A comparison of the European and North American models of sports organisation.I. Introduction
Comparative legal commentary on the organisational structure of sports, particularly of professional sports, is substantial and growing. One of the main themes in Europe has been the relationship between a rather pristine European Sports Model, as it has been called, and the growing commercialization of sport. This theme has been expressed variously in analyzing the regulatory power of the European Union over sporting activity and in contrasting the European Sports Model with a so-called North American Sports Model. Both models are largely policy constructs, and the North American Sports Model may simply be that which the European Model is not. Even so, the models help each of us see our own sports culture as others see it. Although the European Sports Model has been the subject of many writings, in-depth comparisons between it and the North American model are infrequent. (1) Comparing the models highlights core values, sharpens analysis, and yields new insights.
A few preliminary observations may be useful in defining the models. First, they are just that: models, that is general representations of reality rather than precise descriptions of organisational structures. We should not overlook significant variations. For example, the European Sports Model is based largely on just one sport that dominates attention in Europe, namely, football/soccer. Other sports have their own distinctive structures. For example, contrary to the monopolistic national structures of football/soccer in Europe, several competing organisations stage championship boxing matches there as well as elsewhere. Also, several European rugby leagues, contrary to the European mold, maintain caps on salaries expendable by member teams. There are also important variations among the structures of national football/soccer organisations within Europe. Moreover, although the European Sports Model has been replicated around the world, it is by no means universal. Some Asian and Caribbean organisational structures, for example, are distinctive.
The North American model is likewise diversified. For example, there are important variations among the several major professional leagues within North America, between Canadian and U.S. structures, and between those structures and others elsewhere in North America, such as in Mexico, Central America, and the Caribbean. (2)
Second, a functional analysis and evaluation of the European Sports Model inevitably must take account of the legal constraints, particularly European Union law. Of particular prominence are the tensions between European Union law and the so-called specificity of sport, according to which the special nature of sport, the "sporting exception," (3) with its own complex structure of regulation and dispute resolution, constitutes a reserved domain of authority largely insulated from EU intervention.
Finally, the actual structure of professional sports in Europe continues to evolve. Consequently, the European model may no longer reflect the realities of football/soccer in an era of global marketing.
II. The European Sports Model
What, then, do we mean exactly by the European Sports Model? In 1997 the Treaty of Amsterdam, which amended the Treaty Establishing the European Economic Community, attached several single-paragraph declarations, including Declaration 29 on Sport. (4) It was the first to acknowledge the economic and social roles of sport in the process of European integration. Later, in preparation for a 1999 Conference on Sport in Olympia, Greece, the European Commission expanded on this declaration by publishing a detailed consultation document entitled "The European Sports Model." (5) The same year, the Commission published the Helsinki Report on Sport (6) in response to which the European Council published a definitive statement, the 2000 Nice Declaration on Sport. (7) Neither of these latter two documents specifically reiterates the features of the European Sports Model although they both confirm values closely associated with the model. Then, in 2007, the Commission issued a White Paper on Sport (8) that puts several features of the model in the larger context of sport as an economic and social phenomenon of fundamental importance to human welfare.
The European Commission's Consultation Document identified six specific features that continue to form the core of the European Sports Model:
A. Pyramid Structure
In each country, a single, comprehensive structure for each sport includes four integrated, interdependent levels of professional and nonprofessional organisations. This structure is described as a pyramid. At its base are the largely autonomous and nonprofessional clubs that are said to be fundamental institutions in European society from the smallest communities on up. For example, it is estimated that 39% of the population in Austria belongs to a sports club. (9) At the next higher level are regional federations within each country. They are responsible for organising competition among the constituent clubs in a particular sport. At the third level up are national federations. They are responsible for overseeing the work of the regional federations, organising competition among clubs from different regions, staging national championships, and regulating sports activity. For each sport, there is a separate national federation, each of which therefore enjoys both a monopolistic position in a particular sport and the competence to regulate itself, subject to national legislation. At the top of the pyramid are the European federations, again, one for each sport, such as the Union of European Football Associations (UEFA), with one member from each country. They organise European championships in each sport, based on the rules of international sports federations (IFs), such as the Federation Internationale de Football Associations (FIFA) in football/soccer. A primary function of this pyramid structure is to facilitate an equitable distribution of revenue among the constituent sports clubs so as to encourage mass participation and competitive balance among clubs.
B. Promotion and Relegation
In Europe's open system of promotion and relegation, clubs may move up or down from year to year depending largely on their win-loss records. The purposes of this system are primarily to give small-or medium-sized clubs a better chance to reward merit and generally to enhance competition. (10) A dynamic, hierarchical system therefore operates at all levels of the pyramid. The English Football Association (FA) hierarchy, for example, consists of seven tiers. Each year, the best performing teams on any of the bottom six tiers may advance to a higher tier and, if they are consistently successful, end up in the national league system, the highest tier of competition. The FA itself is the exclusive, recognized national federation in English football and is therefore a member of UEFA.
The specific rules and criteria for the process of promotion and relegation are defined by the national federations, such as the FA in England, but they all seek to reward merit and promote equality of opportunity and balance competition among teams. In addition, the promotion-and-relegation system performs an ethical function by mandating relegation to a lower tier of any team that has engaged in specified questionable practices.
Thus, for example, English football clubs finishing in the last four places of the National Football Conference at the top are relegated to either of two second-tier leagues for the following season. Two clubs are therefore relegated to the North League and two clubs to the South League. Conversely, the top team in each of these second-tier leagues is promoted to the geographically undifferentiated National Football Conference. Its remaining two spots for promoted clubs, one from each league, are filled after a series of playoff games among clubs finishing second through fifth in each of the leagues. These playoffs not only add to the excitement of competition each year but also offer an equitable second chance to some clubs, particularly late bloomers and non-champions. Promotion and relegation of teams in the lower tiers is also merit-driven, but clubs must affirmatively request promotion upward if they qualify. (11)
Overall, the European Commission "has taken the position that the pyramid structure of sport, along with promotion and relegation, are important aspects of the culture of sport in Europe, and that preservation of [such cultural] institutions (and presumably after such cultural aspects of sports) is an important interest that should be considered in determining whether the rules and policies of leagues and governing bodies are lawful under EU law, including competition law". (12) As we shall see, this is the crux of an ongoing legal tournament in Europe, involving substantial litigation.
C. Grassroots Involvement.
Another feature of the European Sports Model is a strong commitment to voluntary, grassroots leadership. Some 700,000 clubs at the local level are expected to be actively involved in training athletes and organising competition in their communities, usually by enlisting volunteers (an estimated 10 million) rather than paid professionals. (13) Such grassroots involvement is a foundation of European sports. For example, Portuguese football/soccer clubs rely on approximately 70,000 unpaid coaches. (14) While there may be some funding and other involvement at the grassroots from the regional and national federations, the clubs bear most of the responsibility for developing players and putting together teams.
