Mario Monti, Commissioner for competition policy, has the UK's biggest sports deal firmly in his sights, and what he decides could transform both the finances of the game and alter the balance of power in the UK television industry. The English Premier League is due to issue a tender document this spring for bids for its broadcasting rights - live, highlights, new media, and international - from 2004. But now the Commission has told the League that its arrangements to sell collectively prevented individual clubs from selling any rights of their own, are anti-competitive and not in the interests of consumers. The League has until the end of February to deal with these objections. (Financial Times Creative Business 14/1/03)
Portugal, which is due to host the 2004 European football championships, may have to cancel the building or renovation of three stadiums due to budgetary restrictions, according to a report in Portuguese financial daily, Diario Economico. Portugal is currently running a budget deficit of 4.1 percent and is the subject of the European Commission's "excessive deficit procedure", which could result in a fine of 0.5 percent of GDP. The Portuguese government have dismissed the report as "speculation" but it follows a warning in March from UEFA, European football's governing body, that it was prepared to award the Championships to another country if Portugal could not sort out its finances. ("No" Campaign Bulletin 23/8/02)
The leading football clubs of Europe should seek European Union approval for their proposal for player salary caps or they risk possible fines warns the European Commission. (EUobserver.com 25/5/02)
It is too difficult to arrange international sports events in Denmark, when participants come from non-Schengen countries, writes Danish periodical idrætsliv, quoted by DRonline. Since Denmark joined Schengen in March, many organisations have had problems, because it is very difficult for sports people to obtain a visa. Among others, some boxers from Mongolia never succeeded in complying with the invitation of coming to an arrangement in Denmark, and Russian boxers have experienced similar problems. In this last case, the Danish embassy said that they could not make out a visa before the boxers had bought a flight ticket, but on the other hand the airline would not sell the boxers a ticket, if they had not got visa. (EUobserver.com 21.12.2001)
The European Commission has opened proceeding against the European football organisation UEFA, claiming that the sale of TV rights to the Champions League to just one broadcaster in each country for up to four years is likely to be anti-competitive. (EUobserver.com 23/7/01)
Members of the European Parliament on Thursday warned the European Union's competition authorities that if they broke up the centralised way soccer broadcasting rights are sold it could favour the sport's biggest clubs and hurt smaller ones. But the European Commission indicated that it had concerns with the current system. Glyn Ford, a UK Labour MEP, said that so much money could be diverted to the biggest clubs that European soccer could end up "like the Harlem Globetrotters [basketball team] systematically thrashing its rivals in front of an audience of tourists." In February, Mario Monti, competition commissioner, said that Brussels would investigate the collective selling of broadcasting rights to sports events in several pending cases and would use the opportunity to set out the rules for the issue. In particular, the Commission is looking into the collective selling arrangement of the UEFA Champions League and the marketing of games by the German football association, after being notified by both organisations. Media companies recently paid more than £1.6bn for the rights to screen top-flight football in the UK over the next three years. Earlier this year, the Commission finally agreed a deal with soccer authorities to introduce limited changes to the player transfer system, which it had also investigated on competition grounds. (Financial Times May 31 2001)
A survey by Andersen, the business consultants, has found that top foreign footballers prefer Britain because tax rates are more competitive compared to Eurozone countries. A footballer playing in France has to pay 75 per cent more income tax than he would in Britain. Lutz Meyer, the head of the Andersen team behind the report, said: "In case of contract negotiations this presents a strong advantage for clubs since the player is mainly interested in the net income." ("No" Bulletin 12/4/01)
STAR footballers such as David Beckham could see their salaries spiralling upwards towards those enjoyed by top American baseball players under a deal agreed last night to end the five-month battle over the football transfer system. International football will now undergo a huge shake-up as clubs struggle to hold on to their best players, and the gap between the richest and poorest clubs will widen. Clubs will also spend less on transfer fees because contracts for a player even in his prime will be be protected for only three years. Under the agreement reached between the European Commission and international football authorities in Brussels last night, players will be given contracts of between one and five years, and there will be sporting sanctions if either club or player unilaterally breaks those contracts. There will be one special transfer period each year — plus a limited "window" mid-season — and no player may be transferred more than once a season. (The Times 6/3/2001)
