Abstract
ENIC plc is an English company which had invested in several European football clubs. In 1997, it acquired controlling interests in AEK, Slavia and Vicenza. In the 1997/98 European football season, these three clubs took part in the UEFA Cup Winners’ Cup and all qualified for the quarter final. Thus, three out of eight clubs left in the same competition belonged to a single owner.
Prof. Dr. Ivan Cherpillod, Attorney-at-law, BMP Associés Lausanne, Switzerland. The commentary reflects the author’s personal view.
Juan de Dios Crespo Pérez, LL.M., Attorney-at-law, Ruiz Huerta & Crespo Sports Lawyers, Valencia, Spain
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Notes
- 1.
More precisely, the rule establishes that:
-
(1)
no club participating in a UEFA club competition may, either directly or indirectly:
-
(a)
hold or deal in the securities or shares of any other club, or
-
(b)
be a member of any other club, or
-
(c)
be involved in any capacity whatsoever in the management, administration and/or sporting performance of any other club, or
-
(d)
have any power whatsoever in the management, administration and/or sporting performance of any other club.
-
(a)
-
(2)
No person may at the same time, either directly or indirectly, be involved in any capacity whatsoever in the management, administration and/or sporting performance of more than one club participating in the same UEFA competition.
-
(3)
In the case of two or more clubs which are under common control, only one may participate in the same UEFA club competition. In this connection, an individual or legal entity has control of a club where he/she/it:
-
(a)
holds a majority of the shareholders’ voting rights, or
-
(b)
has the right to appoint or remove a majority of the members of the administrative, management or supervisory body, or
-
(c)
is a shareholder and alone controls a majority of the shareholders’ voting rights pursuant to an agreement entered into with other shareholders of the club in question.
-
(a)
-
(4)
The Committee of the UEFA Club Competitions will take a final decision with regard to the admission of clubs to these competitions. It furthermore reserves the right to act vis-à-vis clubs which cease to meet the above criteria in the course of an ungoing competition.
-
(1)
- 2.
See Dutoit 2005, Article 19 N 5.
- 3.
Several authors in the Swiss legal literature consider however, in accordance with the French text of Article 19, that it is also possible to justify the application of foreign mandatory rules by general interests: see e.g. Dutoit 2005, Article 19 N 1. This point has been left open in the Swiss Federal Supreme Court decision ATF 130 III 620.
- 4.
Cf. Vischer 2004, Article 19 N 23.
- 5.
See Sect. 3.1.5.
- 6.
Swiss Federal Supreme Court decision 118 II 193.
- 7.
CAS Award, at para 25.
- 8.
CAS Award, at para 45.
- 9.
On this point, see CAS Award, at para 39 and following.
- 10.
Answers given by Mr. Van Miert on behalf of the Commission to parliamentary questions nos. E-3980/97, 0538/98, P-2361/98.
- 11.
CAS Award, at para 48.
- 12.
Award, at para 52 and following.
- 13.
CAS Award, at para 58.
- 14.
Award, at para 60 and following.
- 15.
See section “Compliance with UEFA Statutes”.
- 16.
Translation by the author.
- 17.
Federal Supreme Court decision ATF 134 III 193.
- 18.
CAS Award, at para 77.
- 19.
Case 36/74, Walrave, in E.C.R. 1974, 1405, para 4; case 13/76, Donà, in E.C.R. 1976, 1333, para 12. See also case C-415/93, Bosman, in E.C.R. 1995, I-4921, para 76: “the provisions of Community law concerning freedom of movement of persons and of provision of services do not preclude rules or practices justified on non-economic grounds which relate to the particular nature and context of certain matches. It stressed, however, that such a restriction on the scope of the provisions in question must remain limited to its proper objective. It cannot, therefore, be relied upon to exclude the whole of the sporting activity from the scope of the Treaty”.
- 20.
CAS Award, at para 82.
- 21.
CAS Award, ibid.
- 22.
Further, the Panel expressed doubts as to the possibility to operate a distinction between sporting questions and economic issues: see the examples discussed in para 84 of the Award.
- 23.
CAS Award, at para 87.
- 24.
CAS Award, ibid.
- 25.
Opinion delivered on 20 September 1995, case C-415/93, Bosman, in E.C.R. 1995, I-4921, para 256.
- 26.
CAS Award, at para 92.
- 27.
CAS Award, at para 94.
- 28.
CAS Award, at para 98.
- 29.
CAS Award, at para 101, with reference to some US antitrust cases: NASL v. NFL, 505 F.Supp. 659 (S.D.N.Y. 1980), reversed 670 F.2d 1249 (2d Cir. 1982); Sullivan v. NFL, 34 F.3d 91 (1st Cir. 1994); Piazza v. MLB, 831 F.Supp. 420 (1993).
- 30.
CAS Award, ibid.
- 31.
Cf. e.g. case 42/84, Remia, in E.C.R. 1985, 2545, para 18.
- 32.
CAS Award, at para 117.
- 33.
CAS Award, at para 118.
- 34.
CAS Award, at para 119.
- 35.
CAS Award, ibid.
- 36.
It does not allow any person or corporate entity, except with the prior written consent of the Board (which had never been granted so far), to “directly or indirectly hold or acquire any interest in more than 10 per cent of the issued share capital of a Club while he or any associate is a director of, or directly or indirectly holds any interest in the share capital of, any other Club”: Award, at para 120.
- 37.
CAS Award, at para 122.
- 38.