The role of sports is idealized in Europe as a vital means for communities to bind their citizens together, from the grassroots to the top professional level. Indeed, throughout the world, "[s]port is central enough to the experience of the vast majority of people to be a useful tool to break down the barriers which divide citizens." (15) It is unclear, however, how to define a genuine sports community above the level of highly localized, essentially neighborhood competition. Consequently, it is unclear whether the vaunted grassroots involvement ever comes close to achieving the ideal of communitarianism championed by the European Sports Model. Even if that identification is generally valid, the community is not always coterminous with a particular municipality. Sports can divide municipalities and separate them from other municipalities. (16) For example, football/soccer loyalties in Liverpool, an English bastion of the sport, have historically been divided between a Protestant-oriented and a Catholic-oriented club. That kind of division certainly does not bespeak an optimal outgrowth of grassroots in an important community.
D. National Identity
The European Commission has described sport in Europe as "one of the last national passions. The commitment to national identity, therefore, is one of the features of sport in Europe." (17) Declaration 29 on Sport, annexed to the Treaty of Amsterdam, articulated this principle as follows:
The Conference emphasises the social significance of sport, in particular its role in forging identity and bringing people together. The Conference therefore calls on the bodies of the European Union to listen to sports associations when important questions affecting sport are at issue. In this connection, special consideration should be given to the particular characteristics of amateur sport. (18)
The Commission's 2007 White Paper amplifies this appeal by noting reciprocal roles of patriotic emotions and solidarity, on one hand, and personal commitments to physical exercise and healthy social relationships, on the other.
E. International Competitions
The European Commission, acknowledging a psychological need for people to confront one another, promotes sports competition as an alternative to conflict, if not bloodshed, and as a safeguard of cultural diversity. (19) International competitions therefore are seen as a means of harnessing national identity in the production of regional peace and integration.
F. Negative Aspects
The last of the six features of the European Sports Model candidly acknowledges the negative aspects of competition, particularly as a byproduct of efforts to forge national identities. Specifically, the European Commission's Consultative Document recognized that the formation of national identities often inspires ultra-nationalism, racism, intolerance, and hooliganism related to sports events. (20)
III. The North American Sports Model
In general, the European Sports Model reflects an open system of national competitions in which individual clubs, organised comprehensively from the grassroots to the top professional tier in a pyramid structure, move up or down in status generally based on merit at the end of a season. The North American Sports Model is less easily defined because there is little agreement on what exactly it is other than what, to some extent, the European Sports Model is not. For the most part, it largely restates what is seen to be a creeping Americanization of sport, a view that is sometimes inspired by European nativism, antagonism toward American culture, or misunderstanding of it. (21)
This so-called creeping Americanization is closely identified with commercialism, but has other distinctive characteristics. For example, the European Commission's consultation document noted that sport in the United States is not a pastime and way of contributing to society, as it is said to be in Europe, but only a business "operated mainly by professionals". (22) On the other hand, the same document concluded that the negative features of the European Sports Model ultra-nationalism, racism, intolerance, and hooliganism--"are unknown in the U.S.". (23) Despite the questionability of such generalizations about the sports culture in North America, the model merits consideration as a creditable representation of reality. As sketched out in the literature, (24) it has, like the European Sports Model, six principal characteristics:
A. A Sharp Distinction Between Amateur and Professional Sports The pyramid structure of European sports organisations merges professional and non-professional sports into a hierarchy governed for the common good by vertically integrated associations and federations. On the other hand, the North American Sports Model is said to distinguish sharply between "amateur" and "professional" sports, each with its own unintegrated structures. Amateur sports--essentially competitions involving unpaid athletes--are governed by several layers of authority: community leagues, school athletic associations, state and national regulatory boards, the National Collegiate Athletic Association (NCAA) and other supervisory organisations at the nonprofessional level, the Amateur Sports Act, and the rules and processes of the Olympic Movement. Professional sports are governed primarily by their own league rules and the process of collective bargaining. The precise definition of an amateur varies, from the NCAA's strict prohibitions on professional contracts to the inclusive eligibility rules of the Amateur Sports Act and the Olympic Movement that have little to do with compensation of athletes.
The important point is that the distinction between amateur and professional sports which Europeans attribute to North American sports is fundamental in highlighting their commitment to an open, integrated structure of competition. Once the distinction is made, however, it tends to be exaggerated so as to obscure the strong role of non-professional competition in North American sports culture. In the words of a leading expert, the core of the North American Model is "synonymous with the way professional sports has been organised in the four Major League Sports." (25)
B. The Role of Schools and Colleges
The fundamental role of schools and colleges in the organisation of sport, and the characteristic combination of sport with academic education, is another fundamental feature of the North American Sports Model, (26) indeed, an essential building block of both non-professional and professional sports. (27) It is therefore surprising how little attention the comparative legal commentary has given to this feature of North American sports culture. Without understanding the role of the schools and colleges as building blocks, however, the division between "amateur" and "professional" sports appears to be more pronounced than it really is.
C. A Closed System of Competition
The structure of sports organisation in North America involves a closed system of competition. In contrast to the European Sports Model's pyramid structure and its system of promotion and relegation, the major sports leagues in the United States are generally closed and autonomous, each with an average of 30-32 teams. Within the framework of governmental regulation, the teams in each league co-opt their own membership. They define which teams are to be included within a league, and once teams are so included, they may remain in the league with little fear of expulsion. (28) Indeed, membership in a league is an essential and definitive requirement for a team. Member teams thus have only derivative rights from a league and must satisfy distinct obligations (29) to other members to protect mutual market opportunities as well as the league itself. It has been said, quite aptly, that although in Europe there are no leagues without teams, in the United States there are no teams without leagues.
[It] is the league, not the teams, that generates the fundamental market opportunity to produce professional sports games within the league territories. The league transfers derivative rights in the naked market opportunity, a property interest, to enable the member clubs to gain economic rewards by enhancing the inherent value of the business opportunity through team marketing and other operations. (30)
The North American Sports Model implies that membership in the league is essentially a gift from other members of the league, although membership normally entails the payment of a substantial fee. Expansion and contraction of teams is controlled solely by cooptation. Unlike the generally open system within the pyramid of the European Sports Model, the lowest levels of organised professional sports in North America--farm teams and minor leagues in such sports as baseball and hockey--are fundamentally recruitment mechanisms to help train and provide the major leagues with seasoned players.
Thus, the professional leagues operate as joint ventures among the constituent teams. While competing with each other on the field, teams work together off the field in order to promote their mutual economic interests. The teams are horizontally integrated, whereas the European hierarchy of clubs, associations, and federations is vertically integrated.
