The law on banning athletes from competing in rival sports leagues

Across many important international sports, federations and other organisations seek to asset the sole right(s) to organise professional sporting competitions, often as part of their broader regulatory governance role.

As sport has increased in its economic importance, so challenger organisations have increasingly come along seeking to set up rival leagues and competitions, often with a new or novel approach to the way in which sporting competitions should be managed and operated. Typically, though not always, they will approach the governing body in situ to seek their endorsement, thereby ensuring that participants in the new competitions do not face any sanctions. However, unsurprisingly, these approaches are not always well received leading to litigation between the parties concerned.

Two recent cases - one involving the genteel world of Equestrian, the other speed skating - show it is competition law that is frequently becoming the battleground for these dispute. This piece examines the application of competition law to the creation of and participation in rival sporting leagues, including a review of the European Commission’s recent Statement of Objections in the speed skating case. Specifically, it looks at:

• The law on rival sporting leagues
• Competition law and how it applies
• Is sport a “special case” when it comes to the application of the competition rules?
• Post Meca-Medina decision: the battle lines are drawn
• Recent Cases: International show jumping and the Global Champions League case
• Next off the blocks: speed skating and the International Skating Union
  • The European Commission’s Statement of Objections
  • The ISU’s response
• Authors’ comment

The law on rival sporting leagues

In 1977, Kerry Packer, an Australian media mogul affronted by the Australian Cricket Board’s refusal to license exclusive broadcast rights to his Channel Nine TV station, set up a breakaway professional cricket competition known as “World Series Cricket” (WSC). With Packer offering significant sums of money, 34 players signed up to play in WSC, which was to be a series of “all-star” test matches played (initially at least) in Australia.¹

Many of the players concerned were established internationals, including Tony Greig (at that time the England captain). In response, cricket’s world governing body, the International Cricket Council (ICC), decided it had to act and changed its rules so that any player who made themselves available for unauthorised matches (such as those in WSC) would be disqualified from playing in any official test match for their country.

The Test and County Cricket Board (TCCB), which was then the custodian of the game in England and Wales implemented ICC’s decision by disqualifying any player banned by ICC from appearing for any of the domestic counties.² County cricket was (as it still is) an attractive option for overseas players to earn more money outside of their international/domestic commitments.

Backed by Packer³, Grieg and two of his fellow WSC converts (Mike Procter and John Snow) challenged the bans imposed by TCCB and ICC at the English High Court, a case which has become known as Greig v. Insole⁴.

Greig and his fellow claimants argued that the bans imposed on them were in breach of the English common law “restraint of trade” doctrine.⁵ In their defence, TCCB and ICC argued that their actions were justified on the basis that WSC threatened the continued health of the international and domestic game.

However, after a trial lasting seven weeks, the presiding judge ruled that, whereas TCCB and ICC had legitimate interests to protect (namely the proper organisation/administration of the game), their actions had gone further than was reasonably necessary in the circumstances to protect those interests. In particular, the court was not convinced that the game’s finances were (as claimed) under significant threat as a consequence of WSC.

WSC, which took place between 1977 and 1979, undoubtedly changed the cricketing landscape significantly, exposing as it did the financial inequalities of the sport.⁶ Since then, many different sports governing bodies have found themselves subject to similar disputes by the organisers of new competitions or leagues wishing to upset the established order of things. Similar issues are at the heart of those disputes, although it is competition law that now provides the legal backdrop.

Competition law and how it applies 

Article 101 of the EU Treaty⁷ and its equivalents under the national laws of each EU Member State prohibits anti-competitive agreements. The concept of an “agreement” is widely drawn for these purposes and, in particular, includes decisions by associations of undertakings.

Since sports governing bodies typically draw up their rules and regulations with the consent of their “members” (e.g. national federations in the case of an international governing body), who each qualify as undertakings in their own right, those rules and regulations fall within the scope of the prohibition on anti-competitive agreements.⁸

Anti-competitive agreements are automatically void unless they benefit from an exemption, which is possible only if the agreement achieves efficiency benefits that are passed on to consumers and, crucially, that the restrictions in the agreement go no further than is necessary to achieve those benefits.

Alternatively, Article 102 of the EU Treaty⁹ deals with unilateral conduct by preventing an undertaking that has a “dominant position” in a market from abusing this position. Dominance in this context means a position of market power that enables an undertaking to act independently of competitors/customers. In exercising their (regulatory and/or commercial) functions, sports governing bodies are often in such a position of dominance, particularly where they assert sole jurisdiction over the organisation and promotion of their particular sport in a given territory.¹⁰

It is not possible to obtain an exemption for an abuse of a dominant position. However, conduct will not be considered abusive if it can be “objectively justified”, that is the behaviour in question is based on factors which are external to the dominant undertaking.

Is sport a “special case” when it comes to the application of the competition rules?