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I.P. UK : Brexit and Sports Law

In Category: The Legal Market
Published: 08/07/2016

I.P. UK

Sport is a multibillion dollar global industry on a permanent growth trend. Football, that opiate of the masses, is the fastest growing sector of all. The European football market, says Deloitte, will exceed €25bn by 2017. Whilst we may gasp at FC Barcelona’s record-breaking £120m/year deal with Nike, and at the fact that Sky and BT paid £5.1bn for three seasons worth of TV rights for the beautiful game; we know that next year there will be another, bigger deal and more companies vying for opportunities to promote themselves across the world. For every sport there is a new record to be broken both on and off the field.

Now that Britain has decided to extract itself from the EU, sports law may well find itself at the centre of a global shake up as clients and firms try to get to grips with the often very complicated matrix of laws, regulations and conventions that govern it. Sport touches on all areas of contentious and advisory legal services and the weight and complexity of instructions generated by this sector as a consequence of Brexit will have most firms fighting from the back foot.

The European Championships Example

As Euro 2016 reaches its fevered climax, it seems appropriate to draw examples from football. The European Championship predates the UK’s membership of the EEC by 13 years and the creation of the EU by the Maastricht Treaty by 32 years. England first played in the tournament in 1964 without the need for economic or political union as the price of entry.

The EU has played a key role in sport since the landmark Bosman ruling in 1995. This confirmed the principle of free movement of workers in the EU, and essentially enabled players to move to another club at the end of their contract without a transfer fee being paid. More than a decade later the European Courts of Justice established primacy of EU law over sporting federations. Britain’s election to leave the EU will, according to Richard Scudamore, Executive Chairman of the UK’s Premier League, change the character of the League – 332 players now won’t meet the non-EU criteria for work permits, and will therefore be unable to automatically join other clubs. Furthermore, the impact on club and individual intellectual property rights may be immeasurable.

Then there’s the issue of fair play. Financial Fair Play (FFP), to be precise. FFP programmes like those implemented by UEFA and the English Premier League aim to improve the overall financial health of club football through the imposition of financial rules and restrictions. The most notable developments in this area over the last five years was the roll out of UEFA’s break-even requirement attracting particular attention in legal quarters. Andrew Mercer, Legal Counsel at UEFA, commented “All of the statistics indicate the overwhelmingly positive impact that the implementation of UEFA’s FFP regulations have had on European club football. With the continued expansion and evolution of the regulations, particularly in the areas of settlement and voluntary agreements, these rules will continue to play a central role in UEFA’s drive to protect the long-term viability and sustainability of European club football for years to come”.

Sport is a growth industry. Litigation, arbitration, IP, contracts, corporate and restructuring all have a role to play. Sport needs capable and innovative lawyers able to support the aims and objectives of the sector.

Off side!

It would seem, however, that some rules of the ‘beautiful game’, in particular transfer systems and EU law, are uneasy bedfellows. FIFA Regulations on the Status and Transfer of Players are essentially a set of agreements between FIFA, UEFA and the European Commission which allows FIFA to self-regulate transfers. The difference between football transfers and EU law is one that is regularly exploited, but not without a drawn out contractual fight. 

One can envision a set of circumstances in which a contract entered into under the assumption that we would remain part of the EU ceases post-Brexit to be commercially viable or at least becomes less attractive to one of the parties. The doctrines of impossibility and frustration may come to the aid of a party materially disadvantaged by a change in the law not anticipated at the time the contract was negotiate and/or executed. The law is presently unclear and both clubs and commerce will need the assistance of experienced lawyers to navigate the next few months and years.

Rule Britannia

Britain is part of the global community and Brexit cannot change that fact. We are part of the sporting and commercial world and, with or without E.U. membership, our services and, in particular professional services will continue to be in demand. In an increasingly globalised world the decision of the British people (or 52% of them) to leave the E.U. seems peculiar but, even though the days of Empire are behind us it may yet prove to be a boon that our time as part of an homogenous economic bloc has come to a close. We offer the world unrivalled excellence in professional and financial services and our independent status will allow our unique strengths to come to the fore.

Written by Ahmed Shahin, Head of Research and Mark Husband, Managing DIrector

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