The North American Sports Model, generally as constructed in European documents and professional commentary, emphasizes that its constituent leagues operate as cartels of team owners. This point can be exaggerated, however, particularly because the players' unions place a substantial restraint on the hegemony of the owners. The issue of synthetic basketballs is a case in point. When players complained about the NBA replacement of leather-covered basketballs, their union promptly filed a grievance with the National Labor Relations Board, claiming that the NBA had violated agreements by failing to consult the players. The union's initiative prompted David Stern, the NBA Commissioner, to acknowledge the players' complaints. (31)
D. Commercialization of Sport
The composition of the closed leagues that comprise the North American Sports Model is based not on promotion and relegation of teams, but rather on a combination of owner preferences, usually for commercial reasons, and approval by the joint ventures of established teams. Major league teams are called franchises, a commercial term, and investment in them is protected by the closed, horizontally integrated system. The product is sometimes described as little more than packaged entertainment. This is the heart of the argument by Europeans that the North American Sports Model is the product not of grassroots social activity, as the European Sports Model with its pyramidal structure purports to be, but of commerce, purely and simply. (32)
E. An Extensive System of Team and Player Restraints
The European Sports Model has not relied on team and player restraints to enhance competitive balance among clubs. Indeed, several decisions of the European Court of Justice, to be discussed later, (33) have struck down restraints on conditions for a club's employment and transfer of players that had been imposed by sports associations and federations. In North America, however, restraints on teams and players are important, especially contractual restraints, the draft system for player recruitment, salary caps, luxury and payroll taxes, and revenue sharing. (34)
Contractual restraints are best understood against a background of free agency by which players may be released or otherwise freed of contractual obligations. Free agency has been qualified, however, by reserve clauses in particular. A player declining to sign with a team may be restricted from playing on other teams for a period of time. Free agency restrictions vary from league to league and often change with new collective bargaining agreements. Generally, though, they impose conditions on a player's freedom to transfer, based on the length and terms of service the player has provided a team.
Also, teams have had the right to prolong the player's contract indefinitely, under a reserve clause, or, temporarily, under an option clause. The former "Rozelle Rule" of the National Football League (NFL), for example, represented the use of reserve clauses as a basis for imposing transfer fees on teams acquiring players from other teams, often with the intent and effect of locking players into service with single teams for their entire careers. The "right of first refusal" was later developed, which enabled a free agent's former team to match any offer made to him by another team in order to retain his services. Ordinarily, if they elected not to exercise the right of first refusal, the Rozelle Rule still applied and the NFL Commissioner could himself impose a transfer fee on the former team.
A second type of player restraint in North America is the draft system. Although procedures vary from one professional league to another, an annual draft generally serves as the primary mechanism for recruiting players. The Commissioners of each professional league assign priority numbers to teams to determine the order in which they may select from the rosters of available new players. In the interest of balancing among teams, the poorest performers from the previous season have the first right to pick rookies, thereby helping allocate new talent in the league in reverse proportion to performance. These drafts largely define the access of teams to the pool of new players and exclusive contracting of them.
The third type of player restraint is the salary cap, which sets a limit on the maximum amount a team can pay its players. The purpose, again, is to encourage balance among teams by limiting the ability of the wealthiest teams to pick off the choicest cherries in the league. A luxury tax has a similar purpose but operates differently so as to impose a penalty on payments above a set limit.
F. Collective Bargaining System
In North America, team and player restraints, and formal relationships between them, are largely premised in labour agreements. Indeed, the collective bargaining system has been described as a "very essential difference compared with Europe, where the 'sports industry' concept is not yet as developed and player unions have been relatively weaker and not equipped with the necessary bargaining powers". (35) Although restraints on a market such as that of the sports industry may violate U.S. anti-trust law, two exemptions remove restraints on labour from this general policy. The "statutory exemption" is an express statement in the Clayton Act (36) that labour is not a commodity or article of commerce, thereby removing labour agreements from the reach of anti-trust law. The "non-statutory exemption" establishes that the Wagner Act and later labour-relations legislation preempt applications of the anti-trust laws. These exemptions, however, have not always been applied consistently.
IV. Comparison: Continuing Divergence or Gradual Convergence?
In practice, are the two sports models descriptive? If so, are the current organisational structures on the two sides of the Atlantic continuing to diverge or are they converging? Let us begin to answer this question by noting some commonalities between the two models as means to accomplish certain ends, not as ends in themselves. We shall see that because the ends help shape the means and are largely the same on both sides of the Atlantic, the models are gradually converging.
The first of the common ends is to encourage competition at the highest level for the public benefit, whether we define that level as one of pure entertainment or as some sort of unsullied social activity. Consequently, for example, both Europe and North America employ "anti-siphoning" regulations to restrict the media in their ability to control public access to broadcasted competition. In other words, the ability of the media to "siphon off " events by blackouts or pay-for-view requirements is limited on both sides of the Atlantic. Second, both systems seek to find the right balance between the necessary values of cooperation and competition. Striking this balance between competition and cooperation in a social enterprise with "no analogous models in other industries," however, can be difficult. (37) Third, the two models both seek competitive balance among clubs or teams based on two principles of competition: equality of teams and uncertainty of outcome. (38) Opposing teams should be roughly equal on a given day. Dominance by a single team, in the opinion of the Seventh Circuit Court of Appeals, "would be like one hand clapping," (39) and the sound of even two or three hands clapping would also be disappointing to the spectator public. Perhaps a better metaphor, however, involves the sound of music: "Sport without uncertainty of result would be like opera. You would know who is going to die in the end. It might be entertaining, but it would not be sport." (40)
One might think that the closed system in North America, in which the same teams compete against each other year after year, would not encourage the adjustments in the composition of leagues upon which competitive balance relies. It might seem that the rich, flush with success, would tend to get richer and the poor, poorer. To some extent, this is true, but mostly in the short-run. Generally, the professional leagues maintain competitive balance. Even the well-endowed New York Yankees in Major League Baseball lose games and pennant races. A variety of factors, such as robust players' unions, the annual players' drafts, salary caps (both hard and soft (41)), and revenue sharing of broadcast revenue, seek to promote equality.
In European football/soccer, however, a traditional reluctance to adopt such restraints has led to competitive imbalances. Well-established, large-market clubs dominate the sport, (42) and newly formed consortia of elite clubs, especially the G-14, (43) reinforce the imbalances. In part, this may be attributable to decisions of the European Court of Justice and other applications of EC law, (44) but, overall, increased economic regulation of the clubs should have the effect of minimizing commercial disparities among the clubs. Quite likely, however, the EC regulatory machinery has been unable to keep up with the steady commercialization of European football/soccer.
In both Europe and North America, it as to be candidly acknowledged that many fans prefer dominant teams. For such fans, having some assurance of a championship may be more important than watching exciting matches. (45) Thus, the principles of equality and uncertainty of outcome (46) not only may be frustrated but may actually run contrary to the preferences of sports fans. In sum, although competitive balance remains a shared goal of both sports models, there are clearly limitations on its achievement and questions about its importance.