The European Union leaders decided in Nice that sport should be treated as a special case in EU lawmaking. The British Prime Minister Tony Blair and Gerhard Schröder, the German Chancellor backed by Italy, Spain and France agreed to block attempts by Brussels to end the transfer system in football, which it claims breaches EU rules on the free movement of labour. The clubs fear ending the transfer system in football would do huge damage to small clubs. The Presidency conclusions Annex IV says as follows: ‘Even though not having any direct powers in this area, the Community must, in its action under the various Treaty provisions, take account of the social, educational and cultural functions inherent in sport and making it special, in order that the code of ethics and the solidarity essential to the preservation of its social role may be respected and nurtured.’ (EUobserver.com 9/12/00)
A COMPROMISE plan to preserve football’s transfer system is being undermined by "European Commission intransigence", government sources said last night. Ministers fear that Brussels is seeking to whittle down a plan by Uefa and Fifa, football’s European and world governing bodies, to retain elements of the transfer fee system which they say helps to keep smaller clubs afloat. Tony Blair yesterday met Sepp Blatter and Lennart Johansson, presidents of Fifa and Uefa, as well as representatives of the Premier League and Football Association. The Government, backed by Italy, Germany, France and Spain, believes that the abolition of fees will bankrupt smaller clubs who rely on selling players for income, as well as stifling talent in lower divisions. The compromise would preserve transfer fees for players under the age of 23, ban transfer of players under 18 and compensate clubs forced to lose older players. (The Times Tuesday November 14 2000)
The looming abolition of soccer's transfer fee system could spell financial ruin for smaller European clubs, plunging many of those in lower leagues into insolvency, according to a report by accountants Deloitte & Touche. The report, commissioned by Uefa, European football's governing body, warns that the loss of transfer payments would eliminate the asset base of clubs, causing massive financial instability. The European Commission wants to overhaul the system. The consequences for smaller clubs, many of which rely on player transfers to cover operating losses, could be disastrous. If player values are reduced or cancelled, banks may be forced to recall loans and could refuse to extend credit to clubs, the report says. In many European countries, accounting practice requires the cost of player transfer fees to be recorded as an asset on a club's balance sheet. In the English league, the overall value of clubs, which includes E844m of player value, would fall 74 per cent if transfer fees were abolished. The lowest division of the English league would be E8.3m in deficit. (FT 31/10/00)
An article in an Italian Communist daily has revealed that the EU plans to use football to undermine national identity. The ECJ has already ruled that nationality must not be a factor in selecting players for national teams: henceforth, a national team in Europe could be composed entirely of foreigners. Such foreigners need not even be from the EU: "European sporting citizenship will also be recognised for all athletes who come from countries associated with the EU or which have commercial relationships with it." The paper also alleges that national championships are to be replaced by a super-championship at European level, and that it is also proposed to pay the main prizes of such championships in euros. [Il Manifesto, 20th July 2000; Correspondance européenne, 30th September 2000] (European Foundation)
Imagine an organisation spending £37m ($54m) buying a single asset only to find months later that the asset is potentially worthless because it could be acquired free by one of its rivals. It may be about to happen to Europe's top football clubs. Real Madrid, the European champions, face a struggle to hold on to Luis Figo, the Portuguese star bought from Barcelona for a record fee this summer, following this week's acceptance by Fifa, the sport's world governing body, that the player transfer system may have to be scrapped. David Beckham could decide to join another club, with Manchester United, which cultivated and trained him since he was at school, receiving nothing. Player transfers have operated since the advent of professionalism, starting in Britain in 1885. Loyalty bonuses for players who see out the length of their contract could act as an incentive for most players to stay with their club but "big clubs will still attract the best players - that dynamic won't change." "If the system is scrapped, the winners will be the players. The losers will be shareholders and spectators," says Peter Ridsdale, chairman of Leeds United. The consequences, he says, will be far-reaching: clubs would no longer have any incentive to train and develop young players, since there would be no way of recouping