World sport rattled by rulings that open route to goal for new entrants

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The EU’s top court this week opened the door for new challenger competitions across world sport, with rulings that leave the bodies running established tournaments vulnerable to significant disruption. 

Lawyers and executives said the legal precedents — including on the European Super League, an attempted breakaway football competition — will reverberate across sports such as tennis that are potential targets for well-funded new entrants. 

The European Court of Justice ruling on Thursday stunned world football by declaring unlawful the powers used in 2021 by Uefa and Fifa, the sport’s governing bodies, against the proposed European Super League.

“This day will mark a before and after,” said Florentino Perez, president of Spanish club Real Madrid and the chief architect of the ESL. “It is a great day for the history of football and for the history of sports.”

Meanwhile a second judgment on a case concerning ice skating confirmed the governing body had improperly threatened to punish athletes who wanted to compete in an unapproved competition in Dubai. 

Taken together, the two verdicts bring sporting bodies firmly under competition law, undercutting the longstanding powers of international federations to defend their tournaments from rivals.

“These rulings will send shockwaves through the sports world,” said Simon Leaf, a sports lawyer at Mishcon de Reya, adding that the decisions were “welcome news to challenger groups across the industry” and were likely to lead to the launch of new competitions “in the near future”.

Sports federations have been grappling with how to handle the emergence of breakaway tournaments, such as LIV, a rebel golf tour backed by Saudi Arabia’s sovereign wealth fund that has threatened the supremacy of the US-based PGA Tour. Beyond golf, Riyadh has poured billions of dollars into global sport, from football and motorsport to boxing and mixed martial arts.

Breakaway leagues are not a recent phenomenon. Formula One, the car racing series, saw off an effort by teams to form their own competition in 2009, while the English Premier League was itself the result of a breakaway when it launched in 1992. Sports such as tennis have been seen as vulnerable to disruption because players are not contracted to clubs. Some cycling teams have also explored a new format.

Governing bodies and competition organisers have often turned to their rulebooks to protect the status quo by threatening to punish disloyalty. The newcomers have responded through the courts by accusing incumbents of breaking competition laws in Europe and the US. 

Legal experts say the two European rulings will alter the way sporting bodies can operate by clearly acknowledging that their role in organising tournaments constitutes economic activity like any other. That means using their regulatory power as a blunt tool to block rivals is subject to strict limits. 

André Pretorius, a partner at Herbert Smith Freehills working on competition law, said the football and skating cases were “comprehensive victories for those who want to challenge the extensive powers of sporting governance bodies to bless or block new competitions”.  

The ECJ verdicts came soon after a tribunal in the UK ruled that Fifa’s new global regulations limiting the fees paid to football agents were anti-competitive. The rules, which were due to come into force in October, are now in limbo pending legal challenges in Germany, Spain and elsewhere. 

Nick De Marco, a British barrister specialising in sports law, said evidence was building of a “wind change” in how the legal system viewed sports bodies now that many of them generate billions of dollars in revenue from broadcast deals.

“Courts have woken up to the fact that sport is a big financial business, and it needs to comply with competition law. It can’t operate as a cartel,” he said. “Bodies like Uefa and Fifa are massive commercial operations with huge clout. They can’t hide behind the approach that ‘We are sports bodies and can do what we like’.”

The EU court’s verdict on football is unlikely to spark a swift reshaping of the European game. Uefa insisted the ruling was backward-looking, and that changes had already been brought in to address the issues considered by the ECJ. 

At a press conference after the ruling, Uefa president Aleksander Ceferin likened the decision to a neatly wrapped Christmas present handed to the ESL cheerleaders, but with nothing inside. Gianni Infantino, his Fifa counterpart, said the judgment “does not change anything”.

Opposition remains strong. Fan groups, national leagues and European governments have been swift to voice their hostility to challenger contests, while a long list of clubs have said they remain committed to Uefa-run competitions. 

But those behind the ESL believe the verdict has opened up a path for them to bring about change, and immediately proposed a new three-league format designed to replace Uefa’s Champions League. 

“I think people’s attitudes today will change,” said John Hahn, co-founder of A22, the sport marketing agency pushing for the new competition. “Don’t forget, this is a 70-year monopoly. Those things don’t get undone overnight.”

Additional reporting by Javier Espinoza in Brussels