Sporting Rules/Regulations Part 3

A response to the question that critically considers the self-regulatory sporting rules and the impact of the same on the UK Domestic Laws, The ECJ jurisprudence and the inpact of the EC White Paper on Sport: written by Football Agents and Sports Lawyers:

UEFA club licensing (Overview)

UEFA control over all aspects of club licensing is virtually absolute. An individual club applicant must satisfy UEFA of its ability to discharge its duties in five areas - sporting, infrastructure, personnel and administrative, legal and financial.15 It is the financial status of UEFA clubs that has generated the greatest contemporary controversy.

The UEFA club licensing initiatives captured in its regulations represent a comprehensive response to significant public pressure that football was heading down an undesirable and ultimately destructive financial path. The general fears expressed included the concern that very few clubs could ever reasonably compete for national and European championships, given the escalation of player salaries (connected to greater player mobility),16 and the apparent willingness of certain club owners to indebt the club at levels in excess of revenues to secure premier talent in a given transfer window.

The UEFA Financial Fair Play Regulations (FFPR) has six inter-related components'':

(i)            introduce more discipline and rationality in club football finances;

(ii)           decrease pressure on salaries and transfer fees and limit inflationary effect;

(iii)          encourage clubs to compete with(in) their revenues;

(iv)          encourage long-term investments in the youth sector and infrastructure;

(v)           protect the long-term viability of European club football;

(vi)          Ensure clubs settle their liabilities on a timely basis.18

15 UEFA Club Licensing and Financial Fair Play Regulations 2010, art 3 (definitions), Part II Club Licensing, 8. I6UEFA The European Club Footballing Landscape: Club Licensing Benchmarking Report Financial Year 2010, 3, 7.

17 Ibid.

18 See the Rangers example, infra.

The FFPR centers on a minimum "break even"19 requirement that clubs must follow to gain UEFA licensing. Where clubs are determined to have failed to achieve a balanced annual budget, the penalties for non-compliance include forfeiture of UEFA membership.

The White Paper provisions20 and the relevant text commentaries suggest European football provides the template for all future relations between sports Governing Bodies and EU regulators. As a matter of fundamental public policy, the Commission asserts that "robust licensing systems for professional clubs at European and national levels" are an essential tool to promote good governance in sport.21 It is apparent from the White Paper language that so long as sport licensing systems seek the assurance that all clubs respect similar financial management and transparency rules, a key policy objective is achieved.

So long as these regulatory systems are compatible with general EU Internal Market competition provisions, where the "legitimate objective" relating to the proper organisation and conduct of sport is not overstepped, it is plain that the Commission is prepared to afford sport regulators broad discretion in the precise mechanics of regulatory enforcement.22

The Commission has also stressed the need for the implementation and gradual reinforcement of licensing systems at the national level; this emphasis is consistent with the trend to the promotion of regulatory harmony in all EU commercial spheres.23

The recent plummet of Glasgow Rangers from iconic Scottish First Division club to bankruptcy is the most recent cautionary tale that illustrates today's financial realities of club mis-management. It is noteworthy that the UEFA regulations make no express

19

For an analysis on FFPR allowed income v expenditure see Burnett & Ors "UFFA's Financial Fair Play Regulations: analysis" (2010)8(12)WSLR14

20 White Paper Art 4.7

21 Ibid.

22 Ibid.

23 See Treaty of Europe, art 101.

provision for special case treatment, or other exemptions, where the club in question has a tradition of competitive excellence.24 It is in this context that Lago asks the rhetorical question - Is there currently a crisis in European professional football?25 UEFA promulgated its financial stability rules with these concerns in mind.26 The future implications of the FFPR with specific consideration of the consequences for those clubs that are placed within UEFA administration are critically assessed later in this paper.

15 UEFA Club Licensing and Financial Fair Play Regulations 2010, art 3 (definitions), Part II Club Licensing, 8. I6UEFA The European Club Footballing Landscape: Club Licensing Benchmarking Report Financial Year 2010, 3, 7.

17 Ibid.

18 See the Rangers example, infra.

19

For an analysis on FFPR allowed income v expenditure see Burnett & Ors "UFFA's Financial Fair Play Regulations: analysis" (2010)8(12)WSLR14

20 White Paper Art 4.7

21 Ibid.

22 Ibid.

23 See Treaty of Europe, art 101.

24 Conn, D [online] 'Rangers reduced to wreckage and life in a different league'

<http://wwvv.guardian.co.uk/football/blog/2012/j u1/12/rangers-scotti sh-football-league>accessed 14 September 2012, 2.

25 Lago, note (8).

26 UEFA, note (17), 6.

Part 1 of 7

Part 2 of 7

Part 3 of 7

Part 4 of 7

Part 5 of 7

Part 6 of 7

Part 7 of 7

An original essay written by Football Agents and Sports Lawyers