Finally, the two models seek to insulate sport as much as possible from political and harmful economic manipulation. For example, the European Commission secured an agreement limiting the role of the IF governing Formula One Racing after complaints that the federation had been using its regulatory power to favor its own economic interests. (47)
2. Means: The Models Themselves
To what extent do the basic features of the two models, respectively, conform to reality in this era of globalization and commercialization? To what extent are the models similar despite the apparent differences between their respective features? In seeking answers to these questions, it will be helpful to note several characteristics of sport as it actually operates on both sides of the Atlantic, in terms of the six basic features of the European Sports Model.
a. Pyramid Structure
In the closed, horizontally integrated system of the North American Sports Model, a kind of pyramid structure, though not the same or as formally organised as that of the European Sports Model, is nevertheless apparent. That is due to several factors: the profound role of the schools and colleges in training and recruiting professional players, the annual drafts for recruiting new players, and the importance of semi-professional teams and leagues in thousands of communities. Moreover, the closed system generates lasting long-term loyalties to particular teams as well as close cultural identifications with them. These community-based loyalties help ensure what amounts to an informal, semi-integrated pyramid of sports organisation. Also, the establishment of open competition in sports, involving non-professionals and professionals alike, has further blurred the distinction between amateur and professional sports in North America.
b. Promotion and Relegation
In the North American Model, team success also serves to a limited extent as a basis for reconstitution of league membership. To be sure, the process of recomposition or reconstitution of team membership in leagues is not established by formal rules, as in the European Sports Model, nor is it routine, and the process is very gradual. But there is a kind of slow, de facto promotion and relegation, in which a team's competitive standing, by influencing ticket sales and other commercial revenue, helps determine the long-term sustainability of a particular franchise. In recent years, the relocation to Washington, D.C. of the less-than-successful Montreal Expos in the MLB is one example of this phenomenon; another involves the plan for the relocation within the NBA of the underperforming Seattle Sonics to Oklahoma City. This plan is of particular interest because the team would thereby move from a large population center and media market to a much smaller one. Perhaps only a community-owned team such as the Green Bay Packers in the NFL is secure from the limited process of de facto promotion and relegation.
More significantly, however, Europe's promotion-and-relegation system, particularly in football/soccer may no longer be absolute. It is under attack by institutional reforms and commercialism. The UEFA's new system for comprehensive licensing of teams, following a French practice, challenges the merit-based system of promotion and relegation. The result of relying on a licensing system to certify teams is apt to be a semi-closed tournament system akin to the North American Model. Also, the decision of the Court of Arbitration for Sport (CAS) in the Granada 74 case, which upheld the purchase, renaming, and relocation of a team, opens up a major crack in the system. In addition, the elite European clubs have formed their own revenue-generating dream league. This "G-14" group (so-called, although the group has grown beyond the original 14 clubs) has launched what amounts to an attack on the vertically integrated structure by launching their own championship competition. The G-14 arrangement, though still unauthorized, has so far succeeded in puncturing the promotion-and-relegation-driven hierarchy of the European pyramid structure.
c. Grassroots Involvement
Grassroots involvement is also alive and well, not only in Europe but in North America. Such hallowed traditions as Little League Baseball, competition among schools for colleges, and community leagues in many sports bear witness to the vitality of voluntary, grassroots organisation of sports in North America. As we have seen, this grassroots foundation is essential in the training and recruitment of professional players. To be sure, as one moves up the sports pyramid, it is apparent that community playing fields abruptly change to commercial ventures, but that is true in both Europe and North America.
In Europe, "much professional sport is rapidly distancing itself from the social and educational context of recreational sport". (48) In no small measure, this has resulted from foreign acquisition of elite clubs. The discourse of such investment ventures does not smack of communitarianism but rather of commerce. For example, in describing the Hicks Sports Group's acquisition of Liverpool F.C., its Chief Operating Officer spoke of a "gold rush to English soccer" by investors who sought "low-hanging fruit," "brand exploitation," and "synergies in cross-fertilizing opportunities". (49) The commercial marketing of sports now permeates European football/soccer. In North America, however, a robust system of non-professional competition among schools and colleges remains an alternative fixture of the sports culture.
d. National Identities, International Competitions, and Negative Aspects
In terms of professional sports, the remaining three features of the European Sports Model are considerably less important in North America, primarily because the North American Sports Model encompasses only two countries, the United States and Canada. Indeed, only three of the four major leagues in North America MLB, NBA, and NHL--have any teams at all in Canada; and only one, the NHL, has substantial Canadian membership.
The feature of national identity in the European Sports Model is itself problematic. Indeed, "the traditional structures of European sports will most likely continue to create problems simply because they are by nature based on the importance of nationality and thus contain an inherent element of potential discrimination". (50) Moreover, new pressures to relocate clubs and establish feeder clubs in other countries challenge the aspiration of national identity.
Another big question concerns the nature of the international competition that is said to build upon national identity as a feature of the European Sports Model. Because of this relationship, based on national rivalries, international competition unfortunately involves the "inherent element of potential discrimination" that too often takes the form of spectator violence and hooliganism, all of which constitute the "negative aspects" of the European Sports Model. Ironically, the controversial G-14 competition among elite clubs, as a structure not based on national rivalries, may better avoid the negative aspects of the European Sports Model despite its general threat to the promotion of national identities. It is not at all clear whether the European Sports Model has helped the region advance competition beyond such rivalries, with all the bitterness and spectator violence such rivalries entail, to a higher level of transnational integration.
Nor is it clear that the fifty years of European integration has led to any continent-wide identifications in sport. Indeed, many English football fans often cheer for Brazilian and Argentinian teams in their World Cup matches with French and Italian teams rather than for their fellow Europeans. This is particularly puzzling in a region committed to integration. Why, indeed, are there so few European-wide teams? If European integration is important enough to trump the autonomy of sports as something "special," why is the impulse of integration missing in the actual composition of teams? The Ryder Cup team in golf stands out as a major example of a European-wide team. (51)
B. The Great Legal Tournament in Europe
Despite the commonalities shared in varying degrees by the two models, important institutional differences between them are also profound. We have already seen that their general organisational structures diverge, in theory if not in practice. Of increasing significance, however, has been the framework of external regulation. Although both European and North American systems are subject to similar legal constraints, particularly anti-trust/competition law, some constraints are more distinctive of one system than the other, for example labour and collective bargaining law as a fundamental element in North American professional sports. Moreover, the framing of related issues has been quite different.
The distinctive framework within which several important issues have been addressed within the European Community involves a dichotomy between pure sporting activity and sporting-related activity subject to economic regulation. The extent to which EC regulatory law extends to sports has profound implications for the integrity of European sports law. Whenever, in the interest of European economic and social integration, EC law overrules the governance of sport by associations and federations, it must be acknowledged that the pyramid of sports organisations is at least potentially challenged. Indeed, what we might call a great legal tournament in Europe concerning EC regulatory authority in the sports arena, as opposed to the autonomy of clubs and associations, has been described as the "crux of sports law" (52) in Europe.
This development has been fueled, on one side, by rampant commercialization, for example the sale of English football/soccer clubs to foreign investors. (53) On the other side is an abiding recognition that sport is "special" and therefore worthy of an exemption from regulation when it does not engage the process of economic integration in Europe. The state of play in the European legal tournament is reflected in four cases, three that have been decided by the European Court of Justice and one by the Court of Arbitration for Sport.
