revenues consequently decreased as well. As it can be seen in Figure 3, there are huge differences between the annual revenues of 2019 and 2020 amongst the "Super Clubs" and it reflects a greater negative influence of the pandemic on the football industry: Football clubs have made big losses from this crisis (Entzminger, 2020). Consequentially, these "Super Clubs" attempted to restore their financial power, a role the European Super League project was to profitably fulfil.

Figure 3: The Graph of Economic Condition of Super Clubs During the Pandemic (BBC, 2022)

Furthermore, the development of the football industry has been a process of Americanization, while the economic difference between "Super Clubs" and average clubs increases every day (Andrews, 2015). In fact, the model of the Super League was taken from North American sports leagues such as the National Basketball Association (NBA) and the National Hockey League (NHL) (Van Den Bogaert, 2022). Mirroring their North American counterparts in competition organization, this concept also reflects an economic and administrative dominance of these "Super Clubs". Hence, Europe’s top football organizations consider the symbiosis of administrative and financial power to rely upon competitive rearrangements. The numbers, on paper, affirm this vitality afforded to the new league: Each member of the league is promised a 233 million Euro sign-on bonus—double what the Champions League winner currently takes (Zglinski, 2021). Through solidarity payments, broadcasting fees, advertisements, and other types of income, the total value of the league was expected to reach 10 billion dollars (Official Webpage of the European Super League, 2022).

Sports Law

Motivations and grievances aside, the European Sports Model and international sportive order are highly regulated by both governments and non-governmental organizations. There is a hierarchy among these organizations (consult Figure 4). The head of football organizations around the world is FIFA, which is the top institution responsible for the football industry. The aim of FIFA is to safeguard the competition, promote sporting values, increase professionalism within the sport, and improve the financial health of sporting competitions (Omnes and Darcis, 2021). To achieve this, FIFA mandates federations to adopt minimum criteria of sporting and competitive merit (Omnes and Darcis, 2021). Each federation may implement these minimum requirements within their own sporting hierarchy and through unique methods (Omnes and Darcis, 2021). Importantly, Article 71 of these FIFA Statutes claims that FIFA is entitled to regulate the organization of international competitions, which includes the foundation and prohibition of these (Dalwai, 2021). In addition, according to Article 22 of the FIFA Statutes, the approval of national and supra-national football federations is needed (Dalwai, 2021).

Concerning sports law, the European Commission’s white paper says that sportive competitions have to be structured in international federations, with solidarity mechanisms between clubs and a limitation for participants (Omnes and Darcis, 2021). UEFA is the only authority that governs football associations in Europe (Westenend, 2022). It is also liable for the decisions and statutes of FIFA. For European football clubs to participate in any competition, the approval of the UEFA is a necessity, while the respective competitions need to satisfy the principles determined by the governing body, the UEFA (Van Den Bogaert, 2022). Crucially, some have argued that this makes UEFA the monopoly of European football (Zglinski, 2021). Digging deeper, this may also be reflected in the association's own statutes, which, according to Article 49, confer on UEFA the sole authority to organize and abolish international competitions on the continent. There are also regulations applicable directly to players that belong to the UEFA statutes (Dalwai, 2021).

Figure 4: The Hierarchy of [Organized] Association Football (Durcey, 2003)

Equally, the European Union has its own sporting rules that apply. Article 165 of the TFEU (Treaty on the Functioning of the European Union) discusses sportive activities and foresees the collaboration of states within the sportive domain. It promotes fairness and openness in sporting competitions and earmarks the protection of athletes (Westenend, 2022). Hence the apparent certainty that the project of the European Super League was not suitable for prevailing sporting regulations on the continent. Not only does it seemingly breach the authority of UEFA and FIFA, but also the regulations of the European Union: The ESL is considered to antagonize the requirements of solidarity mechanisms between clubs, the safeguarding of competition, the promotion of sporting values and the increases in financial health of football, fairness, and openness (Omnes and Darcis, 2021).

Figure 5: The Sports Industrial Complex (Durcey, 2003)

Hierarchy of Contract Law

One of the main problems seemingly limiting the viability of the ESL is the prevailing hierarchy of contract law of UEFA and FIFA as well as the European Union. Both sporting organizations have hinted at legal ramifications against football players participating in the European Super League. In fact, UEFA claimed ESL players would be banned from domestic and international football competitions by refusing their representation in UEFA-registered national teams (Van Den Bogaert, 2022). Yet, these anticipated restrictions towards individual players may not be as straightforward as envisioned (Dalwai, 2021), since according to Article 45 of the TFEU (EU-level legislation), there may not be discrimination among the workers of any entity based on their preferences and their nationality (Faella and Michieletto, 2022).