the investment by selling the player on. "Players will be cherry-picked and their salaries - which are already a cause of concern - will sky-rocket." Small clubs outside the top divisions in Spanish, Italian, German and English leagues - the most lucrative in the world - would be likely to suffer most. Many could go to the wall. Plans to reorganise football's transfer system suffered a double blow on Friday when the European Commission criticised a key proposal and players' agents warned they could challenge part of the reforms in court. Fifa wants to maintain restrictions on younger players' movements to prevent clubs losing the talent they have nurtured through youth development schemes. But footballers' agents, who broker transfers, say Fifa's insistence that clubs should continue to charge transfer fees for players under the age of 24 is unworkable. There were fears among investors that the valuations of listed football clubs would plummet if they could not list players as intangible assets on the balance sheet. Nigel Hawkins, analyst at Williams de Broe, said the end of transfer fees would free big clubs to compete for players by offering higher salaries, and forecast the first £100,000-a-week ($145,000) footballer within a year. But he said removing transfer income from small clubs would threaten their survival. (FT September 1 2000)
The world governing body for soccer, Fifa, agreed on Thursday night to end the multi-million pound transfer fee system after the European Commission accused top clubs of running an illegal cartel. Fifa has accepted it must begin a shake-up of the system or risk the Commission abolishing fees altogether, which Fifa believes would throw the European game into chaos. The soccer authorities believe there is nothing wrong with the current system and argue an abolition of fees would ruin smaller clubs which rely on selling young stars for financial survival. But Viviane Reding, the EU's sports commissioner, said on Thursday: "I find it scandalous that players. . . are being used as objects of speculation." Ms Reding, along with Mario Monti, the EU's competition commissioner, has been investigating the transfer system since 1997 after three small clubs filed complaints. Keith Cooper, Fifa's spokesman, said on Thursday: "We feel the system in place so far has functioned well, but if it proves to be contrary to European law there is not much point arguing. We have to do something about it." (FT August 31 2000) FIFA is an international body with 203 affiliated members - Ed
The system of licensing football agents run by Fifa, the sport's world governing body, has fallen foul of the European Commission. It issued a preliminary judgement that the Fifa system, under which agents who have not registered with the governing body and put up a mandatory £81,000 bank guarantee are not allowed to operate in football, was illegal. (FT 22/10/99)
The Maritime and Coastguard Agency is implementing the EC maritime equipment directive 96/98. This revokes all ships radio certificates at the end of next year. This will force small boat owners to go through an expensive new "EC-type approval" process, which for many will outlaw efficient existing equipment and raise the average cost of a new radio from £200 to as much as £900. Typically, however, it turns out that the EC directive was intended to apply only to new radios installed in commercial vessels. It was only our own zealous officials who had the brilliant idea of extending to every boat, however tiny. (Sunday Telegraph 5/12/99)
The Serpentine swimming club has existed for 135 years without mishap. It is now constantly harassed by officials attempting to implement EU regulations. It is had to compose an 'operating procedure', an 'emergency procedure' and a 'risk assessment'. Officials of the club are prohibited from breaking the ice in winter. The club has been told that if it steps out of line once more it will be shut down. (Personal interview 28 April 1999)
Competition Commissioner Karel van Miert warns football clubs that their bid to create a breakaway super league could fall foul of EU law. (E Voice 3/9/98)
British yachtsmen have been banned from sailing on lakes and rivers around Berlin because of absurd German rules. Giles Chichester MEP, son of Sir Francis Chichester, is complaining to the EC. The German authorities do not accept British sailing qualifications. It is particularly ridiculous because the Berlin Club uses British Army facilities. (D Telegraph 8/5/98)
The EU may ban indoor go-carts. An electric go-cart has been developed as an alternative. (Autocar December 1997). Indoor carting is a popular but fragmented sport and petrol engines could be banned in five years. (FT 28/1/98)
Those entering gambling joints under new EU rules must now produce passports or driving licences. (CEC April 1995)
A big field sports protest 'Pour Sauver La Chasse et la qualité de la vie a la campagne' to be held in Paris on 14th February, which has been arranged to protest at new EU regulations that curtail the wildfowling season. (SAGBNI press release 15/1/98). 100,000 field sport supporters demonstrated in Paris against the EU regulations. The French hunt small birds such as skylarks and ortolans which would be considered an unacceptable practice in Britain- Ed.