1. Bosman. The first of these cases, Union Royale Belge des Societes de Football Ass'n v. Bosman, (54) remains the cause celebre. A Belgian player, Bosman, sought a transfer from his former team to a French team. When his new team failed to pay a required transfer fee to the former team, thereby preventing the transfer, Bosman brought legal action against the team and the Belgian football association. The transfer-fee requirement, long a fixture in European sports, had been justified as a means of ensuring balanced competition and uncertainty of results, as well as an equitable means of compensating a team for the cost of training a player. Ultimately, however, the European Court of Justice (ECJ) struck down the player transfer system under Article 39 of the EC Treaty, which provides for freedom of movement among Member States. On the same basis, the ECJ also struck down a provision that, in the interest of national identity, had strictly limited the number of players from other EC Member States who could become members of a team. The Bosman decision was later extended to benefit players from non-EC states having special agreements with the EC, that is the so-called "Europe agreements" states that are in the process of applying for membership in the EC. (55)
In response to serious issues that emerged from the Bosman decision, FIFA and the UEFA reached an agreement with the European Commission in 2001 that provides for a revenue-redistribution mechanism between teams in compliance with EC law. The new mechanism involves two elements. The first is a provision for training compensation whereby, if a player under age 23 who has trained with one club transfers to another club, training compensation is due from the transferee to the transferor club. The ECJ suggested the rationale for this system in Bosman by noting that a system of compensation to teams for expenses incurred in training players might not run afoul of Article 39, even, as in the FIFA regulations, after the expiration of a player's contract. The second element in the agreement is a so-called "solidarity mechanism," which requires that if a player is transferred during the course of his contract, a small portion of any fees paid by the transferee to the transferor team is redistributed to other teams for which a player has played previously. The agreement applies only to transfers during the course of a player's contract.
2. Meca-Medina. In Meca-Medina & Majcen v Comm'n of the Eur. Communities, (56) two swimmers claimed that the anti-doping rules of the Olympic Movement, as specified by the international swimming federation (FINA), violated provisions of the EC Treaty that protect freedom of movement and void collusive arrangements among organisations. The ECJ determined that EC law generally applies to sports-related issues, just as it would to other issues with economic implications. Thus, to avoid the prohibitions of the EC Treaty, contested sporting rules must be limited to sporting necessities. In the dispute itself, however, the ECJ ruled that EC law did not apply. Instead, the swimmers' claim was "at odds with the Court's case law," and their argument that anti-doping rules were imposed not only for health considerations but also to safeguard the economic potential of international competition was "not sufficient to alter the purely sporting nature of the legislation." What may be most significant (and disappointing) about the ECJ's decision is that it failed to further clarify what is economic and what is not in defining the contours of sports organisational autonomy within the European Community.
3. Oulmers. In Charleroi v FIFA, (57) a Belgian football/soccer club, the Royal Charleroi Sporting F.C., joined by the G-14 group of elite clubs, challenged rules of the FIFA. These rules require clubs to release players for so-called "international duty" on national teams and insure them against the risk of injury in FIFA-sponsored or recognized international matches without compensation from FIFA, even when players are injured in the course of such "mandatory release" competition. (58) A Moroccan national, Abdel Majid Oulmers, was badly injured in the course of a mandatory release competition to play on the Moroccan national team. The injury resulted in demonstrable losses to the club during Oulmer's prolonged period of recovery from his injury. The Charleroi club therefore requested damages for these losses. More ambitiously, the G-14 elite group requested 860 million Euros in damages as compensation for costs incurred by elite clubs over a period of ten years to implement the FIFA mandatory release requirements to their detriment. FIFA responded, first, that there was no connection between the injury of Oulmers and Charleroi's eventual league standing; second, that it is the national associations, not FIFA or UEFA, that should reimburse clubs for the cost to them of player injuries; and third, that 75% of the profits from major tournaments are returned to national associations for use in their discretion, such as to compensate them for player injuries as in the case itself.
The case was initially brought before a Belgian commercial tribunal, the Tribunal de Commerce de Charleroi. It rejected the G-14 demand for damages but decided to refer two questions to the ECJ: (1) whether the club's obligation to release players without compensation, as FIFA mandated, violated freedom-of-movement and antitrust competition provisions of the EC treaty; and (2) whether FIFA's binding determinations of a coordinated match calendar, which is an essential foundation of the pyramid construction of European sports, complied with those provisions. What is important about that case is, once again, the question of where to draw the line between the autonomy of sporting activity and regulation of it by the EC in the interest of economic integration. If the petitioning club and the G-14 win, the pyramid and its vertical integration of European clubs, under the supervision of FIFA and EUFA, will crumble further. It is also feared that a decision in favor of the petitioners will all but end the coordination of professional, non-professional, and national team competition in European sports. If that happens, not only will the pyramid be quite hollow as a formal consideration, but it will be especially difficult, if not impossible, for national teams from poorer countries to compete internationally if they cannot count on a coordinated calendar of matches that ensures the availability of star players employed by high-paying European clubs.
4. Granada 74 SAD. In 2007 FIFA and UEFA asked the Court of Arbitration for Sport to enjoin the Spanish Football Federation from allowing a new club, Granada 74 SAD, to compete in the second division of Spanish football. A wealthy investor purchased a second-division football/soccer club, Ciudad Murcia, renaming it Granada 74 SAD and relocating its headquarters to a coastal town, Motril, south of Granada and west of Murcia. FIFA and UEFA claimed that the club's registration by Spain's Football League (LFP) violated the normal promotion-and-relegation system for gaining membership in the second division, based on sporting results on the field of play rather than a commercial transaction.
The sole CAS arbitrator, however, endorsed the club owner's view that Granada 74 SAD was not a new legal entity that had replaced Ciudad Murcia. Instead, it was the same entity with a different owner, name, and location. He also found that Granada 74 SAD had been duly recognized by the LFP. Thus, the new ownership, the name change from Ciudad Murcia to Granada 74 SAD, and the club's relocation did not breach any applicable rules. Insofar as the Ciudad Murcia team had obtained the right to play in the Second Division on sporting merit, its mere sale and conversion into Granada 74 SAD did not breach FIFA and UEFA regulations that are designed to prevent a different range of practices, namely all methods or practices that jeopardize the integrity of matches or competitions. The CAS arbitrator therefore concluded that the owners of the upstart club had engaged in a perfectly legal business transaction by purchasing 100% of the shares of a registered sports company whose renaming and change of registered address was protected by Spanish law. Finally, the CAS arbitrator ruled that the similarity of the newly formed club's name, Granada 74 SAD, with that of another club, Granada 74 CP, was immaterial insofar as the LFP had duly registered the name of Granada 74 SAD. (59)
C. Specific Legal Issues
So far, we have seen that despite the contrasting features of the European and North American Sports Models, they converge in sharing fundamental commonalities and structural characteristics in practice, but they continue to be divergent institutionally and in certain specific practices. In particular, the EC framework is materially different insofar as it understandably puts overwhelming emphasis on issues of economic import. Thus, inspired by the objective of regional integration, a unique effort continues in Europe to distinguish pure sporting activity from sporting-related activity subject to economic regulation.
Specific legal issues of professional sports highlight both the continuing divergence and emerging convergence between the two models. For example, the following comparative summary of anti-trust (competition) regulations, with specific reference to broadcasting rights, is instructive. (60)
1. Regulation Under Anti-Trust/Competition Laws
a. United States
The structure of professional sports leagues in the United States is defined primarily through a combination of labour law and anti-trust law: "The common ground for attack is found in application of the antitrust law." (61) Most claims arising in this area suggest violations of the Sherman Act, (62) stemming from collusion between owners of separate teams. What, then, are the main anti-trust ramifications of the organisational structure for professional sports in North America?
i) Joint Venture/Horizontal Integration Structure Whenever a professional league is classified as a joint venture of separate and independent teams, such collusion is open to attack under the Sherman Act. However, in defense, the leagues have asserted that they do not constitute cartels but rather a single entity. (63) Thus the collusion is "internal" and beyond the reach of the Sherman Act. Under the single-entity approach, teams can no more illegally collude with one another than could members of the board of a corporation. Unfortunately for the league, however, United States courts have not been very receptive to classifying professional sports leagues as single entities.
