In 1823, William Webb Ellis first picked up the ball in his arms and ran with it. And for the next 156 years forwards have been trying to work out why. - Tasker Watkins VC, LJ.

Monday, December 2, 2013

HEC, PRL & Competition Law.

Who would have thought competition law would be of such interest to rugby players?

One of the features of the ongoing travails of European rugby has been intense reference to competition law (often under the title of "restraint of trade") by those involved in the discussions.

Various chairmen of the clubs in Premiership Rugby Limited (PRL), the company which runs the Aviva Premiership in England, have been waving the stick of competition law since the Fédération Francaise du Rugby (FFR), the IRB and various other unions have made it clear that the proposed breakaway tournament that PRL wish to set up, the originally-named Rugby Champions Cup, is viewed distinctly less favourably than the European Rugby Cup's (ERC) Heineken European Cup (HEC). The FFR has been reported all along as having turned its face against this newcomer, and the current position would seem to be that the French clubs have fallen into line (although in a dispute which feels as if it is approaching the length as well as complexity of the Thirty Years War, it remains to be seen how definite this is).

This positon led to club chairmen such as Nigel Wray of Saracens coming out with the comment "See you in Court, mate" to the IRB and unions he needed to persuade - which Metternich-like masterpiece of diplomacy suggests he may be somewhat confused about the operative word in the phrase "charm offensive".

There is an irony in this, of course. Sports is indeed subject to competition law (one can see a good background guide HERE); and PRL found that out when subjected to investigation by the Office of Fair Trading in the UK, and, more recently (with the RFU), when the rules about primacy of tenure in grounds as a qualification for promotion into the AP were challenged, successfully, by London Welsh via the RFU's own disciplinary systems.

The jurisprudence of the European Courts, referred to in that London Welsh decision, is clear that each incidence will be looked at on a case-by-case basis, with a recognition that, while they are subject to competition law, considerable margin of appreciation afforded to governing bodies like the unions who are looking at the benefit of the sport as a whole, as one can see in the MOTOE case about the organisation of Greek motorcycling. So, in Meca Medina, a case of the European Court of Justice (ECJ), where two athletes tried to have anti-doping rules struck down as affecting competition, the ECJ stressed that, while governing bodies are subject to competition law, purely sporting rules are not, and each case will be dealt with individually. So, it is hard to be definitive in advance about whether decisions where there is a mixed element of purely sporting organisation and the commercial side of sport will be anti-competitive, still less be so confident as to, in effect, dare the French state to back up its legislation whereby sporting bodies are bound by law by the decisions of their governing bodies.

The further irony is this: PRL has apparently contractually committed all its members to play in a new tournament which will be broadcast by BT, and to have no truck with an ERC-run competition (recently confirmed by Simon Cohen, CEO of the European and English giants, Leicester). It is an economic actor, in (by its own admission in the London Welsh decision) a dominant position in the English market - and it is restraining competition about which clubs can play what across Europe as a result of that committment. It is not a governing body, and attracts no margin of appreciation for its actions. And the recent reports from the Commission about the cartelisation of football are not what one might term sympathetic to the club side of the club-v-country arguments. Certainly, one doubts the Top14 would have relished attention being drawn to the acquisition habits of some of its clubs by being sucked into a case of this kind just as it is in the throes of negotiating a new broadcast deal of its own. This is all the more so  when litigation of this kind (involving assessment of what the relevant market is, the nature and shape of the market, and all sorts of other detailed examinations and documentation such as keep the lever-arch-file and banker's box business so buoyant) is of a length and complexity as could swallow half a playing career to resolve.

Even more pointedly, the European Commission, when examining the sale of broadcasting rights in the UEFA Champions League decision, laid down basic ground rules for the sale of exclusive broadcasting rights by an organising body to a broadcaster. These would include an open tender process - and a duration of no more than three years. BT Sport's deal with PRL to broadcast the Aviva Premiership - the foundation stone of the whole dispute, and the bread-and-butter of PRL clubs - is for four years.

On which note, one looks at the announcement (in Spanish) of some €14.5m in fines for selling exclusive broadcast rights in Spanish for four, as opposed to three, years - HERE - as well as the recent Commission announcement into the basic concept of selling exclusive territorial broadcast rights (as dealt with in THIS excellent blogpost from Blackstone Chambers), looks at that aspect of the BT Sports deal, and at the very least check wonder as to the footing of those at one stage so eager to litigate.

And it is at this point one is reminded why lawyers so rarely use phrases like "see you in Court" outside of the pages of fiction, and instead spend so much of their careers trying to settle cases outside of Court instead. Before telling someone you'll see them in Court, it it is always best to be entirely sure there's no way they could be happy to see you there, too.

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