The European Super League From A Legal Perspective: The End Of A Saga?

On 19 April 2020, 12 of the most famous football clubs announced a breakaway from the UEFA Champion’s League to join a new European Super League (“ESL”). The announcement was met with a heavy backlash from the football organisations, government regulators and football fans. UEFA, the Premier League and the FA threatened to ban players from participating in the World Cup and in other domestic and European competitions. As a result, in less than 48 hours all 6 Premier League teams had withdrawn from the competition. There is no single answer to the question “why the ESL has been discontinued”. Potentially there was a combination of factors, such the UEFA threats, mass fan protests, broadcasters’ and sponsors’ anxiety and multiple legal hurdles.

Below, we consider the legal aspects, which might have impacted upon the decision of the clubs to step back; and may still affect their bargaining power when it comes to the negotiation table.

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Competition Law

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• UEFA’s perspective

In accordance with an initial announcement by the ESL, there would be 15 permanent members (including Manchester United, Manchester City, Liverpool, Arsenal, Chelsea Tottenham Hotspur, Real Madrid, Barcelona, Atlético Madrid, Juventus, AC Milan and Inter Milan) and 5 additional football clubs to qualify annually.

However, this could have created a number of competition law issues. In particular:

Discriminatory rules. It may well be argued that the proposed two-tier membership system restricts competition by applying different terms to participating clubs and therefore would have breached Article 101(1)(d) of the Treaty on the Functioning of the European Union (“TFEU”). It may also have been argued that the club-founders would have been forming a cartel which restricted most clubs from joining the competition, in order to make vast profits.

Collective dominance. The breakaway clubs may have constituted a significant proportion of the market for top-tier European football due to the closed nature of ESL’s membership, and the number and status of the founding clubs.

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• The ESL perspective

On the other side of the coin, the ESL may have argued that the ban proposed by UEFA amounted to anticompetitive and unfairly discriminatory behaviour with a view to excluding its competitors from UEFA’s and FIFA’s competitions.

There is precedence for this in the world of sports, when newly established closed leagues have successfully pressed charges against governing bodies. For example, action was taken against the International Swimming Federation, the International Wrestling Federation and the US Skating Union for banning athletes from participating in unauthorised competitions.

A good analogy was drawn by Mark Orth, an expert in sports competition law: “What if Amazon just assumed it could introduce exclusivity for dealers saying if you are offering your goods on any other online platform you are excluded from our platform?  There would be an outcry.” This is true. Nobody would question the illegality of Amazon’s actions.

Based on the precedents, and as unpopular as it might have been, the ESL may well of had a compelling argument had its case been presented in Court.

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Employment law

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The proposed breakaway would have also thrown up some interesting employment issues. Taking for example the standard form club-player employment contract in the Premier League Handbook, these points occur:

• Breach of an express term. The standard contracts include an undertaking from the club to comply with the rules laid down by the FA, UEFA and FIFA.  Rule L9 of the Premier League Rules lists the competitions into which a club may enter. For any other competitions, a club would have to obtain prior written approval of the Premier League Board. It was clear though from UEFA’s and FIFA’s statements that no such approval was going to forthcoming. Therefore, the founding clubs could of ended up being in breach of an express term of their employment contracts with the players (unless of course the players themselves agreed to a variation – and those that gave interviews certainly did not support the idea!).

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• Breach of an implied term. It may also have been argued that the employment relationships between clubs and players are of such a nature that they form a relationship of mutual trust and confidence. Meaning that any failure to consult with players before making a decision which could have negatively affected their career, may have destroyed that mutual trust and confidence. Arguably, that could have been classed as a repudiatory breach enabling the player to terminate his employment contract with the club.

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In short, had the ESL proceeded then there would almost certainly have been a whole host of legal claims and cross claims that would have kept many lawyers busy. Whilst the issue may have been resolved in the short term, many sports journalists anticipate that the tensions between some of the super clubs, and the governing bodies, will flare up again. We may yet therefore see the lawyers sharpening their pencils.

For legal advice on matters of sports law, please contact Madina Tatraeva at madina.tatraeva@iaw.co.uk.

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