The Supreme Court decision of 1984 in Copperweld v Independence Tube Corp. (64) adopted a "unity of interest" test to differentiate between strictly "internal" agreements to manage the affairs if the league and illegal anti-competitive agreements that established relationships between teams. While this test suggested new hope for the single-entity defense, courts have been reluctant to accept it so as to relieve the leagues of anti-trust regulation.
Recently, Major League Soccer (MLS), the newest professional sports league in North America, was deliberately structured so that it would resemble a single entity. All teams are owned by the league, with investors/operators having very limited control over the actual decision making. Many predicted that this would be a new model for successful U.S. sports leagues. While the MLS approach initially seemed to suggest great hope for success, these expectations did not materialize. In Frazer v Major League Soccer, (65) the court did not rule, as had been hoped, that the MLS structure passed the "unity of interest" test of Copperweld, but rather decided the case on other grounds. In any event, even if a single-entity approach were found to be tenable for a professional league, its disadvantages of inhibiting the autonomy of teams may outweigh its benefits.
Historically, the anti-trust law has applied comprehensively to all sports organisations except Major League Baseball (MLB). In Federal Baseball Club of Baltimore Inc. v National League of Professional Baseball Clubs, (66) the Supreme Court famously ruled that organised baseball did not fall within the scope of anti-trust law. Despite criticism by later courts and invitations for Congress to modify the statute to change this rule, the exemption remained absolute until 1998 when Congress, in response to an incident involving a pitcher, Curt Flood, nearly 30 years earlier, extended the anti-trust law partially to baseball. Most importantly, the Court decided that the law applies to employment issues involving MLB (but not minor league) baseball players, thereby giving those players rights comparable to those of other professional athletes.
ii) Broadcasting Rights
Television and media rights engage a complex of collective league rights and individual club rights. The essential question for analysis of legal issues surrounding sale and distribution of television and other media rights for professional sports is: Who owns the rights in the first instance? If the rights are viewed as belonging to the teams, then the collective selling of them is subject to review under antitrust or competition laws. If, however, the rights actually belong to the league, such laws do not apply. "Under the common law, the home team has a fundamental right to telecast its own game. Thus, any rights sales by a club-run league constitutes an agreement among competing clubs to jointly sell valuable rights, which is subject under anti-trust law to the rule of reason analysis. Any sale that demonstrably raises prices, reduces viewership, or renders output unresponsive to consumer demand would be unlawful." (67)
The Sports Broadcasting Act of 1961, (68) however, created an exemption from anti-trust regulation for the collective selling by professional leagues of the rights to broadcast professional baseball, hockey, basketball, and football games. This exception has been justified by the necessity of a collective sale and corresponding distribution of revenues in order to maintain equality and competitiveness between small-market and large-market franchises. Only the NFL, however, sells the collective exclusive rights to every game. The other major leagues sell exclusive television rights for some games, but games not sold by the league may be sold by the teams playing in the games.
In the European system, competition law and regulations also remain paramount. (69) Articles 81 and 82 of the EC Treaty, much like Articles 1 and 2 of the Sherman Act upon which the European provisions were based, prohibit anti-competitive agreements and market dominance. These provisions therefore constitute the main vehicles for challenges to arrangements that set up exclusive broadcast and distribution rights. Article 81(3), however, gives the Commission the power to allow exemptions from anti-trust challenges if doing so could be expected to improve production or distribution in the interest of regional economic integration while benefiting consumers, so long as otherwise prohibited arrangements include only restrictions that are indispensable to the attainment of acceptable objectives and do not afford the possibility of substantially eliminating competition. Article 81(3) therefore confirmed that the collective sale of television rights is generally consistent with EC competition law. In practice, however, the arrangements for collective sales have encountered problems:
[In Europe, transaction costs inhibit] club-run leagues from maximizing profits from the sale of broadcast and internet rights. Owners have passed up profitable opportunities because, unable to agree among themselves on how to divide the proceeds, a requisite super-majority cannot agree to proceed with a valuable rights sale. In the English Premier League in football/soccer, for example, rights have traditionally been sold collectively. In reviewing a government challenge to an agreement to sell television rights for only sixty of the league's 380 possible games, a tribunal found that the league's limitation on television sales actually reduced revenues. However, the clubs could not agree on how to share revenue gained from additional sales, whether negotiated individually or collectively. Unlike English soccer, television rights to NBA games not collectively sold by the league may be sold by each club within a team's assigned territory. (70)
Starting in 1999, therefore, UEFA sought clearance from the Commission for its pooled sale of broadcast rights to Champions League games. The result was a revised selling arrangement approved by the Commission in 2003 with several essential elements. First, a bidding process establishes broadcast rights. Rights to broadcast matches that have not been so acquired by a certain deadline revert to the clubs, giving them the ability to exploit the residual rights within their respective media markets and thereby increase the likelihood of events being televised to their fan base. Second, contracts for broadcast rights may not exceed a period of three years, at which time a new bid process is to be initiated. Third, opportunities for exploitation of new media, such as internet broadcasts, are to be marketed separately in response to the Commission's concern that the so-called "bundling" of those rights with the television broadcast rights would inhibit the development of the new media.
"Globalization and commercialism are not just American inventions." (71) These trends continue on both sides of the Atlantic, (72) accelerating a convergence of the European and North American Sports Models in many respects and on all levels of competition. In sharper focus, the formation of the G-14 group of elite European football/soccer clubs, the licensing of teams, and opportunities for investors in clubs to bypass the promotion-and-relegation system are among the developments that threaten the pyramid system in Europe. The variations in practices among the several North American professional leagues as well as the much-neglected similarities between features of the European Sports Model and the actual characteristics of sports organisation in North America further call into question both the reality of a North American Sports Model and the extent to which its features actually differ materially from those of its European sibling.
Traditionalists may lament the changes that are occurring rapidly in the organisation of European sports, such as the creeping Americanization, as it has been dubbed, of English football. But the current developments are often positive. For example, the perennial issue among NCAA schools in North America of allocating funds between money-making and money-spending sports is becoming significant in Europe as the more monolithic, single-sport structure of its organisational pyramid falls apart. Also, European sports will likely continue moving toward a collective bargaining system and an exemption from EC competition law for labour agreements. These developments should certainly accrue to the benefit of players even as they threaten to undermine the carefully crafted vertical integration of the European sports pyramid. The more the models stay the same, the more they change.
(1) A major exception is Lars Halgreen, European Sports Law: A Comparative Analysis of the European and American Models of Sport (2004). See also Stephen Weatherill, Resisting the Pressures of "Americanization": The Influence of European Community Law on the "European Sports Model," 8 Willamette J. Int'l L. & Disp. Res. 37 (2002). If the instant commentary offers any new perspective at all to European readers, it is that of a North American.
(2) Throughout this study, discussion of the North American Model will be limited to the features of sport in the United States and Canada, drawing heavily on examples from the United States. The Canadian structure is similar to that of the United States, though not identical with it, and a few Canadian teams and players in binational professional leagues are thereby subject to the same rules as United States teams and players.