The decision about the International Skating Union (ISU), which was taken by the Court of Justice of the European Union (CJEU) on December 16, 2020, can be defined as a potential precedent for the Super League Project. In the case of the ISU, two speed skaters, Mark Tuitert and Niels Kerstholt, were banned from the ISU for a lifetime because of their participation in an unauthorized skating competition. The CJEU accepted the scope of power and the pre-authorization system, which includes eligibility rules. ISU has to protect its own commercial interests and has the authority to restrict competition (Dalwai, 2021). According to this decision, any ice skater who is bound by ISU rules cannot participate in an unauthorized competition; otherwise, they will be subject to a lifetime ban from any competition organized by ISU. For football players, the same economic consequences can be seen as more dramatic (Omnes and Darcis, 2021).

Figure 6: Florentino Perez, President of Real Madrid CF and Chairman of European Super League (SkySport, 2021)

There seem to be two options for players of European Super League clubs which are highlighted by legal scholars around Europe: to enter the ESL and forfeit any further involvement, rights or benefits conferred to by the active supervising bodies; or continue playing for their clubs and deny participation in the ESL structure. Both may create difficult conditions for the players. Currently, it is not clear whether banning ESL participating players and clubs is illegal or the decision ISU/CJEU, as a precedent, may equally be binding here—potentially giving UEFA and FIFA the right to implement said restrictions on players.

Competition Law

Moreover, question marks related to competition law remain a backdrop to the ESL context. Articles 101 and 102 of the TFEU are applied to associations and other organized ventures with regard to their financial and commercial actions (Westenend, 2022). Both of these articles are the basis of competition law of the European Union, and they exist to prevent unfair competition generally. Indeed, the basis of the Court of Justice of the European Union's hearing regarding the European Super League was primarily its suitability within the framework of Articles 101 and 102 of the Treaty on the Functioning of the European Union (Van Den Bogaert, 2022). For most of the legal authorities, the contract behind the Super League project was an example of a horizontal agreement, and it may damage the competition among European football's participating clubs (Omnes and Darcis, 2021).

Figure 7: The Scheme of European Competition Law (Blog.kuan0, 2013)

Contractual agreements which involve economic incentives may be used to mislead the market by reducing output and raising price rates (Westenend, 2022). Article 101 of the TFEU generally prohibits agreements which harm competition in the open market: So-called horizontal agreements are therefore closely monitored by responsible authorities (Omnes and Darcis, 2021). But so may the suitability of vertical agreements, with respect to the competition law, be subject of Article 101 of TFEU (Westenend, 2022). As both associations and companies in the European Union are covered by the regulation of Article 101 of the TFEU, the entire football pyramid is liable to the existing framework.

Hence, the CJEU claims that competition can only be guaranteed if equality of opportunity can be supplied between economic operators (Van Den Bogaert, 2022). In addition, CJEU has created restrictions on agreements that consider fixing prices, limiting output, sharing markets in different regions, and boycotting a competitor (Westenend, 2022). The end of market competition and the absence of regulation will result in the creation of a monopoly and maybe a pure oligopoly. It is certain that the long-term outcome of the ESL will not be the generation of competitive outcomes (Welsh, 2023).

Figure 8: Buildings of Court of Justice European Union (Law Society Gazette, 2021)

Moreover, Article 102 is an article about market dominance and the division of markets into geographies. Although holding the dominant position is not prohibited under Article 102, the legality of the position may still be violated (Zglinski, 2021). This is because there are two types of abuse determined under Article 102: exploitative abuse and exclusionary abuse. Exploitative abuse includes financial, labor, and power explanation. All three of them are considered as potentially breaching any fair competition. On the other hand, exclusionary abuse includes predatory pricing, refusal of supply, exclusive dealings, and margin squeeze (Westenend, 2022).

Both of these articles hold jurisdiction over sporting activities such as rules of the game, anti-doping rules, rules about the composition of national teams and their participation in competitions, participation of football clubs in competitions, rules about the transfer of players and the period of transfers between clubs, amongst other domains (Faella and Michieletto, 2022). The current football market of Europe is largely defined by the three-tiered continental UEFA club competitions based in Europe (Van Den Bogaert, 2022) [CL, EL, and Conference League], to which the ESL can become a direct competitor, especially at the current highest level, the Champions League. Since, the ESL must, thus, be considered an actor in that market, the CJEU claims that competition may only be guaranteed if equality of opportunity can be supplied between economic operators remain prescient (Zglinski, 2021; Van Den Bogaert, 2022). In addition, for the CJEU, the ESL project may be defined as a movement to create a monopoly within a currently competitive framework (Welsh, 2023). Thus, the potential infractions and breaches of the competition rules, both Article 101 and Article 102. The ESL would also restrict the choices of consumers and harm the balance of sponsorship, TV rights, and broadcasting issues (Westenend, 2022). This is despite the significant increase in wealth in the football industry, since most clubs may thenceforth not be able to conserve their existence due to the economic gaps that are created by disproportionate players’ salaries or even the funding for transfers. The gap in incomes between the clubs of the Super League and other clubs may increase as well if not regulated (Zglinski, 2021).