The Commissioner for Competition wants the EU's founding treaty to be amended to include sport, which he claims, needs to be regulated by the EC. (Times 2/2/98)
Formal proposals to cut by two-thirds the number of Formula One races within the European Union are being considered by the FIA. If accepted the number of races within the EU will be cut from 10 to 3 or 4. The proposals also call for the 15 EU states to be stripped of their individual representation on the FIA, to be replaced to one single seat for the EU. The proposals have been put on the agenda by non-European nations disgruntled over the high proportion of races held in Europe. According to a Washington based consultancy each race generates £30m to £40m in consumer spending associated with each event. FIA officials denied the proposals were an attempt to influence the European Commission objections to the FIA’s broadcasting rights arrangements. (FT 5/4/00)
When the European Commission declared the FIA was abusing its dominant position, the natural expectation was that Brussels had a car-load of finely tuned evidence. In fact its evidence gathering ran to dispatching a single junior official to the 1987 Monaco GP. The FIA wrote to the Commission stating that it made a hopeless muddle of the facts and is completely confused about the regulation and general functioning of motorsport. No team, organiser, sponsor or driver has complained of the FIA’s management of Formula One. The EC did receive two complaints, one from the promoter of GT racing and another from truck racing. The EC has failed to define the market the FIA is supposed to be abusing. It leaked confidential information to the press, for which it has paid a fine. The FIA wants an independent investigation into the EC’s conduct and the replacement of officials dealing with the FIA’s case. (D Telegraph 5/2/00)
Formula one motorsport is under attack by the EU on two fronts. The ban on tobacco advertising and sponsorship in the year 2006 will cripple the sport unless it moves to the Far East. Asian countries are keen to host F 1 and do not interfere like the EU does with petty regulations. EU competition law has been invoked by a German TV producer to obtain a ruling in a German court to award TV rights to Grand Prix races to event organisers rather than the Federation Internationale Automobile (FIA). The FIA, which organises all GP races throughout the world, depends on TV income to support its operations. If the EU takes the rights away then the FIA would reduce the number of races in the EU from ten to two, or less. (Motoring News 18/6/97). The EU is warning that the way TV rights are administered is against competition law. This threat could also drive the sport to the Far East. (FT 23/12/97). The FIA rejects the EU interference and questions whether European competition law can be applied to international sports governing bodies. The EU claims that television provides most of the finance for all motorsport. The FIA says this is totally wrong, most motor sport is financed from the private resources of the competitors. The EU also objects to having one motorsport regulating body in each country claiming it is illegal. The FIA says this attacks the very foundations of all organised sport. (FT 30/1/98)
The European Commission has launched formal proceedings against the organisers and promoters of international motor racing, claiming they are abusing their dominant market position. The institution had found evidence of serious infringements of EU competition rules that could result in substantial fines. (European Voice 1 July 1999). A final hostile ruling against motor racing could cost the sport dear. Many of the sports TV deals may have to be renegotiated under terms acceptable to Europe's competition authorities. This would hit the sport's finances and send shock waves to the City of London. The banks are likely to be deeply disturbed by news that the TV contracts that underpinned Mr Ecclestone's F1 company bonds may have to be renegotiated. The many commercial agreements in the sport, such as insisting F1 teams handover TV rights to the FIA and the broadcasters show the entire F1 championship serious, not just the local event, are welcomed by participants in the big championships as it tends to maximise sponsor revenues. F1 racing is hugely expensive. Teams rely on the hundreds of millions of dollars generated by Mr Ecclestone. The FIA, clearly troubled by the EC investigation, recently moved its headquarters outside EU to Switzerland. While the commission could force a roll-back of the contracts within Europe, the sports rulers could make good the threat to move at least half the 11 F1 European events to locations elsewhere, far away from Brussels tentacles. (Financial Times 30 June 1999).
The EU is attacking Fifa, the world governing body for football, and Uefa, its European sister. The Commission believes it is time to open to scrutiny the business side of international sport. Fifa says it should be left to organise itself. (FT 30/1/98). The Commission told Fifa that the bank guarantee of £82,000 it requires from football agents to obtain a license is too high. The EU has stopped German football clubs acting together to sell TV rights to European matches played in Germany. It is early days for us, says a Commission official. We have sent out warning shots and now we are waiting for reactions that we hope will help us to understand better the picture. (FT 23/1/98)
Soccer leagues in Europe may be allowed by the European Commission to continue negotiating their television rights on a collective basis but only if money from broadcasting contracts is invested in small clubs, youth programmes and other grass-roots activities. (FT 2/12/99)
An alliance of the most powerful figures in international sport has been formed to take on the EU. The International Olympic Committee will head a working group to tackle increasing interference of Brussels bureaucrats in sport. Members of the group include the International Amateur Athletic Federation, International Ski Federation, FIA and UEFA. (European 30/3/98)
An EU Agricultural Directive proposes that betting levies for the Bloodstock Industry should apply to any bets on races outside the country where the bet is placed. This means that a UK resident placing a bet on a French race will have to pay the 5% French levy and not the 1-% UK levy. In Ireland, where there is no levy but 80% of bets are placed on UK races, Irish bookmakers will have to pass on the 1-% levy to the UK Bloodstock Industry. This regulation is being passed off as a part of an agricultural directive and breaches the subsidiarity rules (FT 6/12/94).