(3) For a thorough, highly informative exploration of this topic, see Richard Parrish & Samuli Miettinen, The Sporting Exception in European Union Law (2008). In his Foreword to the book, Stephen Weatherill, id. at vii, observes as follows:
In my view the correct way to understand the so-called "sporting exception" in EC law is simply to regard it as the space allowed to sports governing bodies to show that their rules, which in principle fall within the EC Treaty where they have economic effects, represent an essential means to protect and promote the special character of sport. There is no blanket immunity. There is case-by-case scrutiny. EC law applies, but does not (necessarily) condemn.
On the "specificity of sport," see also Ian Blackshaw, The 'Specificity of Sport' and the EU White Paper on Sport: Some Comments, Int'l Sports L.J. 2007/3-4, at 87.
(4) Declaration 29, Treaty of Amsterdam Amending the Treaty on European Union, the Treaties Establishing the European Communities and Certain Related Acts, Oct. 2, 1997, 1997 O.J. (C340) 1 [hereinafter Declaration 29 on Sport]. The entire Declaration 29 appears in this text at infra note 18. See also Treaty of Nice, Feb. 6, 2001, O.J. (C80) 1. Both of these treaties amended the Treaty of the European Economic Community [hereinafter EC Treaty].
(5) European Commission, Directorate-General X, The European Model of Sport (1999) [hereinafter Consultation Document]; Richard Parrish, Sports Law and Policy in the European Union (2003); Weatherill, supra note 1. For a cogent analysis of current problems and possible solutions related to the model, see Thomas M. Schiera, Balancing Act: Will the European Commission Allow European Football to Reestablish the Competitive Balance That it Helped Destroy?, 32 Brook. J. Int'l L. 709 (2007). Gritt Osmann, Das Europaische Sportmodell, Spurt, 6/1999, at 228; 2/2000, at 58. Pertinent documents may be found in The European Union and Sport: Legal and Policy Documents (Robert Siekmann & Jan Willem Soek, eds. 2005).
(6) Report from the Commission to the European Council with a View to Safeguarding Current Sports Structures and Maintaining the Social Function of Sport Within the Community Framework, The Helsinki Report on Sport, COM (1999) 644 final.
(7) Declaration on the Specific Characteristics of Sport and its Social Function in Europe, of Which Account Should be Taken in Implementing Common Policies No. 13948/00 of Dec. 2000 (EC).
(8) Commission of the European Communities, White Paper on Sport, COM (2007) 391 final (hereinafter White Paper). Parrish & Miettinen, supra note 3, at 43, observe as follows:
The White Paper was not designed to act as the basis for legislative proposals but to state the Commission's current policy position on sport. In doing so the White Paper acts as another communication with sports organisations and also as an orientation document sensitizing the other Commission DG's and EU institutions to the current debates within sport. The White Paper is structured around three themes: the societal role of sport, its economic dimension and its organisation in Europe.
With respect to the European Sports Model, the White Paper adopts the concept of the specificity of sport, id. at 13, but advances the rather unhelpful, noncommittal view that a definition of a unified model generally defies adequate definition. Id. at 12.
(9) Sport for All, Sports Info. Bull. 19 (1997).
(10) On the benefits of this system, generally see Parrish & Miettenen, supra note 3, at 207.
(11) Football Association, National League System Regulations (2006); see also Roger G. Noll, The Economics of Promotion and Relegation in Sports Leagues: The Case of English Football, 3 J. Sports & Econ. 169 (2002).
(12) Gary Roberts, The Legality of the Exclusive Collective Sale of Intellectual Property Rights by Sports Leagues, 3 Va. Sports & Ent. L.J. 52 (2001).
(13) See Commission of the European Communities, Commission Staff Working Document, The EU and Sport: Background and Context, Accompanying Document to the White Paper on Sport 14, SEC (2007) 935.
(14) See Consultation Document, supra note 5, at 2.
(15) John Wunderli, Squeeze Play: The Game of Owners, Cities, Leagues and Congress, in Sports Law & Regulation 13, 24 (1999). Thus, a professional sports team should be a tool to be used to improve the quality of life of the members of the community. A sports team can be a very effective educational and communicative tool. The intangibles of a sports franchise can be good or bad, but sports is definitely a powerful medium. It may sound trite, but it is nevertheless true, that a sporting contest has metaphorical qualities which lends itself to shared observation, evaluation, and discussion. It also has romantic qualities which frame idealistic thoughts and memories ... A sports franchise is a powerful tool that a city can use to improve the quality of life of its citizens.
Id. at 25.
(16) [It] must be strongly noted that a professional sports team does not automatically have a unifying effect by virtue of being a professional sports team. In fact, the same power a sports team has to unify, it has to divide, if it is perceived as only for a particular race, economic class, or culture ... Professional sports can also bring to the fore pettiness, greed, divisiveness, and an exaggerated emphasis on athletic victories.
Id. at 24, 25.
(17) Consultation Document, supra note 5, at 4, 5.
(18) Declaration 29 on Sport, supra note 4.
(19) Consultation Document, supra note 5, at 5.
(21) The perception of creeping Americanization has been described as follows:
Indeed, it seems as if the British find every aspect of the sporting world's Americanization fearful. Thus, for example, The Guardian reported complaints in 1995 that British stadiums have increasingly come to resemble those in America and are now equipped with good seats, restaurants, and even dance floors: Abolishing those infamous standing-room sections, or "terraces," where nearly 100 people lost their lives in riots at Hillsborough in Sheffield, has made the sport too "nice." In 1998 The Independent intoned: "The creeping Americanisation of British sports, in terms of ubiquitous coverage and potential for earning, means that niceness is at a higher premium than ever before." Americanization has also been blamed for taming fans, who previously cared passionately about whatever game they were watching; now they allegedly attend events primarily to see and be seen. Andrei S. Markovits, Western Europe's America Problem, Chron. Higher Ed., Jan. 19, 2007, at B6, B8. See also Weatherill, supra note 1, passim.
(22) Consultation Document, supra note 5, at 4.
(23) Id. at 5.
(24) See especially Halgreen, supra note 1, at 7.
(26) "This direct interrelationship between the education system and professional sports leagues is quite unique for the U.S. in comparison to Europe." Id. at 73.
(27) But see Halgreen, id. at 72 ("The very strong sports tradition among U.S. high schools and colleges is also a very significant feature in the American Model of sport compared to the situation in Europe").
(28) A further distinction has been drawn between "closed" and "hermetic" structures, as follows:
The structure and organisation of sporting leagues in the US also differs on other essential points. The major leagues are generally considered to be "hermetic," meaning that new teams are seldom admitted to a league and there is no annual promotion or relegation between junior leagues and senior leagues. Expansion franchises are admitted only on agreement between existing league members, and there is a substantial entry fee for new franchisers, which is divided among existing league members. The league structure is not just hermetic, it is also "closed" in the sense that member teams do not compete simultaneously in different competitions. And apart from occasional exceptions, such as the consecutive NBA-dominated "dream teams" at the Olympic Games, nor do teams release players to compete in national team competitions. This means that especially the World Cup in ice hockey is often deprived of the best players, who have to play championship games at the same time in the NHL.