CAS Award, at para 123.
- 39.
See Sect. 3.1.4.1.
- 40.
CAS Award, at para 129.
- 41.
CAS Award, at para 133.
- 42.
CAS Award, at para 135.
- 43.
CAS Award, at para 33 and following, 43 and 135.
- 44.
CAS Award, at para 136.
- 45.
CAS Award, at para 143.
- 46.
The existence of a sporting exception had not been discussed under Swiss law of competition: the only exemption from the law on cartels which had been admitted under Swiss law related to the “rules of the game” (mainly those applying on the pitch), which are not subject to the law on cartels. The Contested Rule could not be assimilated to a “rule of the game”, and the parties concurred in this respect. Whether a (much broader) “sporting exception” existed under Swiss law remained undecided: the Panel had already decided that the existence of any “sporting exception” could not have the effect that the Contested Rule would be exempted from the application of the law of competition (Award, at para 84).
- 47.
CAS Award, at para 149.
- 48.
CAS Award, at para 156.
- 49.
Case COMP/37 806 ENIC/UEFA.
- 50.
It is reminded that CAS expressed some doubts on this point: see section Is UEFA an “Undertaking”.
- 51.
Decision, at para 28.
- 52.
Decision, at para 32.
- 53.
Decision, at para 35.
- 54.
Decision, at para 36.
- 55.
Decision, at para 47.
- 56.
This was a way of changing a club into a sporting company and was granted/required by reason of Spanish Law 1084/1991.
- 57.
In fact, had these clubs not signed a “sponsorship agreement”, a contract which will be discussed later in the article, it would have been popular for the two clubs, with the same ownership, to have existed in the same division within 1 year that is, if Granada 74 SAD was relegated, and CP Granada 74 promoted to the Spanish third division in 2007/2008 season.
- 58.
Mr Jerôme Champagne and Mr. Marco Villiger, Heads of International Affairs and Legal of FIFA, respectively.
- 59.
This being the leading submission seems strange, it would be normal practice to allege first that the shares were acquired illegitimately and then state that even if they were acquired legitimately that holding said shares could amount to competitive abuse. However the counsel for the claimants entered their submissions in reverse order. It likely made little impact on the outcome of the case, and is more a stylistic note.
- 60.
Found at para 57 of the Decision.
- 61.
In fact, it was proven later that due to the existence of a “sponsorship agreement” it was impossible for these clubs to play each other in official competitive matches.
- 62.
However as part of this agreement the RFEF would receive 1% of the amount of any money spent in order to purchase said position in the league. Due to the nature of the purchase, a company buying Ciudad de Murcia SAD shares rather than CP Granada 74 buying Ciudad de Murcia´s spot in the second division, the Spanish FA were set to lose out on some money. These underlying tones were never discussed at the court, but they were certainly something to think about.
- 63.
It should be noted that this agreement has since been dispensed of. Which is probably excellent news for the ¨preservation of the integrity football¨ especially with the increasing presence of extremely wealth private ownership coupled with financial difficulty in the world, as well as the world of football. The ability to “buy your place in the league” would no longer be a euphemism for overspending, but a literal reality.
- 64.
Sevilla CF SAD and Sevilla Atlético, Villarreal CF SAD and Villarreal B, and Real Madrid and Madrid B are three perfect examples of already existing “Sponsorship Agreements”.
- 65.
The National Cup of the Spanish FA.
- 66.
They also have the opportunity to renounce their Sponsorship Agreement, but this is an option which has not been explored yet as most teams who have Sponsorship Agreements do so for training purposes and want to continue the affiliation rather than dispose of it. However, as this option and its legal consequences have not yet been discussed, we will leave the issue to rest for the moment.
- 67.
Article 18.2 of the FIFA Statutes – “in any case, the member shall ensure that neither a natural, nor a legal person (including holding companies and subsidiaries) exercises control over more than one club whenever the integrity of any match or competition could be jeopardized”.
- 68.
The RFEF had attempted to prove that Granada 74 SAD had not properly inscribed or registered their company and therefore had no right to legal personality, or to exist. However it was proved that it was not the inscription of Granada 74 SAD that should be examined by the inscription of Ciudad de Murcia SAD. The purchase of the shares, the change of name, and the transfer of domicile did not affect the inscription of the company (paras 108–111 of the Decision).
Furthermore, Article 15 of the Real Decreto 1564/1999 Ley de Sociedades Anónimas dealt with situations of this nature. It stated that the lack of inscription of a company would not negate the validity of the undertaking´s actions but just transfer liability from the entity to the founders and directors of the company (including a period of up to 3 months after inscription as well).
- 69.
In the sense that sporting bodies understood it.
- 70.
With good reason due to the amount of extreme in football these days.
- 71.
In order to explain by means of example, it is impossible to imagine a situation where Adidas and Reebok agreeing to operate on two different levels of performance so as not to distort the marketplace for Nike and Puma.
- 72.
Even though this practice was acceptable at the time of the decision.
References
Dutoit B (2005) Droit international privé suisse, 4th edn. Schulthess, Basel
Vischer F (2004) Zürcher Kommentar zum IPRG, 2nd edn. Schulthess, Zurich
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Cherpillod, I., de Dios Crespo Pérez, J. (2011). Club Ownership. In: Wild, A. (eds) CAS and Football: Landmark Cases. ASSER International Sports Law Series. T.M.C. Asser Press. https://doi.org/10.1007/978-90-6704-808-8_3
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