The European Commission has stated that the football transfer system is contrary to European competition rules. This would drive many smaller football clubs into bankruptcy because they rely on selling up-coming young players to richer clubs. Also, the European Court is to consider a case that the UEFA rule limiting clubs to three foreign players is a restriction on the free movement of players within the EU. The rule is intended to prevent the richest clubs from buying all the best players (FT 21/6/95). Mr Alan Sugar, chairman of Tottenham Hotspur, warned that the impact of the ruling has been underestimated. Tottenham had to write down £7.29m from the loss in value of players. (FT 11/10/96). These new regulations are a bombshell to the whole of professional football. Other sports such as hockey will also be affected. Transfer fees on foreign out-of-contract players are no longer paid so UK clubs are hiring foreign players on free transfer rather than hiring domestic talent (FT4/6/97)
Hereford United, my local club, has been driven to the edge of bankruptcy by the EU Bosman ruling on transfers. They bought a young player for £65,000 and later arranged to sell him for £120,000 to a big club. The FA valued the player at only £45,000 saying that under the EU regulations he would be worth nothing in two years. (HUFC 3/2/98)
The Italian Sports Minister has called on the Commission to reintroduce limits on the number of non-national footballers who can play in European matches. This would be against the Bosman ruling on free movement for players. He claims support from the French, Spanish and Portuguese sports ministers. The German upper house is voting on a new competition law that will exempt the sports sector from national anti-cartel rules. The law is aimed at allowing the German Soccer Federation to hold on to its monopoly rights for international football matches. Football clubs would lose vital revenue from the sale of sports rights. The EC is determined to oppose the move to set sport above competition rules. (European Voice 1/6/98)
Of the 30 players selected for the Celtic v Rangers match only five are Scottish. (BBC Radio 5 14/11/99). The Chelsea football club fielded a team with no Britons at all. (BBC R4 27/12/99)
British manufacturers of climbing equipment say the EU Personal Protective Equipment Directive, which is effective from 1 July 1995, will lead to higher prices, lower standards, a reduced range and stifle innovation. British equipment is made to the standards of the International Union of Alpinists (UIAA) and the EU standards are lower. The EU requires all items sold to have instructions in every EU language. The directive is intended for industrial equipment but is being inappropriately applied to sports equipment. The cost of testing, labelling and packaging will make it uneconomic to develop and sell some specialised low volume climbing aids. (FT 21/4/95). RP Nuts are crucial small safety devices for climbers. They are made by an enthusiast in his garage in Australia. They comply with UIAA standards, which are higher than EU standards, but the cost of testing, including an inspection by EU officials of the garage in Australia, is prohibitive. It is now illegal to import them. Similarly, HB Climbing in Wales, which makes the British equivalent, has been forced to drop them from their range. (Indy on Sunday 2/7/95). The CEC, unbelievably, blames Member States for this rule in the Directive on Personal Protective Equipment (89/686/EEC).
The European Firearms Directive forbids sporting shooters from using hollowpoint handgun ammunition. The UK exempted all handgun ammunition for which there is a rifle in that calibre, the French did the opposite and included all rifle ammunition for which there is a handgun in that calibre (CIS forum post 14/7/95).
Sporting riflemen from the EEC may no longer come to the UK to shoot. They would have to post their European Firearms Passes to the UK police but this would make them illegal gun holders in their own countries. (S Telegraph 3/1/93)
Climbers, walkers, skiers and off-road cyclists are likely to be banned from areas of biological and landscape importance. The British Mountaineering Council said that nearly every popular climbing cliff in Europe is important for biological or landscape reasons (Observer 13/8/95)
It is reported from Finland that Brussels is attempting to harmonise the temperature of swimming pools (Independent 12/12/96)