Halgreen, id. at 77.
(29) See, e.g., Hollywood Baseball Ass'n v Commissioner, 42 T.C. 234 (1964).
(30) Ray Yasser, James R. McCurdy, C. Peter Goplerud, & Maureen A. Weston, Sports Law: Cases and Materials 231 (2006).
(31) WR News, Edition 3, Jan. 26, 2007.
(32) See generally Weatherill, supra note 1.
(33) See text at infra notes 54-58.
(34) See Stephen F. Ross, Player Restraints and Competition Law Throughout the World, 15 Marq. Sports L. Rev. 49 (2004).
(35) Halgreen, supra note 1, at 79.
(36) 15 U.S.C. [section] 12 et seq. (2000).
(37) Matthew J. Mitten, Timothy Davis, Rodney K. Smith, Robert C. Berry, Sports Law and Regulation: Cases, Materials, and Problems 399 (2005).
(38) See White Paper, supra note 8, at 4.1 For further discussion of the unique balancing required, see Stephen Weatherill, Fairplay Please!: Recent Developments in the Application of EC Law to Sport, 40 Common Mkt. L. Rev. 51, 52-57 (2003).
(39) Chicago Professional Sports LP v. N.B.A., 95 F.3d 593, 598 (7th Cir. 1996).
(40) Weatherill, supra note 38, at 76.
(41) The hard cap, employed by the National Football League (NFL), specifically and absolutely limits the total amount that a team may pay its players, whereas a soft cap, as employed by the National Basketball Association (NBA), likewise sets a limit on compensation but allows exceptions, for example, to enable a team to resign its own veteran free agent without a salary cap limitation. Players anticipating a transfer to another team may negotiate a salary with their current team cap-free. Thus, soft caps encourage players to remain with their teams. See Alan M. Levine, Hard Cap or Soft Cap: The Optimal Player Mobility Restrictions for the Professional Sports Leagues, 6 Fordham Intell. Prop. Media & Ent. L.J. 243 (1995).
(42) Stratis Camatsos, European Sports, the Transfer System and Competition Law: Will They Ever Find a Competitive Balance?, 12 Sports L.J. 155, 178 (2005).
(43) For a description of this consortium, see text at 2(b), infra.
(44) See infra notes 54-58. For a discussion of the decision's effect in shifting power from clubs to players and thereby triggering a dramatic increase in players' salaries so as to favor dominant teams, see Schiera, supra note 5, at 718.
(45) See James D. Whitney, Winning Games Versus Winning Championships: The Economics of Fan Interest and Team Performance, 26 Econ. Inquiry 703 (1988).
(46) For an influential articulation of these principles, see Simon Rottenberg, The Baseball Players' Labor Market, 64 J. Pol. Econ. 242 (1956).
(47) In the United States, by contrast, the National Association for Stock Car Auto Racing (NASCAR), which sets standards and organises competition for the most popular form of automobile racing, is a family-controlled, for-profit enterprise that is independent of IF regulation.
(48) Weatherill, supra note 38, at 92.
(49) Casey Shilts, Remarks at the Conference on the Increasing Globalizaiton of Sports: Olympic, International and Comparative Law and Business Issues, National Sports Law Institute, Marquette University (Sept. 28, 2007).
(50) Halgreen, supra note 1, at 64.
(51) See Mark Rice-Oxley, Common Currency? New Flag? Nope. Try Golf to Unify Europe, Christ. Sci. Mon., Sept. 17, 2004, at 1.
(52) Halgreen, supra note 1, at 396.
(53) See, e.g., Ola Olatawura, The "Theatre of Dreams"?-Manchester United, FC Globalization, and International Sports Law, 16 Marq. Sports L.J. 287, 289 (2006) (corporate raider Malcolm Glazer's purchase of Manchester United); John Cassidy, The Red Devil, New Yorker, Feb. 6, 2004, at 47 (Russian billionaire Roman Ambromovich's takeover of Chelsea).
(54) Case C-415/93, 1995 E.C.R. 97. For a thorough analysis of pertinent European Union law, see Stefan Van den Bogaert, Practical Regulation of the Mobility of Sportsmen in the EU Post Bosman (2005).
(55) See Deutscher Handballbund eV v Kolpak, Case C-438/00, 2003 E.C.R. 1-04135. For a discussion of judicial and other developments in the EU regulation of sports after Bosman, see Roberto Branco Martins, The Kolpak Case: Bosman Times 10?, 2004-1/2 Int'l Sports L.J. 26.
(56) Case C-519/04P, July 18, 2006.
(57) Case C-243.96 (withdrawn; Eds).
(58) The ECJ's precise framing of the question presented is as follows:
Do the obligations on clubs and football players having employment contracts with those clubs imposed by the provisions of FIFA's statutes and regulations providing for the obligatory release of players to national federations without compensation and the unilateral and binding determination of the coordinated international match calendar constitute unlawful restrictions of competition or abuses of a dominant position or obstacles to the exercise of the fundamental freedoms conferred by the EC Treaty and are they therefore contrary to Articles 81 and 82 of the Treaty or to any other provision of Community law, particularly Articles 39 and 49 of the Treaty?
(59) Case Granada 74, The Claim, C.A.S. Press Release, Sept. 7, 2007.
(60) Another important set of issues, involving the licensing of sports merchandise, lies beyond the scope of this study but merits mention. (In North America almost all licensing is collective, unlike the European practice. See Roberts, supra note 12.).
(61) Yasser et al., supra note 30.
(62) 15 U.S.C. [section] 1 et seq. (2000).
(63) See Nathanial Grow, There's No "I" in "League": Professional Leagues and the Single Entity Defense, 105 Mich. L. Rev. 183 (2006); L. Kaiser, The Flight from Single-Entity Structured Sports Leagues, 2 DePaul J. Sports L. & Contemp. Probs. 1 (2004); Karen Jordan, Forming a Single Entity: A Recipe for Success for New Professional Sports Leagues, 3 Vand. J. Ent. L. & Prac. 235 (2001); Brad McChesney, Professional Sports Leagues and the Single-Entity Defense, 6 Sports L.J. 125 (1999).
(64) 104 S. Ct. 2731 (1984).
(65) 284 F.3d 47 (1st Cir. 2002).
(66) 259 U.S. 200 (1922).
(67) Stephen F. Ross & Stefan Szymanski, Antitrust and Inefficient Joint Ventures: Why Sports Leagues Should Look More Like McDonald's and Less Like the United Nations, 16 Marq. Sports L. Rev. 213, 229 (2006).
(68) 15 U.S.C. [section][section] 1291-1294 (2000).
(69) See generally Eleanor M. Fox, The Competition Law of the European Union (2002).
(70) Ross & Szymanski, supra note 67, at 239.
(71) Id. at 81.
(72) See, e.g., Stephen Weatherill, Is the Pyramid Compatible with EC Law?, Int'l Sports L.J. 2005/3-4, at 3.
by James A.R. Nafziger *
* Thomas B. Stoel Professor of Law, Willamette University College of Law. Professor Nafziger is the author of International Sports Law (2d ed. 2004) and serves as President of the International Association of Sports Law (IASL).