Separate Law Systems

As it stands, UEFA has received the support of three different national football federations: the Italian Football Federation (FIGC), the English Football Federation (FA), and the Spanish Football Federation (RFEF). Indeed, even at the national level, these federations prohibit the participation of clubs in organizations and competitions not officially sanctioned by UEFA. Since clubs are primarily bound to obey the rules of their national football associations, their statutes, and their regulations, it adds a restrictive combination of regulatory and commercial frameworks that oppose the idea of the European Super League (Van Den Bogaert, 2022). These will be briefly overviewed below.

Figure 9: The Building of Supreme Court in Madrid (Alamy, 2019)

Spanish Law

The first approach by the Spanish legal authority to the CJEU circled around the issue of a potential breach of the European competition laws by the ESL (Omnes and Darcis, 2021). Indeed, the first proceeding against FIFA and UEFA, initiated by the founder clubs was heard in front of the Madrid Supreme Court which then referred it to the CJEU. The driving argument was the apparent abuse of a dominant position by FIFA and UEFA. The outcome is still pending, a condition that may remedy or exacerbate the discussion here within (Faella and Michieletto, 2022). Similarly to the governing bodies of European and International Football, Spain has its own rules which would be applied to a potential new competition such as the Super League project. Not least, according to Article 39 of the RFEF statute, compliance by national clubs with the supra-national associations (here FIFA and UEFA) needs to be guaranteed, otherwise, the statute of the Spanish Federation may simultaneously be breached as well, carrying with it additional consequences (Omnes and Darcis, 2021).

English Law

Currently, the biggest concern in England is the perceived damage that may be done to the spirit of English football and its historic pyramid structure. Some even claim stopping the ESL was a direct attempt at ensuring the sustainable economic survival of their national game as a whole (Welsh, 2023). In the Premier League, each club is obliged to accept an agreement to administer their sporting activities according to the statutes and regulations of FIFA. In addition, FA rules say that there are penalties for actions that breach any rules outlined by the national body and those of FIFA and UEFA, respectively (Dalwai, 2021). Even the English Premier League has its own specific rules for participating clubs: According to Article L9 of the Premier League, without the approval of the Premier League board, clubs cannot enter any competition other than the UEFA Champions League, UEFA Europa League, UEFA Conference League, FA Cup, the FA Community Shield, and the Football League Cup (Omnes and Darcis, 2021), thus barring the participation in while also affecting foundation of the ESL.

Italian Law

Finally, Italy’s sports laws mirror those in Spain. According to the national governing body, in order to obtain a license to participate in Serie A, Italy's highest level, clubs are prohibited from attending any competition except those recognized by FIFA, UEFA, and the FIGC (Omnes and Darcis, 2021). As it stands, according to Italian law, prospective participation in the ESL may not be feasible and, thus also, its foundation, impossible.

Figure 10: English Football Fans Protests the Coup of Super League (ESPN, 2021)

Conclusion

The decision of the CJEU remains uncertain and so is the legality of the European Super League to national and international legislation. The primary argument sustained by the ESL leadership is not one of anti-competition but rather of added competition (Faella and Michieletto, 2022). This also supports their running proceedings leveled at the institutional opponents of the league, claiming that UEFA and FIFA are abusing their existing dominant position to prevent further competition (Faella and Michieletto, 2022). However, it is also clear that defending the viability of the ESL may not simply rest on a top-level approach, but it must actively alter its own public image by leveraging its current topical centrality to sports conversation in Europe. Importantly, it must prove to the entirety of the sports industrial complex and especially the fans that it is beneficial to the game's prevailing vitality frameworks and beyond (Omnes and Darcis, 2021).

Bibliographical References

(2022, April 18). Official Webpage of European Super League. https://thesuperleague.com/#who_we_are Andrews, M. (2015). Being Special: The Rise Of Super Clubs İn European Football. CID Working Paper Series 2015/299 Harvard University. Dalwai, M. (2021). The European Super League: Examining The Validity Of Uefa's Bans From The Players' Perspective. Global Sports Policy Review, 2(1), 1-17. Entzminger, N. (2020). Causes, Implementation Guidelines, And Limits Of A Potential European Football Super League Model [Master Thesis, IESEG School of Management]. ResearchGate. https://doi.org/http://dx.doi.org/10.13140/RG.2.2.28806.50241 Faella, G., & Michieletto, P. (2020). Competition Law in the Sports Industry: The European Super League Case. Luiss Department of Economics and Finance. Welsh, J. (2023). The European Super League debacle: why regulation of corporate football is essential. Soccer & Society, 24:2, 172-189, DOI: 10.1080/14660970.2022.2054805 Omnes, V., & Darcis, L. (2021). The Legal Barriers Of The Super League. Global Sports Policy Review, 1(2), 106-118. Van den Bogaert, S. C. G. (2022). The rise and fall of the European Super League: A case for better governance in sport. Common Market Law Review, 59 (Special Issue), 25-40. https://doi.org/10.54648/COLA2022140 Westenend, F. L. (2021). The FIFA and UEFA Prior Authorisation Rules And The European Super League In Light Of Competition Law: A red card? [Master Thesis, Lund University Faculty of Law]. Zglinski, J. (2021). The Rise and Fall of the European Super League. EU Law Live Weekend Edition, 55.

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